An Introduction to Extended Producer Responsibility (EPR) and SAP’s Approach to the Circular Economy

• Extended Producer Responsibility (EPR) is an environmental policy approach in which a producer’s responsibility for a product is extended to the post-consumer stage of a product’s life cycle.
• Producers are responsible for meeting responsibilities and targets set by the Government.
• EPR aims to Incentivize producers to Design their packaging in an eco-friendly way, Ensure the Effective Collection and treatment of waste packaging, and Increase Recycling rates and Reuse.

This map shows how many countries are trying to implement EPR Schemes in the coming Days.

The UK and Spain have already introduced plastic packaging taxes, and others, such as Italy, Germany, the USA, and Canada, have announced.

The main thing is that when we use packaging material for our product’s packaging purposes, we should have clear information about how it was made and how we will recollect and recycle it. We have to declare this information to government bodies, and we have to pay the plastic packaging fee when we are not using recycled content or when we are using restricted material in our packaging material. To do this, we have to register with PROs.

What is Plastic Packaging Taxes:

Plastic packaging taxes are imposed on companies that produce or import plastic packaging. They aim to encourage companies to reduce their use of plastic packaging and increase the use of more sustainable alternatives.

Why are Plastic Packaging Taxes becoming more popular?

In our current Economy, we take materials from the Earth, make products from them, and eventually throw them away as waste – the process is Linear.

Each year, 90 billion tonnes of primary materials are extracted and used globally, with only 9 percent reused or recycled (United Nations Environment Programme, 2019). While this is unsustainable, the nature of the mainstream ‘Take-Make-Dispose’ consumer model also has significant detrimental impacts on human health, climate change, and the environment.

This means that we need a model where we reduce waste as much as possible by adopting behaviors such as reducing, reusing, and recycling materials.

In Europe, one reason for the growing popularity of plastic packaging taxes is the European Union’s introduction of a European Plastic Packaging Levy in 2021. This levy requires member states to pay €0.80 for each kilogram of plastic packaging waste not recycled in their country. Many countries consider passing these costs to the industry through national plastic packaging taxes.

Globally, events indicate that more regulation is to be expected. For example, in March 2022, the United Nations Environment Assembly agreed to launch negotiations on a legally binding global agreement to combat plastic pollution. For countries to comply with the legally binding provisions and obligations of this UN treaty, they will most likely strengthen their national laws regarding plastics.

What makes the Administration of Plastic Packaging Taxes Complicated?

The details of the plastic packaging tax legislation vary from country to country, for example, on the following issues:

• Which packaging types and levels are included in the tax?
• What is the taxable event? (imports, production, distribution, etc.
• What are the reporting obligations, and what forms need to be filled and how often?
• What are the rules for recycled plastic content in packaging?
• Are there any exemptions for certain types of packaging, such as packaging used for human medicine or tertiary packaging?

The more countries introduce packaging material taxes, the more difficult it will be for global companies to keep track and comply.

SAP Introduced SAP RDP solution to help producers/Importers to handle packaging material and packaging taxes.

SAP has regulations related to EPR for the countries like Canada, France, Germany , Italy, Netherland, Portugal, Spain, United Kingdom are built into the system as a standard, and for new rules/Countries, SAP will coordinate with PROs and try to merge those Regulations into the system.

• Extended Producer Responsibility
• SAP
• SAP RDP