Acts Online
GT Shield

National Environmental Management: Waste Act, 2008 (Act No. 59 of 2008)

Notices

Guideline and Toolkit for the Determination of Extended Producer Responsibility Fees

Executive Summary

 

Extended Producer Responsibility (EPR) represents an environmental policy wherein a producer's obligation for their product extends to encompass its post-consumer phase within the product's lifecycle. EPR aims to ensure that producers bear responsibility for the entire lifecycle of the products they place on the market, encompassing design, production, and disposal phases. The primary objective of this document is to provide guidance to Producer Responsibility Organisations (PROs) and to producers implementing EPR schemes, for the determination of EPR Fees based on the criteria detailed in regulation 7 of the Extended Producer Responsibility Regulations, 2020 (EPR Regulations), promulgated in terms of section 69(1)(b), (g), (i), (I), (o), and (dd) of the National Environmental Management: Waste Act, 2008 (Act No. 59 of 2008) (NEM: WA). The process of defining EPR fees adheres to the "Polluter Pays Principle" designed to incentivise sustainable waste management practices and to facilitate the shift from a linear “take-make-dispose” model, towards a resource efficient and circular economy.

 

Methods of determining EPR fees

This Guideline document presents four EPR fee determination methods with widespread international acceptance and implementation that are most applicable within the South African context. Guidance is provided on how the fee determining methods have previously been applied across several sectors and in other parts of the world. The aim is to guide the PROs and producers implementing EPR schemes in choosing the most appropriate fee determining method for their specific needs and stage of sector development. The method employed for calculating the EPR fee depends on several factors such as the sector's level of development and maturity, and the specific types of identified product categories and products. The table below presents an overview of the four EPR fee determination methods put forward in this Guideline document.

 

Flat fee approach

Modulated fee approach

Eco-modulated fee approach

Product take-back scheme approach
• Uniform rate applied to identified products as per the EPR Regulations sector Notices.
• Fee is applied across the sector indiscriminately.
• Typically applied to a developing EPR sector.

 
• Varying fees depending on product design.
• Fees account for ease of reuse, repair and recycling.
• Typically applied to a well-established EPR sector.
• Varying fees based on environmental impact of products.
• Benefits and penalties issued based on environmental considerations.
• Typically applied to a well-established EPR sector.
• Manufacturers and retailers reclaim products that have reached the post-consumer stage.
• This is implemented as deposit refund or product return.
• Typical application is seen in the beverage industry.

 

Calculation of the EPR fee

The existing EPR Regulations mandate that the EPR fee is established through nett cost recovery, involving a differentiated rate for identified products within a product class. The calculation formulae will vary according to the fee determination methods mentioned above and will take into account the criteria as specified in regulation 7 of the EPR Regulations. The application of these calculations is further unpacked in the provided Toolkit.

 

Conditions of fee adjustments

This Guideline document provides guidance on the conditions under which the EPR fees may be adjusted. The conditions put forward are based on consideration of international best practise as well as applicability within the South African context. To this end, three conditions are put forward and their pros and cons unpacked. These are:

1. No adjustment: when there are economies of scale and enhancements in waste management efficiency. Under these conditions, when waste volume rises and operational effectiveness improves, the costs per unit of waste management could naturally decrease.
2. Annual inflationary adjustment: is tied to Consumer Price Inflation (CPI). This adjustment period ensures that the fees remain aligned with the broader trend of price and cost escalation over time. Consequently, this approach ensures the fees' actual value and guarantees sufficient coverage for waste management expenses.
3. Three and / or five-year adjustment: permits the fees to be revised every three and / or five years, taking into account the progressive increases in the collection, recycling and other targets, and the DFFE's evaluation phase of EPR schemes, respectively. It also reduces the administrative burden of frequent re-evaluation of fees, provides price certainty to producers and assists PROs and producers with their planning and investment decisions over the short and medium term.

 

EPR fee determination Toolkit

Finally, a Toolkit is provided as an addendum to this Guideline document to provide guidance to the PROs and producer implementing EPR schemes, on how to use the fee determination methodologies for their respective EPR scheme. These take into account the criteria behind each method and provide simplified applicable formulae for the user. The toolkits are designed to be a plug and play solution while also allowing for modifications that capture the subtle nuanced difference that exist in the respective sectors. A short manual is also provided for a step-by-step application of the toolkits.