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The purpose of this paper is to analyse the main changes to Legislative Decree No. 152 of 3 April 2006 (Environmental Consolidated Act, Testo unico in materia ambientale, hereinafter “TUA”), as amended after the transposition into the Italian legal system of EU Directives Nos. 851/2018 and 852/2018 on the transition to a “circular economy”, with a focus on the novelties introduced on “Extended Producer Responsibility” (“EPR”).
Directive 2018/851/EU introduced into Directive 2008/98/EC the definition of “extended producer responsibility regime”, meaning “a set of measures taken by Member States requiring producers of products to bear financial or financial and organisational responsibility for the management of the waste stage of a product’s life cycle including separate collection, sorting and treatment operations”[1].
“Extended responsibility” can be defined as an environmental policy approach where the producer has also post-consumer responsibility for the product after it becomes waste[2].
It appears from the definition introduced by Directive 2018/851/EU that extended producer responsibility involves the imposition of obligations on producers in order for them to be - financially or managerially - liable for the post-consumer phase of the life cycle of a product, when it becomes waste. Extended producer responsibility schemes are indeed essential elements of good waste management[3].
The action of the EU’s lawmakers proved necessary especially in view of the fact that the efficiency and effectiveness of extended responsibility schemes vary significantly from one Member State to another: consequently, it was deemed necessary to set certain minimum requirements for the operation of such schemes.
The objective pursued through the imposition of general minimum requirements is - besides reducing costs and improving the effectiveness of such schemes - to contribute to the incorporation of end-of-life costs into product prices, by providing incentives for producers, when designing their products, to take better into account recyclability, reusability, reparability and the presence of hazardous substances at the design stage[4].
Such innovations are part of the EU regulatory framework aimed at fostering the transition to a more “circular” economy. More specifically, such innovations are part of the so-called “Circular Economy Package” under Directives 2018/849/EU, 2018/850/EU, 2018/851/EU and 2018/852/EU of the European Parliament and of the Council of 30 May 2018, amending the EU’s key provisions on waste.
The circular economy principle promotes sustainable waste management, in which waste, once recovered, re-enters the production cycle so that new resources are saved: this is an economic, production and consumption model in which waste, or what might generally become waste, is fed back into the production cycle to reduce human impact on the environment[5].
In recent years, the European Union has strongly encouraged the adoption of a new model of production and consumption, which involves sharing, leasing, reusing, repairing, refurbishing and recycling existing materials and products as long as possible[6].
The objective pursued is therefore to gradually depart from the current “linear” economic model, based on a “take-make-consume-throw away” pattern[7].
In such context, Italian lawmakers worked on the TUA text, by - inter alia - rewriting Article 178-bis and introducing new Article 178-ter, amending the rules governing extended producer responsibility by introducing new paradigms for regimes that assign producers financial and managerial responsibility for the life cycle stage in which a product becomes waste.
That said, before analysing the innovations under Articles 178-bis and 178-ter of the TUA, it is necessary to highlight two peculiar aspects of the “extended responsibility” regimes.
First, Article 8, paragraph 1 of Directive 2008/98/EC – which was not amended by Directive 2018/851/EU – provides that, in order to “strengthen the re-use and the prevention, recycling and other recovery of waste, Member States may take legislative or non-legislative measures to ensure that any natural or legal person who professionally develops, manufactures, processes, deals with, sells or imports products (producer of the product) has extended producer responsibility”.
Therefore, the establishment of EPR schemes continues to be a mere option for national lawmakers.
However, Directive 2018/851/EU amends the following paragraphs of Article 8 of Directive 2008/98/EC, expressly providing that, where Member States decide to establish extended producer responsibility schemes, it will be necessary to apply the general minimum requirements under following Article 8-bis, precisely introduced by Directive 2018/851/EU.
Consequently, Directive 2018/851/EU has not introduced a real obligation on Member States to establish EPR schemes, but has provided that, if national lawmakers decide to set them up, it will then be necessary to apply the general minimum requirements set out in new Article 8-bis of Directive 2018/851/EU, transposed into national law through new Article 178-ter of the TUA.
The goal of the EU’s lawmakers is therefore to ensure greater uniformity of the schemes adopted by individual Member States in the area of extended producer responsibility [8].
More specifically, in Italy, Directive 2018/851/EU was transposed by Legislative Decree No. 116 of 3 September 2020, which, on the one hand, rewrote Article 178-bis of the TUA by providing for the mandatory establishment - by special implementing Ministerial decrees - of extended responsibility schemes and, on the other hand, introduced new Article 178-ter, entitled “General minimum requirements for extended producer responsibility”, which, as mentioned, transposes the general minimum requirements set out in Article 8-bis of Directive 2008/98/EC, as amended by Directive 2018/851/EU.
In other words, having imposed the mandatory establishment of EPR schemes at the national level involves the compulsory introduction of the general minimum EPR requirements set out by amended Article 8a of Directive 2008/98/EC.
A further aspect to highlight is the circumstance that, for certain products or families of products, extended producer responsibility is already substantially provided for by the laws and regulations in force (reference is made, just by way of example, to the rules on end-of-life vehicles, batteries, tires, etc.)[9].
However, as highlighted below, newly amended Article 178-bis, paragraph 1, of the TUA provides for the establishment, by means of appropriate implementing Ministerial decrees, of additional extended producer responsibility schemes in order to strengthen reuse, prevention, recycling and recovery of waste.
Furthermore, Article 6 of Legislative Decree No. 116/2020 expressly provides for an “adaptation deadline” for persons subject to extended producer responsibility schemes set up before the entry into force of Legislative Decree No. 116/2020 (i.e., 26 September 2020).
More specifically, such persons will be required to comply with the provisions of Legislative Decree No. 116/2020 on extended producer responsibility by 5 January 2023.
To that end, Article 6 of Legislative Decree No. 116/2020 provides for a real adaptation mechanism, which required the entities subject to EPR schemes set up before 26 September 2020 to amend their bylaws to bring them into compliance with the new provisions of the TUA and, especially, with the requirements under Articles 178-bis and 178-ter, and notify such amendments to the Ministry of the Environment and Land and Sea Protection by 1 June 2022.
The Ministry may in the sixty days following such notice specify further amendments to bylaws to be made within a further period of thirty days, and if such amendments are not adopted, may also introduce such amendments ex officio if deemed necessary. Finally, pursuant to Article 6, paragraph 4 of Legislative Decree No. 116/2020, any amendments to bylaws shall be deemed approved if the Ministry fails to notify the amendments to be made or to amend them ex officio.
2. Amendments to articles 178-bis and 178-ter of TUA - The general minimum requirements for extended producer responsibility
Turning to the analysis of the new text of Articles 178-bis and 178-ter of the TUA, the first novelty is undoubtedly the shift from a mere “possibility”[10] to establish EPR schemes to the introduction of a real “obligation” to establish them[11].
Indeed, as mentioned, Directive 2018/851/EU did not provide for a real obligation for national lawmakers to introduce extended liability regimes, leaving that choice to individual Member States.
In transposing Directive 2018/851/EU, Italian lawmakers opted for the mandatory introduction of said schemes[12].
As a result, it was necessary to introduce new Article 178-ter of the TUA, which implemented the general minimum requirements for EPRs precisely provided for by Directive 2018/851/EU.
As mentioned, such Directive provides that, in cases where individual Member States decide - on a voluntary basis - to introduce EPR schemes, these must necessarily meet the general minimum requirements transposed into our law as a result of the introduction of Article 178-ter of the TUA.
It should be pointed out from the outset that amended Article 178-bis devolves to one or more ministerial decrees - to be adopted by the Ministry of the Environment and Land and Sea Protection, in consultation with the Ministry of Economic Development, after consulting the Unified Conference and, in any event, in compliance with the general minimum requirements under Article 178-ter of the TUA - the establishment, again at the request of a party, of extended producer responsibility schemes.
It will therefore be necessary to wait for such implementing ministerial decrees – for whose adoption no deadline is set by new Article 178-bis - to be able to assess how, in relation to individual supply chains, the new extended liability obligations will be precisely set out.
In the meantime one may, however, acknowledge the extension of the scope of such EPR regimes: especially in this respect, the last sentence of first paragraph of Article 178-bis expressly provides that, by virtue of such ministerial decrees, measures shall inter alia be taken to ensure that any natural or legal person who professionally develops, manufactures, processes, deals with, sells or imports products (producer of the product) be subject to extended producer responsibility.
EPR schemes shall include appropriate measures to encourage the design of products and their components to reduce their environmental impact and waste generation during their production and subsequent use. In addition, it is expressly provided that such measures shall foster the development, production, and marketing of products and product components that are suitable for multiple use, contain recycled materials, are technically durable and easily repairable, and, after becoming waste, suitable for being prepared for reuse and recycling (see Article 178-bis, paragraph 3).
In other words, as effectively summarised by the Ref Research Laboratory working group, EPR schemes should contribute to the achievement of four key objectives: a) reduce waste generation (prevention/reuse); b) increase the rate of reuse and preparation for reuse; c) prevent waste dispersion in the environment; d) reduce the use of hazardous substances in marketed products[13].
Likewise completely new is the provision of paragraph 4 of Article 178-bis, according to which the aforementioned implementing ministerial decrees shall:
(a) take into account technical feasibility and economic viability as well as the overall health, environmental and social impact, while meeting the need to ensure the proper functioning of the internal market;
(b) regulate the possible methods for reuse of products and management of the resulting waste, while requiring the public to be made aware of how reuse and recycling shall be carried out;
(c) provide specific obligations for members of the system.
Finally, the second paragraph of Article 178-bis expressly provides that EPR schemes shall apply “without prejudice to the responsibility for waste management under Article 188”: indeed, as pointed out below, Articles 188 et seq. of the TUA regulate a special form of responsibility, the so-called “liability of the waste producer”[14].
The general minimum requirements for EPR schemes were introduced by Directive 2018/851/EU under Article 8-bis of Directive 2008/98/EC and, subsequently, transposed in Italy through the inclusion, by Legislative Decree No. 116/2020, of a new article in the TUA, i.e. Article 178-ter.
Specifically, such article provides that EPR schemes shall meet the following requirements:
a) establishing the roles and responsibilities of all players in the different chains, including producers who place products on the national market, organisations that implement, on behalf of producers, the obligations arising from the latter’s EPR, public and private waste managers, Local Authorities and, where applicable, operators responsible for reuse and preparation for reuse and social economy enterprises (Article 178-ter, paragraph 1, a);
b) making provisions in accordance with the hierarchy of waste management targets, aimed at achieving at least the quantitative targets relevant for the EPR scheme and the achievement of the objectives set out in Legislative Decree No. 116/2020 and in the European Directives on packaging (Directive 94/62/ EC), batteries (Directive 2006/66/EC), end-of-life vehicles (Directive 2000/53/ EEC) and electrical and electronic equipment (so-called WEEE, Directive 2012/19/EC) and setting, where appropriate, further quantitative and/or qualitative objetives deemed relevant for the EPR scheme (Article 178-ter, paragraph 1, b);
c) adopting a system for reporting information about the products marketed and data on collection and treatment of waste resulting from such products, through the so-called “National Registry of Producers” (Article 178-ter, paragraph 1, c);
d) fulfilling administrative burdens on producers and importers of products in accordance with the principle of fairness and proportionality in relation to market share and regardless of their origin (Article 178-ter, paragraph 1, d);
e) causing producers to provide users and waste holders involved in EPR schemes with proper information on waste prevention measures, centres for reuse and preparing for reuse, waste take-back and collection systems and the prevention of littering as well as measures to incentivise waste holders to deliver waste to existing separate collection systems (especially, where appropriate, by way of financial incentives) (Article 178-ter, paragraph 1, e).
Furthermore, EPR regimes shall also ensure:
a) a geographical coverage of the waste collection network corresponding to the geographical coverage of product distribution, without limiting collection to those areas where the collection and management of waste are the most profitable, while providing adequate availability of waste collection systems even in the most disadvantaged areas;
b) suitable financial means or financial and organisational means to meet extended producer responsibility obligations;
c) adequate self-monitoring mechanisms, supported by regular independent audits, to assess the financial management and quality of data collected and reported through the National Register of Producers;
d) publicity of information on the achievement of waste management targets.
That said, one of the main obligations under Article 178-ter is the payment of financial contributions by producers in order to comply with their obligations under EPR schemes.
Such contribution must cover the following costs for products that producers place on the domestic market:
- costs of separate collection of waste and its subsequent transport;
- costs of sorting and processing necessary to meet the Union waste management targets (taking into account revenues from reuse, sales of waste from one’s own products, from sales of secondary raw materials obtained from one’s own products, and from unclaimed deposit fees);
- costs necessary to meet other targets and objectives set out in above-mentioned paragraph 1(b) of the same Article 178-ter of the TUA;
- costs of providing adequate information to product users and waste holders in accordance with the above-mentioned paragraph 1(e), Article 178-ter of the TUA;
- costs of data gathering and reporting under the above-mentioned paragraph 1(c), Article 178-ter of the TUA.
In addition, Article 178-ter, paragraph 3, b) of the TUA provides that, in the case of “collective fulfillment” of EPR obligations, the financial contributions should be “modulated”, where possible, for individual products or groups of similar products, notably taking into account their durability, reparability, reusability and recyclability and the presence of hazardous substances, thereby adopting a life-cycle approach and aligned with the requirements set by the relevant Union law and, where available, based on harmonised criteria in order to ensure a smooth functioning of the internal market.
Going on with the analysis of the provisions related to financial contributions imposed on producers for the fulfillment of EPR obligations, it should be noted that letter c), paragraph 3, of Article 178-ter provides that such financial contributions should not exceed the costs that are necessary to provide waste management services in a cost-efficient way. Such costs shall be apportioned, after consultation with the Italian Regulatory Authority for Energy, Networks and the Environment (ARERA), on a transparent basis among stakeholders (so-called principle of “efficiency of waste management services”[15]).
Finally, Italian lawmakers have accepted the possibility offered by Article 1(9) of Directive 2018/851/EU to depart from the allocation of costs related to producers’ financial responsibility for covering waste management costs, as outlined above, where this is justified by the need to ensure proper waste management and the economic viability of the extended producer responsibility regime.
However, the same rule provides that such an exemption is admissible only subject to prior approval by the Ministry of Environment and Land and Sea Protection and, in any event, under certain conditions[16].
A final aspect to be considered concerns the functions of supervision and control over compliance with the obligations arising from EPR schemes, which Legislative Decree No. 116/2020 assigns to the Ministry of the Environment and Land and Sea Protection, which will perform such role in accordance with specific procedures to be set out by ministerial decree (Article 178-ter, paragraph 7).
Article 178-ter, paragraph 6, in particular, lists the tasks attributed to said Ministry, which include the task of collecting and verifying electronically a series of data[17] to be included within the so-called “National Register of Producers”.
A further novelty introduced by Legislative Decree No. 116/2020 on transposing Directive 2018/851/EU is precisely the establishment of a “National Register of Producers” with the Ministry of Environment and Land and Sea Protection.
All the persons subject to an EPR regime shall be required to enroll in said Register: again, the procedures for enrollment and operation of the Register shall be determined by the aforementioned ministerial decree to be adopted pursuant to Article 178-ter, paragraph 7[18].
The content of this article is for information purposes only and is not, and cannot be intended as, professional advice on the matters dealt with. For further information, please contact Gianmarco Navarra, Clitie Potenza and Michelangelo Eugenio Maida.
[1] Such a definition is consistent with that given by the Organisation for Economic Cooperation and Development (OECD):”Extended Producer Responsibility (EPR) is a policy approach under which producers are given a significant responsibility – financial and/or physical – for the treatment or disposal of post-consumer products. Assigning such responsibility could in principle provide incentives to prevent wastes at the source, promote product design for the environment and support the achievement of public recycling and materials management goals”, https://www.oecd.org/env/tools-evaluation/extendedproducerresponsibility.htm.
[2] Gruppo di lavoro del Laboratorio Ref Ricerche [Ref Research Laboratory Working Group], La responsabilità estesa del produttore (EPR): una riforma per favorire prevenzione e riciclo, page 3.
[3] Whereas clause 21 of Directive 2018/851/EU.
[4] Whereas clause 22 of Directive 2018/851/EU.
[5] G. SPINA, L’attuazione del principio dell’economia circolare nelle regioni italiane, in Ambiente & sviluppo No. 6/2021, page 441. See also the definition of “circular economy” provided by A. MURATORI, La revisione della Parte Quarta del D.Lgs. n. 152/2006 secondo il Governo e l’economia circolare, in Ambiente & sviluppo No. 5/2020, according to which the notion “circular economy” means “a system of production and consumption (of goods made to meet the growing needs of the civil community) that is ultimately focused on not wasting natural resources -particularly finite resources- and reintroducing into the economic cycle the vast masses of waste and residues generated during the various stages of the life cycle of goods, from their production (also including the procurement of the necessary raw materials) to their marketing and, finally, post-consumption”.
[6] M. LOCHE, A. CASTELLI, La nuova Direttiva Ue sul recupero dei veicoli fuori uso e l’adeguamento della normativa nazionale italiana, in Ambiente & sviluppo No. 2/2021, page 99.
[7] C. BOVINO, La riforma della responsabilità estesa del produttore (EPR): impatti sulla disciplina degli imballaggi, in Ambiente & sviluppo No. 10/2020, page 779.
[8] C. BOVINO, see above, page 782.
[9] In this regard, it should be noted that Article 227 of the TUA expressly provides that “Without prejudice to the provisions of Articles 178-bis and 178-ter, where applicable, the national statutory provisions on other types of waste shall remain in force (…)”.
[10] Former Article 178-bis, paragraph 1 of the TUA indeed provided that “In order to strengthen prevention and facilitate the efficient use of resources throughout the entire life cycle, including the stages of reuse, recycling and recovery of waste, while avoiding jeopardizing the free movement of goods in the market, the methods and criteria for introducing extended producer responsibility may (…)be adopted”.
[11] New Article 178-bis, paragraph 1 of the TUA provides that “In order to strengthen reuse, prevention recycling and recovery of waste, by one or more decrees adopted pursuant to Article 17, paragraph 3, of Law No. 400 of August 23, 1988, of the Minister of the Environment and Land and Sea Protection, in consultation with the Ministry of Economic Development, after hearing the Unified Conference, extended producer responsibility schemes shall be established, including at the request of a party (…)”.
[12] C. BOVINO, art. cit., page 784.
[13] Gruppo di lavoro del Laboratorio Ref Ricerche, op. cit., page 10.
[14] The provision is quite similar to that in Article 8(4) of Directive 2008/98/EC, as amended by Directive 2018/851/EU.
[15] C. BOVINO, art. cit., page 789.
[16] Specifically, it is provided that the exemption is permissible only under the condition that:
(a) in the case of extended producer responsibility schemes established by European Directives (e.g., packaging, end-of-life vehicles, etc.), in order to meet waste management targets, product producers bear at least 80% of the necessary costs;
(b) in the case of extended producer responsibility schemes established after 4 July 2018, to achieve waste management targets, product producers bear at least 80% of the necessary costs;
(c) in the case of extended producer responsibility schemes established before 4 July 2018 to achieve waste management targets, producers bear at least 50% of the necessary costs;
Lastly, Article 178-ter, paragraph 5, expressly provides that such exemption should not be used to reduce the share of costs incurred by producers of products under extended producer responsibility schemes established before 4 July 2018 (i.e., the date of entry into force of Directive 2018/851/EU).
[17] These are the data set out in paragraph 9 of Article 178-ter that, according to terms to be set out in a special implementing Ministerial Decree, producers shall report to the National Register of Producers (e.g., data on the placing of their products on the national market and how producers intend to fulfill their obligations; information on the systems through which producers fulfill their obligations, individually and in association, with bylaws and attached documentation relating to their project, etc.
[18] It is specified that, in case of producers with registered offices in another EU Member State who place products on the national territory, for the purpose of fulfilling the obligations arising from the establishment of an extended liability regime, they shall designate a legal or natural person established on the national territory as an authorised representative for the purpose of fulfilling the obligations and registration in the National Register of Producers (see Article 178-ter, paragraph 8, last sentence).
