How Product Stewardship and Policy Innovation Drive Circular Economy Goals

Born in the 1980s, Product Stewardship (PS) was an environmental management response in OECD countries contending with increasing amounts of waste production and lack of waste disposal sites.

PS policies follow key principles in maximising resource recovery:

• Producer Responsibility: producers are required to design, manage, and finance programs for the end-of-life management of their products as a condition of sale
• Results-Based: Products and its recovery system must be designed in a way that follows the resource recovery hierarchy, including being protective of human health and mitigating environmental degradation.
• Governance: Government ensures producer programs are transparent by including input from all stakeholders in its development.
• Roles for Everyone: To ensure effectiveness of producer programs, everyone has a part to play from the government, retailers and consumers.

By design, PS schemes facilitate an ecosystem where everyone has a shared responsibility in recovering valuable products and resources to be given new life, either through recycling, repurposing, or remanufacturing for future consecutive uses.

This is particularly useful when market forces and social conscience cannot improve waste reduction and recovery.

Globally, there are several PS schemes that have been successfully implemented to mitigate waste.

• Belgium’s Glass Container Recycling Program has seen a recovery rate of over 80%.
• Canada’s paint stewardship scheme, which follows extended producer responsibility (EPR) principles, has shown 70% of collected paint being recycled, with an increase of 15% from 2018 to 2022 highlighting growing effectiveness.
• South Korea has established an 86% recovery rate for total waste through EPR principles as well.

In Australia, the Recycling and Waste Reduction Act 2020 (RAWR ACT) has provided a framework for the development of PS schemes.

This has translated to a diverse ecosystem with approximately 106 schemes developed that are either voluntary, co-regulatory, or mandatory-arranged.

The Institute for Sustainable Futures (ISF) Product Stewardship report highlights 366,000 tonnes of material has been successfully recovered in 2022 across 19 initiatives. This includes 12,000 drop-off points established for collection enhancement.

Whilst this participation and subsequent recovery is to be applauded at surface level, critiquing the data on the effectiveness of each scheme paints a very different picture.

As noted by ISF, data gaps and inconsistent reporting have limited the ability to truly analyse operational effectiveness of each scheme.

Mike Ritchie and the team from MRA Consulting however have gone one further, reviewing the underlying data from all schemes and surmised that of the 106 schemes, only nine have been effective, ‘[despite] a couple of very successful schemes, most are…failing to achieve their primary goal of diverting materials from landfill for reuse and recovery’.

Indeed, the true benchmark of a PS scheme lies in its ability to reduce and recover items from landfill with respect to total waste produced, not how many participants are there.

This is not a criticism of PS schemes, as we have seen them successfully implemented in various countries around the world.

So what considerations help translate a scheme from ineffective to effective?

To ensure greater effectiveness of the PS schemes, some key factors on how best to manage the scheme must be addressed.

Understanding the Ecosystem

The first key consideration is to understand the scale of the network in the recovery of the product.

Whilst PS and its equivalent EPR schemes can ensure the market acts with transparency, is it the right mechanism to elicit change?

What are the market conditions? Is there demand for the product? What recycling capabilities are currently present? And who are the stakeholders?

A firm understanding of the system in place will help in determining PS suitability, or whether other mechanisms are better suited.

Market Demand

As we have seen with RedCycle, if there is no stable end market for recycled products, the ability to contribute to circular outcomes will be diminished.

Recycled materials typically face strong market barriers from cheap virgin material inputs to desire for operational change – so government policy needs to foster the conditions for demand generation, for example, mandated recycled content in new products.

Design for Sustainability

Poor design is one of the key challenges in ensuring whether a product is recovered or not. This is where EPR principles come into play, ensuring that manufacturers become more accountable in deploying closed loop solutions and systems to capture and remanufacture goods.

Implementation of material passports, a digital dossier that provides material specifications and its end-of-use management plan, can support producers in embedding circularity into their products (ability to be disassembled, repaired, for instance).

Disposal Accessibility and Incentives

Collection networks are a key function in ensuring end-of-life products can be captured successfully for recycling.

Without adequate infrastructure or guidelines in place, chances of adverse scenarios increase, such as the increase in waste truck fires due to the incorrect disposal of vape batteries.

Consumers must also be appropriately incentivised to return products – a good example is Australia’s Container Deposit Scheme which provides a 10-cent refund, netting an average recovery rate of 69% nationally.

Addressing Free Riders

Harmonisation of resource recovery frameworks and its subsequent enforcement across networks can develop a safety net that ensures non-participants in the PS scheme do not gain a competitive advantage.

Support for reporting and dissemination of scheme information can also assist in ensuring compliance and identifying free riders.

With current waste management practices being heavily scrutinised by the community and media, penalties must also be applied to participants for non-compliance.