Europe's Extended Producer Responsibility (EPR) schemes have a real track record. Recycling rates across packaging, electronics, batteries, and tires have improved markedly over two decades, driven by systems that make producers financially responsible for what happens to their products at end of life. What has been harder to see is what's happening to the recyclers on the receiving end of those systems. Recycling Europe, the Brussels-based trade association formerly known as EuRIC representing 84 national federations across 24 EU and European Free Trade Association countries, argues that the organizations administering EPR schemes have been structurally incentivized to pay recyclers as little as they can get away with. While the newly released paper is an industry advocacy document, the core problem it identifies is real: the European Commission's own legislative work acknowledges that key minimum requirements in Article 8a of the Waste Framework Directive (WFD) are not properly enforced across Member States.
The "Necessary Costs" Definition Gap and What It Means for Recycling Investment
Article 8a(4)(c) of the WFD requires that producers bear at least 80% of the "necessary costs" of end-of-life waste management. Three words the law never defines. Producer Responsibility Organisations (PROs), the intermediary bodies that collect fees from producers and pay recyclers for the actual work, are left to decide what counts. In markets where multiple PROs compete, the incentive is obvious: define "necessary costs" narrowly, keep fees low, attract more producer members. The recycler on the other end of the contract absorbs the gap.
Recycling Europe wants "necessary costs" to mean something closer to the full economic picture: collection, sorting, and treatment, yes, but also research and development investment, market development for recycled materials, and the capital costs required to make recycling economically competitive with landfilling and incineration. That last part is not a small ask. Across several EU member states, recycling facilities built on the expectation of stable PRO contracts have found those contracts revised downward after opening, sometimes to the point of making the investment unworkable. You cannot build a recycling industry on revenue that evaporates when a PRO decides to run a cheaper tender.
What the Circular Economy Act Could Change for Procurement and Sustainability Teams
The European Commission is preparing the Circular Economy Act, expected by end of 2026, which will take another pass at EPR reform across product categories. The ground is already shifting. The Packaging and Packaging Waste Regulation (PPWR), in force since February 2025 and applying from August 2026, mandates eco-modulation of fees based on recyclability. The WFD's October 2025 revision brought mandatory EPR to textiles and footwear for the first time. Each expansion adds companies to the universe of producers paying into these schemes.
For procurement and sustainability teams, what happens to "necessary costs" in the Circular Economy Act will matter. Broader definitions mean higher EPR fees in categories where they have historically been suppressed. That flows through to product costs and supplier economics. Weaker definitions keep the underfunding dynamic in place, which means recycled material supply stays less reliable than circular economy targets require. Either way, the cost structure of EPR is changing. Companies that have treated it as a compliance checkbox rather than a supply chain variable are going to find that harder to sustain.
