Guidance on Extended Producer Responsibility (EPR) Analysis of EPR schemes in the EU and development of guiding principles for their functioning

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1 (EPR) Analysis of in the EU and development of guiding principles for their functioning In association with: ACR+ SITA LUNCH DEBATE 25 September 2014

2 Content 1. Objectives and 2. General overview of in the EU 3. by 2

3 3

4 Objectives DESCRIBE, COMPARE AND ANALYSE DIFFERENT 1 TYPES OF EPR SYSTEMS OPERATING IN THE EU IDENTIFY 2 IDENTIFY NECESSARY CONDITIONS AND BEST NECESSARY CONDITIONS AND PRACTICES FOR THE FUNCTIONNING OF EPR BEST PRACTICES FOR THE FUNCTIONNING SYSTEMS OF EPR SYSTEMS 3 PROPOSE PROPOSE AND ASSESS OPTIONS TO PROMOTE AND ASSESS OPTIONS TO PROMOTE AN OPTIMAL AN OPTIMAL USE USE OF OF EPR SYSTEMS ACROSS SYSTEMS THE EUACROSS THE EU 4

PRACTICES FOR THE FUNCTIONNING SYSTEMS OF EPR SYSTEMS 3 PROPOSE PROPOSE AND ASSESS OPTIONS TO PROMOTE AND

5 A 5 step, supported by a continuous stakeholder consultation Panorama of EPR schemes in EU-28 Selection of waste streams and case studies In-depth analysis of 36 case studies Exploration of main issues Guiding principles Preliminary interviews Consultation on the selection Individual interviews, data collection and review of the case studies Stakeholder workshop (100 participants) Written consultation (over 50 responses) 5

principles Preliminary interviews Consultation on the selection Individual interviews, data collection and

6 Panorama of EPR schemes in EU-28 Selection of waste streams and case studies In-depth analysis of 36 case studies Exploration of main issues Guiding principles 1. Four main issues identified Share of responsibilities between stakeholders and true cost principle Fair competition Transparency and surveillance 2. Each issue was addressed following a similar Issues under consideration Empirical assessments from the sample benchmark Taking the stakeholders expertise into account Concluding remarks Towards possible guiding principles 3. Eight guiding principles were formulated 6

Four main issues identified Share of responsibilities between stakeholders and true cost principle Fair competition Transparency and

7 General overview of in the EU 7

8 EPR in the European Union Extended Producer Responsibility: a widely used environmental policy Around 200 in the EU Three directives introducing EPR: WEEE, ELV, B&A Widely used for packaging and tyres But also: graphic paper, oil, medicine, agricultural foil and packaging, textile, furniture, hazardous products, refrigerants, etc with a large variety of implementation models Obligations often exerted collectively, through Producer Responsibility Organisations (PROs) Differences in the type of responsibility, cost coverage, implementation procedures, reporting, etc. 8

textile, furniture, hazardous products, refrigerants, etc with a large variety of implementation models Obligations often exerted collectively,

9 Performance of Analysing performance of : a lack of evidence to identify the best organisation Severe lack of comparable information available: lack of transparency on economic indicators, non aligned methods for reporting technical performance Great discrepancies in performance indicators at the EU-28 level Many aspects, independent from EPR organisation, interfere with technical and economic performance: population density, historical development of waste collection and treatment infrastructure, awareness and willingness of the public to participate, complementary economic or fiscal tools 9

EU-28 level Many aspects, independent from EPR organisation, interfere with technical and economic performance: population density, historical

10 by EPR schemes CSI Audit - Our Offer

11 Allocation of responsibilities among stakeholders Four main systems 11

authorities C&I: professional waste generators CONTRACT Waste WASTE

12 Allocation of responsibilities among stakeholders SIMPLE FINANCIAL RESPONSIBILITY PRODUCERS/IMPORTERS PROs WASTE HOLDERS HH: local authorities C&I: professional waste generators CONTRACT Waste WASTE MANAGEMENT OPERATORS Collection Sorting / Treatment Secondary materials INDUSTRY 12

Allocation of responsibilities among stakeholders Main issues and guidance FULL ORGANISATIONAL RESPONSIBILITY PRODUCERS/IMPORTERS PROs WASTE HOLDERS

13 Allocation of responsibilities among stakeholders Main issues and guidance FULL ORGANISATIONAL RESPONSIBILITY PRODUCERS/IMPORTERS PROs WASTE HOLDERS HH: local authorities C&I: professional waste generators Waste WASTE MANAGEMENT OPERATORS Collection Sorting / Treatment Secondary materials INDUSTRY 13

HH: local authorities C&I: professional waste generators Waste WASTE

14 Cost Coverage Most cover (partly or fully) the net costs for the management of waste that has been collected separately, as well as administrative, reporting and communication costs relative to the operation of collective schemes In most cases for battery waste, the financial responsibility assumed by battery producers covers 100% of collection and treatment costs. In five packaging schemes studied, 100% of net costs for separately collected waste are covered (except for France and UK) For WEEE, PROs cover 100% of transportation (pick-up from public amenity centres) and treatment costs. However only in three out of seven cases, PROs also cover 100% of the collection costs, through reimbursement to local public authorities. 14

15 When costs covered do not fall within the operational responsibility of producers, a standard, or reference cost, is used to estimate the amounts to be covered, and to determine how much producers should contribute either by: Reimbursing local authorities - A reference cost is used by the Belgian PRO for portable batteries to reimburse local public authorities, based on a reference civic amenity site and by the Belgian EPR scheme for oils, where the reference formula takes into account average costs. - In some cases, the reference costs are related to optimised net costs. This is illustrated through France s packaging EPR scheme, where the reference costs are evaluated based on an optimal functioning of the collection and sorting operations. Financial incentives - In the UK, where producers comply by buying Packaging Recovery Notes (PRN) from recyclers, it is estimated that the producer fee covers only 10% of the total cost of the system CSI Audit - Our Offer

amenity site and by the Belgian EPR scheme for oils, where the reference formula takes into account average costs. - In some cases, the reference costs are related to optimised net costs.

16 Some may cover: Costs for non-separately collected waste Costs for public information and awareness raising Costs related to waste prevention actions Costs for litter prevention and management Costs related to the enforcement and surveillance of the EPR system Examples: In France, only 75% of collection and treatment costs are covered, however, these include non-separately collected packaging waste remaining in the residual fraction. In Portugal, 5% of the PRO s budget must be dedicated to communication and awareness raising activities and 3% to research and development. In Austria, PROs have to use 3 of their annual income to support waste prevention projects CSI Audit - Our Offer

$however, these include non-separately collected packaging waste remaining in the residual fraction.$

17 : towards guiding principles Objectives and Main issues and guidance Guiding principle #3: The design and implementation of an EPR scheme should at least ensure the coverage of the full net costs related to the separate collection and treatment of the end-of-life products. EPR scheme should cover the following net costs related to the end of life of products: Costs for establishing a separate waste collection system Collection, transport and treatment costs for separately collected waste Administrative costs, i.e. costs linked to the running of PROs Costs for public communication and awareness-raising (on waste prevention, litter reduction, separate collection, etc.) as long as producers have a say in their design and implementation Costs for the appropriate surveillance of the system (including auditing and measures against free riders Subtract revenues from recycled material sales. 17

EPR scheme should cover the following net costs related to the end of life of products: Costs for establishing a separate waste collection system Collection, transport and treatment costs for

18 Contacts Mathieu Hestin Director Circular Economy and Waste Management Manuela Gheoldus Consultant Circular Economy and Waste Management 18

19 Deloitte fait référence à un ou plusieurs cabinets membres de Deloitte Touche Tohmatsu Limited, société de droit anglais («private company limited by guarantee»), et à son réseau de cabinets membres constitués en entités indépendantes et juridiquement distinctes. Pour en savoir plus sur la structure légale de Deloitte Touche Tohmatsu Limited et de ses cabinets membres, consulter En France, Deloitte SA est le cabinet membre de Deloitte Touche Tohmatsu Limited, et les services professionnels sont rendus par ses filiales et ses affiliés. Deloitte fournit des services professionnels dans les domaines de l audit, de la fiscalité, du consulting et du financial advisory, à ses clients des secteurs public ou privé, de toutes tailles et de toutes activités. Fort d un réseau de firmes membres dans plus de 150 pays, Deloitte allie des compétences de niveau international à des expertises locales pointues, afin d accompagner ses clients dans leur développement partout où ils opèrent. Nos professionnels sont animés par un objectif commun, faire de Deloitte la référence en matière d excellence de service. En France, Deloitte mobilise un ensemble de compétences diversifiées pour répondre aux enjeux de ses clients, de toutes tailles et de tous secteurs des grandes entreprises multinationales aux microentreprises locales, en passant par les entreprises moyennes. Fort de l expertise de ses collaborateurs et associés, Deloitte en France est un acteur de référence en audit et risk services, consulting, financial advisory, juridique & fiscal et expertise comptable, dans le cadre d une offre pluridisciplinaire et de principes d action en phase avec les exigences de notre environnement.. Member of Deloitte Touche Tohmatsu Limited

com/about. En France, Deloitte SA est le cabinet membre de Deloitte Touche Tohmatsu Limited, et les services professionnels sont rendus par ses filiales et ses affiliés.

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