April 21, 2022
On the first day of SPC Impact 2022, Michelle Carvell and Gabi Dobrot from Lorax EPI dove into a discussion of eco-modulation and what it practically means for packaging designers making material selection considerations. This presentation focused specifically on the history of eco-modulation policy, implementation, and global trends in fee setting.
Broadly, eco-modulation is a specific subset of extended producer responsibility (EPR) legislation that uses fees to incentivize more environmentally conscious packaging design and decentivize less environmentally friendly alternatives. The overarching objective is financing the waste recovery systems while also inventicizing design optimization and education about the waste recovery processes. Generally, the entirety of the packaging materials placed on the market are included in reporting requirements, with varied fee levels based on criteria like:
- differentiating material characteristics (such as density)
- the cost of processing with current waste management infrastructure
- the expected revenue for the material post recycling
- or other format and material factors
Eco-modulation also includes different fee levels based on what behaviors or design qualities are being targeted for improvement.
Eco-modulation started in the European Union (EU) with limited programs that broadly applied fees to materials based on the weight of the material. Early eco-modulation did not specify between sub-material types (such as PET rather than “Plastics” broadly), and the way of reducing fees was primarily limited to reducing the weight of the material. These policies were focused on source reduction, which leads to lower greenhouse gas emissions but does not extend to other sustainable design principles. Eco-modulation has evolved in complexity to address additional sustainability categories as it has been implemented in Canada and additional complexity has been added to the policy in some EU countries.
More complex eco-modulation policies include additional detail in reporting categories. Rather than simply requiring reporting the weight of “plastic,” subcategories of “PET” or “PE” are required, often alongside the format and coloring, such as “rigid” or “flexible” or “transparent blue” or “opaque.” Additionally, the most advanced and complicated fee schemes now include additional penalties for materials that have material health concerns or other non-favorable attributes.
One of the benefits of eco-modulation is the ability to use the fee schedule as a guide map to navigating environmental trade-offs. Trade-offs can be evaluated by what would cause the lowest fees. For example, the difficult decisions of determining whether to prioritize recyclability or overall greenhouse gas emissions of a product package system can be informed by looking at what fees would be assessed to the different design possibilities. However, this phenomenon also highlights the importance of regular evaluation of the fee setting schema to continuously improve what design choices are being incentivized to make sure best practice in environmental design is not being unintentionally disincentivized.
The final takeaway from this session on eco-modulation is that brands should not hold out hope for global harmonization of eco-modulation policy. Harmonization is generally only regional at best, and we cannot expect entire continents or North American countries to develop harmonized policies. Regional differences in eco-modulation programs enable the targeting of the most pressing challenges. This is especially true as regions also have different prioritizations of what environmental issues should be addressed as the maturity of recycling infrastructure, marine plastic pollution rates, and the current effects of climate change are not the same everywhere.
The general recommendation from Dobrot and Carvell for brands looking to proactively plan for eco-modulation and other EPR program requirements is to collect as much data as possible about the packaging they are putting on the market. As harmonization in policy is unlikely, having data about all possible reporting requirements is the best way to be prepared for a variety of policies.