Extended Producer Responsibility:
A New Concept Spreads Around the World
by Bette Fishbein, Senior Fellow, Sustainable Products and Practices, INFORM Inc.
RUTGERS UNIVERSITY DEMANUFACTURING PARTNERSHIP PROGRAM NEWSLETTER, Vol. 1 No. 2 Winter 1996
What is Extended Producer Responsibility?
"Extended producer responsibility" (EPR) means that the responsibility of producers for their products is extended to the post-consumer stage. In other words, under EPR, a company must be concerned not only with making the product and how it functions, but also with what will become of the product at the end of its useful life. In the case of consumer goods, this principle shifts responsibility for recycling and waste disposal from local government to private industry, thereby internalizing the costs of waste management into product prices. Under such a scheme, citizens pay for waste management as consumers, when purchasing products, rather than as taxpayers, through local taxes. EPR programs typically are aimed at increasing recycling and often contain mandated recycling targets.
While EPR is intended to reduce the amount of materials going to landfills, it is also aimed "upstream"-- at product design and material selection. Its underlying theory is that if producers must pay for waste, they will have an incentive to make products that are less wasteful. EPR provides the missing link between product design and recycling: a link that is key for making recycling efficient and economic. The movement toward designing for disassembly, developing reverse logistical systems, and demanufacturing are strategies industry has used in response to the new incentives posed by EPR.
How has EPR Developed?
EPR was first initiated in Germany under its Packaging Ordinance of 1991. This, in effect, shifted responsibility for packaging waste, one-third of the municipal waste stream, from local government to private industry. The concept has been endorsed by the European Union (EU) and is being implemented in EU member countries for packaging and other products. The idea has subsequently spread around the world, including Asia, where Japan passed EPR legislation for packaging in 1995. The government of Japan has been funding studies to document EPR programs in the Organization of Economic Cooperation and Development (OECD). It has found 18 of the 25 OECD countries have EPR policies.
There is no "one size fits all" model for EPR programs. They vary by country and by the products being targeted. Germany shifted full responsibility for packaging waste to industry, whereas in Japan and France this responsibility is shared by government and private industry. There is great variation in the level of recycling mandates and in the definitions of recycling and "producer." EPR is most often applied to packaging, but it is also being employed for products such as end-of-life vehicles, electric and electronic goods, paints, batteries, and graphic papers.
EPR in the United States
There is no federal legislation in the U.S. on EPR. It was proposed for packaging as part of the Resource Conservation and Recovery Act (RCRA) reauthorization in 1992, but did not pass. There is, however, legislation at the state level which has driven the system recently launched by Nickel-Cadmium (Ni-Cd) battery manufacturers to take back and recycle these batteries at industry expense. Led by New Jersey and Minnesota, eight states mandated producer responsibility for Ni-Cds, which led the industry to institute a national take-back program. The manufacturers of Ni-Cds and the products that contain them have voluntarily set a recycling goal of 70 percent by 2001, up from 2 percent in 1993 and 15 percent in 1995. There are numerous cases of individual companies taking back their products at the end of their useful lives, such as Kodakís take-back and recycling of single-use cameras.
The Ni-Cd program is the first in the United States. involving an entire industry and thereby necessitating a third party to manage the program and the allocation of costs among the companies involved.
The Presidentís Council on Sustainable Development (PCSD)
President Clinton created the PCSD in 1993 to follow up the Rio Conference goals on sustainability. This high level multi-stakeholder Council operates by consensus and includes representatives from business, government, academia, and non-profit organizations. Its report, issued in February 1996, included a recommendation for EPR-- but the definition of EPR was considerably different from the one used abroad.
The PCSD defines EPR as "extended product responsibility," a practice "that considers the entire life of a product, from design to disposal, to identify strategic opportunities for resource conservation and pollution prevention." Implicit in this idea is that responsibility should be shared by all members in the product chain and not be imposed on the producers alone. By defining EPR as a lifecycle approach to products, the concept is broadened to include responsibility at all points in the lifecycle, not just at the end of a productís life when it becomes waste. This contrasts to the EPR definition abroad which is defined as extension of producer responsibility for products to the post-consumer stage. The PCSD also recommends that EPR be voluntary. Environmentalists have expressed concern about the broadened PCSD definition, arguing that if everyone is made responsible for everything, no one is responsible for anything.
The Presidentís Council chose EPR as one of the few recommendations for follow-up and held a workshop on EPR at the White House Conference Center in October 1996. The workshop was intended to showcase initiatives U.S. companies have already taken to implement EPR. The following are some of the highlights from the presentations at the workshop:
*Comprehensive lifecycle approach to products. "Asset management," a corporate-wide program at Xerox, has changed materials selection and product design. Xeroxís comprehensive program involves product take-back , reverse logistics, design for disassembly as well as reuse, remanufacturing, and recycling. The company has environmental guidelines for the preferred management of the products it takes back.
*Companies extending their responsibility to post-consumer products. Through a national take-back program for spent Ni-Cd batteries, launched by manufacturers of batteries and the products that contain them, industry is paying for collection and recycling. The program is operated by the Rechargeable Battery Recycling Corporation (RBRC), a non-profit company set up by industry. Another product take-back program is run by DuPont which is voluntarily taking back plastic (PET) films which the company chemically reprocesses into feedstock for new PET..
*Products as service or function. Interface Flooring is offering an option to lease carpeting and its servicing as an alternative to buying. The program provides incentives to make a more durable product and reduce waste. The company goal is closed-loop recycling for all carpeting at the end of its useful life. In a similar mode, some chemical suppliers are selling the service of keeping a plant clean rather than selling the actual chemicals which results in a reduction of the amount of chemicals used. In these leasing scenarios, companies are paid for servicing (keeping the plant clean or the offices carpeted) not for the amount of material goods sold, giving them an incentive to do more with less.
*New type of partnerships. General Motors, Ford and Chrysler have set up a "precompetetive consortium"-- the Vehicle Recycling Partnership (VRP.) The VRP invests in research and development to create improved product design, infrastructure and technologies for recycling and proper disposal of scrap vehicles. As a result of this work, mercury switches, a barrier to recycling, will be eliminated in all cars produced by the partners.
Even in the absence of a national policy, progress is being made on EPR in the United States. Many companies are beginning to focus on the post-consumer stage of their products which was not true as recently as five years ago. It remains to be seen whether the broadened definition of EPR, adopted by the PCSD, will lead to the significant changes and innovations by businesses that the PCSD report says are needed to achieve sustainability.