EPR E- commerce

Digitalisation holds many promises, to spur innovation, boost more inclusive and sustainable growth and enhance overall well-being. But at the same time, digitalisation can also be disruptive, changing familiar structures and expectations of the economy, society and even politics, raising questions about how and when regulators should intervene, and new policy challenges with regard to privacy, security, trust, consumer policy, competition, innovation, jobs and skills.

Increasing online sales pose a challenge to environmental policies, known as Extended Producer Responsibility or Product Stewardship, which aim to increase waste recovery and recycling. Extended producer responsibility (EPR) systems aim to make producers responsible for the environmental impacts of their products throughout the product chain, from design to the end-of-life phase. With about 400 EPR systems currently in operation across the globe, most of them in OECD member countries, these policies have become one of the key approaches in this area. While these systems have helped to increase recycling and collection rates, as well as generating financial resources to pay for these activities, governments are grappling with a number of issues that hinder their effectiveness and efficiency. 

One of these issues is free-riding of producers or retailers, which the fast expansion of online sales in recent years has been exacerbating. Online sales are creating new free?riding opportunities as consumers are able to buy more easily from sellers in other countries. These sellers often have no physical, legal entity in the country where the consumer resides, and are not registered with national or local EPR schemes. The consequence is that they avoid producer and retailer/distributor obligations and costs. 

As a result, the EU is also actively seeking cooperation with online e-commerce marketplace such as Amazon to discourage this increasingly free-rider opportunity. The e-commerce platforms will be obliged to urge producers and distributors selling through the platform to complete product compliance and fulfil their own EPR obligations to prevent them from avoiding their due obligations and costs through emerging cross-border transaction methods.