Up to 10% of electronic and electrical equipment bought on digital marketplaces in Europe avoids contributing to extended producer responsibility (EPR) systems, putting their viability at risk.
That is the conclusion of a report by environmental consultancy Eunomia for the Organisation for Economic Co-operation and Development (OECD), which called on governments to take “urgent action”.
It said ‘free riding’ sellers avoid paying into EPR schemes for the end-of-life management of between 460,000 and 920,000 tonnes of goods each year.
Environmental schemes that deal with waste electrical and electronic equipment (WEEE) were left possibly hundreds of millions of euros out of pocket as a result.
OECD senior policy analyst Peter Börkey, co-author of the report Extended Producer Responsibility (EPR) and the Impact of Online Sales, said: “Free-riding in EPR systems requires urgent action from governments and industry stakeholders because it is threatening the economic viability of these systems. This report provides an overview of the interventions that are currently being discussed by stakeholders.”
Co-author Mark Hilton, head of sustainable business at Eunomia, said free-riding had been worsened by the recent fast expansion of online sales.
“The sellers often have no physical legal entity in the country where the consumer resides and are not registered with EPR schemes, avoiding fees and take-back obligations,” he said.
“It’s not just a problem in terms of small overseas sellers – the large multi-seller platforms based in the EU are also not obligated because, technically, they neither import nor sell. These are all areas that need addressing if we are to retain effective and fair EPR schemes.”
The report proposes a single electronic register of producers for each jurisdiction; simpler methods to report suspected free-riders; and for customs, tax and trading standards officials to work more closely with environmental authorities.
Firms that lacked a physical presence should be tackled by changing WEEE legislation, so they could be prosecuted for illegal action in another country and courts could be allowed to close websites.
Longer term, it proposed that all websites that sell EEE under their own name should be required to show their producer responsibility organisation, and that online platforms with depots in a country could be defined as a ‘producer’ in certain circumstances.
The report came amid growing concern about free-riding by WEEE firms and pressure on EPR schemes to collect more materials rather than rely on compliance fees.