Case study: Extended Producer Responsibility (EPR) — A city or utility pilot and the results so far

When Oregon launched the United States' first fully operational Extended Producer Responsibility program for packaging on July 1, 2025, it marked a watershed moment for municipal waste management. Within three months, over 1,250 producers had submitted supply reports through the Circular Action Alliance portal, representing an estimated 85% of packaged goods sold in the state. Meanwhile, across the Atlantic, Ljubljana's RCERO facility processed its one-millionth tonne of mixed municipal waste in March 2024, achieving a 95-98% material recovery rate that positions the Slovenian capital as Europe's first zero-waste city. These divergent approaches—one regulatory, one infrastructural—reveal both the promise and complexity of translating EPR policy into measurable urban outcomes. The gap between regions is stark: Belgium's Fost Plus reports 89.8% household packaging recycling rates, while the U.S. national residential recycling rate sits at just 21% according to The Recycling Partnership's January 2024 analysis.

Why It Matters

Extended Producer Responsibility fundamentally restructures the economics of waste. Under traditional models, municipalities bear the full cost of collecting, sorting, and processing materials that producers design without regard for end-of-life management. EPR inverts this by requiring producers to finance and often operate the recovery systems for their products, creating direct financial incentives for packaging redesign.

The scale of the problem demands this intervention. The European Environment Agency reports that EU member states generated 79.7 million tonnes of packaging waste in 2023—approximately 177.8 kilograms per capita. Projections suggest this will increase 20% by 2030 without intervention. For cities, packaging waste now constitutes 30-40% of municipal solid waste by volume, straining collection infrastructure and landfill capacity.

EPR's economic logic is compelling. When producers pay differentiated fees based on material recyclability—a practice called eco-modulation—they face concrete incentives to redesign packaging. Belgium's Green Dot Tariff, operated by Fost Plus since 1994, charges aluminum packaging at rates ranging from €48 to €1,090 per tonne depending on format and collection route. These price signals have driven measurable design changes: Unilever reformulated shampoo bottles to mono-material PP plastic specifically to reduce Belgian EPR fees.

For municipal engineers and utility operators, EPR represents both an opportunity and an operational challenge. The opportunity: shifting collection and processing costs to producers who can afford substantial infrastructure investments. The challenge: integrating new compliance systems with existing waste management contracts and infrastructure.

Key Concepts

The Producer Responsibility Organization (PRO) Model

PROs serve as intermediaries between producers and municipalities. Producers pay fees to the PRO, which then contracts with local governments and private operators to provide collection and recycling services. This model has evolved significantly since Germany's Der Grüne Punkt launched in 1991.

Single-PRO systems, like those now operating in Oregon and California through the Circular Action Alliance, offer administrative simplicity but risk monopolistic inefficiency. Multi-PRO systems, common in Germany and parts of the UK, encourage competition but create coordination challenges. Belgium's hybrid approach—Fost Plus handles household packaging while Valipac manages commercial streams—demonstrates that sector-specific specialization can coexist with geographic monopoly.

Eco-Modulation and Fee Design

Eco-modulation adjusts producer fees based on product recyclability, recycled content, and environmental impact. Under Article 8a of the EU Waste Framework Directive, eco-modulation became mandatory for all member states by 2024. Effective fee structures require three elements: accurate recyclability assessment methods, granular fee differentiation, and regular recalibration based on market conditions.

The challenge lies in defining "recyclability" consistently. A PET bottle is technically recyclable everywhere, but practical recyclability depends on local infrastructure. Colorado's EPR program addresses this by requiring the Circular Action Alliance to assess recyclability based on actual in-state processing capacity, not theoretical technical potential.

Municipal Integration Points

City and utility pilots must address several integration challenges:

Integration Area	Key Consideration	Typical Timeline
Collection contracts	Alignment with PRO service agreements	12-24 months
Processing infrastructure	Capacity matching with material flows	24-36 months
Data systems	Tonnage reporting and verification	6-12 months
Resident communication	Behavior change and contamination reduction	Ongoing
Fee reconciliation	Municipal reimbursement mechanisms	Annual cycles

What's Working

Ljubljana's Zero-Waste Infrastructure Model

Ljubljana's success stems from integrated infrastructure investment rather than EPR policy alone. The RCERO Ljubljana regional waste management center, operational since 2015, serves 700,000 citizens across 38 municipalities—approximately one-third of Slovenia's population. The facility achieves its 95-98% recovery rate through mechanical-biological treatment that extracts recyclables, produces biogas from organic fractions, and converts residuals to refuse-derived fuel.

Key metrics demonstrate the model's effectiveness: residual waste per inhabitant dropped to 120 kg annually by 2024, compared to the EU average of 235 kg. The city achieved a 68% separate collection rate and projects reaching 78% by 2025. Critically, Ljubljana paired infrastructure investment with aggressive contamination reduction—doorstep source separation for five waste streams, supported by public education campaigns and financial incentives.

The financial model proves equally instructive. Initial EU Cohesion Fund investment of €80 million leveraged €15 million in regional contributions. Operating costs of €45 per tonne compare favorably to western European averages of €80-120 per tonne. The facility generates revenue from recycled material sales, biogas, and processing fees, approaching cost-neutral operation.

Oregon's Graduated Implementation

Oregon's program plan, approved in February 2025, demonstrates careful attention to municipal transition. Rather than immediately shifting all costs to producers, the program phases in responsibility over five years:

Year 1-2: Producer registration and baseline data collection
Year 3: Infrastructure needs assessment with municipal input
Year 4: Pilot reimbursement programs for participating municipalities
Year 5: Full producer financial responsibility for compliant materials

This graduated approach addresses a critical failure mode observed in other jurisdictions: the "stranded asset" problem where municipal processing investments become worthless when PRO contracts redirect material flows elsewhere.

Belgium's On-the-Go Collection Innovation

Fost Plus expanded beyond curbside collection to address out-of-home packaging waste—a segment representing 15-20% of packaging by weight but disproportionately visible as litter. The program deployed sorted collection bins at transport hubs, public parks, and schools, supported by a smartphone rewards app that incentivizes proper sorting. Early results show 23% higher collection rates in pilot municipalities compared to curbside-only systems.

What's Not Working

Recycling Rate Accounting Opacity

Independent analysis by the Fair Resource Foundation revealed significant discrepancies between Fost Plus's reported 89.8% recycling rate and actual municipal outcomes. The Foundation's 2024 review estimated practical recycling rates closer to 59-65% when accounting for contamination, export losses, and process residuals. This gap highlights a systemic problem: PROs control both operations and reporting, creating inherent conflicts of interest.

The measurement challenge extends beyond Belgium. California's SB 54 requires 65% recycling by 2032, but the regulation's definition of "recycling" remains contested. Does mechanical recycling of plastic to lower-grade applications count equally with closed-loop bottle-to-bottle recycling? Does chemical recycling—still unproven at scale—qualify? These definitional ambiguities undermine comparability across programs.

Fragmented U.S. Regulatory Landscape

With seven states now operating or implementing EPR programs (Maine, Oregon, Colorado, California, Minnesota, Maryland, and Washington), producers face a patchwork of requirements. California regulates business-to-business tertiary packaging; other states exempt it. Maine uses a per-item fee structure; Oregon and Colorado use weight-based systems. This fragmentation increases compliance costs without improving environmental outcomes.

The Circular Action Alliance's emergence as the dominant PRO across multiple states offers partial harmonization, but fundamental policy differences persist. A producer selling identical products in Portland and Sacramento faces different registration deadlines, reporting formats, and fee calculations.

Infrastructure Investment Lag

EPR programs generate significant funds—California projects $500 million annually from 2027-2037—but deploying capital into recycling infrastructure takes years. Oregon's program plan acknowledges that even with producer funding, new MRF capacity requires 3-5 years from approval to operation. During this gap period, collected materials may lack viable processing destinations, potentially increasing export to lower-quality facilities abroad.

Key Players

Established Leaders

Fost Plus (Belgium) — Operating since 1994, Fost Plus manages household packaging EPR for all three Belgian regions. Despite recent governance criticisms, the organization has invested over €700 million in domestic sorting and recycling infrastructure and processes 750,000 tonnes of packaging annually.

Der Grüne Punkt / Duales System Deutschland (Germany) — The original PRO, launched in 1991, pioneered the Green Dot licensing model that spread across Europe. Now operates in a competitive multi-PRO environment following 2003 market liberalization.

CITEO (France) — Formed from the 2017 merger of Eco-Emballages and Ecofolio, CITEO manages packaging and paper EPR for France's 36,000 municipalities, processing 3.5 million tonnes annually.

Valpak (UK) — The UK's largest compliance scheme, serving 2,500+ businesses. Operates under the UK's unique "packaging recovery note" (PRN) system, which creates tradeable credits for demonstrated recycling.

Emerging Startups

Circular Action Alliance (USA) — Founded in 2022, CAA has become the primary PRO for U.S. packaging EPR, now operating or approved in five states. The nonprofit structure and producer governance distinguish it from European commercial PROs.

Recykal (India) — Digital platform connecting waste generators with recyclers, providing EPR compliance services for India's 2022 plastic waste EPR regulations. Raised $22 million Series B in 2023.

Greyparrot (UK) — AI-powered waste sorting analytics used by PROs to verify material flows and contamination rates. Technology addresses the recycling rate verification problem identified in Fost Plus audits.

Key Investors & Funders

Closed Loop Partners (USA) — Impact investment firm with $450 million under management focused on circular economy infrastructure. Active investor in MRF modernization and chemical recycling facilities.

European Investment Bank — Provided €50 million in financing for Ljubljana's RCERO facility and continues to fund circular economy infrastructure across member states under the Circular Economy Action Plan.

CalRecycle (California) — State agency administering the $500 million annual plastic pollution fee, with mandated investments in recycling infrastructure and market development.

Examples

Ljubljana, Slovenia: The RCERO Ljubljana facility demonstrates that infrastructure investment can achieve results exceeding those of regulatory-focused EPR alone. Processing 170,000+ tonnes annually with 95-98% recovery rates, the facility reduced per-capita residual waste to 120 kg—half the EU average. Success factors include EU Cohesion Fund financing, regional municipal cooperation across 38 jurisdictions, and integrated mechanical-biological treatment technology.
Oregon, USA: The first fully operational U.S. packaging EPR program launched July 1, 2025, with the Circular Action Alliance as sole PRO. The program's graduated five-year implementation protects municipal infrastructure investments while transitioning costs to producers. Early indicators show strong producer compliance—over 1,250 supply reports submitted in the first quarter—though material outcome data will emerge only in 2026-2027.
Copenhagen, Denmark: Denmark implemented packaging EPR effective January 1, 2025, as one of the last EU member states to comply with Directive requirements. Copenhagen's existing waste-to-energy infrastructure complicated EPR implementation, as material diversion for recycling reduces feedstock for the city's district heating system. The city's 70% recycling target for 2024 demonstrates ambition, though critics note heavy reliance on incineration obscures lower material recycling rates.

Action Checklist

Audit existing municipal collection contracts for EPR compatibility, identifying clauses that may conflict with PRO service agreements
Establish baseline tonnage data by material stream using standardized composition studies to support future reimbursement claims
Engage with emerging PROs early to secure favorable terms before program mandates take effect
Assess local processing infrastructure capacity against projected material flows under EPR scenarios
Develop resident communication plans addressing sorting requirements and contamination reduction
Model financial impacts of EPR transition including stranded asset risks and contract termination costs
Join regional coalitions to advocate for municipal interests in PRO governance and fee-setting

FAQ

Q: How long does it typically take for EPR programs to show measurable recycling improvements? A: Based on European experience, programs require 3-5 years from implementation to demonstrate statistically significant recycling rate improvements. Belgium's Fost Plus took nearly a decade to reach 80%+ reported rates. The lag reflects infrastructure investment timelines, behavior change adoption curves, and the need for multiple fee recalibration cycles to optimize eco-modulation signals.

Q: What happens to existing municipal recycling contracts when EPR programs launch? A: Most EPR frameworks include transition provisions protecting existing municipal investments. Oregon's program, for example, phases in producer responsibility over five years and requires the PRO to assess infrastructure needs before redirecting material flows. However, municipalities should proactively review contracts for termination clauses and renegotiate terms to align with anticipated EPR requirements.

Q: How are EPR fees calculated, and who determines the rates? A: Fee structures vary by jurisdiction but typically combine base rates per material type with eco-modulation adjustments for recyclability. PROs develop fee schedules subject to regulatory approval—CalRecycle approves California rates; Oregon DEQ oversees CAA's methodology. Fees generally cover collection, sorting, processing, and administrative costs, with eco-modulation adding 20-50% premiums for hard-to-recycle materials.

Q: Can small municipalities participate effectively in EPR programs? A: Yes, though often through regional consolidation. Ljubljana's success relies on a 38-municipality consortium sharing the RCERO facility. U.S. programs like Colorado's explicitly require PROs to serve rural and small communities, with fee structures adjusted to reflect higher per-capita collection costs. Small municipalities should prioritize regional partnerships and early engagement with PRO planning processes.

Q: How do EPR programs handle materials that are technically recyclable but lack local processing infrastructure? A: This represents a critical policy design question. Colorado requires the Circular Action Alliance to assess recyclability based on actual in-state processing capacity, effectively excluding materials with only theoretical recyclability. Other programs use "broadly accepted" thresholds—typically requiring processing access for 60-80% of the population. Materials failing these tests face higher fees or exclusion from recyclability claims.

Sources

The Recycling Partnership, "2024 State of Recycling Report: Only 21% of U.S. Residential Recyclables Captured," January 2024
European Environment Agency, "Municipal Waste Management Country Profiles 2025," March 2025
Circular Action Alliance, "Oregon Program Plan and Implementation Timeline," February 2025
Fair Resource Foundation, "Review of EPR for Packaging Waste in Belgium: Paper 2 - Recycling Rates for PMD," March 2024
City of Ljubljana, "RCERO Ljubljana: A New Milestone in Operations," March 2024
Proskauer Rose LLP, "Seven States and Counting: The 2025 Guide to EPR Packaging Compliance," 2025
CalRecycle, "SB 54 Plastic Pollution Prevention and Packaging Producer Responsibility Act: Implementation Updates," August 2025
EBRD Green Cities, "Zero-Waste Strategy: Ljubljana, Slovenia," 2024