Designing Extended Producer Responsibility to deliver on EU’s competitiveness and strategic autonomy agenda
Extended Producer Responsibility (EPR) is a policy principle established over 30 years ago to make producers accountable for the entire lifecycle of the products they place on the market. However, when this principle was incorporated into EU policy, its original lifecycle perspective was largely lost, with the focus shifting primarily to the end of life stage of products. Since then, EPR has evolved to become the second largest source of funding for waste collection and recycling in Europe, surpassed only by taxpayer contributions.
After decades of implementation, Extended Producer Responsibility (EPR) systems across Europe stand at a crossroads. In our latest research, we examine both the successes and shortcomings of EPR in the EU and explore its untapped potential. This analysis is especially timely given the new context of declining competitiveness and the renewed emphasis on strategic autonomy as a key priority for the EU.
The EPR Paradox
Since the 1990s, Extended Producer Responsibility (EPR) has been a cornerstone of European waste policy. The core principle is simple and sound: producers should bear responsibility for the waste their products generate. But after three decades and billions of euros invested, what has actually been achieved?
Our research reveals what we call the “EPR paradox” — when systems originally intended to manage waste end up becoming institutional barriers to more circular and sustainable approaches.
Consider this: despite widespread EPR implementation, packaging waste has increased by 20 percent per capita over the past two decades.
Other waste streams covered by EPR, such as waste electrical and electronic equipment (WEEE) and lightweight batteries, have seen waste generation rise faster than collection or recycling rates.
EPR fees typically account for less than 2 percent of product costs, and in some cases as little as 0.1 percent. This provides little incentive for producers to improve product design for reuse, repair, or recyclability.
Despite the widespread roll-out of EPR systems, full cost coverage remains rare. In most cases, producers cover less than 50 percent of the costs associated with the products they place on the market.
In Barcelona, most lightweight packaging is sorted from mixed waste, while EPR only covers the costs of separate collection. As a result, taxpayers end up funding expenses that should be the responsibility of producers.
More broadly, the implementation of EPR has coincided with a significant decline in reuse systems and repair infrastructure, undermining more circular and sustainable waste solutions.
The uncomfortable truth? EPR systems have become remarkably useful at financing and organising waste management but remarkably ineffective at preventing it from being generated in the first place.
To be fair, EPR was never explicitly designed to reduce waste generation or to promote reuse and repair. Instead, it focused on setting rules, targets, and funding mechanisms for waste management. Meanwhile, prevention, reuse, and repair were left to market forces, without legal mandates or financial support to drive them.
The result is a system that manages waste better, but generates more of it than ever before.
From waste management to resource strategy
The global context has changed significantly since EPR was first introduced. Recent supply chain disruptions, energy security concerns, and the rising demand for critical raw materials driven by electrification and digital technologies have exposed the EU’s growing resource vulnerability.
This is where EPR takes on new strategic relevance. Our analysis shows that the EU has the potential to recover more critical raw materials from waste streams than from its own mines. This reframes EPR not only as an environmental policy, but also as a powerful tool for strengthening resource security.
However, to unlock this potential, EPR must move beyond its current limitations and evolve to support a more circular, resilient economy. That’s why our study proposes a comprehensive framework to address current limitations and unlock EPR’s full contribution to EU competitiveness and strategic autonomy: a two-pillar framework for transformation.
Pillar 1: system optimisation
The current fragmentation of EPR across 27 national systems creates administrative burdens, enables free-riding, and undermines the potential of the European single market. We propose the following:
- Harmonised EU EPR principles
Standardise definitions, calculation methodologies, reporting requirements, and enforcement mechanisms to ensure consistency and transparency. - European EPR advisory and monitoring body
Establish a dedicated entity to reduce administrative burden, support compliance, offer policy guidance, and channel investment into circular infrastructure. This body could be financed with less than 0.5 percent of existing EPR fees. The benefits would far outweigh the costs by creating economies of scale across the EU.
Pillar 2: from cost coverage to circular economy enabler
EPR must evolve from a waste management tool into a catalyst for material efficiency and reduced reliance on virgin material imports. This shift requires:
- Expanding EPR to finance prevention, reuse, and repair
Develop repair funds that make repair cheaper than replacement and mandate EPR schemes to invest in reuse infrastructure. - Complementary policy measures
Introduce material reduction targets aligned with climate goals, implement strategic bans on unrecyclable materials, and apply targeted taxes to shape consumer behaviour. - Connecting EPR systems globally
Create transboundary EPR fee mechanisms and establish global frameworks to ensure responsible waste treatment worldwide.
Practical applications
This framework can deliver tangible change. For example:
- In textiles and electronics, EPR-financed repair funds could keep repair costs significantly lower than the price of new products.
- In packaging, EPR could support both the collection of single-use packaging and the development of reusable packaging systems, with clear transition plans between them.
France’s Anti-Waste and Circular Economy Law already offers an early example. It mandates EPR schemes to fund reuse and repair through a dedicated Repair Fund.
The legislative challenge
A major barrier is Article 8 of the EU Waste Framework Directive, which currently restricts EPR fees to covering waste management costs. This prevents EPR from becoming a full-fledged driver of circularity.
We recommend two options: either amend Article 8 to permit EPR fees to exceed cost coverage, or introduce a double fee structure. One fee would remain nationally determined for waste management, while the second would be harmonised at the EU level to support circular economy initiatives.
Conclusion: the future of EPR
The future of EPR lies not in perpetuating waste management but in catalysing a systemic shift toward resource efficiency and circularity. By implementing our proposed two-pillar approach, the EU can transform EPR into a cornerstone of sustainable development that drives innovation, creates green jobs, reduce environmental impacts, and strengthen the EU’s competitiveness and strategic autonomy.
For too long, EPR has been seen as merely a technical solution to a waste problem. It’s time to recognise it as a powerful economic tool that can help shape the EU’s strategic future.
