By Helen Millicer
A quiet but effective European revolution is catching on and spreading across the world – Extended Producer Responsibility (EPR). A robust EPR will soon materialise in Australia; now it’s a matter of when and whether we put in place the essential guardrails and work together to achieve excellence.
Over 30 years, EPR and Producer Responsibility Organisations (PROs) have evolved, introducing new measures like eco-modulation in fees incentivising improvements in design, and investing in expanded collections and recycling. Effective EPR and PROs are so valuable that EPR is becoming central to governments and industry sector strategies for circular materials and products, stronger industry sectors, local jobs, higher economic productivity, improved trade balance and lower harmful emissions.
Many of us may have seen the consequences of good EPR and PROs in our travels without noticing. From the smart design of attached caps and recyclable labels on bottles, to expanded kerbside collections and accessible, free drop-off points in stores for all types of products including electronic goods and batteries.
Origins and mandating responsibility
Germany and France first introduced EPR for packaging in early 1990s, and now every EU nation has EPR for packaging. And all have passed laws making it mandatory for producers to be responsible for the life cycle of their packaging. Others that have followed suit on mandatory packaging EPR and PROs include Norway, Ireland, Israel, Canada, Columbia, Chile and South Africa.
Following impressive results in managing packaging, EPR and PROs are now being formed for other product categories. In Belgium, for example, there are accredited PROs for electronics, batteries, oil, tyres, mattresses, PV panels and end-of-life vehicles. The French were first in forming the first PRO in 2007 for clothing/footwear/linens, proving to other nations and the European Commission that positive action can be taken to wrangle this growing product category toward a more circular future.
These priority product categories are familiar to us in Australia as almost all sit on our Minister’s Priority List for the formation of a PRO to manage a scheme. We are now ready for the next steps.
What is good EPR, and an effective PRO?
Typically, a PRO starts with industry leaders banding together to voluntarily fund the formation of a scheme in partnership with the central government. Typically, within three to four years the central government has passed legislation requiring all related producers to follow suit and take responsibility by a) either joining a scheme or b) taking back their own packaging/product and providing same level of coverage and service.
Because there is no delay, these nations avoid the ‘zombie zone’ of limping ‘half-alive’ voluntary schemes that we have in Australia that must coax producers to stay for an indefinite period with ‘best as they can muster’ services. Timely and good legislation can also prevent formation of competing for-profit schemes that race to attract members with low levies, minimal services and progress.
Timely legislation and smart regulation provide clarity for producers, enables planning, PRO contracts and investments to be formed on services and processing for quality material for markets.
Across six months in Europe earlier this year, I met many PROs from across Europe and Canada, with most covering off on packaging while others were in electronic products and textiles. It was notable that not one country has voluntary schemes. It was useful to learn how, in such countries, PROs and regulators manage the thousands of liable producers who pay the levies and pursue those comparatively few who try to dodge taking responsibility.
The difference between our voluntary and their mandatory schemes was pronounced in the budgets, capacity and internal resourcing allocations. In Belgium’s packaging PRO, Fost Plus, ‘free riders’ are only around 15 per cent of producers, meaning 85 per cent of producers financially contribute to coordination and investments. In Australia only 15 per cent of producers have voluntarily signed up to Soft Plastics Stewardship Australia.
Representatives of governments, PROs and industry alike politely shrugged at our voluntary approach in Australia wondering how we see this as fair, socially and environmentally responsible, economically viable or useful. They offered to help.
Brits and Germans admit mistake
At conferences, I often heard Germans and Britons say they wished they had designed their schemes as not for profit instead of for-profit schemes, and single scheme not competing PROs. They admit others got it right (like the French, Dutch, Belgians, Spaniards and Czechs). In the heady days of 1990s neo-liberalism in Germany and England, it was thought competing and for-profit schemes would deliver lower costs and greater efficiencies for producers and public.
There have been studies into the comparative differences between schemes that vary in their services and levies between countries. However, the clearest evidence of the challenges of competing for-profit schemes is that both Germany and England are passing additional laws and installing an overarching special NFP reporting entity, like a data clearing declaration centre, to receive and reconcile confidential data on quantities and obligations from for-profit producers, recyclers and schemes. There are too many blind spots, likely gaming of systems and an inability for these nations to go to the next level in circularity. I was struck by the bureaucratic complexity and duplication of the systems in these two countries and the ramifications for producers and governments, particularly when the alternative is a single NFP PRO that delivers a beneficial service under contractual agreement and in partnership with governments.
Good governance for success
During this visit to the EU, I was keen to understand governance structures and how governments and PROs engage. There are two models for government oversight of compliance; the regulator may be within a national government department, or a separate national entity.
In Czechia and Austria, the regulator is a national government department. In Norway, Estonia, and Denmark, all PROs are overseen by the national EPA. Spain and Poland use a national Registry. In Belgium, regulation is handled by the Interregional Packaging Commission, created soon after the country’s packaging law and PRO. Its small expert team interprets policy and legislation, drafts and supervises agreements and the PRO, renews accreditation every five years, and pursues non-compliant producers.
The Commission ensures the PRO meets its Agreement obligations and requires that contracts with local authorities and service providers align with it. Like an EPA, it has a board representing Belgium’s three regional governments responsible for waste policy. Reflecting its importance and success, the Commission is now being restructured to receive responsibility for managing all other product PROs from government departments.
Given the federal structure of Australia, the number of ready schemes and evolving sophistication of their obligations and operations (eco-modulation, design assessment and supply chain contract management) Belgium’s Commission may be a good model for Australia, or it may be a role taken up by Australia’s national EPA. Australia already has examples of effective independent commissions/agencies like the ACCC, Clean Energy Regulator, for implementation of regulations and supervision of liable parties.
Next frontier – improving design of legislation, PROs and Products
Since their inception, European EPR and PROs have evolved more than their Australian counterparts. No one left me in any doubt that light-touch EPR legislation and NFP PROs, as opposed to prescribed legislation and for-profit PROs, has enabled practical government/industry collaboration on achieving progressively ambitious environmental and economic goals and plans.
While Australian schemes are either rigid or impoverished, Europe’s PROs are flexible and innovative. High-performing NFP PROs respond to evolving policies, product design, and markets, expanding scope as approved by governments. PROs can flex their levies and uphold their responsibilities; they consistently safeguard program/supply chain solvency while serving members and the public. Having being at the coal-face, seeing the impact of China Sword in 2018-19 on Victorian councils, businesses and communities, including costly government bailouts, I know that this flexibility for PROs to manage and balance the supply chain is essential.
Notably, it was only the NFP sole-national PROs that developed and introduced eco-modulated fee structures, because they had the backing and flexibility of producers and governments. This has accelerated the race toward recyclable packaging in EU since 2018, and now their current focus is investing in supply chain collaboration for reusable packaging and incentivising recycled content.
Again, these innovations by NFP packaging PROs are being adopted by other product category PROs. During my stay in the Netherlands in May, the Dutch WEEE PRO CEO expressed interest in introducing eco-modulated levies to promote durable, repairable, and recyclable product design in the electronic good sector.
With such excellent EPR and PRO partnerships, governments can move decisively on key goals, and their populations gain more efficient and circular products.
Caution and encouragement
It’s important to end with a caution: advancing producer responsibility and a capable regulator in Australia will meet resistance, both from producers unwilling to pay levies and from waste operators prioritising market share over transparency or environmental outcomes.
This article sets out the roadmap for success; preparing businesses for a PRO-charged future, demonstrating benefits to new audiences, and urging governments and stakeholders to unite swiftly on reforms.
The way ahead
The path forward for Australia involves a suite of measures, from levies and bans to incentives, better carbon accounting and regulations. One of our largest underutilised levers is EPR and good PROs.
Helen Millicer, GAICD is a Churchill Fellow, CEO of One Planet Consulting and Board Director for Solving Plastic Waste CRC. She has written a report for the Australian Government on measures for eco-design of products, and advised on the formation of Soft Plastic Stewardship Australia since 2022.