Special Investigating Units and Special Tribunals Act, 1996
R 385
National Environmental Management: Waste Act, 2008 (Act No. 59 of 2008)NoticesGuideline and Toolkit for the Determination of Extended Producer Responsibility Fees4. EPR fee determination |
| 4.1 | Methods for EPR fee determination |
This section provides information on the applicable methods of fee determination, including its criteria, strengths, and limitations. It also includes lessons learned from others who have implemented such methods, followed by a brief case study of how each method was successfully applied and the learnings from the case. For each method presented, a calculation approach with a well-defined equation and parameters is provided for further guidance and ease of application by the user.
To conclude, an overview is provided on the application of the method by sectors, including the waste category, the specific approach used for determining the fees, and the countries where it has been applied. This information can be used as a decision-making tool to determine the most appropriate fee approach for a specific scheme. Additionally, the section discusses the specific types of materials that each method has successfully worked for under each approach, allowing for a more robust approach to selecting the most appropriate method for determining fees.
| 4.1.1 | Flat fee approach |
| 4.1.1.1 | Overview of the approach (criteria, strengths, and limitations) |
In a flat/ base EPR fee structure, a fixed rate is applied to a product category. This does not account for any differentiation based on the actual management costs associated with the differences in the products themselves (e.g., lower-impact materials, recyclability, etc.).2
Once the category that the flat fee will be applied to is identified, the following steps are taken in determining the fees:
| • | defining of criteria that will be used; |
| • | setting up of units fees; and |
| • | establishing an appropriate formula to use based on the criteria and unit fees that have been defined. |
This fee structure has been widely accepted and applied globally. Its implementation has been seen in countries such as Austria, Japan, and South Korea, particularly to the packaging sector. The table below presents the key considerations in the implementation of a flat fee structure including the criteria, strengths and limitations, as well as lessons.
Table 0-1 Key considerations in the implementation of a flat fee structure
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Criteria:
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Strengths:
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Limitations:
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Lessons: The flat/base fee structure offers a simple and predictable method for gathering funds from PROs. This approach lessens the administrative burden on producers while concurrently fosters higher recycling rates. Nevertheless, this approach lacks adequate incentives to motivate producers toward the design of environmentally friendly materials. |
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Case study: WEEE EPR in Egypt |
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Application: Determination of the EPR fee for the electrical and electronic equipment (EEE) sector in Egypt was spearheaded by the National EPR Committee (NEC), and collected by the Waste Management Regulatory Authority (WMRA). In determining the fee, the net costs of collection, transportation, recycling and disposal was assessed. It was noted that costs for waste management included indirect costs for services such as public awareness and administrative costs for managing the EPR scheme which typically ranges from 5 to 10% of the total fees collected.3 The flat fee structure was used to implement the EPR fee. The fee is given for a range of product categories based on the assessment and benchmarking of EPR fees from other countries from collectors and recyclers.4 This was used to effectively obligate producers to pay a fee based on their market share. The flat fee varied depending on the product category and was given in Livre Égyptienne per unit (LE/unit). The categories included mobile devices, PCs and laptops, routers and servers.
Case learnings: The EPR flat fee structure for the EEE sector is a relatively recent development, introduced in 2021. Benchmarking of flat fees from various countries was used as a guide to give an indication of the fee range. The flat fee system approach gave a simple solution, making all producers and brand owners responsible for paying the same fees, promoting transparency and fairness. |
| 4.1.1.2 | Calculations for EPR fee determination |
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EPR Fee = Total costs / weight (or volume or number of units)
Total costs: administration costs, costs of establishing collection system. |
| 4.1.2 | Modulated fee approach |
| 4.1.2.1 | Overview of the approach (criteria, strengths, and limitations) |
In the modulated fee structure, fees paid by producers vary depending on the product design.5 Products that can be easily reused, recycled, and repaired incur lower costs when compared to those that are difficult to reuse, recycle or repair.
The application of a modulated fee structure requires details on the categories and subcategories of products. Once these have been ascertained, the following steps are followed:
| • | setting clear objectives; |
| • | defining criteria and indicators to assess product characteristics that are harmful to the environment; and |
| • | formulating a fee calculation based on the prescribed criteria and indicators. |
The modulated fee structure has garnered widespread adoption on a global scale, particularly within the packaging sector. This fee structure has found practical and effective implementation across various nations, with notable examples including Belgium, Spain, France, Germany, and the United Kingdom. In these countries, the modulated fee structure is based on Green Dot rates, a system that promotes environmental responsibility and sustainable practices. By linking the fee structure to Green Dot rates, these nations are actively fostering a more ecologically conscious approach to packaging production and disposal.
The table below presents the key considerations in the implementation of a modulated fee structure including the criteria, strengths and limitations, as well as lessons.
Table 0-2 Key considerations in the implementation of a modulated fee structure
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Criteria:
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Strengths:
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Limitations:
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Lesson: A structured modulated fee system guarantees equitable charges for producers, reflecting the environmental costs associated with their products in the market. This approach incentivises producers to reevaluate their design strategies to minimise adverse environmental effects. However, the fees alone may not be adequate to effectively promote behavioural changes in both consumers and producers. |
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Case Study: EKO-KOM |
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Application: EKO-KOM is an EPR scheme operating in the Czech Republic, focused on managing packaging waste originating from households and industry. This encompasses a variety of materials such as paper, cardboard, ferrous metals, aluminium, glass, plastic, wood, and composite packaging. The program employs a modulated fee structure for plastic, considering factors like container size, rigidity, transparency, and coloration, particularly emphasizing the recyclability aspect for PET6. For other plastic fractions, a uniform fee system is employed. Notably, this initiative promotes sustainability by exempting reusable packaging from fees, provided they are reused to 70% 7,8.
Case learnings: Implementing modulated fees based on the type of plastics serves as a motivation for manufacturers to design items that are both readily recyclable and can be reused. This approach effectively prompts companies to reevaluate their product design, aiming to minimize their fee obligations through more sustainable product development approaches. |
| 4.1.2.2 | Calculations for EPR fee determination |
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Note: The modulated fee structure is supplemented by the following differentiating variables: material type product category ease of recycling |
| 4.1.3 | Eco-modulated fee approach |
| 4.1.3.1 | Overview of the approach (criteria, strengths, and limitations) |
Eco-modulated fees are applied to provide incentives to encourage producers in designing products that have minimal impacts to the environment.Error! Bookmark not defined. The use of environmentally sustainable materials is rewarded while the use of materials that are harmful is penalised. Higher fees are charged on materials that are difficult to recycle.9
The application of an eco-modulated fee structure requires details on the categories and subcategories of products. Once these have been ascertained, the following steps are followed:
| • | establishing specific objectives; |
| • | defining environmental criteria and indicators; and |
| • | formulating the fee structure based on these criteria and indicators. |
The implementation of eco-modulated fees is applied in countries such as France, Spain, Sweden, Italy, Belgium, and the Netherlands for different product categories such as WEEE, batteries, and packaging.
The table below presents the key considerations in the implementation of an eco-modulated fee structure including the criteria, strengths and limitations, as well as lessons.
Table 0-3 Key considerations in the implementation of an eco-modulated fee structure
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Criteria:
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Strengths:
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Limitations:
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Lessons: Eco-modulated fees primarily emphasise recycling rather than waste reduction. This approach incentivises producers to create environmentally friendly products, leading to a considerable portion of the eco-modulated funding being allocated to bonuses, while the utilisation of penalties remains relatively limited. This leads to imbalances between the incentives and penalties. The implementation of the eco-modulated fee structure is complex and necessitates a well coordinated framework to ensure equitable treatment of all producers involved. |
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Case study: Portuguese scheme Sociedade Pontoverde (SPV) |
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Application: The Portuguese scheme Sociedade Pontoverde (SPV), introduced penalty fees in 2019 for three types of packaging that 'disrupts the recycling process': PET bottles with a metal cap; glass bottles with non-removable stoppers; and PET bottles with PVC labels. Fees for all the materials contained in this type of packaging is subject to an increased fee, with the aim of encouraging producers to move to more easily recycled product designs.10
Case learnings: Having penalties for mixed packaging that discourages/ hinders recycling, forces producers to reconsider the design of their packaging. In this sense eco-modulation fosters innovation in product design as producers now seek to pay lesser fees to the PROs.11 |
| 4.1.3.2 | Calculations for EPR fee determination |
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Note: The eco-modulation criteria should reflect the product characteristics and its circular economy performance, which is supplemented by a penalty for example bonus or malus to give incentive to producers to shift to sustainable packaging (percentage is applied).
One way to specify the difference between the modulated and eco-modulated approach is as follows:
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| 4.1.4 | Product take-back scheme approach |
| 4.1.4.1 | Overview of the approach (criteria, strengths, and limitations) |
Take-back is the idea that manufacturers and sellers "take back" the products that are at the end of their lives. Take-back is aimed to reduce business' environmental impacts and increase its efficiency, while lowering costs for business models. The implementation of product take-back takes place in two forms, namely:
| • | Deposit refund schemes |
| • | Product return schemes |
| 4.1.4.1.1 | Deposit refund schemes (DRS) |
These are initiatives where consumers are required to pay an upfront fee when purchasing beverages in single-use containers. Thereafter, the fee is refunded upon the return of the beverage containers. DRSs are typically used by major beverage producers to reclaim glass and plastic beverage bottles. This is to ensure the safe disposal of beverage containers and promotes the recovery and recycling of such products.
The implementation of DRS includes the following steps:
| • | determining the type and size of containers eligible for the scheme; |
| • | determining the deposit fee amount to be charged; |
| • | establishing collection points such as through retailers or return vending machines;and |
| • | establishing infrastructure for the processing of the collected containers should also be considered to ensure that the returned materials do not end up in landfills. |
The DRS fee structure has widespread global acceptance and implementation, with notable examples from countries such as Australia, Canada, Chile, Denmark, Ecuador, Germany, Hungary, Iceland, Israel, Italy, Mexico, Norway, Spain, Sweden, Turkey, and the US. This practice is also widely applied by the beverage industry in South Africa.
The table below presents the key considerations in the implementation of a DRS fee structure including the criteria, strengths and limitations, as well as lessons.
Table 0-4 Key considerations in the implementation of a DRS
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Criteria:
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Strengths:
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Limitations:
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Lessons: DRS can only be viable if producers also play their part in ensuring that containers produced are designed to enable the recycling. The benefits and procedure of returning containers should be well communicated with consumers to enhance consumer participation. The availability of infrastructure to serve as collection points also plays a crucial role in ensuring the effectiveness of the scheme. Engaging and collaborating with businesses that sell beverage containers eligible for DRS can be useful in solving the issue of limited collection points. |
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Case study: Israel DRS |
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Application: DRS represent structured initiatives aimed at offering financial incentives to consumers in order to encourage the return of used beverage containers for recycling or reuse. At the point of sale, consumers are charged a deposit fee, which is subsequently reimbursed upon container return. Israel initially introduced DRS for glass and plastic bottles below 1.5 litres in 2001, and in 2020, they expanded the program to encompass bottles up to 5 litres 12. The deposit fee for containers under 1.5 litres stands at ILS 0.25, while larger bottles carry a deposit fee of NIS 0.30 13. Consumers can either return the containers to stores or supermarkets or through the reverse vending machines. Through the implementation of the DRS, the effective collection, reuse, and recycling of beverage containers are actively promoted. Simultaneously, consumers are encouraged to diminish littering while contributing to increased recycling rates.
Case learnings: The DRS in Israel restrict retailers from taking back plastic and glass bottles above 60 per day. This results in a decrease in the number of containers collected. The availability of reverse vending machines plays a key role in improving collection rates. Financial incentives play an important role in enhancing consumer participation, which is essential for the success of this initiative. Monitoring and evaluation is necessary in identifying areas that require improvement to ensure the effectiveness of the scheme. |
| 4.1.4.1.2 | Product return schemes |
Product return schemes are initiatives where consumers are allowed to return products to the retail or producer for reuse, repair, recycling, or safe disposal. These initiatives are typically arranged by retailers or producers to take back products. This has wide applicability across a wide spectrum of sectors such as clothing and textiles; electrical and electronic equipment; furniture; tyres etc.
The implementation of such schemes follows these fundamental steps:
| • | determining the type of products eligible for return; |
| • | setting up criteria; and |
| • | establishing collection points to be used where products are returned. |
This approach has seen widespread adoption and implementation including in South Africa and other countries such as Australia, Canada, Denmark, France, Germany, Norway, Sweden, the UK, and the US. The table below presents the criteria, strengths, limitations and lessons learned in the implementation of product return schemes.
Table 0-5 Key considerations in the implementation of a product return scheme
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Criteria:
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Strengths:
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Limitations:
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Lessons: Take-back schemes play a key role in facilitating the collection of used products/waste, further ensuring proper disposal. Through these schemes, production costs are reduced, products are kept in use for as long as possible, and further contributing to reduced EPR fees. The success of take-back schemes lies in consumer awareness and proper infrastructure to enable the collection and processing of collected materials. Incentivising take-back schemes also play a huge role in enhancing participation. |
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Case study: Fashion take-back schemes |
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Application: These are initiatives organised by renowned brands and retailers to solicit used clothes and textiles back from consumers with the intent of repairing, reselling, reusing, and recycling. The primary objective behind these endeavours is to mitigate fashion waste. Brands such as H&M, Zara, Levi’s, MUD Jeans, and Patagonia are among those offering such take-back schemes14. In 2013, H&M initiated a global garment collecting programme wherein they accept unwanted clothes or textiles from any brand, regardless of condition15. As a token of appreciation, consumers are granted vouchers for contributing their used clothing materials. Subsequently, the collected clothes or textiles are sorted into three categories, depending on their condition, and are then either sold as second-hand items, reused, or subjected to recycling processes.
Case learnings: Setting up specific criteria plays a key role in determining the success of fashion return schemes. The condition of returned clothing or textile can often result in high recycling costs which in turn also contribute negative environmental impacts. The availability of recycling infrastructure is also important in driving these schemes in order to avoid materials ending up in landfills. Awareness raising is necessary in order to enhance consumer participation, which is essential in driving the success of fashion return schemes. |
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Case study: IKEA buy-back and resell program |
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Application: IKEA is a renowned retail company specialising in furniture design and sales. The majority of IKEA’s retail stores are situated in Europe. The company launched an innovative buy-back and resell initiative, which centres on purchasing pre-owned IKEA furniture from consumers16. Under this program, consumers have the opportunity to exchange their unwanted old furniture for store credit in the form of a refund card. Subsequently, the collected furniture items are refurbished and resold as old furniture.
Case learnings: The program provides valuable insights into the viability of the circular economy approach. The refurbishment of furniture can be effective in reducing waste going to landfills and promotes the adoption of sustainable practices. The effectiveness of the program relies on consumer awareness and consumer participation. Maintaining the quality of the items also plays a key role in driving this initiative, to ensure that the quality is not degraded to drive the initiative of selling second hand goods. |
| 4.1.4.2 | Calculations for EPR fee determination |
Note:
The costing of this scheme would be determined by the producer who is operating the take back scheme. This section will be further developed to include the variables used in calculating the fee and the formula on how this is calculated based on feedback from producers.
| 4.2 | Recommendations for application of fee determination methods |
It should be noted that there are different products within different sectors, and many different variables to be considered, therefore there will not be a one size fits all formula for the fee determination. A hybrid approach of all methodologies can be applied.
For example, the flat fee approach could be considered the base fee approach for all EPR schemes if the other variables / factors applicable to the modulated fee, eco-modulated, and product take back scheme approaches are irrelevant for an identified product or a class of products. Therefore, the default fee is likely to be the flat fee approach.
The main controlling factor for the approach taken to determine the EPR fee is the maturity of the sector and the stage of development it is at. In a mature sector, companies can focus on everything from product design, percentage of recycled content, ease of repairs and recycling to collection, transportation, and storage and not just on recycling. On the other hand, a fledgling sector may primarily focus on collection. Therefore, an approach for a mature sector will differ from an approach suitable for a sector that has not yet placed the needed systems in place.
Further to the above, the EPR fee determination needs to consider the objectives that the policy aims to pursue. The best practice suggests starting with one single objective. This allows refinement of the instrument to the level that successfully delivers on that objective before expanding it to deliver on multiple objectives.
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Note: Every country has its own approach which is applicable to its political landscape, environmental, social, technological advancement and legal conditions. Based on the outlined conditions, (external costs) will be internalised in the product price. |
The summary table below provides a decision-making tool for specific schemes to choose their approach taking into account international examples where these methods have been used, the sectors they are applicable to, and specific examples provided. This can help schemes declare their fees and the applicable approach to DFFE.
The review of the application of the four methodologies discussed in the previous section revealed that different approaches are used throughout the world, as indicated in Table 4-6.
Table 0-6: Examples of countries using selected methodologies, by category
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Waste category |
Flat fee approach |
Modulated fee |
Eco-modulated fees |
Take-back scheme |
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Paper and packaging |
Austria, Macedonia, Malta, Netherlands, Norway, Bosnia and Herzegovina, Bulgaria, Estonia, Germany, Greece, Ireland, Lavia |
Belgium, Netherlands, Croatia, Cyprus, Czech Republic, Spain, France, Hungary, Israel, Lithuania, Luxembourg |
France, Portugal Italy, Netherlands, Norway |
Finland, Germany, Belgium, Austria, Netherlands, Norway |
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WEEE |
Malta, Canada, China, Japan, Korea |
- |
France, Taiwan, Italy, Canada, United Kingdom |
Finland, Ireland, Latia, Denmark, Sweden, Australia |
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Lighting |
Korea |
- |
- |
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Portable batteries |
Malta, Korea |
- |
France |
Austria, Switzerland, Belgium, Netherlands, Denmark, France |
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Pesticides |
- |
- |
- |
Canada |
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Lubricant oils |
Korea |
- |
- |
Belgium, Germany, Spain, Italy, Portugal, Greece, Poland |
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Vehicles |
China, Netherlands, Korea |
- |
France |
Slovak Republic, Germany, Finland |
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Furniture and textiles |
Austria |
Croatia |
France |
Belgium |
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Household chemicals |
- |
- |
France |
Belgium |
Although not exhaustive, the information contained in the above table points to the following trends:
| • | One country can have different methodologies used to define EPR fees for the same waste category. This suggests that the decision to use a specific methodology lies with the PRO. |
| • | While different methodologies may be present in the same country for the same range of products, this appears to be most common for the paper and packaging waste category. This could be rationalised by paper and packing being the most common waste category for which the EPR fees have been applied thus far. |
| • | No one methodology is widely applied to suit all waste categories. This suggests that the nature of waste – particularly regarding its material uniformity and other characteristics – plays an important role in selecting the suitable methodology for EPR fee determination. |
Note:
More detailed information on EPR implementation globally is available online in a recently published EPR Technical document developed under the G20 Presidency of India entitled: Knowledge exchange on EPR for Circular Economy, Presidency Document, Technical Document Developed for the G20, July 2023. This document addresses emerging EPR policy design issues, highlights some of the key challenges and lessons learnt from EPR implementation and presents case studies from developing and developed economies.
The following table further expands on the type of products that are subjected to the various fee determination methodologies. It shows that the ranges of products that are usually included under paper and packaging and WEEE waste categories for which EPR fees are applied, tend to be relatively detailed. This could be explained by the considerably wide variety of waste that these two categories cover compared to the other waste categories.
Table 0-7: Examples of products subjected to selected methodologies, by category
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Waste category |
Flat fee approach |
Modulated fee |
Eco-modulated fees |
Take-back scheme |
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Paper and packaging |
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WEEE |
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- |
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Lighting |
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- |
- |
- |
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Portable batteries |
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- |
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Pesticides |
- |
- |
- |
- |
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Lubricant oils |
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- |
- |
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Vehicles |
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- |
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Other |
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- |
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Household chemicals |
- |
- |
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| 4.3 | Key criteria outlined in regulation 7 of the EPR Regulations |
In general, the climate of EPR spending in South Africa is focused on establishing systems and boosting collection. This is especially true with newly established PROs, who are spending EPR fees on developing their sectors to enable circularity. The more established PROs are able to focus their EPR spend on the end of the value chain, which includes design for the environment and initiatives to scale up the collection in under-serviced areas.
| 4.3.1 | EPR Fee Criteria |
The fee criteria define the basis on which the fees are calculated, and it determines which products or activities are subject to the EPR fees.
| • | Product Categories: The EPR fee base starts by defining the specific product categories or classes of products that fall under the EPR scheme. For example, it could include plastic packaging, electronic devices, batteries, etc. |
| • | Weight or Volume: The fee base can be based on the weight or volume of the products placed on the market. This means that the fees are calculated based on the total weight or volume of products covered by the EPR scheme that are sold or distributed. |
| • | Number of Units: Alternatively, the fees can be calculated based on the number of units or items of a specific product category placed on the market. For example, a fee may be applied per unit of electronic device or per item of plastic packaging. |
| • | Material Composition: In some cases, the EPR fee base may take into account the material composition of the products. For instance, fees for plastic packaging could be differentiated based on the type of plastic used (e.g., PET, HDPE, LDPE). |
| • | Environmental Impact: The fee base might consider the environmental impact of the products. Products with higher environmental impact or hard-to-recycle materials could be subject to higher fees to incentivize producers to improve the environmental performance of their products. |
The EPR Regulations require that the EPR fee be based on nett cost recovery including a differentiated rate per item category, of each product or class of products. These fees must be paid by a producer to fund schemes and they are dependent on criteria (a) - (i), listed in Table 4-8 below.
Table 0-8 Key criteria outlined in regulation 7 of the EPR Regulations
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Section 7(3) requirements |
Interpretation of EPR Fee Criteria |
EPR Fee Determination |
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The weight of each product or class of products is a factor in determining the EPR fee. Heavier products contribute more to the waste stream, requiring more resources and costs for their collection, transportation, and recycling or disposal. The EPR fee is charged per weight of product or recycled product used for packaging and placed on the market.
Weight of the product or volume or number of units. |
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Products that are more easily recyclable and have higher recycling rates may qualify for lower fees, as they impose lower waste management costs. Products that are easily recyclable and have well-established recycling processes incur lower waste management costs. Products that are more easily recyclable and have higher recycling rates may qualify for lower fees, as they impose lower waste management costs. Limited recycling opportunities for most products exist currently and need to be developed, therefore these fees can be considerably higher. There will be investment required in research and development (R&D) specifically to address and grow recycling opportunities.
The EPR fees obligated businesses must pay will increase or decrease depending on the recyclability of the packaging they place onto the market. Those using difficult-to-recycle, not recycled, or unrecyclable packaging, will likely see higher costs associated with complying with the reformed Packaging Waste Notice. This informs ecomodulation of fees.
Factors affecting ease of recyclability:
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Let's consider two types of plastic packaging materials covered by the EPR scheme - PET bottles and multi-layered flexible packaging. PET bottles are highly recyclable and have established recycling infrastructure, making their recycling costs relatively lower. On the other hand, multilayered flexible packaging is challenging to recycle due to its complex structure, leading to higher recycling costs. Thus, the EPR fee for PET bottles may be lower compared to multi-layered flexible packaging.
A differentiated rate will apply. |
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The demand for recycled materials can influence the EPR fee structure. Materials with higher demand in recycling markets may have a positive economic value, potentially offsetting some of the waste management costs. This will be determined by the sales on i) |
Let's consider aluminium cans covered under the EPR scheme. Aluminium has a high recycling demand and value, making it economically attractive for recyclers. Due to its high recycling potential, the EPR fee for aluminium cans might be lower than that for other materials with lower recycling demand. |
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Certain products may require separate waste collection systems due to their unique characteristics or potential environmental impact. The costs of establishing and operating such specialized collection systems can impact the EPR fees. All costs necessary to bring the collection system to its intended use. |
Direct financial cost – Full cost |
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The fee should factor in the full logistics of these costs and specifically to the point of collection and sorting where the budget spend is combined for all materials. This will include the development of Hubs. |
Direct financial cost – Full cost |
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This covers staff costs(salaries), building of systems, office overheads (rentals and IT costs, office consumables), marketing, and governance as per the EPR Regulations. |
Direct financial cost – Full cost |
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This should be based on budgeted costs for public communication and awareness raising. Public communication and awareness raising aim to inform, educate, and raise awareness about specific issues, causes, or topics of public interest. The primary goal is to create understanding, change attitudes, and promote behaviour change for the betterment of society. |
Direct financial cost – Full cost |
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Monitoring costs |
Direct financial cost – Full cost |
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This should be factored in terms of ease of recyclability and market in terms of demand for material. Where there is no market, a higher EPR fee should be placed.
NB: This encourages secondary markets of recycled materials. For example, as technologies are developed, the volume and value of secondary materials that are recovered from electrical and electronic waste has increased significantly. To still reflect the actual cost of treatment less revenue from secondary materials, the fee has dropped accordingly. |
Direct income from secondary markets
Nett cost: the full cost less the revenue from the sales of the collected material. Where there is no market for recycled material, the nett cost will be the full cost less zero. |
Note: The manner in which the EPR fee is calculated
The total amount of the contributions (EPR fees) that cover the nett cost of the obligations mandatory on the producer
| 4.3.2 | Calculations for EPR fee determination |
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EPR Fee = (Total costs less Revenue from Recycled material) / weight (or weighted average on units) or volume) x differentiated rate
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| 4.4 | Other key considerations |
| 4.4.1 | Administration and practical feasibility of fees |
Administration:
| • | Clear guidelines and regulations: A well-defined regulatory framework with clear guidelines and regulations is essential for effective administration of EPR fees. This includes defining the scope of products covered, fee calculation methods, reporting requirements, and enforcement mechanisms. |
| • | Efficient collection and tracking systems: Establishing efficient systems for collecting fees from producers and tracking their compliance is crucial. This may involve collaboration between government agencies, industry associations, and third-party organisations. |
| • | Transparent reporting and auditing: Regular reporting and auditing of EPR fee collection and utilisation help ensure transparency and accountability. This can involve independent audits, public disclosure of financial statements, and stakeholder engagement. |
Practical Feasibility:
| • | Stakeholder collaboration: Successful implementation of EPR fees requires collaboration among various stakeholders, including government departments, producers, EPR Schemes, and environmental organisations. Engaging stakeholders in the design and implementation process can enhance practical feasibility. |
| • | Adequate resources and expertise: Sufficient resources, including funding and skilled personnel, are necessary for effective administration of EPR fees. This includes expertise in fee calculation methodologies, monitoring systems, and enforcement mechanisms. |
| • | Industry readiness and capacity: The practical feasibility of EPR fees depends on the readiness and capacity of industries to comply with the EPR Regulations. This may involve providing support, guidance, and incentives to help businesses adapt their operations and implement sustainable practices. |
| 4.4.2 | Impacts on industry competitiveness |
Positive impacts:
| • | Encourages innovation: EPR fees can incentivize businesses to invest in R&D to develop more environmentally friendly products and processes. This can lead to innovation and a competitive advantage for companies that embrace sustainable practices. |
| • | Market differentiation: Companies that proactively manage their environmental impact and effectively implement EPR programs can differentiate themselves in the market, attracting environmentally conscious consumers and gaining a competitive edge. |
Negative impacts:
| • | Increased costs: EPR fees can add to the overall costs of doing business, especially for industries that produce large quantities of waste or have complex supply chains. This can put pressure on profit margins and potentially impact competitiveness, particularly for smaller businesses. |
| • | Potential for unequal impact: Depending on the design of EPR programs, certain industries or businesses may bear a disproportionate burden of the fees, potentially affecting their competitiveness compared to others and free riders who benefit without paying EPR fees. The fee is passed on from companies and charged to consumers, whereas the companies should be held partially liable for a percentage of the fee. |
Non-EPR member producers:
| • | Mapping and identification of producers: All producers, such as manufacturers, importers and distributors operating in the country are required to register with DFFE as mandated by regulation 4 of the EPR Regulations. This database needs to be compared against the existing EPR schemes to allow for enforcement of the EPR Regulations. This can be achieved in collaboration with the Department of Trade, Industry and Competition and the South African Revenue Service (SARS) as well as the National Treasury. |
| • | Enforcement and penalties: A penalty must be imposed on the non-compliant producers as stipulated in regulation 13 of the EPR Regulations. This will ensure that the EPR fees are fairly applied and achieve the maximum desired outcomes. |
| 4.4.3 | Impacts on consumers |
Direct impacts:
| • | Cost implications: EPR fees are passed on to consumers as part of the product's price. This can result in higher prices for goods and services that are subject to EPR Regulations. |
| • | Affordability: Increased product prices due to EPR fees may affect the affordability of certain goods, particularly for lower-income consumers. |
| • | Consumer behaviour: Higher prices may influence consumer purchasing decisions, potentially leading to changes in consumption patterns or preferences. |
Indirect impacts:
| • | Environmental benefits: EPR fees incentivise manufacturers and producers to design products that are more environmentally friendly and easier to recycle. This can lead to a reduction in waste and environmental and human health impacts, benefiting consumers in the long run. |
| • | Product availability: EPR Regulations may encourage the development and availability of more sustainable products, giving consumers a wider range of environmentally friendly options to choose from. |
| • | Consumer awareness: EPR programs often raise awareness about the environmental impact of products and the importance of recycling. This can lead to increased consumer consciousness and engagement in sustainable practices. |
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