Download - 1.7 C Vanderstricht, a practitioner's view
Global Forum on Environment: Promoting Sustainable Materials Management through Extended Producer Responsibility (EPR)
Tokyo, 17 – 19 June 2014
Christoph Vanderstricht
Global EPR leader
Partner EY
Presentation title
Key learnings of 20 years experience advising public and private sector in the design, implementation and optimisation of EPR regulations and models across the world.
Page 2 Presentation title
Agenda
1. Introduction
2. Misconceptions
3. Differences
4. Similarities
5. Conclusions
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1. Introduction: Our EPR experience
Since 1994, the current EY team has been involved in more than 40 countries in the design, development, implementation and optimisation of EPR and other solid waste management regulations and operational solutions for the public as private sector in a vast waiver of product categories: household and industrial packaging; batteries; electronic waste; tyres; non-woven cotton; solar panels, lamps, etc.
(See countries in yellow for geographical experience)
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1. Introduction: The future of resource management
There is wide recognition that, at a global level, current waste growth and resource management practices are unsustainable. Key to develop a circular economy rather than a linear economy which involves simply digging materials out of the ground produce products, and send the waste to landfills.
Demographic growth
Consumption patterns
Urbanisation
Economic growth
Low waste management infrastructure
Public health
Energy demand
Public financing
Central government
Producers
Waste managementtechnologies
Product innovation
► Government must create the economic and legislative conditions for change
► Integrated waste management strategy and system design to reinforce the waste hierarchy
► Implementation of capacity building at municipal/city authority level
► EPR principles to place the cost burden on the producers and drive market development. Creating circular economies
► Increasing use of outsourcing, performance based contracting and PPP/BOT commercial structures to manage the municipal financial burden, drive change and manage technology risks
► Increasing use of multi-stream collection systems to manage public health risks and provide material to the treatment system
► Investment in engineered landfills, waste to energy/gasification and anaerobic digestion as well as intangible factors such as education and awareness
► Economies of scale, increasing capital intensity, technology focus drive joint ventures and M&A activity in the supply chain
How to react to the pressures of change
Municipal authorities
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1. Introduction: Drivers for a government to implement EPR regulations
Extended Producer
Responsibility
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2. Misconceptions about EPR
► EPR is an instrument to better organise waste management operations and induce product stewardship: collection points; transportation models and the use of valorisation technologies
► EPR only concerns the Ministry of Environment
► EPR laws can be easily copied from one country to the other
► Small and medium enterprises should not be bothered by EPR
► The phantom of the monopoly
► Inefficiencies and fraud with collective schemes show that the model is not working.
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The most important component of the cost is the cost of collection of the waste, followed by the cost of recycling (depending on the product). In makets with high bying power the prices for are 3 times lower than in markets with low buying power (ie where more collective schemes are “competing”)
2. The phantom of the monopoly in a reversed marketBuyer Market versus Seller Market
High supplier power
High buyer power
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The cooperation between the private and public sector is key to design and implement a sustainable EPR regulation.
There are different partnership models for public-private cooperation:
Experience shows that in most case close cooperation between government and
private sector is necessary to realise the objectives and avoid dramatic risks in the
market.
Industry-government
co-regulation (of industry self regulation
combination and government regulation, with government
having the authority to enforce)
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Voluntary agreements
established by industry
Voluntary agreements as a
partnership between industry and government (participation of individual
firms not obligatory)
Regulation established and
enforced by government
Voluntary Mandatory
3. Differences: Governance models for EPR development
Page 9 Presentation title
3. Differences for EPR: Why countries are different
Prioritised
Product
Strength of
government
(enforcement)
Regulatory and
constitutional
context
Culture
Available collectio
n and transport
ation Infrastru
cture
Page 1010
Central collection site
Low-density collection
points
High-density collection points (close-to-home
drop-off)
Street-sideContainers
Kerbside or Door-to-Door Collection
BRING SYSTEMS
DOOR-TO-DOOR
Transport by residents / corporations
Collection System Transport
Durable goods Fast moving consumer goods
3. Differences for EPR: Products are different
Collection models depend on the product, the economic activity and the demographic specifications.
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4. Similarities for EPR: Why “countries” do have similarities
Improper EPR and solid waste management are a threat to public health and the environment
Effective EPR models create value and opportunities for social inclusion, jobs and better environment
Human action & Change of behaviour
Expectations of the key stakeholders
Strong enforcement and control from government is key
Seller markets lead to higher prices and buyer markets to lower prices
EPR is increasingly becoming the Wild West creating risks for countries and “producers”
The devil is in the detail
“Wrong” or “sub-optimal” EPR models lead to higher costs for society, governments and has strong negative impacts in terms of level playing field in the product markets.
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5. Conclusions
► EPR is an economic instrument impacting the whole market: the product market as well as the waste market
► EPR is not only about the environment and therefore requires attention from different ministries (Finance / Trade / Customs / Economy)
► EPR risks should not be underestimated► EPR requires proper consideration and careful implementation by
governments and private sector► EPR requires strong government enforcement and control ► EPR can contribute considerably in the development of an inclusive and
greener sustainable market in big number of countries► EPR should be implemented as part of an integrated strategic approach
by governments, taking into account other challenges (eg energy
needs / resource management)
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More information
Christoph Vanderstricht,
[email protected]: +56985508312 (Chile)
Tel: +32477619252 (Belgium)
Thank you
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Additional slides (use during the workshops?)
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Sustainable resource management
► Sustainable resource management is a strategic challenge today and tomorrow for all countries across the world.
► It is a key theme for industries and the public sector alike.
► There are several key economic (regulatory) instruments which are broadly used/in development in OECD (also in increasing number of non-OECD countries):► ADF (advance disposal fees)► Landfill/recovery/incineration — taxes tipping fees► Tradeable (landfill) permits► Recycling credits or rebates► Virgin material and ecotaxes ► Extended producer responsibility (EPR)
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Sustainable resource management
► EPR is the instrument which comes closest to implementing the whole life cycle approach
► EPR helps in:► Reducing by the amount resources required► Diminishing the associated environmental impacts ► Improving resource scarcity and competiveness► Driving the cost down
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Producers
Distributors
Waste collectors and transporters
EPR scheme
End-users
Waste recyclers
Government (central and local)
No costNo hassle
Price Communication Easy collectionNo cost for disposal
Compliance (no fines / penalties)Control / Sustainable solutionCost efficiency
Municipal collection points
Commercial collection points
Professional collection points
Increase profitCompetitive marketSolid growth of the marketLong term contracts
ComplianceNo additional costAdditional financing
- Minimize or externalise internal cost- Employment - Revenue
Introduction to the world of EPR- stakeholders -
Informal collection
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EPR
Other Environmental
regulations
Commercial codes
Competition laws
Accounting rules
Administrative law
Contact law
Company law
Tax law
EPR regulation is not "stand-alone"
Introduction to the world of EPR- legal & regulatory -
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Producers
Distributors
Waste collectors and transporters
Financing scheme
End-users
Waste recyclers
Government
Participation agreement
Municipal collection points
Commercial collection points
Professional collection points Public markets
Service level agreementJoint awareness campaign
Joint Awareness campaign
Accreditation Service level agreement
Cooperation agreementService level agreementJoint awareness campaign
Introduction to the world of EPR- legal & regulatory -
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Introduction to the world of EPR- finance & control -
► Depending on the legal, political, social, economic, demographic and geographic situation in a country, several models are conceivable to fulfil the financial side of the EPR obligations in that country.
► Three generic models can be considered: ► Public financing instruments (tax or similar contribution)► Market driven instruments :
► Deposit - refund schemes► Individual and/or collective financing schemes► Certificate exchange schemes
► Combination of public financing instruments and market tools
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Introduction to the world of EPR- scenarios -
Legal and regulatory scenarios
Finance and control scenarios
Information flow and reporting scenarios
Operations and infrastructure
scenarios
Stakeholder commitment scenarios
Governance scenarios
The optimal scenario for a country
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Introduction to the world of EPR- finance & control -
► Depending on the legal, political, social, economic, demographic and geographic situation in a country, several models are conceivable to fulfil the financial side of the EPR obligations in that country.
► Three generic models can be considered: ► Public financing instruments (tax or similar contribution)► Market driven instruments :
► Deposit - refund schemes► Individual and/or collective financing schemes► Certificate exchange schemes
► Combination of public financing instruments and market tools
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Introduction to the world of EPR- finance & control -
Producers
Distributors
Waste collectors and transporters
Financing scheme
End-users
Waste recyclers
Government
Price +contribution
Price +contribution
Contribution
Municipal collection points
Commercial collection points
Professional collection points
Servicefees
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Introduction to the world of EPR- operations & infrastructure -
Producers
Distributors
Waste collectors and transporters
Financing scheme
End-users
Waste recyclers
Government
Municipal collection points
Commercial collection points
Professional collection points
•Business plan •Geograhical coverage •Technology deployed•Containers
•Quality standards •EH&S standards •BAT •Target setting
•Transportation models•Quality standards •EH&S standards •BAT •Target setting •Compliance with regulations
•Containers•Quality standards •EH&S standards •Target setting •Compliance with regulations •Training and communication
Practical information FAQ
Disposal (sorting at the source)
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Introduction to the world of EPR- information flows -
Producers
Distributors
Waste collectors and transporters
Financing scheme
End-users
Waste recyclers
Government
Public awarenessPractical guidance on disposal of the wasteFAQ
Put on the market (PoM) data
Municipal collection points
Commercial collection points
Professional collection points
SLA reporting Collection "certificates" (weight / units)
SLA reporting Recycling "certificates" (weight / units)
Product labelling / markingProduct information on safeDisposal manuals
Financial auditorverification report on PoM
Financial auditor
Audit report on collection and recycling
Periodic reporting Position papers