What extended producer responsibility will mean for the paper and paper packaging value chain

With South Africa’s extended producer responsibility (EPR) regulations coming into effect on 5 May 2021, the paper sector and its value chain will need to strengthen and extend their approach to the recovery and recycling of materials.

This EPR journey will take unprecedented levels of collaboration, municipal buy-in and separation-at-source by consumers in their homes, at their workplaces and in their schools. To borrow from the words of Ralph Waldo Emerson, “EPR will be about the journey, not the destination.” And you should not go it alone. The endgame is less material going to landfill, and a more circular approach to managing and treating waste.

For many years, recovery and recycling has been voluntary and largely industry-driven, with a number of producer responsibility organisations (PROs) delivering strategic recovery initiatives, school recycling programmes and waste entrepreneur training. This is evident in a 68.5% current paper recovery rate, with the majority of the fibre being beneficiated on South African soil.

In fact, since the beginning of 2019, the majority of paper and paper packaging manufacturers have been paying voluntary EPR fees to Fibre Circle.

“The paper and paper packaging industry feel that some of the regulations and conditions published in the gazette on 5 November 2020 are not practical, measurable or implementable,” says Francois Marais, Fibre Circle manager. There are some regulations which may also be open to misinterpretation. For this reason, Fibre Circle and the Paper Manufacturers Association of South Africa are engaging with the Minister through Business Unity South Africa. A small task team, comprising representation from the three-sectors addressed in the regulations, has been established to engage with DEFF and the Minister to discuss and agree amendments. 

In the meantime, Fibre Circle has some answers to the questions members and prospective members have raised.

Why is EPR important?

The packaging industry has been in consultation with the Department of Environment, Forestry and Fisheries (DEFF around the issue of industry waste management for a number of years. Initially, engagement concerned Section 28 of the National Environmental Management: Waste Act 59 of 2008 with the call for industry waste management plans. More recently, discussions  have centered around EPR under Section 18.

While the regulations are not perfect, the latter is better for business: it does not involve a tax or oversight by the Waste Management Bureau but rather allows all parties to work together for the greater good.

Nevertheless, mandatory EPR will change how producers, brand owners, retailers and importers design, make, sell and keep their products in the recycling loop as far as practically possible. Producers of goods or packaging will have to take back their material after use and do something with it, whether it is cost-effective or not.

The regulations also make the producer or group of producers responsible and liable for the establishment of an EPR scheme, the development and implementation of an EPR plan and compliance against each product’s targets for collection/recovery and recycling.

To this end, EPR will see an investment in collection infrastructure where needed, not only providing consumers with more convenient recycling facilities, but also a concerted recovery effort at the pre-consumer or post-industrial phase. Intensive consumer awareness campaigns will also help to drive behaviour change.

Why should my company join an EPR scheme that will be administered by a PRO?

While the regulations around PRO responsibilities will be amended for clarity, PROs seek to represent the collective interests of their respective sectors, helping them to identify shared constraints and synergistic opportunities, as opposed to individual companies developing a separate EPR scheme.

Fibre Circle was launched in 2019 to represent the broader paper sector as a registered PRO with public benefit status. It has been working with producers, importers, brand owners and retailers, and highlighting the benefits of producers belonging to an existing PRO rather than establishing their own schemes.

Which paper products are included in the new regulations?

• Newspapers
• Magazines
• Office and graphic paper
• Corrugated/kraft (for example, cardboard boxes)
• Liquid board packaging (for example, beverage cartons, paper cups)
• Backing paper or release liner from adhesive labels
• Paper sacks (for example, cement, potato, dog food?)

Each of these product classes has been set yearly targets for the next five years, for recovery/collection and recycling (processing and beneficiation).

What are the responsibilities of producers?

1. Existing producers and PROs must register with DEFF within six months of the regulations coming into effect i.e by 5 November 2021. Newly-established producers and PROs must register within three months of initiating operation.
2. All producers must:
3. Establish a PRO with an EPR scheme or join an existing EPR scheme
4. Determine and pay an EPR fee to fund the scheme that covers the full cost of recovery and treatment of its post-consumer packaging sold into the South African market

The scheme will be required to report on its progress.

What are the minimum requirements for EPR schemes?

EPR schemes will need to cater for:

1. cleaner production measures that must include, as a minimum, but not limited to –
   1. design for recyclability; and
   2. waste minimisation or waste avoidance;
2. waste reduction including, as a minimum, but not limited to –
   1. composition of products; or
   2. volume of products; or
   3. weight of products to be restricted and reduced with associated time frames;
3. reuse;
4. recycling;
5. recovery for beneficial use;
6. treatment;
7. disposal;
8. implementation and reporting on the following requirements to complement the scheme –
   1. minimum recycled content standards;
   2. secondary materials utilisation rate;
   3. recovery rates; and
9. compliance with the requirements for programmes planned to contribute to government priorities.

What are the criteria for a PRO under Section 18?

The PRO must be:

1. an autonomous body established by producers
2. a registered NPO
3. managed by a board of directors comprising representatives of the value chain
4. made up of members who have no vested interest in a waste stream or family members who do so

How does one sign-up or become a member of Fibre Circle, the Paper and Paper Packaging PRO?

Please contact Francois Marais – francois.marais@fibrecircle.co.za

Is there a membership fee?

No, EPR fees cover the membership fee. Currently, voluntary EPR fees are paid by paper manufacturers on a quarterly basis in respect of sales of identified products into the South African market. This will change as the EPR fees are agreed on by sector working groups as determined by the regulations.

What are the current EPR fees for the paper and paper packaging sector?

Fibre Circle handles the collection and disbursement of fees, based on a rand per tonne of product sold to the local market. Products (defined as unaltered with no lamination or coating, for example) with established recovery and beneficiation routes will attract R3.20/tonne while those that are more difficult to collect or recycle will attract a higher fee of R75/tonne. [These fees are subject to change as the EPR schemes are developed and the true costs of recovery and treatment are established.]

UNALTERED Including, but not limited to, newspaper, magazines, office and graphic paper, corrugated board and boxes	ALTERED Including, but not limited to, liquid board packaging, release liner, frozen food cartons and paper sacks
R3.20 per tonne	R75per tonne

The following aspects may also affect the fee structure but are not limited to:

• Volumes available for collection
• Ease of recovery from the consumer or source through existing infrastructure or municipal collaboration
• Technology and cost required to collect and/or recycle it locally
• Quality of the recyclable material (level of contamination and known consistency, for example, fresh, recycled or mixed)
• Product composition, including additives for wet strength or burst strength, dyes and laminates such as silicone, polyethylene and aluminium
• Availability or viability of end-use markets
• Consumer awareness levels

Producers and the PRO must together develop and submit the EPR plan to DEFF within six months of the regulations coming into effect.

How often are fees payable?

Fees to Fibre Circle are payable on a quarterly basis, based on sales. Members will submit their tonnages to an independent statistician. An invoice will be raised for the amount, and the invoice will be payable within 30 days.

We pay you every quarter, when do you pay the government?

Fees are not payable to the government. They are paid to the PRO, covering operational costs, EPR schemes for the respective product class and the implementation of EPR activities.

How are the fees spent?

Fees enable the PRO to meet the requirements of product EPR schemes. For example, supporting recovery and recycling, waste reduction, extending beneficiation opportunities, innovation, skills development and job creation. With the regulations coming into effect from 5 May 2021, Fibre Circle is well placed to continue providing EPR support to its members. The fees will also cover Fibre Circle operating costs.

Do we get any reduction in fees if we are involved with a recycling project?

No, the EPR fees are for the purpose of enabling optimal recovery and beneficiation of the identified products.

What are the targets for each product class?