feature
Is
Extended Producer Responsibility
Effective? Although its costs and benefits are hotly debated, use of this policy
tool is spreading rapidly. CAROLA HANISCH
1 7 0 A • APRIL 1, 2000 / ENVIRONMENTAL SCIENCE & TECHNOLOGY / NEWS
xtended producer responsibility (EPR)—a policy option requiring producers to be financially or physically responsible for their products after their useful life—is rapidly growing in popularity among European and some Asian countries. EPR requires that producers either take back spent products and manage them through reuse, recycling, or remanufacturing, or delegate this responsibility to a. third party, a so-called producer responsibility organization (PRO), which is paid by the producer for spent-product management. Some countries, such as the United States consider mandated EPR programs, as in Europe, too cosdy. Instead, they favor voluntary agreements among stakeholders. The idea underlying EPR is mat placing responsibility for waste management wim producers creates a strong incentive for them to redesign products with an aim toward less material use and improved recyclability. "Waste management produces external costs mat are not included in product prices. Take-back obligations create a valuable incentive for producers to start thinking about problems that they usually just leave for society to take care of," explains Gertrude LiibbeWolff, a professor of environmental law at the University of Bielefeld in Germany.
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© 2000 American Chemical Society
"Once companies realize that they are going to have to pay for waste management and recycling, they have an incentive to make less wasteful products and to design for recyclability by reducing the materials and parts used, particularly reducing the number of different plastics, labeling them, and designing fasteners for G3.SV
Disposed packaging is a large (and avoidable) component of the waste stream.
disassembly The German auto industry did this for its cars; Xerox has done this for its office machines; and Kodak has done this for its singleuse cameras which it takes back and recycles "We [are] see[inel some standard design changes heinp made for different rvnps nf prnHnrts " savs T
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based nonprofit environmental research organization. Yet despite some success, the concept of EPR remains controversial. Whether it is environmentally effective and economically efficient is a key question, and one that is hard to answer. "If individual manufacturers become responsible for collection, sorting, and recovery or disposal of their own products, mere will be a tendency toward a separate, parallel, or segregated waste management system. Those systems lose the benefits of economies of scale and synergies between different treatment options enjoyed by integrated systems [and] tend to be less efficient, both economically and environmentally," criticizes Jacques Fonteyne of the European Recovery and Recycling Organization (ERRA) in Brussels. ERRA, an association of international companies drawn from the packaging chain sector informs European Union (EU) institutions about packaging waste issues Among others its members include the Coca-Cola Company Elf Atochem Danone Group Heineken Nestle Pepsi Cola International Procter & Gamble' Tetra Pak and Unilever Corporation Process evolution EPR began in Germany in 1991 with the German Packaging Ordinance. The country was then facing a severe landfill shortage, with packaging waste amounting to a significant percentage—30% by weight and 50% by volume—of the nation's total municipal waste stream. Klaus Topfer, then Germany's environment minister, addressed the issue by making industry responsible for handling its packaging waste. Under the ordinance, producers of all kinds of packaged products are required to either individually take back their packaging or join the Duales System 1 7 2 A •
APRIL 1, 2000 / ENVIRONMENTAL SCIENCE & TECHNOLOGY / NEWS
Deutschland (DSD), an industry packaging waste management organization. For a fee, DSD licenses its green dot label to producers, who then are allowed to print it on their packaging—the green dot on packaging waste lets consumers know that they can use the DSD collection system. Green dot-labeled plastic, metal, and composites are collected in yellow bins or bags located at households; glass and paper are collected in separate bins or drop-off containers. Despite high costs and numerous start-up problems, the German EPR concept proved contagious and rapidly spread among other European countries, although generally, in a less stringent form. In the Netherlands, for instance, household plastic packaging is not separately collected. In France, producers share financial responsibility for waste management with municipalities. Only Austria adopted the German approach: collecting almost everything, combined with ambitious recycling quotas for household plastic packaging a requirement that can drive costs considerably Although a variety of EPR systems are in operation, there are underlying commonalities. All are strategically focused on the postconsumer phase of products and imply that producers have physical and/or financial responsibility for product waste management. All approaches also set target quotas for waste reduction and recycling, differing somewhat, for example, in what is considered recycling (mechanical and/or feedstock recycling and/or energy recovery). In 1994, the European Commission developed a packaging waste directive to achieve some harmonization among the different programs. The EU Packaging Directive aims to reduce packaging waste generation by 50% throughout Europe by 2001. By the same date, at least 25% of all packaging materials combined must be recycled, including a minimum of 15% for each type of material specified in the directive. A recent comparison of recycling targets achieved by EU member states (i) proves that reaching the recycling targets set out in the Packaging Directive is possible. The general target of 25% recycling has already been achieved by all the members states that were to comply with this target. Ireland, Portugal, and Greece are allowed to achieve the same targets at a later stage. Plastic is the only material for which, in several countries, the recycling rate is still below the rate set by the directive. The 15% recycling rate for plastic was exceeded only by Germany and Austria, although the Netherlands, Italy, Sweden, and Finland are not far from achieving this rate. In many countries, EPR now extends beyond packaging management to include electric and electronic devices, as well as automobiles. Sweden, for example, which initiated EPR with packaging waste requirements, now has EPR policies applicable to tires, magazine papers, and cars and is just completing legislation on electric and electronic goods (2). Elsewhere, Asian countries such as Japan, Taiwan, and Korea, and some South American countries, including Brazil and Peru, are also adopting EPR programs.
Quantifying benefits Despite EPR's growing popularity among legislators, its e n v i r o n m e n t a l effectiveness and economic efficiency are contested. As they are relatively new, there are few available data about most EPR programs. Moreover, some observers feel the programs are too complicated. "EPR [policy] on packaging has become too complex in Europe. Each country is doing its own thing, so the problem for importers is [that] sometimes it costs them more to calculate [applicable EPR program] fees [on imported goods] going into each country than it does for the actual fee. And each reporting requirement is different as well," criticizes Michele Raymond, publisher of Recycling Laws International, in College Park, MD. Germany, through its packaging ordinance, has had the longest experiences with EPR. The effects of the ordinance are reasonably well documented, and achievements can be assessed. Since introduction of the DSD in 1991, 30 million metric tons of packaging wastes have been recovered, amounting in 1998 alone to about 5.6 million metric tons. Between 1991 and 1998, the per capita consumption of packaging was reduced from 94.7 kg to 82 kg, a reduction of 13.4%. "We [are] consuming] less packaging with rising economic growth that means the goal of waste reduction has been achieved," says Hans-Peter Oels packaging expert of the German Federal Environment Agency in Berlin But these re~ ductions have been realized at significant costs: In 1998 DSD spent 3 9 billion DM ($2 02 billion) for waste management or 696 4 DM ($360 8) per ton of packacrint? waste "When you ask whether a nrogram is effective a lot of this is a judgment call You can say that the Packaging Ordinance and FPR nrogram in Cermanv has reduced parVacrincr anH increased rpcvrline" hut at a high price Now to say whether it is worth it?" asks Fishbein who has written a book on the German Packaging Orrli p In fact, the value of EPR programs is currently hotly debated. Costs are known, but environmental benefits are very hard to measure. Plastic recycling is the most disputed area because it is extremely expensive. In Germany, since January 1, 1999, at least 60% of all plastic packaging materials must be recycled—this amount is further broken out as at least 24% by feedstock recycling and 36% by mechanical recycling. "Feedstock recycling" means depolymerization of plastic packaging materials into refinery products that replace primary energy sources in industrial processes. The environmental benefit of different plastic recycling options is controversial. Is, for example, mechanical recycling superior to other options? A recent report (3) presented by the Fraunhofer Institut fur Verfahrenstechnik und Verpackungen in Freising, Germany, confirms that, when compared with feedstock recycling and energy recovery processes (see box at right) mechanical recycling, in some instances, has the potential to achieve considerably greater environmental savings. If recycled plastics— for example, from bottle recycling, film recycling, or
cable conduit production operations—replace use of virgin plastics material, savings are realized. However, in other instances, for example, if recycled plastics are used as concrete or wood substitutes, as in construction of palisades or fence bases, saving effects are in general considerably lower than in the case of feedstock recycling or energy recovery. A weakness of the report, however, is that it addresses the plastics recycling situation up to the end of 1995 and does not cover options that are available now, such as polyethylene terephthalate (PET) recycling and further physical separation of mixed plastic wastes.
Growth of EPR initiatives An EPR approach (6) slightly different from that of other European countries is pursued in the Netherlands. Since 1991, industry and government have agreed, in two covenants, to reduce packaging waste. Approximately 2000 companies voluntarily participated within the first covenant and collectively made demonstrable progress in recycling or preventing generation of packaging material. More than 225,000 companies are participants in the second covenant, which has been in place since 1997. A packaging waste reduction monitoring standard has been agreed upon that applies to at least 90% of all packaging materials produced and imported. "The main difference since 1997 is the change from being voluntary to being required," says Martin von Nieuwenhoven, secretary of the Packaging Committee in Utrecht, Netherlands. Companies not
Incineration or feedstock recycling? A recent study (4) performed by researchers at the Okoinstitut in Darmstadt, Germany, addresses whether environmental benefits gained from feedstock plastic recycling are worth the high attendant collection and sorting costs. Previous studies indicated that the environmental benefit of incineration is comparable to feedstock recycling and sparked a discussion about whether it would be more cost-effective to stop sorting and just incinerate plastic waste together with residual municipal waste. The Okoinstitut study used data from all waste incineration facilities in Germany, not just that from individual, particularly efficient units, as was the case in the previous studies. Results of the Okoinstitut study indicate that feedstock recycling is environmentally beneficial compared to incineration and that costs of both options are converging. Currently, collection, sorting, preparation, and feedstock recycling of one metric ton of dirty, mixed household plastic waste costs about 2100 DM ($1088.1), whereas incineration costs 1080 DM ($559.6). The study calculates that both costs will be around 800 DM ($414.5) in 2020. A critical factor influencing the price decline in feedstock recycling is installation of automatic sorting machines. Just recently, a new automatic sorting technology called S0RTEC 3.0 has been introduced in Hannover (5). This fully automatic sorting and recovery machine will be used to process the waste of the EXPO 2000 exposition in Hannover and is expected to reduce plastic recycling costs by half. More valuable recyclates can be gained as it is able to sort plastic by material
APRIL 1, 2000 / ENVIRONMENTAL SCIENCE & TECHNOLOGY / NEWS • 1 7 3 A
joining the covenant must comply with government regulations on waste reduction and recycling. But progress has been slow. An annual report (6) released in 1998 indicated that the quantity of packaging waste dumped in landfills or incinerated continues to grow. Although recycling of most other materials is successful, recycling of plastic packaging materials has scarcely improved in past years, and additional efforts will be required to reach the covenant's mechanical recycling obligations for plastics: 27% by 2001. In Sweden, an Environmental Protection Agency study (7) indicates that the total weight of packaging consumed was about 20% lower in 1998 than it was in 1991. The study sug"When you make gests that packaging recycling is environmentally efeverybody ficient a n d t h a t energy consumption and polluresponsible for tion caused by waste transport are of little relevance everything then in this context. According nobody is to the report "The energy gain from recycling is ofresponsible for ten so significant that it is advantageous in environanything." mental terms to t r a n s p o r t collected packagine lone distances for recvcline even as far as from the far —Bette Fishbein, Inform
Inc., New York City
n o r t h of *\wprfen d o w n to ttip» far Qmitri "
The Paris-based Organization for Economic Cooperation and Development (OECD) is also heavily engaged in EPR activity. After five years of study, OECD is about to complete a guidance manual for governments. "We are producing 12 billion tons of waste per year in the world—two tons per person—and it is increasing constantly. One of the challenges is to decouple waste and pollution production from gross domestic product growth and wealth generation. That is why we are trying to come up with a guidance manual on how to implement EPR programs. We feel that it certainly has some potential to resolve some of the waste issues" explains Jean Cinq-Mars head of OECD's Pollution Prevention and Control Division
Slow progress in the United States There is no comprehensive, federal EPR law in the United States, although states and cities have created recycling programs calling for specified percentage diversions of waste from the waste stream—there are about 9000 curbside recycling programs in the United States. To push recycling markets for plastics, California, for example, is trying to enforce its mandate on recycled content in rigid plastic containers. European-style EPR programs, although not yet popular in the United States, have been a recent topic of discussion. The reason for this is that municipalities are finding that they have to struggle hard to meet recycling targets and are concerned about the poor markets for the recyclables they do collect. 1 7 4 A • APRIL 1, 2000 / ENVIRONMENTAL SCIENCE & TECHNOLOGY / NEWS
"There is a gap between what buyers are willing to pay and what it costs [municipal] governments to collect and sort materials. Who is going to pay (cover the cost differential) of the gap? Europeans have figured that one out—just force it on the manufacturers," says Raymond. "But," she notes, "Europeans haven't solved the plastics problem. They haven't created new markets for mechanical [ly collected] recycled plastic." Municipal officials also express growing frustration over introduction into the marketplace of products that are not designed with recycling in mind, and as a result, increase the cost of existing curbside and drop-off recycling programs. Examples of such products include new short-life electronic devices or new packaging consisting of complex resin mixtures or hard-to-remove labels. A prominent example is the multilayer PET plastic beer bottle, which is of amber color, has an oxygen barrier layer made of nylon, and has aluminum caps and labels. Although there are reasons why municipal officials might press for EPR schemes, the availability of cheap landfill space presents a distinct disincentive against adopting such policies. In contrast to Europe, where landfill capacity is scarce, mere is no general American landfill crisis, although waste transport is becoming an important issue in some locales. New York City, for example, is closing its only landfill site, leading to concerns among other states about increasing waste transports into their territories. Arguably, such concerns might contribute to an increased interest to examine EPR approaches, but there is strong opposition against imposition of any state-mandated programs. Lynn Scarlett, policy analyst and executive director of the Reason Public Policy Institute in Los Angeles, is one who is critical of mandated EPR programs (8). "The main goal of environmental policy should be to reduce all impacts simultaneously rather than focusing on one aspect, such as the reduction of postconsumer waste. EPR is just one tool to achieve environmental improvement. One of the problems with many EPR programs is that sometimes people have confused the tool for the goal," she says. Fonteyne agrees: "The debate has been inappropriately centered on the idea that the aim of EU waste policy should be 'to maximize recycling*. We argue that the aim should be 'to minimize the environmental impact.'" When Scarlett looks at developments in the United States, she sees "other tilings emerging], such as industry design-for-recycling consortia and industry green purchasing guidelines that are being established to try to simultaneously achieve an entire array of environmental goals: toxics reduction, waste minimization, and air improvement. Let us encourage these tools to emerge, but let us not require them because you might end up slowing environmental progress rather than enhancing it." There is, in fact, a broad range of voluntary takeback programs in the United States. Companies currently participating in voluntary EPR programs include C o m p a q , 3M, Hewlett-Packard, Nortel, Frigidaire, and Xerox. Ford and Saturn—a subsidiary of CM—take back bumpers, and some carpet
companies, such as Interface Flooring Systems of LaGrange, GA, lease their products. "I think the most successful models will be models in which there is no government intervention— where people are doing the right thing without being told to do it," says Nabil Nasr, director of the National Center for Remanufacturing and Resource Recovery at Rochester Institute of Technology in New York. As an example, he cites voluntary take-back of toner cartridges. "A lot of manufacturers are realizing that there is a residual value in end-of-life products," he says. A very successful nationwide EPR model in the United States—one mat has not come about entirely voluntarily—involves take-back of nickel-cadmium rechargeable batteries. Some states had begun to prohibit sale of such batteries unless producers agreed to take them back. Producers, not wanting to deal with a multitude of varying legislation in different states, initiated a nationwide take-back system. At the federal level, at EPA, a broader definition of EPR has gained acceptance. Here, EPR stands for "Extended Product Responsibility". It is based on the principle that all actors along the product chain share responsibility for the life-cycle environmental impacts of the whole product system, including upstream impacts inherent in the selection of materials for products, impacts from manufacturers' production processes, and downstream impacts from use and disposal of products. Not everyone is satisfied with this U.S. definition of EPR. "I agree, we have to look at the whole life cycle of products. But, for example, if you buy a pen you have very little influence on how to design a pen that is nontoxic or recyclable. How often in your life have you contacted manufacturers to tell them to change the design of their pens? Nobody does that. So by having an extended producer responsibility, you are putting some pressure on producers to change their production designs. That is one of the reasons why EPR is interesting, says Cinq-Mars. Fishbein agrees: "When you make everybody responsible for everything then nobody is responsible for anything. That is the problem with the American definition of EPR, it is too broad and too general. Companies can call any environmental program they have EPR. The concept is fine as an overall umbrella concept, but then you have to [refine the concept] and ask who is responsible for the waste. But that, of course, is exactly what industry critics of EPR do not want to do—so they try to broaden it." Volrad Wollny, project leader at the Okoinstitut in Darmstadt, Germany, has a similar view. "There must be financial responsibility with producers all other kinds of responsibility will not work " he says.
EPR in the electronic age The merits of EPR might soon be tested in an emerging field of trade: e-commerce. One thing mat seems to be coming up on the radar screen is the potential impact of electronic commerce on EPR programs," says Cinq-Mars. "If people stop running to the store and start ordering their products at one of these small, new
companies through the Internet, you'll have more and more stuff being shipped in corrugated boxes, creating more packaging waste. Then you have the problem of how are these companies paying national packaging fees. How do you collect them? How do you determine what is a commercial product that is sent to a customer and what is not?" says Raymond "Particularly if you look at e-commerce and the Internet, many new products are coming out on the market, [for example] new electronic products, cell phones, palm pilots—and they become obsolete in a few months. It is critical to Although a small fraction of the waste stream, have some kind of pro- disposed batteries introduce significant quanducer responsibility there tities of heavy metals to the environment. for [their] end-of-life, or local government is going to be totally overwhelmed with all these products comine into t h e waste stream fiust] they starting to set overwhelmed by computers now Over 20 million Dersonal computers are being discarded each year creating a big problem E-commerce is the wave It is an ideal time to h n i l r l in "FPR p r o because it is all ne>\\r" sa\rc F i c h h i a i n
References (1) Report from the Commission to the Council and the European Parliament, Interim Report according to Article 6.3 (a) ofDirective 94/62/EC on packaging and packaging waste; Rep. 596, 19.11.99; COM, European Commission: Brussels, Belgium, 1999. (2) Electric and Electronic Waste—Coming Regulation in Sweden. www.environ.se (accessed Jan. 2000), press release of Sept. 23, 1999. (3) Heyde, M.; Kremer, M. Recycling and Recovery of Plastics from Packaging in Domestic Waste—An LCA-Type Analysis of Different Strategies; Fraunhofer Institut fur Verfahrenstechnik und Verpackung, Eco-Informa Press: Bayreuth, Germany, 1999. (4) Dehoust, G.; Wenem, P; Fritsche, U.; Wollny, V. Vergleich der rohstofflichen und energetischen Verwertung von Verpackungskunststoffen; Okoinstitut: Darmstadt/Essen, Germany, Nov. 1999 (5) SORTEChnology 3.0, Duales System Deutschland AG; SYSTEC: Koln, Germany, Nov. 1999. www.gruener-punkt. de (accessed Ian. 2000). (6) Annual Report 1998, Packaging Committee, Oct. 1999, Utrecht, www.minvrom.nl/environment/packaging/ (accessed Jan. 2000). (7) Producentansvar for fbrpackningar—For miljbns skull (summary and conclusion in English); Rep. 4983; Swedish Environmental Protection Agency: Stockholm, 1998. (8) Scarlett, L. Product Take-Back Systems Mandates Reconsidered; Policy Study Number 153; Center for the Study of American Business: St. Louis, MO, Oct. 1999. Carola Hanisch is a freelanee writer based in Freiburg, Germany. APRIL 1, 2000 / ENVIRONMENTAL SCIENCE & TECHNOLOGY / NEWS • 1 7 5 A
