At a Glance
The European Union requires its 27 Member States to prevent and manage the generation of waste, through a variety of rules, including the Extended Producer Responsibility (EPR) framework. Under EPR, sellers that place products on any of the 27 EU national markets are deemed to be “producers” of waste. As such, they are required to register, report and pay fees to foreign EPR organizations (called PROs or schemes). They must do so from the first product sold, in each Member State and product category where they are active. The purpose is for sellers to contribute to the management of the waste that their products will eventually turn into, at the end of their lives.
eBay welcomes the EU’s plan to revise and update key components of its waste management rules, such as the Waste Framework Directive, and the Packaging and Packaging Waste Directive. The EU should use this opportunity to deeply reform the EPR system so that all players involved, including marketplaces like eBay and small online sellers, may do their part in reaching the EU’s ambitious goals for waste reduction.
Issue in Detail
The Waste Framework Directive (WFD) along with the Packaging and Packaging Waste Directive (PPWD), and the Directive on Waste from Electric and Electronic Equipment (WEEE), form the current framework at EU level which provides for Extended Producer Responsibility (EPR).
This legislation requires Member States to prevent the generation of waste, by following the “polluter-pays principle” i. e. by making “producers of waste” (including sellers that place products on any EU market) responsible for managing the end of life of their products.
In practice, the Extended Producer Responsibility system requires sellers to register, report and pay fees to EPR organizations (also known as Producer Responsibility Organizations – PROs, or schemes). They must do so from the first product sold, and in every Member State and product category where they are active. These obligations cover only new products but apply equally regardless of whether the seller is based inside our outside of the EU, and is always broken down at national and category levels.
Although it pursues a crucial policy objective, the EPR framework has failed to adapt to the decentralized and cross-border nature of trade on eBay. With the average European eBay-enabled small business reaching 20 different markets every year, and almost always being active in at least 2 different EPR categories (packaging for shipping their products, and the products themselves), a standard estimate of 20 (2 times 10, assuming 50% of the markets reached are in the EU) different registration, reporting and payment processes is to be expected for any European SME present on eBay. Even though willing to comply with their obligations, many sellers may end up being unable to do so by sheer lack of time and resources, and many more can stay unaware of them entirely.
The EU’s proposals for a new Packaging and Packaging Waste Regulation, as well as for revising certain aspects of the Waste Framework Directive, therefore present a unique opportunity to deeply reform the EPR system so that all players involved, including marketplaces like eBay and small online sellers, may do their part in reaching the EU’s ambitious goals for waste reduction.
In particular, the EPR system should be simplified and harmonized to include:
- A single point of registration (one-stop shop), or at the very least for mutual recognition of national registrations within an EU wide register, following what is already in place for Value Added Tax. Once this is established, sellers will more easily register at the one-stop shop closest to their place of establishment and declare in which EPR category(ies) and Member State(s) they are currently active. Smaller producers could also benefit from simplified reporting obligations, in accordance with the EU’s equal treatment principle enshrined in its Waste Framework Directive.
- De minimis in volume of products sold, below which EPR fees would either be waived, tiered or turned into an annual flat amount. Currently, a Spanish company that sold even one unique coffee machine to a French buyer over any given year is liable for EPR obligations connected to that product in France. This includes affiliation to a PRO, payment of the fee, and take-back obligation if any. But these requirements are often unrealistic for smaller companies to comply with. With a threshold system, not only these occasional exporters could continue growing their business, but producer responsibility organizations would no longer have to shoulder costs to manage them higher than the fees they owe.
In addition, it should be formally recognized that online marketplaces cannot be considered “producers” on the same level as actual manufacturers or distributors, especially where they might have to be involved in EPR compliance on behalf of their sellers. As such, they should be considered outside of the “equal treatment” principle and EPR schemes should be empowered to accept the limited information that marketplaces have on products offered on their platform.