Extended Producer Responsibility Legislation Research Articles

Is it wise to compete or to collaborate? Remanufacturing business models under collective extended producer responsibility legislation

Collective extended producer responsibility (CPR) legislation aims to accomplish manufacturers’ extended producer responsibility (EPR) through a common channel of product recovery activities. This work intends to study the impact of the CPR legislation system on competitive and collaborative business models of original equipment manufacturers (OEMs) and independent remanufacturers (IRs). Therein, we developed a two-period competitive and collaborative model considering an oligopoly market scenario for analysing optimal remanufacturing and pricing strategies of OEMs and IRs. Government subsidies promote the remanufacturing activities, and their effects are examined on optimal remanufacturing and pricing decisions for competitive and collaborative models under CPR legislation. The result highlights that competition with IRs under the CPR legislation system within oligopoly market scenarios is profitable for OEMs. Furthermore, the result indicates that a competitive business model increases consumer surplus, increasing used products collection and remanufacturing. The findings benefit OEMs of identical products from implementing a profitable business model under CPR legislation to restrict the availability of low-quality remanufactured products of IRs, thereby protecting the brand image and controlling the cannibalization effect on new products selling.

The (Mis)Understanding of the Symbol Associated with Recycling on Plastic Containers in the US: A Brief Report

Plastic containers are a major source of pollution and contribute to greenhouse gases. Many plastic containers are embossed with a small symbol of three arrows forming a triangle and a number in the middle of the triangle. As part of a US online study, we assessed the meaning of this symbol. Of the 808 respondents presented with a visual image of the three-arrow symbol, 81.3% reported (incorrectly) that the symbol indicated that the item could definitely be recycled and 16.3% reported that it could probably be recycled. The findings suggest that a large proportion of individuals have an inaccurate understanding of the symbol on plastics purported to indicate recycling. Plastic manufacturers should revise labels about recycling and not disseminate potentially deceptive information about the ability to recycle their products, and more effective methods such as extended producer responsibility legislation are needed to reduce plastic pollution.

Fast Fashion, Charities, and the Circular Economy: Challenges for Operations Management

Textile waste is one of the most pollutant items globally, being strongly affected by fast fashion (FF) products. Public pressure has made many FF firms voluntarily collect a small fraction of their preowned items and export them to developing countries for reuse. However, some developing countries are launching import bans on second‐hand clothes. In addition, FF firms may soon be forced by extended producer responsibility legislation to collect more preowned items for reuse and recycling. To date, they do not have sufficient capacity to deal with this. Charities have been the key collectors and recyclers of unwanted clothes. Therefore, charities could help FF firms increase their capacity in this reverse supply chain (SC). However, we hardly witness such a collaboration for two main reasons: (i) charities prefer to sell high‐quality preowned items in the primary market to generate the highest possible revenue and FF firms may fear cannibalization, (ii) many charities believe that FF firms generate quantities of low‐quality items that require collection and sorting while being difficult to sell in the primary market. Charities also face competition from many small for‐profit organizations selling FF preowned items. While charities have the support of volunteers, they tend to be less efficient. This work urges Operations Management (OM) researchers to suggest innovative business models to help (i) FF firms and charities collaborate to solve the abovementioned issues, and (ii) charities to improve their traditional practices for competitiveness. This study is primarily a position paper highlighting some challenges and introducing interesting research problems. Although the paper is not a research paper, it follows a qualitative research method to collect and analyze the required supporting documents to justify arguments and statements. We collected primary and secondary data from the textile reverse SC members to familiarize the OM community with this context. The current changes in the textile reverse SC offer many great opportunities for impactful OM research.

Comparison of three E-Waste take-back policies

In this study, we compare three primary forms of product take-back legislation: advanced recycling fee (ARF), extended producer responsibility (EPR), and pre-disposal fee (PDF). With ARF policy, the government is responsible for product recycling and charges consumers a recycling fee at purchase. EPR legislation makes manufacturers responsible for product recycling and financial support of the take-back system. A PDF policy also makes manufacturers responsible for product recycling but charges consumers a disposal fee when they return used products for recycling. With these three policies as our focus, we examine the impact of important parameters and compare them from the perspective of the manufacturer, the product's environmental impact, and social welfare. Though manufacturers have expressed concern over potential harm to sales under an ARF policy, we find this is the best policy in most cases, from the perspective of social welfare or the manufacturer.

Extended Producer Responsibility: A Systematic Review and Innovative Proposals for Improving Sustainability

Extended producer responsibility (EPR) is an environmental policy introduced in Europe, back in the 1990s. Under EPR, a producer's responsibility for its products is extended beyond the consumption stage, and the producer has to meet the targets of collection and recycling rates imposed by the EPR legislation. Motivated by the importance of this topic, in this paper, we conduct a systematic review on EPR from an operations management perspective. To be specific, we categorize the EPR literature, for both e-wastes and non-e-wastes, by research methodologies (qualitative case studies, quantitative empirical research, and analytical modeling studies) and discuss the respective findings. In addition to systematically exploring the state-of-the-art research within the context of EPR, we investigate pertinent issues, such as the implementation of EPR, EPR management systems, supply chain management under EPR, and EPR-related operations (such as end-of-life product management and design for recyclability). We highlight some EPR-related innovative measures and proposals in five areas, namely policy, product, process, supply chain, and technology. Finally, we discuss future research and propose a concluding picture of how EPR can help establish innovative operational measures to improve sustainability.

Management of Solar Photovoltaic Panels under the Extended Producer Responsibility Legislation

The Korean government announced the Renewable Energy 3020 Implementation Plan to increase the share of renewable energy in the power sector to 20% by 2030. Accordingly, considerable renewable energy wastes, including those from solar photovoltaic (PV) and wind turbines, are expected to increase in the coming years. To recycle the end-of-life solar PV panel waste in an environmentally safe manner and to establish a waste recycling system in the future, the Korean government has proposed to amend the Enforcement Decree to the Act on the Resource Circulation of Electrical and Electronic Equipment and Vehicles by classifying solar PV panels as an extended producer responsibility (EPR) item, thus making solar panel manufacturers and importers responsible for their recycling. However, implementation of the proposed amendment has been postponed to 2021. This study addresses the important issues regarding the proposed amendment, and explores associated problems and improvements through a comparative analysis of the EPR in Korea and the EU.

Extended responsibility or continued dis/articulation? Critical perspectives on electronic waste policies from the Israeli-Palestinian case

Extended producer responsibility policies and interventions propose a template for electronic waste management with considerable and growing discursive and policy traction worldwide. Originating in the global North, they increasingly implicate countries and sites in the global South, in particular, people working in informal electronic waste hubs that process Northern electronic waste. This paper examines the implications of extended producer responsibility in one such place through the lenses of critical waste studies and the dis/articulations approach to global commodity chains, which can usefully be extended to analyze the afterlife of commodities. From Israel and the Palestinian Authority's perspectives, recently activated extended producer responsibility legislation is a common-sense way to rationalize the management of electronic waste. But from the cluster of Palestinian villages that has processed the bulk of Israel's electronic waste for more than a decade, extended producer responsibility constitutes the most recent in a series of external driving forces that have disarticulated and rearticulated their landscapes and livelihoods from external economies over the last half century. The restricted scope of reformist extended producer responsibility policies notion of “responsibility” combined with the asymmetrical terms of dis/articulation between North and South is likely to result in outcomes that not only downgrade the informal sector's position in the value chain, but also undermine their ability to upgrade the electronic waste sector in a way that could avoid further pollution. We consider the options at this junction using the heuristic of suggesting what a more temporally, geographically, and sectorally conceived “extension of responsibility” might mean for extended producer responsibility.

Extended Producer Responsibility for waste televisions and computers: A regulatory evaluation of the Australian experience

High annual volumes of television and computer waste presents a challenge to Australian communities, resulting in the development of Extended Producer Responsibility (EPR) legislation. This study aims to establish, through the use of public interest theory, whether EPR legislation in Australia was in the public interest. Using a regulatory analysis, the results show that during the first 3 years of the scheme, over 130 liable parties joined co-regulatory arrangements each year to fund upstream recycling services for television and computer waste. In program terms, the scheme has been highly successful recycling over 130,000 tonnes of metals, leaded and non-leaded glass, plastics and other materials while limiting landfill transfers to approximately 6900 tonnes, all at a cost of A$50–60 million per annum to producers. The scheme has also seen a range of upstream recycling partnerships established between the co-regulated administrators and formal technical and social enterprise waste management organizations. However, while the upstream material recovery rate is steady at approximately 95%, the results suggests that exporting waste for downstream processing will continue in the future. Analysis also points to substantial funding for ‘over target’ collections, downstream recycling infrastructure and landfill diversion strategies as critical for averting severe environmental impacts from e-Waste dumping. The study concludes by suggesting that while the successes of EPR scheme are in the public interest, its potential deficiencies could limit such benefits and therefore need to be addressed. Notably, the scheme could be enhanced through the application of improved recycling target methodologies, including the estimation and forecasting of domestic Waste Electrical and Electronic Equipment (WEEE) stock levels.

Competitive advantage of qualified WEEE recyclers through EPR legislation

Most of waste appliances in China are handled by unqualified recyclers, rather than by qualified ones equipped with advanced but costly technology. To address this problem, China implements a series of take-back legislations in the framework of Extended Producer Responsibility (EPR) with a self-financing subsidy scheme. To analyze the performance of the legislations, we develop a two-period model with a selling period run by a manufacturer and a recycling period conducted by two recyclers. We show that the self-financing condition gives an upper limit for the subsidy. We also show that this limit is not monotone in the recyclers’ competitiveness difference, and there may be a gap between the upper limit and the optimal subsidy that maximizes the social welfare, i.e., a larger subsidy does not necessarily render a larger welfare. Further, we numerically show that the legislations improve the environment performance, but decrease the total profits of the manufacturer and recyclers. Interestingly, the legislations may or may not decrease the consumer surplus.

Efficient Implementation of Collective Extended Producer Responsibility Legislation

Extended producer responsibility (EPR) is a policy tool that holds producers financially responsible for the post-use collection, recycling, and disposal of their products. Many EPR implementations are collective—a large collection and recycling network (CRN) handles multiple producers’ products in order to benefit from scale and scope economies. The total cost is then allocated to producers based on metrics such as their return shares by weight. Such weight-based proportional allocation mechanisms are criticized in practice for not taking into account the heterogeneity in the costs imposed by different producers’ products. The consequence is cost allocations that impose higher costs on certain producer groups than they can achieve independently. This may lead some producers to break away from collective systems, resulting in fragmented systems with higher total cost. Yet cost efficiency is a key legislative and producer concern. To address this concern, this paper develops cost allocation mechanisms that induce participation in collective systems and maximize cost efficiency. The cost allocation mechanisms we propose consist of adjustments to the widely used return share method and include the weighing of return shares based on processing costs and the rewarding of capacity contributions to collective systems. We validate our theoretical results using Washington state EPR implementation data and provide insights into how these mechanisms can be implemented in practice. This paper was accepted by Serguei Netessine, operations management.

Design Implications of Extended Producer Responsibility for Durable Products

We analyze product design implications of extended producer responsibility (EPR)-based take-back legislation on durable goods. In particular, we observe that durable product design incentives under EPR may involve an inherent trade-off that has not been explored to date: Durable goods producers can respond to EPR by making their products more recyclable or more durable, where the former decreases the unit recycling cost and the latter reduces the volume the producer has to recycle. When these two design attributes do not go hand in hand, as is the case for many product categories, product design implications of EPR can be counterintuitive. We find that more stringent collection targets (defined as the portion of total product volume to be collected) or recycling targets (defined as the portion of each collected product unit to be recycled) may imply reduced recyclability or durability. Moreover, although collection and recycling targets appear to be similar EPR implementation levers for increasing the total amount of materials recycled, they, in fact, have opposing effects in driving producers’ design choices. As a result, EPR may have unintended consequences for the environment. A calibrated numerical study on the photovoltaic panel (PVP) industry allows us to show that more stringent EPR requirements (such as those proposed by the recent recast of the WEEE directive) can lead to a PVP technology choice with lower recyclability and higher durability and, consequently, result in higher greenhouse gas emissions. These results call for a careful analysis of the benefits of EPR legislation in the context of durable goods. The online appendix is available at https://doi.org/10.1287/mnsc.2018.3072 . This paper was accepted by Vishal Gaur, operations management.

Implementing Extended Producer Responsibility Legislation

SummaryThe goal of this article is to contribute to the understanding of how the multiple, and sometimes conflicting, stakeholder perspectives and prevailing conditions (economic, geographic, etc.) in the implementation locality shape extended producer responsibility (EPR) “on the ground.” We provide an in‐depth examination of the implementation dimension of EPR in a specific case study by examining concrete activities at the operational front of the collection and recycling system, and probing the varying stakeholder preferences that have driven a specific system to its status quo. To this end, we conduct a detailed case study of the Washington State EPR implementation for electronic waste. We provide an overview of various stakeholder perspectives and their implications for the attainment of EPR policy objectives in practice. These findings shed light on the intrinsic complexity of EPR implementation. We conclude with recommendations on how to achieve effective and efficient EPR implementation, including improving design incentives, incorporating reuse and refurbishing, expanding product scope, managing downstream material flows, and promoting operational efficiency via fair cost allocation design.

Recovery decisions of a producer in a legislative disposal fee environment

The main objectives of the environmental legislation originating from extended producer responsibility (EPR) principle are to lead producers to undertake recovery initiatives for their end-of-use products and to promote environmentally desirable product design. It is still controversial whether current implementations of EPR principle are effective in attaining these objectives. This study seeks to answer the following questions: (1) What is the impact of EPR legislation on the product recovery decisions of producers? (2) How do the redesign opportunities (i.e., design for disassembly) affect the willingness of producers for product recovery? (3) How do the investment needs to start recovery practices and the reluctance of producers to allocate sufficient funds for this purpose affect the optimal recovery decisions? We use stylized economic models to represent the implementation in practice and solving our models we obtain closed form and numerical solutions that help us to see the impact of various parameters on the optimal decisions of a producer. Our findings indicate that redesign opportunities encourage producers for more recovery, however the reluctance of producers to cover the initial investments may substantially reduce the effectiveness of the legislation and the recovery amounts.

Extended producer responsibility and eco‐design changes: perspectives from China

AbstractThe concept of extended producer responsibility (EPR) has been incorporated into environmental policy by a growing number of governments. Inspired by EPR initiatives of the European Union, China has also enacted similar legislation, known as China RoHS and China WEEE. Despite high expectations, the actual influence of EPR legislation on product design changes remains ambiguous. Based on the findings of 36 questionnaires and in‐depth interviews with China's electrical and electronic (EE) manufacturers, this paper explores the responses of China's EE companies to China RoHS and WEEE and makes comparisons between responses to EPR legislation in the EU and China, building on the previous work of the authors. In order to evaluate the influence of EPR legislation in motivating environmental design changes, drivers and barriers for adopting eco‐design are also investigated. It is found that the impact of EPR regulations in China is low. There is little evidence that EPR has stimulated systematic eco‐design. Copyright © 2007 John Wiley & Sons, Ltd and ERP Environment.

Leasing and extended producer responsibility for personal computer component reuse

Although extended producer responsibility legislation creates economic incentives for manufacturers to recycle or remanufacture product components, this has proven to be very difficult. Leasing arrangements where the manufacturer sells a service rather than a product might facilitate more cost-effective product take-back. This paper presents a mathematical model for product design that considers leasing programs and their impact on cost, reliability and environmental impact. The optimal combination of new, recycled and remanufactured components over several product lifecycles is determined by maximising a multiattribute utility function for a portfolio of customer market segments.