Deep dive: Extended Producer Responsibility (EPR) — the fastest-moving subsegments to watch

In 2025, Extended Producer Responsibility for packaging reached a historic inflection point: seven U.S. states enacted comprehensive EPR laws covering an estimated 272 million people and protecting 1.3 billion acres, while the European Union's Packaging and Packaging Waste Regulation (PPWR) became law in February 2025 with mandatory recyclability requirements effective August 2026. Oregon launched the nation's first operational packaging EPR program in July 2025, with approximately 1,700 producers submitting compliance reports and fees ranging from $0.17–$0.23 per pound of covered material. The UK's packaging EPR scheme issued its first disposal fee invoices in October 2025, with plastic facing base fees of £423 per tonne and eco-modulation penalties escalating to 2.0x for non-recyclable packaging by 2028. This regulatory tsunami represents the most significant shift in producer accountability since Germany's 1991 Green Dot system pioneered the EPR concept.

Why It Matters

The global waste management crisis has reached proportions that voluntary corporate sustainability initiatives cannot address alone. Packaging contributes approximately 40% of global plastic waste generated between 2000 and 2019, and global waste generation is projected to grow 70% by 2050 without systemic intervention. EPR fundamentally restructures economic incentives by shifting end-of-life costs from municipalities and taxpayers to the companies that introduce products into the market.

The financial stakes are substantial. The UK's EPR scheme alone is expected to transfer approximately £1.2 billion annually from local authorities to producers. In the United States, the Recycling Partnership estimates that comprehensive EPR implementation could raise recycling rates to 75%, compared to the current national average of approximately 32%. For producers, compliance costs are projected at 0.5–1% of annual revenue or a 20–40% increase in packaging-related expenditures.

Beyond compliance costs, EPR creates differentiated competitive dynamics. Eco-modulation mechanisms—which adjust fees based on packaging recyclability—reward companies with sustainable design practices while penalizing those relying on difficult-to-recycle materials. California's SB 54 offers bonuses of up to $50,000 per SKU for demonstrated environmental impact reductions through redesign. Companies that proactively optimize packaging portfolios can transform regulatory compliance into cost advantages and market differentiation.

The convergence of regulatory mandates across major markets creates unprecedented urgency for multinational producers. A company selling packaged goods in Oregon, California, the UK, and the EU now faces four distinct EPR schemes with different fee structures, reporting requirements, and eco-modulation criteria. Understanding the fastest-moving subsegments within EPR—packaging, textiles, electronics, and batteries—is essential for strategic planning.

Key Concepts

EPR Subsegments and Material Categories

EPR programs have historically developed around specific waste streams, each with distinct collection infrastructure, recycling economics, and regulatory frameworks:

Packaging EPR represents the fastest-growing subsegment, covering single-use containers, wrapping materials, and food serviceware. U.S. state laws typically include paper, plastic, metal, and glass packaging, with some jurisdictions adding printing and writing paper. The EU's PPWR mandates that all packaging placed on the market be recyclable by 2030, with progressively stricter recyclability grades (A/B/C) determining fee modulation.

Electronics and E-Waste EPR operates in 25 U.S. states and throughout Europe, with established collection networks for computers, televisions, and small appliances. The subsegment is expanding to medical devices and monitoring equipment in jurisdictions like Saskatchewan, which extended electronics EPR in 2026.

Battery EPR has accelerated with electric vehicle adoption, covering lithium-ion, lead-acid, and emerging chemistries. The EU Battery Regulation requires 73% collection rates for portable batteries by 2030 and mandates recycled content minimums.

Textile EPR is emerging as the next frontier, with France's REP Textiles program requiring producers to fund collection and recycling infrastructure. Several U.S. states are considering textile EPR legislation following the packaging model.

Eco-Modulation Mechanisms

Eco-modulation adjusts EPR fees based on packaging design characteristics, creating financial incentives for recyclability:

Fee Bonuses (Reductions) reward mono-material packaging, post-consumer recycled (PCR) content, wash-off labels, easily separable components, and recyclable adhesives. Oregon's program provides life-cycle assessment (LCA) bonuses for demonstrated environmental improvements.

Fee Maluses (Penalties) penalize multi-layer laminates, opaque or colored plastics that interfere with NIR sorting, permanent shrink sleeves, non-recyclable adhesives, and oversized packaging. The UK's RAM (Recyclability Assessment Methodology) assigns Red ratings to difficult-to-recycle packaging, triggering escalating multipliers of 1.2x (2026), 1.6x (2027), and 2.0x (2028).

Producer Responsibility Organizations (PROs)

PROs serve as intermediary organizations that collect fees from producers and fund collection, sorting, and recycling infrastructure. In the United States, Circular Action Alliance (CAA) has emerged as the dominant PRO, operating across Oregon, California, Colorado, Minnesota, Maryland, and Washington. Maryland uniquely allows multiple PROs, enabling competition among stewardship organizations.

Sector-Specific KPIs

Metric	Baseline (Pre-EPR)	Good (Year 1-2)	Excellent (Mature Program)
Producer Registration Rate	N/A	>85%	>98%
Fee Collection Compliance	N/A	>90%	>99%
Packaging Recycling Rate	30-35%	50-55%	>65%
PCR Content (Plastic)	5-10%	15-25%	>30%
Portfolio Green/Amber Rating	40-50%	60-70%	>85%
Contamination Rate	20-30%	12-18%	<10%
Cost per Tonne Collected	$150-250	$100-150	<$100

What's Working and What Isn't

What's Working

Multi-State PRO Coordination: Circular Action Alliance's emergence as a unified PRO across multiple U.S. states reduces compliance complexity for national producers. Rather than navigating six separate organizational relationships, companies can register once and fulfill reporting requirements through a standardized portal. CAA's founding members—including Amazon, Coca-Cola, Procter & Gamble, and Walmart—have invested in developing interoperable data systems and harmonized reporting templates.

Eco-Modulation Driving Design Changes: Early evidence suggests eco-modulation mechanisms influence packaging decisions. The UK's tiered fee structure has prompted consumer goods companies to accelerate transitions from multi-layer flexible packaging to mono-material alternatives. France's +10% penalty on plastic bottles under 0.5L has driven format consolidation. Companies report conducting packaging portfolio audits specifically to identify and eliminate Red-rated materials before fee penalties take effect.

Provincial Success in Canada: British Columbia's Recycle BC program, operating since 2014, demonstrates mature EPR outcomes with approximately 45% plastics recovery rates and comprehensive province-wide collection. Ontario's transition to full producer responsibility, completing in December 2025, leverages these learnings with mandatory data reporting and needs assessments driving infrastructure investments.

South Africa's Inclusive Model: South Africa's EPR regulations uniquely emphasize integrating informal waste pickers into formal collection systems. Service fees explicitly account for this integration, creating a model that addresses both environmental and social sustainability objectives. This approach has attracted attention from other emerging markets developing EPR frameworks.

What Isn't Working

Fragmented U.S. Implementation: Despite CAA's coordination efforts, each U.S. state maintains distinct fee structures, eco-modulation criteria, and compliance timelines. Oregon's July 2025 launch preceded California's August 2025 registration opening by only one month, but their programs differ significantly in scope and fee calculations. Producers operating nationally must maintain parallel compliance systems, increasing administrative burden and reducing the efficiency gains that harmonized EPR should deliver.

Delayed Recycling Infrastructure Investment: EPR fee collection has outpaced corresponding investments in sorting and recycling capacity in several jurisdictions. The assumption that producer fees automatically translate to improved infrastructure has proven optimistic where program administrators lack authority to mandate capital expenditures or where recycling market economics remain unfavorable.

Small Producer Exemptions Creating Free-Riders: Most EPR programs exempt small businesses below revenue or tonnage thresholds. While administratively necessary, these exemptions can create competitive disadvantages for compliant producers and allow significant material volumes to escape the system. The UK's small producer threshold of £1M turnover and 25 tonnes annually means reporting without fee obligations, potentially leaving infrastructure funding gaps.

Limited Textile EPR Progress: Despite fashion and textiles generating 92 million tonnes of waste annually, textile EPR remains nascent outside France. U.S. state legislatures have introduced textile EPR bills, but none have achieved passage. The complexity of fiber blends, global supply chains, and the absence of established recycling infrastructure presents higher barriers than packaging EPR implementation.

Key Players

Established Leaders

• Circular Action Alliance (CAA) — The dominant U.S. PRO managing packaging EPR programs across six states, backed by 40+ founding member companies including major CPG brands and retailers.

• Citeo (France) — Europe's largest PRO by revenue, managing packaging and paper EPR in France with extensive eco-modulation experience and expanding textile responsibilities.

• Der Grüne Punkt (Germany) — Operator of the original Green Dot system since 1991, managing packaging EPR across Germany with sophisticated sorting partnerships.

• Recycle BC (Canada) — The PRO operating British Columbia's packaging and paper EPR program, achieving among the highest recovery rates in North America.

• TOMRA — Global leader in reverse vending machines and optical sorting technology, providing critical infrastructure for deposit return systems and material recovery facilities.

Emerging Startups

• Clarity AI — Provides EPR compliance software enabling producers to track packaging data by SKU, model eco-modulation scenarios, and manage multi-jurisdiction reporting.

• Recyda — German platform offering RAM assessments and recyclability optimization tools, helping producers evaluate packaging designs against eco-modulation criteria.

• Neta AI — Uses machine learning to analyze packaging portfolios, identify eco-modulation savings opportunities, and automate producer reporting workflows.

• Greyparrot — Deploys AI-powered waste composition analysis at MRFs, providing the granular data EPR programs need for accurate fee calculations and contamination monitoring.

Key Investors & Funders

• Closed Loop Partners — Major circular economy investor with positions across recycling infrastructure, materials innovation, and EPR-enabling technology companies.

• Breakthrough Energy Ventures — Bill Gates-backed fund investing in waste-to-value and circular economy solutions that complement EPR infrastructure buildout.

• European Investment Bank — Provides concessional financing for recycling infrastructure projects in EU member states implementing PPWR requirements.

• California Department of Resources Recycling and Recovery (CalRecycle) — Administers SB 54 implementation with authority over PRO approval and needs assessments.

Examples

1. Oregon's Inaugural Fee Collection (2025): Oregon launched the nation's first operational packaging EPR program on July 1, 2025, with Circular Action Alliance as the approved PRO. Approximately 1,700 producers submitted reports by the March 31, 2025 deadline, and fee collection commenced immediately. Producer fees average $0.17–$0.23 per pound of covered material, with eco-modulation adjustments based on LCA submissions and design-for-recyclability criteria. The program explicitly banned polystyrene foam containers and packing peanuts effective January 1, 2025, eliminating problematic materials before the fee system took effect. Early implementation data suggests strong producer registration compliance exceeding 90%, though some small importers remain unregistered.

2. UK Packaging EPR Fee Modulation (2025-2028): The UK's revised packaging EPR scheme issued first invoices in October 2025, with large producers (£2M+ turnover, 50+ tonnes annually) facing full disposal fees. The scheme introduced the Recyclability Assessment Methodology (RAM) to grade packaging components as Green, Amber, or Red. Starting in 2026, fee modulation applies: Green packaging receives discounts, while Red packaging faces escalating penalties reaching 2.0x the base fee by 2028. Glass fees decreased 20% from initial estimates, while plastic remains the highest-cost material at £423 per tonne. The system processes biannual data submissions (April and October), with producers required to assess each SKU against evolving RAM criteria.

3. Uruguay's Deposit Return System: Uruguay became the first Latin American nation to implement a comprehensive Deposit Return System (DRS) for single-use beverage containers through the Plan Vale project. The system integrates reverse logistics infrastructure with producer responsibility obligations, creating collection rates substantially exceeding voluntary recycling programs. The approach demonstrates that emerging markets can leapfrog traditional EPR models by implementing DRS infrastructure simultaneously, rather than retrofitting collection systems onto existing waste management frameworks.

Action Checklist

• Conduct a packaging portfolio audit identifying all SKUs by material type, weight, and recyclability rating against relevant jurisdiction criteria (RAM for UK, LCA requirements for Oregon/California)
• Register with applicable PROs including Circular Action Alliance for U.S. state programs, PackUK for the UK scheme, and national PROs in EU member states where products are sold
• Establish SKU-level data collection systems capturing packaging weight, material composition, and sales volumes by jurisdiction to enable accurate reporting and fee forecasting
• Model eco-modulation scenarios to quantify potential fee savings from packaging redesigns, prioritizing high-volume SKUs with Red or Amber ratings
• Engage packaging suppliers on recyclability optimization specifying mono-materials, PCR content minimums, and removable label requirements in procurement specifications
• Build compliance calendar with registration, reporting, and fee payment deadlines across all applicable jurisdictions, noting that U.S. states operate on different annual cycles
• Assess textile and electronics EPR exposure as these subsegments expand, evaluating current product portfolios against emerging legislative proposals

FAQ

Q: Which EPR subsegments will see the fastest regulatory expansion in 2026-2027? A: Textile EPR is the clear next frontier, with France's REP Textiles providing a working model and multiple U.S. states considering legislation. Battery EPR is expanding as electric vehicle adoption accelerates, with the EU Battery Regulation setting precedent for recycled content mandates. Medical device EPR is emerging in specific jurisdictions, including Saskatchewan's 2026 extension to monitoring devices. Producers in these sectors should anticipate compliance requirements within 24-36 months.

Q: How do eco-modulation fees compare across major markets? A: Fee structures vary significantly. The UK charges £423 per tonne for plastic with RAM-based modulation multipliers up to 2.0x. Oregon fees average $0.17–$0.23 per pound ($375–$507 per tonne). EU member states range from €48 per tonne (Belgium aluminum) to €1,090 per tonne (Sweden plastics). California's approach combines base fees with performance bonuses reaching $50,000 per SKU for demonstrated impact reductions. Companies should model jurisdiction-specific exposure based on their material mix and recyclability profiles.

Q: What happens if we miss EPR registration or reporting deadlines? A: Penalties escalate significantly across jurisdictions. Oregon allows penalties up to $25,000 per day of non-compliance. California's SB 54 authorizes penalties reaching $50,000 per day starting January 2027. Beyond financial penalties, non-registered producers may face marketplace access restrictions—Amazon and other platforms increasingly require EPR registration numbers for product listings in regulated jurisdictions. The reputational and channel access consequences often exceed direct penalty costs.

Q: How should multinational companies structure EPR compliance teams? A: Leading practice involves centralized data architecture with decentralized regulatory relationship management. Packaging data (SKUs, materials, weights, sales volumes) should flow to a unified system enabling multi-jurisdiction reporting. However, each regulated market requires relationship management with local PROs, regulators, and compliance verification bodies. Companies typically structure this as a center of excellence for data and strategy, with regional sustainability or regulatory affairs teams handling in-market execution.

Q: Can EPR compliance create competitive advantages beyond cost avoidance? A: Yes, eco-modulation creates first-mover advantages for companies that redesign packaging proactively. Lower fees improve unit economics relative to competitors paying premium rates for non-recyclable packaging. Marketing claims around recyclability resonate with environmentally conscious consumers. Supply chain relationships strengthen when packaging suppliers recognize that recyclability specifications reflect regulatory requirements rather than arbitrary preferences. Some companies report that EPR-driven packaging optimization initiatives identified cost reduction opportunities exceeding compliance expenditures.

Sources

• Circular Action Alliance. (2025). "EPR for Paper and Packaging Registration and Reporting Resources." https://circularactionalliance.org
• Proskauer Rose LLP. (2025). "Seven States and Counting: The 2025 Guide to EPR Packaging Compliance."
• UK Department for Environment, Food & Rural Affairs. (2025). "Packaging Extended Producer Responsibility: 2025 Fee Structure and Modulation Framework."
• European Commission. (2025). "Packaging and Packaging Waste Regulation (PPWR) Summary." EUR-Lex.
• Product Stewardship Institute. (2025). "U.S. EPR Laws Database: 146 Laws Across 35 States."
• The Recycling Partnership. (2024). "State of Recycling Report: EPR Impact Projections."
• EPR Group Consulting. (2025). "What We've Learned About EPR Producer Fees: 2025 Update."
• Resource Recycling. (2024). "Diverse Eco-Modulation Requirements Set EPR Programs Apart."