Should SMEs be Participating in EPR? Are There Any Economic Benefits?
Extended producer responsibility (EPR) legislation was enacted in South Africa in 2021. If you’ve taken the chance to read over the regulations, you’ll know that they apply to businesses in the paper and packaging, electrical and electronic equipment, portable batteries, lubricant oils and lighting industries. But does that include startups and SMEs?
Why should you have to comply with EPR if you’re still in the early stages of getting your business going?
1. Better Products
A key part of EPR is bringing more eco-friendly products to the South African market. It gets business owners on board with reducing wastage and using recycled materials. These can be things entrepreneurs don’t often think about, at least at first. EPR forces you to incorporate sustainability principles into your business plan. It makes you solve problems more creatively and can spark innovation.
Consider a carpet company as an example. They could import mats from overseas or use EPR to help them make carpets locally using recycled materials. The second option makes the product a lot more interesting and unique, helping it stand out among competitors.
2.Cost Savings
When you start running an EPR scheme, your wastage levels go way down. You’ll be working on reducing pollution and preventing your products and packaging from becoming litter one day. Many companies do this by using less packaging in general or designing simpler boxes and bags for their products. These are small changes but they do eventually add up to big savings.
You can also save money by upcycling or repurposing the products and packaging you collect in take-back schemes. Getting customers to bring back used stuff gives you free raw materials that you can feed back into your business.
3.New Business Opportunities
One of the obligations producers have under EPR is to “develop and establish secondary markets for recycled content.” That means helping to drum up interest in products made from recycled materials. You can do this within your customer base or by supporting other businesses that recycle. This is a networking opportunity that helps you find growth partners.
It can also be the push you need to start your side business. Let’s say you run a take-back scheme as part of EPR. You could use the materials you collect to feed another small business that makes totally different products. If you don’t have the time for a brand-new thing, you could partner up with an existing startup and start making passive income. Once you start exploring the world of recycling, new business opportunities are at every corner.
4.Good Publicity
In 2022, Afrobarometer conducted a survey to find out how South Africans felt about pollution. Of the 1582 people they interviewed, 70% said pollution was a serious problem in their communities. It stands to reason then, that any efforts businesses make to clean up the country will be well received. Joining an EPR scheme can help you position yourself as a company that cares.
Running clean-ups or sponsoring recycling programmes gets your name out there and helps you develop a good public image. This is how small businesses can use EPR to attract customers. Importantly, you can attract a whole new set of customers – people who are about the environment. Being proudly committed to the planet is also important if you want to attract investors.
5. A Stronger Economy
EPR is not all about saving money and making yourself look good. It’s also about sharing the benefits of a circular economy with others. To comply with the legislation, business owners must get waste pickers and micro-enterprises involved in their efforts. A recycling program or take-back scheme is your chance to create jobs and help uplift vulnerable people.
In this way, your small business supports other small businesses and the economy slowly grows. Getting income in people’s pockets gives them more spending power. This has a knock-on effect on all types of businesses in the country. Eventually, your good work as an employer gives your own customers more money to spend.
Is EPR Mandatory in South Africa? How Do the Fees Work?
In South Africa, EPR is mandatory for all producers in these industries:
- Electrical and Electronic Equipment
- Lighting
- Portable Batteries
- Paper and Packaging
- Lubricant Oils
According to the EPR regulations, producers are responsible for funding their own EPR schemes. How are EPR fees calculated? By considering the cost of recovering raw materials from your products at their end-of-life stage. That includes factors such as the weight of the products, how easy they are to recycle, and how much demand there is for recycled items in your industry.
In 2024, the Department of Forestry, Fisheries, and the Environment published a Guideline to help producers calculate their EPR fees accurately.
Getting Started With EPR
Being new to EPR can feel a bit intimidating. Fortunately, the EPR regulations allow Producer Responsibility Organisations (PROs) to handle EPR for busy producers. Joining one takes the admin, reporting, and planning off your hands so you can keep focusing on your business.
eWASA is a PRO for many of South Africa’s biggest brands. Our members get access to experts from this professional network to help them implement EPR in a sustainable and cost-effective way. Interested SMEs can check out our membership fee structure here or get in touch for more information.
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