Case study: Extended Producer Responsibility (EPR) — An emerging standard shaping buyer requirements

Extended Producer Responsibility has rapidly evolved from a niche European policy into a global movement reshaping how companies source, package, and sell products. Today, 63 countries have implemented some form of EPR system for packaging, covering over one billion people worldwide. In the United States alone, seven states have enacted EPR packaging laws, meaning 19.3% of Americans now live under producer responsibility frameworks. For procurement professionals, this regulatory shift represents both a compliance imperative and a strategic opportunity to drive sustainable sourcing decisions.

Why It Matters

EPR fundamentally changes who pays for end-of-life packaging management. Rather than municipalities and taxpayers bearing these costs, producers—including brand owners, importers, and distributors—must finance the collection, sorting, and recycling of the packaging they place on the market.

This transfer of financial responsibility creates direct purchasing implications. Buyers must now evaluate suppliers based on their EPR compliance status, packaging material choices, and recyclability ratings. A supplier using non-recyclable flexible plastics in Belgium faces fees of €48 per tonne, while the same material in Sweden costs €1,090 per tonne. These cost differentials flow through supply chains, making packaging decisions a procurement priority rather than an afterthought.

Jurisdictions with established EPR programs consistently achieve recycling rates exceeding 75%, compared to significantly lower rates in regions without such frameworks. For companies with sustainability commitments, working with EPR-compliant suppliers directly supports waste reduction targets and Scope 3 emissions goals. The regulatory trend is clear: EPR is expanding, fees are rising, and compliance requirements are tightening.

Key Concepts

EPR Principles

Extended Producer Responsibility operates on the polluter-pays principle, holding companies financially and operationally responsible for the environmental impact of their products throughout the lifecycle. Core obligations include:

• Financial responsibility: Paying fees that cover collection, sorting, recycling, and disposal costs
• Physical responsibility: In some schemes, directly organizing take-back and recovery systems
• Informative responsibility: Providing data on materials placed on market and ensuring proper labeling
• Design responsibility: Creating packaging that meets recyclability and recycled content standards

Fee Structures and Eco-Modulation

EPR fees vary dramatically by material type, recyclability, and jurisdiction. Modern schemes use eco-modulation to incentivize sustainable packaging design—recyclable materials incur lower fees while hard-to-recycle formats face premium charges.

Under the EU's new Packaging and Packaging Waste Regulation (PPWR), eco-modulated fees will reward packaging that exceeds minimum recyclability thresholds. In California's SB 54 program, fees for flexible polyethylene and polypropylene packaging are substantially higher than for fiber-based materials that integrate more easily into recycling streams.

Compliance Obligations

Producers must typically:

1. Register with national producer responsibility organizations (PROs)
2. Report packaging quantities by material type and weight
3. Pay fees based on reported volumes and material categories
4. Maintain documentation proving compliance and recycled content claims
5. Meet targets for recycling rates, recycled content, and source reduction

Non-compliance carries significant penalties. Oregon imposes fines up to $25,000 per day for violations, while California's regulations authorize penalties up to $50,000 per day.

What's Working

Harmonized Multi-State Coordination

The emergence of the Circular Action Alliance (CAA) as the approved PRO in multiple US states—including California, Oregon, Colorado, and Maryland—demonstrates that coordinated compliance is achievable. Producers can register once with CAA and meet obligations across jurisdictions rather than navigating fragmented state-by-state systems. This reduces administrative burden and creates predictable compliance pathways.

Design-for-Recyclability Incentives

Eco-modulated fees are driving measurable packaging redesign. Companies reformulating products to use mono-material structures, eliminating problematic adhesives, and switching from multi-layer flexible packaging to recyclable alternatives report both lower EPR costs and improved recyclability scores. The financial signal is working: good design is rewarded.

Data Infrastructure Development

EPR programs have accelerated investment in material tracking systems. Producers now maintain detailed records of packaging composition, enabling better supply chain visibility. This data infrastructure supports not only compliance reporting but also lifecycle assessments, carbon footprint calculations, and circular economy metrics that buyers increasingly require.

What Isn't Working

Regulatory Uncertainty and Implementation Delays

California's SB 54 program illustrates implementation challenges. Governor Newsom rejected initial draft regulations in March 2025 due to cost concerns, forcing CalRecycle to restart the rulemaking process. Final regulations remain under development, leaving producers uncertain about exact fee structures and compliance timelines. This uncertainty makes long-term packaging investment decisions difficult.

Fee Disparities and Cost Unpredictability

Dramatic fee variations across jurisdictions create procurement complexity. The same aluminum packaging costs €48 per tonne in Belgium but €1,090 per tonne in Sweden—a 23-fold difference. For multinational companies, optimizing packaging across markets becomes an intricate calculation that shifts as fee schedules update annually.

Recycled Content Supply Constraints

EPR programs increasingly mandate minimum recycled content—the UK requires 30% recycled plastic to avoid its Plastic Packaging Tax, while the EU PPWR sets escalating targets through 2040. However, supply of food-grade recycled materials remains constrained, creating procurement bottlenecks. Buyers must secure recycled content commitments from suppliers while navigating volatile pricing for post-consumer recycled materials.

Real-World Examples

EU Packaging and Packaging Waste Regulation (PPWR)

The EU's landmark PPWR entered into force on February 11, 2025, replacing the previous Packaging Directive with directly applicable regulation across all member states. Key requirements shaping buyer decisions include:

• All packaging must be recyclable by 2030, meeting Design for Recycling criteria
• Recycled content targets for plastic packaging take effect January 1, 2030
• PFAS in food packaging prohibited from August 2026
• Deposit-return systems for single-use beverage containers required by 2029
• Reuse targets with binding obligations starting 2030

For procurement teams, PPWR compliance now factors into supplier qualification. Buyers must verify that packaging suppliers can meet recyclability thresholds and provide documentation proving recycled content claims. The regulation explicitly applies to e-commerce operators and online marketplaces, extending compliance obligations throughout supply chains.

California SB 54

California's Plastic Pollution Prevention and Packaging Producer Responsibility Act establishes North America's most ambitious EPR framework. By 2032, the program requires:

• 25% reduction in single-use plastic packaging by weight
• 100% of single-use packaging recyclable or compostable
• 65% recycling rate for all single-use packaging

The program includes a $500 million annual environmental mitigation fund from 2027-2037, with fees assessed on producers based on material type and recyclability. For companies selling into California—the world's fifth-largest economy—SB 54 compliance effectively becomes a national requirement. Procurement specifications increasingly reference SB 54 recyclability standards as baseline requirements.

UK Plastic Packaging Tax

The UK pioneered a tax-based approach to incentivizing recycled content. From April 2025, plastic packaging with less than 30% recycled content incurs a tax of £223.69 per tonne. For a company importing 100 tonnes of non-compliant packaging, this represents an annual cost of £22,369.

The tax has driven measurable behavior change. Companies reformulated packaging to exceed the 30% threshold, creating surge demand for post-consumer recycled plastics. A 2025 update excluded pre-consumer manufacturing scrap from qualifying as recycled content, requiring buyers to verify that suppliers use genuine post-consumer materials. Mass balance accounting for chemically recycled plastics is now permitted, expanding sourcing options.

Action Checklist

• Map your EPR exposure: Identify every jurisdiction where you place packaging on the market and determine applicable registration, reporting, and fee obligations
• Audit supplier compliance: Verify that key packaging suppliers are registered with appropriate PROs and can provide compliance documentation
• Assess packaging recyclability: Evaluate current packaging against Design for Recycling criteria to identify materials requiring redesign
• Secure recycled content supply: Establish supplier agreements for post-consumer recycled materials with verified chain of custody documentation
• Build reporting infrastructure: Implement systems to track packaging quantities by material type, weight, and jurisdiction for accurate PRO reporting
• Monitor regulatory developments: Track fee schedule updates, new jurisdiction launches, and evolving recyclability standards that affect procurement decisions
• Calculate total cost of ownership: Include EPR fees, potential tax liabilities, and redesign costs when evaluating packaging options

FAQ

Q: How do EPR fees affect purchasing decisions for packaging materials?

A: EPR fees create significant cost differentials between materials. Easily recyclable mono-materials like PET or aluminum typically incur lower fees than hard-to-recycle multi-layer flexible packaging. In high-fee jurisdictions, these cost differences can exceed €1,000 per tonne, making material selection a procurement priority. Buyers should request fee impact analysis from packaging suppliers and factor EPR costs into total cost of ownership calculations.

Q: What happens if a supplier is not compliant with EPR requirements?

A: Non-compliant suppliers create direct risk for buyers. In most EPR frameworks, responsibility flows through the supply chain—if your supplier fails to register or pay fees, the obligation may transfer to you as the importer or brand owner. Beyond regulatory exposure, non-compliance signals operational maturity concerns. Leading procurement teams include EPR compliance verification in supplier qualification criteria and contractual terms.

Q: How should multinational companies approach EPR compliance across different jurisdictions?

A: Effective multi-jurisdiction compliance requires centralized coordination with local execution. Establish a cross-functional EPR governance team covering procurement, sustainability, and legal. Use the harmonization where available—PROs like CAA operate across multiple US states. For packaging redesign decisions, optimize for the most stringent requirements while ensuring baseline compliance everywhere. Many companies are converging toward globally recyclable packaging standards to simplify multi-market compliance.

Sources

• OECD Environment Directorate. "Extended Producer Responsibility: Updated Guidance for Efficient Waste Management." OECD Publishing, 2024. https://www.oecd.org/environment/extended-producer-responsibility.htm

• European Commission. "Regulation (EU) 2025/40 on Packaging and Packaging Waste." Official Journal of the European Union, January 22, 2025. https://eur-lex.europa.eu/legal-content/EN/TXT/?uri=OJ:L_202500040

• CalRecycle. "SB 54: Plastic Pollution Prevention and Packaging Producer Responsibility Act." California Department of Resources Recycling and Recovery, 2025. https://calrecycle.ca.gov/packaging/packaging-epr/

• HM Revenue & Customs. "Plastic Packaging Tax: Rates and Thresholds." UK Government, 2025. https://www.gov.uk/guidance/check-if-you-need-to-register-for-plastic-packaging-tax

• Sustainable Packaging Coalition. "EPR State Legislation Tracker and Comparison Guide." 2025. https://epr.sustainablepackaging.org/

• World Economic Forum. "Extended Producer Responsibility: A Key Enabler of the Circular Economy." WEF Insight Report, December 2025. https://www.weforum.org/publications/extended-producer-responsibility-circular-economy

• Net Zero Compare. "Extended Producer Responsibility for Packaging: Country-by-Country Fee Comparison." 2025. https://netzerocompare.com/academy/extended-producer-responsibility-epr-for-packaging-country-by-country-comparison