Will IPR Finally Deliver Design-for-Environment?

In considering the effect that traditional EPR regimes have had on product design changes, the recent OECD report Extended Producer Responsibility – Updated Guidance for Efficient Waste Management had to conclude:

The contrast between [Design-for-Environment] policy expectations and realizations … seems stark.  

In other words, the obligations upon producers to participate in Extended Producer Responsibility schemes has not led to a profound re-envisioning of how their products might be deconstructed and repurposed at the post-consumer phase.

Product Re-Design Always Central to EPR 

Almost from its inception, a central goal of EPR has been to incentivize producers to create more sustainable products.  The European Union’s landmark Framework Directive 2008/98/EC expressly had design-for-reuse as an object of EPR, which was to:

encourage the design of products in order to reduce their environmental impacts and the generation of waste in the course of the production and subsequent use of products.

In spite of its importance to EPR, DfE has become was more aspirational than real in most EPR producer circles.  An interesting idea whose time had not come.  But why?

But Was DfE Truly Fostered Under EPR?

Most EPR schemes are a form of Collective Producer Responsibility (CPR), with differentiation principally measured only by the form of variable versus fixed fee participation rules adopted.   Under CPR:

  • the diverted materials are usually collected by generic aggregate measures such as weight or units;
  • individual brands are not segregated at reprocessing;
  • the waste diversion fees are usually assessed by generic product description without reference to particular producers and their product configurations; and
  • the oversight under CPR usually comes from a Producer Responsibility Organization (PRO) which lacks the authority to consider fee adjustments to reward end-of-life recovery innovation.

As a consequence, producers do little other than pay the CPR fee and perhaps quibble about the margins of product diversion categories.

Will IPR Do What Collective EPR Couldn’t?

The irony (though hopefully not death knell) for DfE under the coming transition to IPR is the immediate instinct of producers to re-collectivize under a (privately-constituted) PRO in order to preserve economies of scale.  This can clearly be seen in Ontario under North America’s first circular economy-driven IPR regime.

The more to re-form collectives will likely create the same DfE stasis as existed under CPR – namely the lack of real incentive to redesign individual products which are, nonetheless, waste-diverted in combination with those which aren’t.   Large IPR PROs will look like EPR PROs, at least through a DfE lens.

Innovative DfE When Individual Put Back into IPR

The salad days for DfE won’t occur until Individual producers are induced (by consumers, diversion market forces, regulators, etc.) to develop individual product lifecycle relationships with consumers.   There has already been a growth of take-back schemes which are sure to grow (perhaps exponentially) under IPR once the business models favouring DfE are fully deployed.

Other models would also encourage DfE, such as the extension of leasing into non-conventional waste-diverted product markets supported by product-service systems (PSS) where the consumer buys the service rendered by the product with the producer retaining ownership.  It’s unclear how far this scheme can be viably extended.

It would seem that only though these individual producer lifecycle relationships will DfE be fostered voluntarily by the market. Environmental regulators, of course, can mandate other means by which some forms of DfE would be achieved – but surely this is best preempted by tangible market innovation spurred by the impetus of IPR.

Jonathan D. Cocker heads the Firm’s Environmental Practice Group in Canada and is an active member of firm Global Consumer Goods & Retail and Energy, Mining and Infrastructure groups. Mr. Cocker provides advice and representation to multinational companies on a variety of environment, health and safety matters, including product content, dangerous goods transportation, GHS, regulated wastes, consumer product and food safety, extended producer responsibilities and contaminated lands matters. He appears before both EHS tribunals and civil courts across Canada. Mr. Cocker is a frequent speaker and writer on EHS matters, an active participant on EHS issues in a number of national and international industry associations and the recent author of the first edition of The Environment and Climate Change Law Review (Canada chapter) and the upcoming Encyclopedia of Environmental Law (Chemicals chapter).