Extended Producer Responsibility frameworks are directing materials towards recycling rather than higher-value reuse and repair, according to a new policy brief from the Ellen MacArthur Foundation, which calls for stronger fee incentives and clearer regulation to support circular economy goals.
Extended Producer Responsibility (EPR) schemes are failing to prioritise reuse and remanufacturing, despite their potential to retain greater economic and environmental value than recycling, according to a new policy brief published by the Ellen MacArthur Foundation (EMF).
The briefing argues that while EPR systems generate dedicated funding for managing products at end of life, current fee structures largely incentivise recycling and energy recovery rather than higher-value circular pathways such as reuse, repair and remanufacturing. As a result, products that could remain in use for longer are often directed prematurely towards material recovery.
EMF is calling for eco-modulated EPR fees that reflect product durability, reusability and repairability, not just recyclability. Under this approach, products designed for longer lifespans and multiple use cycles would attract lower producer fees than short-lived or single-use items.
UK packaging EPR cited as example
The policy brief highlights the UK’s packaging EPR scheme, which came into force this year, as an illustration of the issue. While reusable packaging avoids ongoing disposal fees, the Foundation says the scheme’s fee modulation framework does not actively reward reuse or refill models.
From 2026, PackUK’s Recyclability Assessment Methodology will apply higher charges to poorly recyclable packaging, but no equivalent incentives exist for packaging designed for repeated use. EMF argues this risks reinforcing recycling as the default option, rather than encouraging prevention and reuse.
Why reuse delivers higher value
The briefing reiterates the Foundation’s long-standing position that reuse and repair retain more embedded value than recycling. When products are recycled, the energy, labour and complexity invested in their manufacture are largely lost. Reuse, by contrast, preserves this value across multiple life cycles.
This hierarchy is reflected in the Foundation’s “butterfly diagram” (above), which places reuse, repair and remanufacturing in the inner loops of the circular economy, with recycling positioned further out as a material-level intervention.
EMF links this to broader resource pressures. Global material consumption now exceeds 100 billion tonnes per year, and UN projections suggest extraction could rise by 60% by 2060. With around three-quarters of extracted materials non-renewable, the Foundation argues recycling alone cannot reverse current trends.
Mandatory schemes and enforcement
Beyond fee design, the Foundation stresses the importance of mandatory EPR schemes with robust enforcement. Voluntary schemes, it says, tend to be fragmented, underfunded and vulnerable to free-riding.
Germany’s long-established packaging EPR system is cited as an example of effective enforcement. In 2023, Germany achieved a 96% packaging recovery rate and a 69% recycling rate, supported by mandatory producer registration and fines of up to €200,000 for non-compliance.
However, EMF notes that packaging volumes placed on the German market have continued to rise, highlighting the limitations of recycling-focused EPR systems in reducing overall material consumption.
Waste definitions and market barriers
The briefing identifies waste classification rules as a further obstacle to reuse and repair. Once products are legally defined as waste, regulatory controls can make reuse more complex or costly than disposal, even where materials remain functional.
Inconsistent definitions between jurisdictions can also deter investment in circular business models. EMF points to end-of-waste criteria as a way to provide clarity, citing Ireland’s system, which allows industry to request decisions for specific materials, as a more flexible model.
The Foundation also highlights the need for stronger demand-side support for secondary materials. Recycled and remanufactured products often struggle to compete with virgin materials on price and consistency, it says, calling for measures such as virgin material taxes, recycled-content procurement rules and quality certification schemes.
Implications for UK circular economy policy
The policy brief is published as the UK prepares its first Circular Economy Strategy, expected in autumn 2025. The advisory Circular Economy Taskforce is chaired by Andrew Morlet, former chief executive of the Ellen MacArthur Foundation.
EMF concludes that effective circular economy policy requires a combined approach: clear waste classifications, EPR schemes that reward higher-value loops, and market interventions to stimulate demand. Without this, the Foundation warns, materials risk being collected and recycled without delivering meaningful reductions in resource use.