Extended Producer Responsibility: The Netherlands

Overview

A circular economy is becoming increasingly critical, especially in light of the plastic pollution crisis. The World Bank estimates that 350 million metric tons of plastic is produced annually, much of which comes from packaging. Less than 10% of that total is recycled.

Extended producer responsibility – or ‘EPR’ – mechanisms are one way to manage packaging waste. These circular-economy policy instruments are based on the ‘polluter pays’ principle and aim to hold manufacturers, importers and distributors accountable for the entire life cycle of their products, shifting end-of-life costs away from the public sector and consumers.

Assigning producer responsibility can reduce waste at the source, promote environmentally friendly product design, and support the achievement of public recycling and materials management targets.

In an EPR scheme, producers, distributors and importers are held logistically and financially responsible for the end-of-life treatment of their packaging. To simplify this responsibility, industry players usually create a Packaging Recovery Organization (PRO). In a PRO, stakeholders collectively share the burden of the EPR obligation and recycling targets, with each member’s portion of the financial obligation based on their products’ market share of the industry. For instance, in the UK, brand owners are responsible for 48% of recovery and recycling, while packers are responsible for 37%. Raw material manufacturers and converters split the remaining share.

A PRO must be registered as a separate non-governmental organization that manages products’ end of life, verifies data and reporting, and communicates with the governing body.

Besides the sole PRO model, EPR schemes can also operate under a dual model, where both industry players and local municipalities invest in separate systems for collecting and recycling, or a shared model, where municipalities and industry players share the end-of-life responsibilities with the PRO managing the financial obligation.

PRO Europe, the umbrella organization for packaging and waste recovery and recycling schemes in Europe, is one of the oldest and most widely adopted systems in the world. It was founded in 1995 in response to the European Union’s Packaging Directive of 1994, noting that widespread recycling in Europe can only be realized if EU member states work together. PRO Europe primarily utilizes the trademark “Green Dot” on packaging as a symbol of alliance with the organization.

Currently, PRO Europe has actively involved 31 countries stretching from Norway to Turkey. The main task of PRO Europe members is to organize the efficient implementation of adequate national collection and recovery systems, mainly for domestic sales and packaging. Countries that are part of PRO Europe also have their own PRO to serve as the national jurisdiction, such as Ecoembes in Spain or Hellenic in Greece.

Meanwhile, the Green Dot has made its way around the globe. The trademarked symbol is now used in more than 170 countries, as a universal emblem of packaging that is part of an EPR scheme.

Within PRO Europe, national EPR schemes have been effective in delivering high recycling rates in the EU. The bloc achieved an overall packaging recycling rate of 64% in 2021.

The Netherlands has the second-highest recycling rate for packaging in the EU at 77%, close behind Belgium’s 80%. Both countries have adopted a shared responsibility model, where municipalities and industry players collaborate and share the burden of waste collection, sorting and recycling, while the PRO collects producer fees and handles the financial responsibility. And both are already surpassing the EU’s 2030 recycling targets of 70%.

Impact

The Netherlands operates under a PRO called Verpact, previously known as Nedvang. Verpact is funded by a tax paid by producers and importers, and this money is used to manage the sorting and recycling of the country’s waste. Municipalities organize commercial and curbside waste collection, funded by the PRO. The country’s plastic packaging recycling rate has risen 17% since Verpact was founded in 2006.

This points to a key factor in successful EPR schemes: to improve and accelerate recycling rates, these programs should be designed in a way that generates sufficient tax revenue from producers to fund and manage efficient operations.

The Netherlands’ producer fees and recycling rates have ebbed and flowed over the years but have largely done so in tandem. Plastic packaging rates dropped by 8% between 2019 and 2020, during the pandemic. However, following this decline, Verpact increased plastic packaging waste fees to €1.05 per kilogram ($1.15/kg) in 2023. Plastic packaging is penalized at the highest rate, while glass and paper face lower producer fees. Plastic recycling recycling rates have remained stagnant around 50% since then, although Verpact plans to introduce additional reforms and fees in 2024 to recover the recycling rate.

Successful EPR schemes are accompanied by the following policies and practices:

• Minimum collection and recycling rates, and recycled content targets for brand owners

• A gradual increase in the fee paid to the PRO for products to ensure coverage of the full cost of collection services

• New landfill fees or bans to gradually eliminate recyclables from entering landfills

The Netherlands also utilizes bans on single-use plastics and a deposit-return scheme that complement Verpact and ensure that the recycling infrastructure is well supported.

Opportunity

While PRO Europe has been in operation for decades now, the US is an example of a major economy that has just started introducing recycling policies. The states of Maine and Oregon have led the circular economy initiative and rolled out EPR policies.

At the federal level, the Break Free From Plastic Pollution Act of 2023 was introduced to the Senate and includes restrictions on single-use plastics, a nationwide deposit-return system, recycled-content mandates and EPR. If passed, this bill would be key to the future of recycling and producer accountability in the US, which saw a nationwide plastic recycling rate of 9% in 2018.

EPR schemes increase the amount of plastic waste that is collected, adding to the supply of recyclable materials and making it easier for companies to source recycled feedstock for new packaging. Increased adoption of EPR schemes at the national and even subnational level will drive more brand owners to commit to recycled-content targets and improve the circular economy. Beyond plastic and packaging, the EPR model can also be applied to the steel, cement and aluminium industries.

Source

BloombergNEF, World Bank Group, Verpact, Packaging Waste Foundation, PRO EUROPE, Eurostat, Bottle Bill, US Government, EPA