CGF Members Publish New Guidelines for Ecomodulation of Extended Producer Responsibility Fees

This publication is an addendum to the paper “Building a Circular Economy for Packaging: View from the Consumer Goods Industry on Optimal Extended Producer Responsibility” first published in August 2020 by the Coalition, which provides a shared perspective of the endorsing companies on the guiding principles and key design parameters of optimal EPR programmes. Building on this, the paper released today aims to provide clarity on the meaning of ecomodulation as an EPR fee setting mechanism and outlines the guiding principles and six key design parameters of optimal ecomodulation systems, which include simplicity, clarity of objectives and criteria, focus on net cost, investment into the system, transparency and consultation and harmonisation.  

Twenty-five Coalition members have endorsed the paper, demonstrating that they recognise the importance of clear and fair financial incentives that guide packaging design suitable for a circular economy, such as encouraging a switch from non-recyclable to recyclable packaging materials.

Effective EPR systems have a critical role to play in sustainably financing and accelerating progress towards reduced packaging waste and increased recycling rates. Ecomodulation is a form of fee-setting that includes environmental considerations and policy objectives. Ecomodulated fees are those that take into account the environmental impact of each type of packaging material, as well as the net cost associated with its collection, sorting and recycling. When well-designed, it is an important mechanism for incentivising the design of sustainable packaging. EPR fees should be set according to the principle that each material type should “pay its own way” and that EPR systems should operate on a net cost basis, meaning the EPR fees should reflect the revenue that is generated by the sale of materials for reprocessing.

Ignacio Gavilan, Director, Environmental Sustainability, The Consumer Goods Forum said, “Improving the performance of waste management and recycling systems is an important part of creating a world where no packaging ends up in nature. This requires new thinking, collaboration and financing. Both papers highlight the commitment of our Plastic Waste Coalition to deliver constructive and harmonised recommendations for optimal EPR systems in markets where our members operate. Our focus now, with the support of Coalition members, will be on implementing these frameworks through programmes in local markets”.

The Plastic Waste Coalition of Action was launched in 2020 and brings together consumer goods companies to collectively take action towards realising a circular economy through rethinking and redesigning the life of plastic packaging in the consumer goods industry. The Coalition set out its vision of progress embodied in four main priorities: packaging redesign, developing a framework for optimal Extended Producer Responsibility (EPR) programmes, encouraging recycling innovation, and piloting new programmes in advanced and transitional markets to increase recycling rates.

For more details on the CGF’s work to accelerate progress towards a circular economy, including Extended Producer Responsibility (EPR) for packaging visit www.tcgfplasticwaste.com.