FEAD’s key messages for a solid EPR framework

FEAD considers that discussions around Extended Producer Responsibility (EPR) are too producer-centred[1], focusing primarily on compliance costs and administrative burden. These aspects matter for Europe’s competitiveness, but they are only part of the picture. The rapid expansion of EPR schemes across Europe, often under different governance models, has also raised significant concerns for waste management operators regarding market distortion, lack of transparency and reduced competition.

EPR schemes must remain a policy tool to address clearly identified market failures, not an objective in themselves. Their performance should therefore be assessed primarily against the environmental and market objectives they were created to achieve. Well-designed schemes should support waste management systems in line with the waste hierarchy, reward performance in terms of quality, efficiency and circularity, and preserve competitive waste markets.

When properly designed and implemented, EPR can drive eco-design, finance sustainable waste management and boost recycling. The Circular Economy Act (CEA) must establish a robust and competition-friendly framework to ensure that EPR schemes deliver on these objectives.

FEAD’s key recommendations for the CEA:

1. EPR as a market driver

The CEA should establish that eco-design and the environmental performance of products placed on the market are core objectives of EPR schemes, complementing existing and future product legislation.

Mandatory eco-modulation should reward better-performing products through lower fees for, for example, materials that are free from substances of concern, homogeneous, durable and easily recyclable. EPR fee modulation should also reward recycled content, including targeted incentives or bonuses for European recycled content (EU + UK + EFTA), to help address market failures and the price disadvantage of recycled materials compared with virgin alternatives.

2. Full and effective cost coverage

In line with the polluter-pays principle, producers should be financially responsible for the full costs generated by the products they place on the market once they become waste.

Cost coverage should therefore go beyond the financing necessary to meet numerical collection or recycling targets. It should also cover waste that is not collected through formal systems, waste entering informal channels and environmental or operational externalities associated with the product, including battery-fire risks.

As part of this, EPR financing must also cover the treatment of recycling residues and the costs of decontamination where substances of concern or substances of very high concern, such as PFAS, are present. This is necessary both to enable compliance of recycled materials with REACH requirements and to ensure that waste treatment operators can comply with applicable emissions legislation.

3. Transparent governance, oversight and tendering.

The CEA should establish a strong framework for transparency, accountability and independent oversight of EPR schemes, including effective sanctions for non-compliant Producer Responsibility Organisations (PROs) and mechanisms to identify and penalise free-riding.

National independent advisory and monitoring bodies should, in particular:

• Ensure environmental and economic performance of EPR schemes;
• Advise on fee structures and eco-modulation criteria;
• Ensure that PROs operate transparently and in the public interest;
• Strengthen eco-design incentives through fee modulation;
• Support investment in local collection, sorting and recycling capacity.

Waste management and recycling operators should be represented in these oversight bodies and contribute to their work.

EPR-related waste management services should also be awarded through open, transparent and competitive tendering, ensuring genuine market access for waste management operators. EPR schemes should additionally publish regular and sufficiently disaggregated data on products placed on the market, collection, sorting, recycling and final treatment.

4. EPR must preserve competitive waste markets.

One option is to prioritise financial EPR models, under which producers finance the system without themselves regulating and operating waste management activities. This approach better preserves competition between waste management companies on service quality, efficiency and environmental performance.

At a minimum, PROs must be prevented from abusing their position: reserves accumulated under EPR schemes and commercially sensitive information obtained from waste management operators should not be used to enter or dominate the same waste management markets, as already occurred in some Member States.

The CEA should therefore establish safeguards against conflicts of interest, including appropriate limits on accumulated reserves and clear rules on the use of market information.

5. Digitalisation must be kept purposeful.

Any simplification or digitalisation initiatives must always serve the very purpose of EPR scheme, not reduce them to a price-comparison exercise. Producers should not be encouraged to select PROs solely on the basis of the lowest fee. Competition based only on price, without sufficient consideration of service quality and environmental performance, risks creating a race to the bottom in producer contributions and ultimately undermining the capacity of PROs to finance proper waste management.

Digital platforms or registries should therefore provide transparent information on the performance, services and compliance of PROs, rather than simply presenting comparative fee levels.

[1] See for example at the CEA stakeholder workshop on 30 April.

FEAD, the European Waste Management Association, represents the entire waste management value chain, from collection and sorting to recycling, energy recovery, and final disposal. It brings together the private waste and resource management industry across Europe through its 21 national member associations and associate members, which collectively represent over 3,000 companies. Together, the sector provides more than 500,000 local jobs and fuels €5 billion in investments into the economy every year. For more information, please contact: info@fead.be