Field: Circular economy
Global Technical function: Setting regulatory requirement
Technical Function Unit: Eco-designing, Performance standard, Providing investment subsidies
Geographic Area: South Korea

Extended Producer Responsibility System for consumer goods

The Extended Producer Responsibility (EPR) System of South Korea was introduced in 2003 to promote take-back and recycling of a number of product groups and support the emergence of a circular economy. The EPR Scheme aims to pass financial and legal responsibility for the management of an end-of-life product to product manufacturers, thoughsetting regulatory requirements and performance standards that incentivise waste prevention and life-cycle thinking at design stage.

The challenge:

From the early 1990s onwards, the Republic of Korea’s rapidly growing economy had led to increased waste generation, as a result of both increased production and consumption. In the mid-90s, the Government introduced the Volume-based Garbage Collection Fee (VGCF), which significantly reduced waste generation and increased recycling rates. However, recycling markets remained under-developed and could not fully process the increase in recyclable materials.

The measure:

The EPR System was introduced in South Korea in order to improve resource efficiency, encourage eco-design and develop recycling markets. The EPR System imposes quotas on manufacturers regarding recyclability of products and packaging, giving them responsibility for managing their products at the post-consumer phase.

The System involves a number of different instruments to support its implementation, primarily involving measures to facilitate recycling. The government has therefore developed and distributed supporting technologies, and end-of life infrastructure such as deposit-refund systems. The government has also been providing investment subsidies and loans to companies working in the recycling value chain in order to help them to expand their businesses.

The supporting legislation for the System states the responsibilities of producers and importers, including restrictions on the use of hazardous substances, and collection and recycling.  This is supported with sanctions for non-compliance and charges for production of non-recyclable wastes. Sanctions are calculated as the cost of recycling, plus a 30% surcharge.

Since the System was initiated, it has been expanded with the introduction of new product groups, now covering packaging products, batteries, tires, lubricants, fluorescent lamps and 27 electronic products, including TVs, refrigerators and computers.

For electronic items, the EPR System involves a number of stakeholders, with different responsibilities in the recycling chain. Firstly, consumers pay a collection fee, or are responsible for taking their end-of-life products to a collection point, which may be provided by a retailer. Then, the manufacturer is responsible for collecting and recycling the product, either individually, or through industry-funded facilitation centres (Producer Responsibility Organisations – PROs), as well as paying fees for non-compliance.

Local governments can implement schemes for the collection of e-waste, requesting subsidies from the industry to do so. The central government monitors the performance of the system, and sets the required legislative frameworks.

Since its implementation, recycling has increased by 103% and landfill has decreased by 31%, and by 2014 over $2.5 million has been saved on landfill expenses. It is also estimated that 10,000 jobs have been created, and that around $3 million has been generated from selling recycled goods and materials.

Lessons learnt:

An existing tradition of government controlled waste management was vital to the success of the EPR System, as well as the VGCF phase, which introduced a consumer role in waste management. This burden on the consumer has been identified as a key reason for the success of the EPR system, as consumers have generally been willing to see some of this responsibility shifted onto producers. The way that the EPR System has shared responsibilities between stakeholders has also been identified as a key success factor.

Further deployment:

Several steps are needed in advance to the creation of an EPR system, including a government role in treatment of Municipal Solid Waste, and a role for citizens in waste management. As such, whilst the System is transferable, it is suited more to countries with developed waste management infrastructure. It is estimated at GML 8

Links:

http://www.oecd.org/environment/waste/OECD_EPR_case_study_Korea_revised_140522.pdf