The reform of expanded (ir)responsibility

The latest waste management reform in Russia, scheduled for March 2020, has been postponed due to the Covid-19 pandemic. Representatives of public organizations believe: to reduce waste, systemic changes in the principles of production and consumption are required.

In his address to the Federal Assembly, the RF President instructed to develop and approve by March 31, 2020, a concept of expanded responsibility of producers  and importers of goods and packaging. However, the Russian Ministry of Nature, charged with the preparation of this document, postponed the reform until next fall “due to the complicated economic situation.”  

As a mechanism of economic regulation, extended producer responsibility (EPR) has already been in operation in Russia since 2014. Now, the manufacturer or importer has several options for using this mechanism: to independently dispose of goods and packaging after deprival of the consumer properties of the latter; conclude a direct contract with the processor, pay an environmental levy, or choose a mixed option. 

Performance indicators of all mechanisms of the waste management system are fixed in the passport of the Ecology National Project. For example, by 2024, 36% of household municipal waste should be sent for recycling, rather than 7% as it was in 2019. Most participants in the waste management system acknowledge that the current system, despite ongoing reforms and the current EPR, does not lead to any increase in the share of waste processing nor an increase in the use of biodegradable packaging.  

That is exactly why they are planning to reform the waste management system once again. In the last version of the Concept for the improvement of the EPR system, among other measures, it is presumed to “integrate” the operator and transfer the management of collected funds to a unified Russian Environmental Operator (REO). In is also expected that the 100% of all packaging utilization shall be introduced already in 2021 on regulatory basis. 

It would seem that such ambitious plans can only be welcomed. However, the proposed changes to the Waste Management Concept caused dissatisfaction among the business community.  Participants in industry associations believe that the adjustment of the EPR mechanism, the “integration” of the operator will deprive the companies of incentives for the development of the manufacturing for the separate collection and processing of waste. Experience shows that manufacturers and their associations, who know their products and their features well, are most successful with such tasks. For example, the treatment of organic waste and the processing of failed complex electronic equipment are quite different processes, and they need to be processed effectively with understanding of the specificities. According to experts, the new version of the concept does not take these manufacturing issues into account.  

Businesses believe that the draft Concept “introduces a purely fiscal mechanism in the form of mandatory environmental levies without the possibility of self-disposal, and the lack of competition in this area will contribute to the inefficient management of existing infrastructure, and may lead to exorbitant costs for the maintenance of the management apparatus”. In addition, due to the transfer of responsibility for the implementation of the EPR completely to packaging manufacturers, it may cause additional environmental damage, since manufacturers of goods in packaging will not be interested in its further disposal.” 

“Adoption of the new version of the concept will kill the EPR sprouts, which have just started to appear after the adoption of by-laws in 2018; it will stop the development of separate collection of municipal solid waste (MSW) and the processing of difficult-to-recycle components,” says Pavel Rudas, executive director of the “RusPRO”Association of Manufacturers and Importers who execute standards for the disposal of waste from the use of goods and packaging on their own. “They will merely burn the waste and name it recycling.” The tax, which, in essence, replaces the EPR, will be borne by ordinary consumers, while goods in packaging will become more expensive. In addition, this document strays from the plans and objectives of the Ecology National Project. At the same time, trade unions and associations are utterly not opposed to strengthening norms. We are always ready to provide our suggestions for improving this important mechanism. It is necessary that the responsible ministries and departments be ready to listen to us and not take our initiatives just formally.” 

Representatives of Russian businesses cite successful examples of implementing extended producer responsibility. “In some industries, organizations have been created to which manufacturers delegated the collection and processing of their waste requiring specialized technologies and facilities. So in 2018, only the RusPRO Association recycled more than 35 thousand tons of packaging waste. Yet, the frequent change of the rules of the game complicates this activity, creates uncertainty in its prospects,” experts say. 

Market participants believe that the modernization of EPR should be carried out with the involvement of the best international experts and on the basis of international best practices. Exactly such approach will help to solve the main task of the reform: not just to increase the “waste” fees, but to reduce the amount of waste and increase the share of their recycling. 

Representatives of the Russian Socio-Ecological Union (RSEU) emphasize the need to employ the best practices of international and Russian waste management practices. They are certain that “a systematic change in the principles of production and consumption, the introduction of the principles of a cyclical economy and a shared consumption economy are the most efficient ways to use resources.” They also believe that it is essential to “universally ensure a decision-making and approval process for projects that would involve all interested parties: waste producers represented by residents and producers of goods and services, public control entities, regional operators... Industrial and commercial enterprises should introduce voluntary measures that are economically viable in medium and long term.”