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Extended Producer Responsibility – EPR

Major developments in the industry
Polyco is now managing all plastic types under the new EPR regulations
EPR Fee Structure
POLYCO'S

RIGIDS

R250

per tonne

FLEXIBLES

R450

per tonne

PET

R400

per tonne

MULTI-LAYER

R750

per tonne

POLYSTYRENE

R250

per tonne

VINYL

R250

per tonne

Major developments in the industry - 14 June 2022
EPR Levy for PET

In light of the confusion in the industry surrounding the payment of EPR levy’s, we would like to issue the following communication as clarification of Polyco’s stance regarding who is responsible for the collection of the levy for PET Thermoform Packaging and how it should be practically administered.

 

Please remember that in order to be compliant under the EPR legislation and a good standing member of Polyco, you must be submitting monthly tonnage declaration forms to Polyco and paying the invoices that you receive from Polyco. If you are an indirect-paying member, please still submit a ‘nil’ declaration form and indicate on the form who is paying on your behalf.

 

 

PET Thermoform Packaging MODEL STANDARDISATION

 

Polyco would like to inform its members that it will be standardising the levy collection model for PET Thermoform Packaging. This is largely due to the fact that we are primarily collecting the EPR levy from the packaging manufacturer. The following roles and responsibilities will apply in this instance:

 

Packaging Manufacturer

  • Raise the EPR Levy, ensuring that the EPR Levy is included in the invoice at the point of sale of the packaging product.
    • This may be as a separate line item, or included in the price.
  • Commit to declaring all imported and locally produced packaging sold to Polyco monthly and pay the EPR levy directly to Polyco on a monthly basis.
    • This shall be done by completing Polyco’s Tonnage Declaration form monthly sent to members via email.
  • Credit the brand owner/retailer based on the packaging that the brand owner/retailer exported.

Brand Owners (including retailers selling product under their own brand) 

  • Pay the EPR Levy to the packaging manufacturer at the point of packaging purchase.
    • Ensure that the EPR Levy is included in the invoice, either as a line item or included in the price.
  • Commit to declaring all imported packaging (packaging items and completed products with packaging) to Polyco monthly and pay the EPR levy directly to Polyco on a monthly basis.
    • This shall be done by completing the Tonnage Declaration sent to members via email on a monthly basis.
  • Credit the retailer based on the packaging that the retailer exported.

Retailers

  • To include in their procurement policy that they will ensure that all packaged products and packaging utilised in the business has been covered by an EPR Scheme.

We hope that the above provides adequate guidance. Please feel free to reach out to us at epr@polyco.co.za if you have any further questions.

Major developments in the industry
Final published Gazetted section 18 Extended Producer Responsibility (EPR) Regulations

As a pro-active response to the growing national concern around waste and its impact on society and the environment, the Department of Forestry, Fisheries and Environment (DFFE) published the final section 18 Extended Producer Responsibility (EPR) Regulations for the paper and packaging industry, electrical and electronic industry and lighting industry in Government Gazette 44539 on the 5th May 2021.

This new legislation officially came into effect on 5 November 2021 and legally mandates producers to demonstrate their Extended Producer Responsibility, or EPR, by achieving published legislated targets. This can be done by either joining an existing Producer Responsibility Organisations (or PRO) or forming a new, independent PRO or EPR scheme that will manage their products at end of life.

Instead of supporting the out-dated linear approach of producing, using and discarding valuable materials such as plastic, paper, glass and metals, the focus is now on developing circular economies within South Africa – where the value of waste is never lost, but is kept within the economy by ensuring that these materials are diverted from landfill to be reused and recycled into many new and useful materials.

Polyco (Plastics Responsibility Organisation NPC) is a non-profit company focused on making waste a valuable resource that works for our economy. We aim to grow the collection and recycling of plastic packaging in South Africa, to promote the responsible use and reuse of this plastic packaging and to end plastic waste in the environment. We have recently increased our scope to represent all plastic packaging polymer types under mandatory EPR, including PET, HDPE, PVC, LDPE, PP, PS and Multi-Layer. This has allowed Polyco to become a “one-stop shop” that is capable of supporting all plastic product producers, retailers and manufacturers. To this end, the Polystyrene Association of SA and VinylLoop, the EPR arm of the Southern African Vinyls Association, has merged its operations with those of Polyco with effect from the 1st of September 2021.

Polyco’s mission is to reduce the amount of plastic packaging going to landfill and to end plastic waste in the environment. This is done by collaborating with multiple stakeholders, by investing in recycling innovation and infrastructure in South Africa, and by educating both the industry and the consumer about recycling. Our members pay a levy for every tonne of virgin polymer purchased from either local or overseas raw material suppliers. In turn, we ensure that their extended producer responsibilities are met and ensure that they remain compliant under new packaging sustainability laws.

ANSWERS TO THE MOST FREQUENTLY ASKED QUESTIONS
Section A: Responsible Obligated Parties
  • Are EPR fees VAT payable, zero rated or VAT exempt?
    EPR fees is in fact VAT payable.
  • According to the new Section 18 EPR legislation, who does the law see as “Producer”?
    You are firstly a Producer if you are you engaged in the following:

    • Commercial manufacture
    • Conversion
    • Refurbishment (Where applicable)
    • Import
    • All the above actions related to new or used identified products
    • And if you place in excess of 10 tonnes of identified products onto the market per year.

    Producers who place in excess of 10 tonnes of identified products onto the

    market on an annual basis, responsible for extended producer responsibility under the regulations shall be identified subject to the following criteria:

     

    • ( a) In the case where branded goods, either are identified products or are sold
    • accompanied by or within identified products and the registered owner of the brand operates an enterprise, domiciled in South Africa, that makes and/or sells such goods, the producer shall be the paper, packaging, and single use product manufacturer, converter and/or the brand owner.

     

    1. Product Manufacturer
    2. Converter

    or

    1. Brand Owner

     

     

     

     

     

     

     

     

     

    IF YOU DO NOT OPERATE OFFICIALY IN SA:

     

    • ( b) In the case where branded goods, either are identified products or are sold
    • accompanied by or within identified products and the registered owner of the brand does not operate or have a controlling interest in an enterprise domiciled in South Africa, that makes and or/sells such goods, the producer shall be either-

     

    If you do not operate in South Africa as an enterprise registered in SA, then the producer shall be:

    • (i) the licensed agent of the branded goods; or
    • (ii) where no official agency agreement may be in place, the importer of the
    • branded goods as depicted on the Bill of Lading;

     

    • ( c) In the case of all other identified products not covered by subparagraphs (i)
    • and (ii) the producer shall be the retailer;
    • [Definition of ‘producer’ substituted by GN 400 of 5 May 2021.]

  • Who is responsible declaring tonnages and paying the EPR fees directly to the PRO?
    If you are the Producer, then you pay and declare.  According to the regulations, you are entitled to invoice the EPR fee to your customers. Please remember you are not allowed to add a mark-up to any EPR fee.
  • We import products into SA that are packaged by various packaging materials, including paper boxes, protective polystyrene and plastic wrap. Which PROs do we need to sign up with? Will Polyco make changes to accommodate producers that need to belong to multiple PROs in the current environment?
    You are liable to register with a related PRO depending on material type. Example: Polyco does not manage paper streams (Fibre Circle is the paper PRO), and therefore you would need to signup with Polyco to manage (plastics) and Fibre Circle to manager (paper).
  • Does Polyco intend to make the retailer or brand responsible, as imports would escape, and suppliers adhere to retailer specs?
    All stakeholders in the value chain are responsible for EPR and need to be subscribed to an EPR Scheme. The Producer is directly responsible for the EPR Fee and Declarations to its PRO.
  • How will resin producers be impacted by the new regulations?
    Resin Producers are not obliged as they do not manufacture packing materials as identified in the regulations.
  • Some identical packaging is made by multiple suppliers and some convertors brand the packaging with their logo’s. Would it be possible to check which convertors have paid the EPR fees? Will this information be on the brand owner’s website?
    All Brand Owners should ensure that their suppliers are EPR compliant.
ANSWERS TO THE MOST FREQUENTLY ASKED QUESTIONS
Section B: Membership
  • What is the process that needs to be followed when applying to Polyco for membership?

    1. Visit https://www.polyco.co.za/become-a-member/ to register your organisation.
    2. Complete the online form and have the form signed by a duly authorised signatory before submitting.
    3. You will be emailed a registration certificate.

  • Is there a cut-off date by when companies need to sign up for membership to PROs? How will late sign-ups be managed?
    The obligation is on Producers to comply with the regulations from the 5th of November 2021. The Minister has declared that declarations and EPR payments needs to be made from 1 January 2022. Late registrations with Polyco will require you paying and declaring from 1 January 2022.  Late registrations with DFFE may still result with punitive action from government.
ANSWERS TO THE MOST FREQUENTLY ASKED QUESTIONS
Section C: Fees
  • How much will the EPR fee cost and how will it be determined?
    The Polyco EPR fee is determined by the criteria in the EPR regulations. The minister has approved the 2022 Polyco Fees as seen above.
  • How will export fee rebates work?
    Exported identified products would be exempt from EPR fees and should be declared as exported volumes in order not to be invoices. Auditable proof will be required.
  • How will Producers pay on Multi-layer materials? Will converters pay on both materials purchased to manufacture multilayer packaging?
    Producers will pay on the full weight of the multi-layer plastic material and not on the separated plastic material.
  • There are concerns about corruption with regards to the management of the funds from the EPR fee i.e. no money actually going back into the industry. Eg. the REDISA corruption.
    The EPR regulations manage and control the PRO’s obligations through regular reporting structures and audits – PRO’s are allowed specific percentages of overhead costs.
ANSWERS TO THE MOST FREQUENTLY ASKED QUESTIONS
Section D: Governance
  • What will the Polyco Board look like going forward?
    Please refer to Polyco EPR Guideline Document (INSERT HERE).
ANSWERS TO THE MOST FREQUENTLY ASKED QUESTIONS
Section E: Compliance
  • How do we ensure that all obliged parties are compliant with the EPR Regulations?
    A PRO is only responsible for their registered member’s activities related to EPR. It is an offence to be non-compliant with the EPR regulations and non-compliance could result in punitive action being taken by the Government.
ANSWERS TO THE MOST FREQUENTLY ASKED QUESTIONS
Section F: Monitoring And Evaluation
  • What is the data capturing process? What type of reporting system/process/mechanism will be used by Polyco? By when will we have the ‘template’ of the information that Polyco members need to complete monthly?
    Polyco will ensure that continued development of the database can be undertaken so that it can be updated to meet the needs of Polyco’s EPR Scheme’s reporting requirements and will only share collated information in accordance to the regulations.
  • How do we report on our products?
    Polyco members will have access to the above-mentioned database to report on tonnages of their products placed on the market. Reporting will be done monthly via the monthly Declaration Form.

    Members will be able to track information such as invoices as well as rebates that may be due.

  • How do we ensure our products are recycled in order to share the information on recycled tonnages with our customers?
    Polyco’s EPR Scheme is focused on ensuring that material within the Scheme is collected and recycled to achieve the regulated targets. Individual product tracking is currently not possible; however, materials/plastic types will be tracked.
ANSWERS TO THE MOST FREQUENTLY ASKED QUESTIONS
Section G: Targets
  • How will targets be measured and reported by polymer & product category? How will targets be assessed against a specific item of packaging or even category e.g., PP yoghurt tubs?
    Polyco’s EPR targets will be measured based on the collection and recycling tonnages realised from projects implemented by Polyco as a percentage of Polyco’s membership representation of the total market. The targets will be determined based on the product type targets set out in the legislation i.e. rigid, flexible and multilayer polyolefin packaging; Vinyls, Polystyrene and PET beverage bottles, oil bottles, thermoformed PET and flexible PET. Targets will not be assessed against a specific item of packaging or specific polymer type e.g. PP.
  • What do you think about EPR regulations grouping all polyolefin rigids into one category rather than separating into polymer type, e.g., PP & HDPE
    This will change in time as we are currently working on the first iteration of the South African EPR Scheme. We are engaging with stakeholders and addressing certain points, with the collection of more data and refining of the Scheme we will be able to substantiate proposed changes with valid data.
ANSWERS TO THE MOST FREQUENTLY ASKED QUESTIONS
Section H: End-Use Market Development
  • Is Polyco looking into product development for end-use markets?
    A big focus of the R&D component of the EPR Scheme is on identifying and stimulating secondary markets / end-use demand for additional recyclate into the market. Part of this process will be linked to the black industrialist programme as the intention is to stimulate this growth in line with enterprise development and additional Black owned recyclers and / or new end-use markets.
  • Converters need guidance for recyclate applications. Can Polyco provide this guidance?
    As part the R&D component of the EPR Scheme, Polyco would endeavour to provide guidance and promote recycling content in packaging. Strategic partnership between Polyco and the South African Plastics Recycling Organisation (SAPRO) and Plastics South Africa, for example, could allow for collaboration in this regard.
ANSWERS TO THE MOST FREQUENTLY ASKED QUESTIONS
Section I: Municipal Collaboration
  • PackagingSA and SALGA are proposing a joint body of PRO members to pool EPR support to municipalities to avoid confusion.
    A PRO Alliance has been formed between all the packaging PRO’s to address certain points in the EPR Scheme jointly.

    Such as:

    • Separation at source support and development
    • Infrastructure e.g. facilitation of MRF development
    • Equipment
    • Operational assistance

ANSWERS TO THE MOST FREQUENTLY ASKED QUESTIONS
Section J: General
  • How will carrier bags be dealt with?
    Carrier bags are excluded from the amended regulations.
  • Do we need to share tonnage information of any labels that are pre-existing on a product?
    No. You will be responsible to the EPR fee to your supplier.
  • Does Polyco cover “other”, i.e. Polymer identification 7 type polymer like acrylic under the new EPR legislation?
    Polyco is responsible for the identified products as per the regulation.
  • Is there BEE support that Polyco members can use for their BEE audits?
    In terms of building sustainable businesses, the Polyco EPR Scheme includes a grant funding application avenue for new entrants into the market. Part of the grant funding application is a minimum Broad Based Black Economic Empowerment (BBBEE) Level of 51% black owned business. As such, Polyco’s support to black owned businesses could be used by Polyco members for their BEE audits as funds used to support these businesses are sourced from Polyco members through the EPR fee.
Major developments in the industry
The South African Plastics Pact and the South African Initiative to End Plastic Waste

The South African Plastics Pact and the South African Initiative to End Plastic Waste are two local initiatives, both aligned to global initiatives, that will have a positive impact on the design and circularity of plastic packaging and address the amount that will potentially end up in the environment. The South African Plastics Pact is linked to the Ellen MacArthur Foundation’s New Plastic Economy, and the South African Initiative to End Plastic Waste is linked to the Global Alliance to End Plastic Waste.

These two local initiatives are fundamentally different, with different areas of focus and targeted stakeholders, but ultimately, if they work together, they can address many of the challenges South Africa faces in terms of the generation and management of plastic waste.

The full value chain within the plastics industry needs to work together to achieve the overarching plastic targets for South Africa. Polyco is proud to support both these initiatives and welcomes the focus of the SA Plastics Pact, where brand owners and retailers commit to the targets and then set their own road maps to achieve them, supported by the PROs, where applicable. 

To learn more about the Plastic Pact please visit: https://www.saplasticspact.org.za/

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