Trend watch: Extended Producer Responsibility (EPR) in 2026 — signals, winners, and red flags

More than 400 EPR schemes now operate across over 50 countries, and the global market for EPR compliance services is projected to surpass $80 billion by 2030. For executives in consumer goods, packaging, electronics, and retail, 2026 marks a decisive inflection point: the European Union's Packaging and Packaging Waste Regulation (PPWR) is entering enforcement, eco-modulation fee structures are reshaping product design economics, and a wave of new state-level EPR laws in the United States is creating a fragmented compliance landscape that demands strategic attention.

Why It Matters

Extended Producer Responsibility shifts the financial and operational burden of end-of-life product management from municipalities and taxpayers to the companies that place products on the market. The principle is straightforward: if you produce it or sell it, you pay for its collection, sorting, recycling, or disposal. In practice, EPR is one of the most powerful regulatory levers for driving circular economy outcomes at scale.

The economic stakes are substantial. In Europe, EPR fees for packaging alone exceed $5 billion annually across all member states. France's Citeo system collected approximately $900 million in 2024 from obligated producers, funding collection infrastructure that achieves a 72% packaging recycling rate. When EPR fee structures incorporate eco-modulation, rewarding recyclable designs with lower fees and penalizing difficult-to-recycle formats with surcharges, they create direct financial incentives that influence billions of dollars in packaging and product design decisions.

The regulatory momentum is accelerating. The EU's PPWR, adopted in late 2024, establishes binding recycled content targets, reuse quotas, and packaging minimization requirements that will take effect in phases from 2030 through 2040. In the United States, Colorado, Oregon, California, and Maine have enacted packaging EPR laws since 2021, with at least eight additional states considering legislation in 2026. India expanded its EPR framework for plastic packaging in 2024, and Canada's provinces continue to transition from shared-responsibility models to full producer responsibility.

For multinational companies, the compliance challenge is compounding. Each jurisdiction defines obligated producers differently, calculates fees using distinct methodologies, and imposes varying reporting requirements. Organizations that treat EPR as a local compliance exercise rather than a global strategic function risk fragmented operations, duplicated costs, and missed opportunities to leverage EPR data for product redesign.

Signals to Watch

Eco-Modulation Becomes the Default Fee Structure

France pioneered eco-modulated EPR fees, adjusting charges based on recyclability, recycled content, and the presence of disruptive materials such as carbon black pigments or multi-layer flexible films. Italy, Spain, the Netherlands, and Belgium have adopted similar approaches. The PPWR mandates that all EU member states implement eco-modulation for packaging EPR by 2030, but many are accelerating timelines to 2027 or 2028. The practical impact is significant: France's Citeo charges a 100% malus (surcharge) on packaging that disrupts recycling streams, while offering up to a 20% bonus for formats that exceed recyclability thresholds. Watch for fee differentials to widen further in 2026 as Producer Responsibility Organizations (PROs) gain access to better sorting and composition data from automated material recovery facilities.

U.S. State-Level EPR Laws Create a Patchwork

Colorado's Circular Economy Development Center began collecting producer registration data in 2025, with fee assessments expected to begin in 2026. Oregon's program is advancing through needs assessments and program design. California's SB 54, the most ambitious U.S. packaging EPR law, requires all single-use packaging and food service ware to be recyclable or compostable by 2032, with a 65% source reduction target. Maine's law, the first enacted in the country in 2021, is now generating operational data on collection costs and producer fee structures. With no federal EPR framework on the horizon, multinational brands must navigate state-by-state compliance requirements that vary in scope, fee methodology, and obligated material definitions. Track legislative activity in New York, New Jersey, Illinois, and Washington, where packaging EPR bills advanced through committees in 2025.

Digital Product Passports Converge with EPR Data

The EU's Digital Product Passport (DPP) requirements, beginning with batteries in 2027 and extending to textiles and electronics by 2030, will generate granular material composition data that EPR systems can leverage for more precise fee calculations and recycling optimization. Several PROs are investing in blockchain-based tracking systems and QR-code material identifiers that link product-level data to end-of-life processing outcomes. This convergence means that EPR fees will increasingly reflect actual recyclability performance rather than theoretical material classifications. Companies investing in product-level data infrastructure now will be better positioned to demonstrate compliance and negotiate favorable fee structures.

Textiles and Furniture Enter the EPR Framework

France expanded its EPR regime to textiles in 2007 through Re_fashion (formerly Eco-TLC), collecting over 250,000 tonnes of used textiles annually by 2024. The EU Strategy for Sustainable and Circular Textiles, adopted in 2022, recommends mandatory textile EPR across all member states by 2025 to 2026. Several countries, including the Netherlands and Sweden, have announced implementation timelines. Meanwhile, France extended EPR to furniture through the Eco-mobilier scheme, which has collected $300 million annually from producers to fund furniture collection, repair, and recycling. The expansion of EPR beyond traditional packaging and electronics into textiles, furniture, and building materials represents a structural shift that will affect new categories of obligated producers.

Winners and Red Flags

Winners

Companies with design-for-recyclability capabilities embedded in product development will capture fee reductions under eco-modulated systems and avoid the compliance burden of reformulating products reactively. Unilever's commitment to making 100% of its packaging reusable, recyclable, or compostable by 2025 has driven material simplification that reduces EPR fees across multiple European markets. Nestle and Danone have similarly invested in mono-material packaging conversions that improve recyclability scores under PRO assessment frameworks.

Producer Responsibility Organizations with digital infrastructure and multinational reach are consolidating fragmented compliance markets. Valpak in the UK, Citeo in France, and Der Grune Punkt (Duales System Deutschland) in Germany are investing in data platforms that offer producers unified reporting, fee simulation, and material composition analysis across jurisdictions. RECOUP (Recycling of Used Plastics) and the Circular Materials initiative in Canada are building similar cross-provincial compliance tools.

Software and data platforms specializing in EPR compliance management serve a growing market as regulatory complexity increases. Companies such as Circulor, Greyparrot (AI-powered waste sorting analytics), and Vesy are building tools that help producers track obligated tonnage, simulate fee scenarios under different packaging designs, and automate reporting across multiple jurisdictions. As the number of EPR schemes multiplies, these platforms transition from nice-to-have efficiency tools to essential compliance infrastructure.

Red Flags

Brands relying on multi-material flexible packaging without a transition roadmap face escalating surcharges across eco-modulated EPR systems. Multi-layer sachets, stand-up pouches with mixed polymers, and metallized films are consistently penalized in eco-modulation scoring. Companies in the food, personal care, and household products sectors that have not initiated material simplification programs will see EPR costs rise 30% to 50% over the next three years as surcharges steepen.

Companies treating EPR as a procurement or compliance function rather than a design input are missing the strategic opportunity. When eco-modulation fee data flows back into product development, it creates a feedback loop that drives lighter, simpler, more recyclable products. Organizations that wall off EPR compliance from R&D and packaging engineering will pay higher fees and lose competitiveness against rivals that have integrated these signals into their design processes.

Regions without adequate collection and sorting infrastructure risk undermining EPR program credibility. In the United States, many communities lack curbside recycling programs capable of handling the material streams that EPR fees are intended to fund. If producer fees flow into systems that cannot deliver measurable recycling outcomes, political support for EPR erodes and producers face reputational risk from greenwashing accusations.

Sector-Specific KPI Benchmarks

Sector	KPI	Laggard	Average	Leader	Notes
Packaging	Recyclability rate (by weight)	<50%	65-75%	>90%	Mono-material leaders outperform
Packaging	Eco-modulation fee impact (% change)	+40% surcharge	Neutral	-20% bonus	Design determines outcome
Electronics	Collection rate (% placed on market)	<30%	45-55%	>65%	EU WEEE Directive benchmark
Electronics	Recycled content in new products	<5%	10-20%	>30%	Drives closed-loop value
Textiles	Post-consumer collection rate	<15%	25-35%	>50%	France leads globally
CPG	EPR cost as % of packaging spend	>8%	4-6%	<2%	Design optimization reduces fees

What's Working

France's eco-modulation model demonstrates measurable design impact. Since Citeo introduced graduated fee bonuses and penalties, the share of packaging formats rated as recyclable in France increased from 62% to 78% between 2018 and 2024. Producers shifted away from PVC, PS, and opaque PET toward mono-material PP, HDPE, and clear PET formats that command lower fees. The financial signal is working: companies that redesigned packaging saved an average of 12% on EPR fees annually, creating a competitive advantage that compounds over time.

Belgium's Fost Plus achieves world-leading recycling rates. Belgium's PRO for household packaging, Fost Plus, reported a packaging recycling rate of 89.8% in 2024, the highest in the EU. The system combines comprehensive curbside collection with advanced sorting infrastructure and a fee structure that rewards simplicity. Belgium's "PMD" (plastic, metal, drink cartons) collection expanded to include all plastic packaging in 2021, increasing the volume of material captured while reducing contamination through clear consumer communication.

Canada's transition to full producer responsibility is reducing municipal costs. British Columbia completed its shift from shared-responsibility to full EPR for packaging in 2014, and Ontario is following suit through its Blue Box transition, transferring financial and operational control of residential recycling from municipalities to producers. Early data from Ontario shows that per-household collection costs declined 15% under producer management, while recycling rates for targeted materials increased by 8 percentage points, as producers have stronger incentives to optimize collection efficiency and material quality.

What Isn't Working

Free-rider compliance remains a persistent challenge. Online marketplace sellers, particularly small cross-border e-commerce operators, frequently avoid EPR registration and fee payment. Germany's Central Packaging Registry (LUCID) identified over 50,000 non-compliant companies in 2024, undermining the level playing field that EPR systems require. Without effective enforcement, compliant producers subsidize the waste management costs of non-registered competitors. The EU is exploring marketplace liability rules that would hold platforms like Amazon and Alibaba responsible for ensuring seller compliance.

EPR fee fragmentation across jurisdictions increases compliance costs. A consumer goods company selling in 15 EU member states may face 15 different PRO registration processes, fee calculation methodologies, reporting formats, and audit requirements. Harmonization efforts through the PPWR will help, but full alignment is years away. In the United States, state-level programs are developing without coordination, raising the specter of a patchwork that imposes disproportionate administrative burdens on mid-size companies.

Actual recycling outcomes lag behind collection targets. Many EPR systems report high collection rates but lower actual recycling rates once contamination, process losses, and export leakage are accounted for. Italy's CONAI system reported 73% packaging recycling, but independent analyses suggest that 10 to 15 percentage points of collected material is downcycled or lost in processing. Closing the gap between collection and genuine closed-loop recycling requires investment in sorting technology and end-market development that EPR fees alone may not fully fund.

Key Players

Established Leaders

• Citeo (France) manages EPR for packaging and printed paper, collecting approximately $900 million annually from 50,000+ obligated producers and funding collection across 36,000 municipalities.
• Der Grune Punkt / Duales System Deutschland (Germany) pioneered packaging EPR in 1991 and remains a leading PRO, though Germany now has a competitive PRO market with ten licensed operators.
• Fost Plus (Belgium) consistently achieves the EU's highest packaging recycling rates, with a system design widely studied as a best-practice model.
• CONAI (Italy) coordinates seven material-specific consortia covering glass, aluminum, steel, paper, plastic, wood, and bioplastics across Italy.

Emerging Challengers

• Circular Materials (Canada) is the new PRO managing Ontario's Blue Box transition, taking over from municipal operations to implement full producer responsibility.
• Packaging Recovery Organisation Europe (PRO Europe) licenses the Green Dot trademark to PROs in 30+ countries and is building cross-border compliance harmonization tools.
• Greyparrot uses computer vision and AI to audit material flows at sorting facilities, providing PROs and producers with real-time data on actual recyclability outcomes versus theoretical classifications.

Key Investors and Funders

• European Commission allocated approximately $1.8 billion through the Circular Economy Action Plan to support EPR infrastructure development, sorting technology, and recycled content scaling across member states.
• Closed Loop Partners (U.S.) has invested over $90 million in recycling infrastructure and circular economy businesses, including several companies building EPR compliance tools and collection technology.
• The Recycling Partnership channels brand funding into community recycling infrastructure improvements across the United States, complementing emerging state EPR programs.

Action Checklist

• Map all jurisdictions where your products are sold and identify current and forthcoming EPR obligations, including registration deadlines, fee structures, and reporting requirements for each
• Conduct a packaging portfolio audit to score each SKU against eco-modulation criteria, prioritizing redesign of formats that incur the highest surcharges across your largest markets
• Integrate EPR fee data into product development stage gates so that packaging design decisions incorporate end-of-life cost implications before commercial launch
• Evaluate centralized EPR compliance platforms that can manage multi-jurisdiction registration, tonnage reporting, and fee payment through a single interface
• Engage with PROs and industry associations to participate in fee-setting consultations, ensuring your company's voice is heard as eco-modulation methodologies evolve
• Establish internal metrics tracking EPR cost per unit sold, recyclability scores, and recycled content percentages alongside traditional packaging cost and performance KPIs
• Build relationships with material recovery facilities and recyclers in key markets to understand actual end-of-life outcomes for your packaging formats and identify design improvements that increase real-world recyclability

FAQ

Q: How much do EPR fees typically cost per tonne of packaging? A: Fees vary dramatically by material, format, and jurisdiction. In France, standard PET bottle fees run approximately $150 to $200 per tonne, while non-recyclable multi-material flexible packaging can reach $600 to $800 per tonne after eco-modulation surcharges. German fees for lightweight packaging average $400 to $600 per tonne. Companies should model their specific portfolio against each market's fee schedule rather than relying on averages.

Q: Will U.S. EPR laws converge into a federal standard? A: Federal EPR legislation is unlikely in the near term given political dynamics. The most probable path is continued state-level adoption, with industry-led harmonization efforts aiming to align definitions, reporting formats, and fee methodologies across states. Companies should plan for a multi-state compliance environment and invest in systems that can accommodate varying requirements.

Q: How does eco-modulation actually change packaging design decisions? A: Eco-modulation creates a direct financial signal that rewards simplification. When a brand discovers that switching from a multi-layer pouch to a mono-material PE pouch reduces EPR fees by 40% in France and 25% in Germany, the packaging engineering team has a quantifiable business case for redesign. Over time, these fee differentials accumulate into meaningful cost advantages for companies with recyclable portfolios.

Q: What happens to EPR fees if recycling infrastructure cannot process the collected material? A: This is a growing tension in many markets. Producers argue that fees should reflect actual recycling costs and outcomes, while PROs contend that fees must fund infrastructure investment to close capability gaps. In practice, some jurisdictions are tying fee adjustments to demonstrated recycling performance improvements, creating accountability on both sides. Companies should advocate for transparent fee allocation and performance-linked funding models.

Sources

• Citeo. (2025). "2024 Annual Report: Packaging and Paper EPR in France." https://www.citeo.com/en/citeo/key-figures
• European Commission. (2024). "Packaging and Packaging Waste Regulation (PPWR) Final Text." Official Journal of the European Union.
• Fost Plus. (2025). "Annual Report 2024: Household Packaging Recycling in Belgium." https://www.fostplus.be/en/about-fost-plus/key-figures
• California Department of Resources Recycling and Recovery. (2025). "SB 54 Implementation: Plastic Pollution Prevention and Packaging Producer Responsibility Act Progress Report." https://www.calrecycle.ca.gov
• OECD. (2024). "Extended Producer Responsibility: Updated Guidance for Efficient Waste Management." OECD Publishing. https://www.oecd.org/environment/extended-producer-responsibility.htm
• German Central Packaging Registry (LUCID). (2024). "Annual Compliance and Enforcement Report." https://www.verpackungsregister.org/en
• Ellen MacArthur Foundation. (2025). "Global Commitment 2025 Progress Report: Packaging Recyclability and Recycled Content." https://www.ellenmacarthurfoundation.org
• The Recycling Partnership. (2025). "State of Curbside Recycling Report 2024-2025." https://recyclingpartnership.org