EPR: A Canadian perspective

Extended producer responsibility (EPR) and product stewardship are increasingly popular waste management strategies that use political means to hold producers liable for the costs of managing their products at the end of their lives.

Canada officially adopted an EPR strategy in 2009, when the Canadian Council of Ministers of the Environment (CCME) endorsed a Canada-Wide Action Plan for Extended Producer Responsibility. Some provinces already had existing stewardship programs in place, but this plan proposed to encourage a “harmonized action by federal and provincial authorities.” The plan includes a set of 13 guiding principles for the design and development of EPR policies and programs and outlines a schedule of products to be included in two phases: Phase 1 by 2015 and Phase 2 by 2017. Today, Canada has more than 70 different programs in place, covering 23 product categories.
 

Conditional support

The Canadian Association of Recycling Industries (CARI), on behalf of its members, developed its own policy on EPR and product stewardship. Because our members actually recycle products and materials subject to stewardship programs, it made sense to examine these programs. CARI decided to support stewardship but only when it is necessary and always subject to the following five conditions:

1. that the manufacturer and/or initial importer of the product be responsible for the end-of-life management costs;
2. that producers focus on designing products that minimize environmental impact and maximize material recovery;
3. that any resulting program be based on the private sector competitive process;
4. that the costs of the program not be listed separately but internalized as with any other cost; and
5. that any collection system be developed with input from the recycling and waste industries.
    

Unfortunately for our members, these conditions are not currently being met by Canadian EPR and stewardship programs.
 

Market disrupters

While the Canada-Wide Action Plan for Extended Producer Responsibility is a national strategy, the majority of Canadian EPR and stewardship programs are implemented and regulated at a provincial level. Some provinces have embraced the strategy more ardently than others. Each province has begun enforcing programs but at different times and with varying regulations. This lack of harmonization across provinces is harmful to competition. Applying regional standards to universal products puts some businesses at a disadvantage; recyclable material from one province easily can end up in the collection program of a neighboring province, which does not promote national and international competitiveness.

In some provinces, EPR programs have disrupted basic market competition. The existing electronics program in Ontario, for example, is a flow-control model. Winners are told what and how much they can manage under the program. Many companies go to the expense and time to qualify and have the ability to process material in the proper manner, but most end up having to compete against the three or four winners of the periodic bidding system at a cost disadvantage. As a result, some businesses have been forced out of the industry.

The CCME’s guiding principles state that stakeholders should be engaged in discussion of these programs and that the programs should be designed to maximize environmental benefits while minimizing economic repercussions. Unfortunately, provincial agencies often do not include the recycling industry as a key player in the dialogue around these programs. As a result, provinces have developed programs for materials that are already well-collected, such as ELVs (end-of-life vehicles).

Currently, British Columbia leads the field in Canada in existing and planned stewardship programs. By 2011, British Columbia had developed programs for more than two-thirds of the action plan’s designated product categories. The province is continuing to expand the variety of stewarded products beyond those listed in the action plan. Unfortunately, because the province’s existing waste audit proposals do not include all products, it has no way of knowing whether certain proposed product programs are unnecessary, nor does it have a reliable baseline to measure the success of its programs. White goods are a good example of a successfully collected and highly recycled product without a stewardship program, yet the province is determined to set one in place.

Original recycling companies have been successfully recycling many of these newly stewarded products in British Columbia for generations. They have invested huge sums of money in infrastructure and equipment at their facilities and engaged many generations in operating successful businesses. Developing another network of depots could drive some of these long-standing companies out of business.

Canadian recyclers believe that stewardship and EPR programs, which to date are essentially collection programs, require the input and expertise of the industries that actually manage such programs. Yet, almost every existing Canadian program has a group of stewards creating recovery systems with minimal input from the industries that currently design and operate such collection systems.

Before setting new programs in place, policymakers should initiate discussion between the existing recyclers, manufacturers, retailers and government. These multistakeholder discussions should first address whether a particular product is in need of a stewardship plan. If a plan is deemed necessary, the parties should determine what is being done well and what needs improvement: problematic or hazardous products entering recycling streams, issues with legislation and how to level the industry playing field.

Another of the CCME’s guiding principles is to devise a communication strategy to educate and inform all participants about the program, including consumers. These programs should educate the consumer about the economic and environmental benefits of recycling. Yet, increasingly, a number of provinces have begun making their stewardship programs visible to consumers through a point-of-purchase recycling fee, better known as an “eco-fee.”

Consumers see this point-of-purchase fee as a tax and become antagonistic toward recycling, believing it to be expensive and inefficient. End-of-life management is a cost of business, just like fuel, labor or material. If, as stated in the CCME’s guidelines, the intent of the communications strategy is to generate support and cooperation for EPR and stewardship programs, these fees should also show the costs of sending a product to disposal and replacing the material through primary resources.
 

Adjusting the focus

In the coming years, CCME expects every Canadian province to expand its EPR product categories, involve new industry sectors and increase program performance and impact on design for recycling and recyclability.

However, CARI and its members believe that for EPR and stewardship programs to be truly effective, they must shift their focus entirely from end-of-life management. A product’s recyclability does not depend on how it ends its life but rather on how it is designed and constructed. Rather than setting impracticable producer-pays regulations, governments and the public should be demanding that manufacturers design products and packaging for recycling.

The CCME’s guiding principles place particular emphasis on encouraging producers “to incorporate environmental considerations in the design of their products,” yet not one of Canada’s existing programs focuses primarily on the design of the product. Because existing EPR and stewardship programs consider collection programs equal to end-of-life management, a producer has no incentive to improve the design of its product. For example, the common research and development costs in Ontario’s electronics stewardship program go toward improvements to the collection program, not for product redesign. Providing or funding a collection system is a relatively cheap and easy way out for producers. What’s more, product improvements are not measured or reported as part of key performance measures.

In its 2012 review of the Canada-Wide EPR strategy, CCME recognized that “although the program aims to encourage environmental design, success has not been tracked so far.”

Although Canadian policymakers believe these end-of-life management programs encourage manufacturers to design for recycling, that is simply not the case. In fact, despite the CCME’s guidelines, many of Canada’s existing EPR and stewardship programs provide a disincentive for manufacturers to improve the design of their products. A program that directly or indirectly determines a producer’s financial contributions based on product sales is a disincentive to increase product sales. Any product improvement that increases its sales means that a forward-thinking producer will pay more into the program.

Designing for recycling includes designing for maximum material recovery, for ease of material recovery and for safe material recovery. It also involves selecting materials that are already recycled, thereby creating the market demand for recycled material, which is an essential and often overlooked part of the cycle. Unlike current EPR programs, the environmental benefits of designing for recycling extend beyond diversion from landfill. Because recycling lessens the need to deplete scarce raw materials, it requires less energy to produce and emits less carbon dioxide.

Rather than focusing on collection, EPR and stewardship programs should measure and record product design recyclability and reward those producers that make positive design changes. Although there are challenges to providing incentives to producers to redesign their products, it remains the primary way to minimize products going to landfill sites and to minimize a product’s environmental impact.

The current Canadian strategy for EPR is flawed, but CARI and its members believe EPR and stewardship programs could be valuable tools if they were properly focused. We would like to see programs that strive for commercial solutions to end-of-life management and that motivate producers to redesign their products to be less wasteful and more recyclable. If the relevant expertise were being applied in the appropriate areas, EPR could maximize the economic and environmental benefits of recycling.

The author is manager of communications and membership for the Canadian Association of Recycling Industries (CARI) in Ottawa, Ontario. Contact her at tracy@cari-acir.org.