How should we align EPR for textiles between countries?

The textile industry, which is characterised by complex supply chains spanning multiple countries, is under increasing pressure to address its environmental impact.

Pushing the boundaries of EPR policy for textiles, a new report published by the Ellen MacArthur Foundation proposes aligning Extended Producer Responsibility (EPR) systems across borders as a key strategy in transitioning towards a circular economy for textiles.

EPR policies, which make producers responsible for the entire lifecycle of their products including the post-consumer stage, are increasingly being adopted or considered for textiles in various countries. France, Hungary, and the Netherlands have already implemented such systems, while others, including the European Union, California, and New York, are in various stages of proposal or debate.

Global textile waste and the need for cross-border EPR alignment

The current fragmented approach to EPR implementation may limit its effectiveness in addressing the global nature of textile waste. With more than 80 per cent of discarded textiles ending up incinerated, landfilled, or leaking into the environment, there is a growing case for a more coordinated, international approach.

Aligning EPR systems across countries addresses challenges posed by inconsistent approaches, particularly the risk of market distortions between neighbouring nations with different textile EPR policies. A key concern is that businesses might relocate to avoid EPR costs, moving to countries with less stringent regulations. This could undermine the effectiveness of EPR systems and create unfair competition between producers in different countries.

Unaligned systems could also lead to uneven development of circular economy infrastructure. Places with well-funded EPR systems might develop advanced recycling and reuse facilities, while neighbouring areas without such systems could lag behind. This disparity could create a widening gap in environmental performance between countries and potentially lead to missed economic opportunities.

Key principles for aligning textile EPR systems internationally

The Ellen MacArthur Foundation (EMF) proposes several key principles for alignment to create a more coherent global approach. Central to these recommendations is the harmonising definitions for product scope, obligated producers, cost coverage, and the waste hierarchy for textiles. This alignment would enhance transparency, reduce transition costs, and assist compliance for businesses operating in multiple markets.

For product scope, the suggestion is to cover all clothing, footwear, and household textiles placed on the market. Regarding obligated producers, the recommendation is to clearly define all actors placing products on the market, including national and international brands and retailers, regardless of their sales channel.

The report advocates for alignment in applying a net cost principle, where EPR fees cover collection, sorting, preparation for reuse and recycling, as well as the actual reuse and recycling processes. Additionally, it suggests including costs for residual waste treatment, data gathering, reporting, and public communication.

EMF emphasises the importance of setting global objectives with corresponding national targets. Four key objectives are proposed: increasing collection volumes, boosting reuse rates, improving recycling rates, and reducing overall waste volumes.

Stakeholder involvement forms the third pillar of the alignment principles. The report highlights the importance of including various actors in shaping and implementing EPR policies, from the non-profit sector to informal workers.

Furthermore, it suggests creating an earmarked fund, financed by obligated producers, to support collection, sorting, reuse, and recycling activities in countries that import significant volumes of reusable textiles. This mechanism would require collaboration between governments and Producer Responsibility Organizations (PROs) to determine ownership of materials and report on flows across multiple countries and transit hubs.

This cross-border approach faces several practical challenges. Implementing such a system would require rigorous mechanisms for identifying recipient countries, accrediting eligible entities, and ensuring effective use of funds. The complexity of tracing products through multiple countries and transit hubs will however add another layer of difficulty.

Balancing global alignment with local needs remains a key consideration. EMF acknowledges that while global objectives create a common direction, national and subnational governments should set specific, time-bound targets based on their unique contexts. This flexibility allows for consideration of varying collection rates, sorting capacities, and existing infrastructure across different regions.

However, achieving this balance presents its own set of challenges. Differing national priorities and existing systems can create obstacles to alignment. Some countries may prioritise job creation in the textile reuse sector, while others focus on developing advanced recycling technologies. These divergent priorities can lead to conflicting approaches to EPR implementation.

Regulatory and enforcement challenges across borders introduces another layer of complexity. Ensuring compliance with EPR obligations becomes more difficult when dealing with international supply chains and cross-border trade of used textiles. Differences in legal frameworks and enforcement capabilities between countries could lead to inconsistencies in how EPR policies are implemented and monitored.

Moreover, the potential for regulatory arbitrage – where companies exploit differences in regulations between countries – poses a significant challenge. This could lead to complex corporate structures designed to avoid EPR responsibilities, making enforcement even more challenging.

Despite these obstacles, proponents argue that the benefits of a more aligned, global approach to textile EPR could outweigh the challenges. They suggest that addressing these issues head-on is crucial for creating a truly circular economy for textiles in an increasingly interconnected world.

Industry reactions to the alignment proposal have been mixed, reflecting the complex landscape of the global textile sector. Many larger multinational brands have expressed cautious support for the concept, recognising the potential for streamlined compliance and a more level playing field across markets. However, smaller businesses and those operating primarily in single markets have raised concerns about the potential burden of adapting to a global system.