The fees paid by producers to support waste management costs often fail to travel that far. A new study highlights what this means for African economies.
Stéphane Arditi, Marco Musso and Roberta Arbinolo are contributors to Meta
Cross-posted from Meta
The export of second-hand products from Europe to Africa has the potential to bring significant benefits to both regions. The trade in used goods offers EU economies a gateway to global markets, promotes reuse, and helps reduce resource consumption by extending product lifespan. At the same time, if the exported products are in good conditions and do not constitute illegal waste exports, Africa’s emerging economies benefit from increased access to cheaper products.
However, receiving countries are too often left to handle the end-of-life stage of imported used goods without adequate support once these inevitably turn into waste. Additionally, products shipped for reuse are sometimes non-functional or waste-like. This can create negative social and environmental impacts that risk outweighing the benefits of the second-hand trade.
EPR to the rescue, or to be rescued?
A potential solution to this problem lies in Extended Producer Responsibility (EPR) fees, a contribution paid by producers to help support products’ waste management costs, including the financing of adequate collection and treatment infrastructures. Since their introduction in the late 1990s, EPR schemes have been a key instrument to promote a sound waste management process. Moreover, EPR schemes can support the transition to a circular economy by holding producers accountable for the end-of-life their products, incentivising circular design and financing the establishment of waste management infrastructures.
EPR schemes are applied across the EU for a range of products including electric and electronic devices, batteries, packaging and, to a certain extent, vehicles. National schemes can also cover additional streams such as textiles. EPR systems are also increasingly extending to Southeast Asia and Africa, yet their implementation on a global scale is still fragmented and not aligned with international trade streams.
For instance, when second-hand goods travel across borders outside the EU, the associated EPR fees are too often retained in exporting countries. This deprives importing countries of the adequate financial support to manage the products once they inevitably reach their end of life and need to be collected, disassembled, repaired, decontaminated, recycled or finally disposed of.
New research on the exports of used electronics and vehicles from the EU to Africa estimates that every year African economies miss out on € 340 – 380 million in EPR fees associated with second-hand electronics, and on € 294.6 – 409.4 million in EPR fees for second-hand vehicles. These estimations are conservative, notably as the data on shipments for reuse are not properly captured and differentiated from waste exports.
The fact that a significant amount of EPR fees is retained in Europe even though the associated products are shipped for reuse to third countries puts additional strain on already struggling receiving economies, where there are limited financial resources for collection, refurbishment and recycling, and informal landfilling and incineration are common.
These challenges are confirmed by two case studies accompanying the research: the first one focused on Lapaz, a suburb of Accra, Ghana, which is a major hub for imported second-hand goods including clothing, electronics and furniture; the second one looking at imported second-hand cars in Nigeria, which is the largest destination of imported used vehicles in Africa. At an event organised ahead of the World Circular Economy Forum 2023 to present the study, researchers and campaigners from Europe and Africa called on EU legislators and national governments to remediate to this situation and ensure that EPR fees collected from producers in Europe follow the products exported for reuse beyond EU borders.
A matter of fairness and transparency
As EPR contributions are internalised in the final price of the products covered by the schemes, it is ultimately consumers who pay the fees. In exchange, consumers and producers can expect a sound waste management of the items that are donated for reuse or discarded at collection points, no matter where the end-of-life treatment takes place. However, if these contributions are retained in the EU when second-hand products are shipped abroad, waste management duties are being unfairly delegated. This implies that countries outside the EU are expected to manage waste in a similar manner to the EU, but without the crucial financial support required for such tasks.
Furthermore, the study highlights how the question of fairness is closely intertwined with transparency. Without accurate information on which products are legitimately exported for reuse and without addressing the problem of false and illegal claims of reuse to smuggle waste, we cannot effectively address and rectify the situation.
The research also shows the importance and challenges of developing robust EPR systems in receiving African countries, exploring the links with EU economies’ duty to more thoroughly fulfil their responsibility for the products placed on the market.
Better monitoring, better dialogue
Rectifying this situation is not an easy job, and consulting local authorities and other relevant actors in receiving countries is key to avoid falling in counter-productive solutions: for example, prohibiting all exports or imports for reuse would mean depriving receiving economies of employment and development opportunities, while missing the chance to save on resources by denying a second life to products that are still functional.
In Ghana, importers and dealers took to the streets to protest a governmental ban on the imports of electronic and electrical waste, which was proposed with the aim to reduce the environmental hazards caused by e-waste and promote the use of more energy efficient devices, but would come at high cost for the reuse value chain.
At the same time, Footprints Africa’s case study on the imported used car industry in Nigeria shows how the latter plays a key role in making affordable and functional vehicles accessible to consumers.
To begin addressing the challenges related to the transfer of EPR fees for items shipped for reuse beyond the EU, researchers and environmental campaigners recommend improving the monitoring of international shipments for reuse and strengthening the dialogue with receiving economies.
Enhancing the monitoring system for legal shipments of reused goods is crucial to help detect fake reuse shipments aiming to evade waste management obligations. The revised EU rules on Waste Shipment address this issue by introducing provisions that establish more precise criteria to distinguish between reusable products and waste. Additionally, exploring the fate of Extended Producer Responsibility (EPR) fees to ensure they accompany legally exported reused products is essential. Implementing a digital system to track and disclose all waste shipments from and within the EU can also aid in this process, if it includes shipments for reuse. Furthermore, there is a growing demand among researchers and campaigners for a clearer differentiation between waste items, second-hand items and recycled materials under the WTO waste codes classification.
At the same time, establishing effective dialogue with receiving economies can facilitate the implementation of local EPR systems ensuring that the fees associated with products shipped for reuse support proper waste management. Rather than outright prohibiting the export or import of second-hand products, a more prudent approach would be to impose stricter conditions for the export and import of goods for reuse. These conditions should include the establishment of independent schemes capable of administering the fees associated with these products. Such a proposition could be brought up for discussion within the GACERE initiative, which aims to promote a circular economy between the EU and third countries. Additionally, international organizations like the UN or the OECD could initiate a project to explore the most effective methods of implementing these independent schemes.
A change of perspective
On a longer term, policy measures will be required to bring about more fundamental change in the way EPR schemes operate – including a change of perspective.
Despite a growing emphasis on the need to preserve resources through reuse, repair, and better product design, EPR schemes and broader circular economy efforts are still predominantly focused on waste management. Under the current approach, EPR targets are set based on the aggregated weight of products in bulk rather than individual products, leading to a neglect of product-specific considerations such as their reuse and repair potential: the primary goal is to meet legal recycling targets and finance existing collection and treatment systems, rather than ensuring the optimal management of each product’s end-of-life. This perspective has led us to overlook products exported for reuse outside the EU, as we can still strive to meet our legal obligations by focusing on bulk waste materials within the EU. However, this approach becomes increasingly unfit as recycling targets increase, and it fails to align with the principles of a circular economy and efficient resource management.
It is crucial to shift EPR systems from a focus on bulk materials to a product-centric perspective, particularly for products containing critical materials like electronics, vehicles and batteries. By treating each product as a reservoir of valuable materials, we can prioritise repair, disassembly for parts harvesting, and recovery of critical raw materials, rather than sending precious resources into bulk shredding. This is why campaigners are demanding a reform of EU legislation on EPR to ensure a comprehensive coverage of products, leverage potential for repair, reuse and value retention, and promote longevity, waste prevention and circularity on an individual product basis. Such approach should be promoted at the very least for products containing critical raw materials. Unfortunately, however, this issue is largely overlooked in the EU Critical Raw Material Act.
As the development of a Digital Product Passport (DPP) will advance our understanding of circular economy potentials, resource savings, and critical raw material recovery, it also opens possibilities for progressing the monitoring of EPR fees. By shifting our focus from bulk materials to individual products as reservoirs of materials and opportunities for resource savings, we could associate EPR fees with each product’s digital passport. This integration could initially be applied to products with significant value retention potential such as cars, electronics and batteries, with the ultimate goal to consider every single product placed on the market in terms of value retention and optimise its resource-saving potential.
Furthermore, the forthcoming revisions of the End-of-Life Vehicle Directive and the WEEE Directive represent clear opportunities to question existing EPR systems and orient them to maximise the circularity potential of electronics and vehicles that are put on the market and could one day be shipped for reuse beyond the EU.
As EU market power erodes in the global economy and we seek new ways of trading with partners based on mutual benefits, modernising EPR systems is a key move to enhance fairness and equip us to tackle the global challenge of preserving natural resources and critical raw materials.
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