EPR Financing

Addresses municipal cost burden

Municipalities have no control over the volume or type of packaging placed on the market, its recyclability, or the volatility of post-consumer material markets, yet they bear the costs unless producers pay. Financing ensures these costs are shifted to producers.

Covers a wide range of packaging materials

Financing mechanisms must apply across all major packaging types (plastic, plant-based fibre, metal, glass, wood, and multi-material formats) to ensure comprehensive coverage and avoid loopholes.

Implements producer fees to fund system operations and allocate costs fairly

Producers (or first importers) pay fees when placing packaged goods on the market. These fees are not taxes; they are payments for services rendered by the EPR scheme. Fees are ring-fenced and used exclusively for waste management and related activities. They are typically based on the full net cost of efficiently operated services, without cross-subsidising between material types or formats. In some systems, municipalities may cover part of the cost, but the producer’s share must be clearly defined and sufficient.

Supports eco-modulation of fees

Fee structures can be modulated based on product design and environmental impact. Packaging that is easier to recycle, reuse, or made with recycled content may incur lower fees, while non-recyclable formats may be penalised. This may incentivise eco-design and can helps shift the market toward more circular packaging.

Promotes market development

Funds collected through EPR schemes help build the business case for collecting and recycling packaging waste, especially for materials with low or no market value. This includes support for infrastructure upgrades, equipment, end-market development, and innovation.

Ensures fair and efficient cost allocation

EPR fees are typically based on the full net cost of waste management services, calculated without cross-subsidising between material types or formats. Fees should reflect the relevant share of costs for efficiently operated services that meet defined minimum quality standards, as described in waste management law or EPR policy. In some systems, municipalities may cover part of the cost, but the producer’s share must be clearly defined and sufficient.

Includes provisions for micro businesses

Effective EPR schemes often include a de minimis threshold for very small businesses, exempting them from full financial obligations while still requiring simplified annual reporting. This ensures broad participation without placing undue burden on micro-enterprises.