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Major developments in the industry
Polyco is now managing all plastic types under the new EPR regulations
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
  • According to the new Section 18 EPR legislation, who does the law see as “Producer”? Is it the obligation of the converter or the brand owner to join the PRO and pay the levy?
    The amendment to the regulations makes both the packaging manufacturer (converter) and brand owner responsible to develop or belong to an EPR scheme. Both the packaging manufacturer and brand owner are responsible to ensure that the identified products that they use are covered by an EPR scheme to manage at end-of-life. They are therefore both liable to belong to all relevant PROs (or establish an independent scheme) should they manufacture or use multiple identified products across all substrates.
  • Are ‘manufacturers’ expected to come to agreements with their customers (i.e. brand owners) regarding the payment of the levy? Will the PRO have guidelines that will clarify who pays the levy to the PRO? Will brand owners be obliged to join a PRO as well as their packaging suppliers? If so, how can members keep tabs on how the levies they have paid, are being spent? The Paper and Packaging Producer Definition is still ambiguous. The party legally responsible is now unclear.
    The amendment to the regulations makes both the packaging manufacturer (converter) and brand owner responsible to develop or belong to an EPR Scheme. Both the packaging manufacturer and brand owner are responsible for ensuring that the identified products they use are covered by an EPR scheme to manage at end-of-life. They are both liable to belong to all relevant PROs (or establish an independent scheme) should they manufacture or use multiple identified products across all substrates. The Polyco EPR levy will be paid by the converter. It is the brand owner’s responsibility to ensure that an EPR fee has been paid on the products they place on the market. Non-paying Polyco members who are still obliged parties and participants in the value chain e.g., brand owners, distributors or retailers, are encouraged to register and join, order to assist with tracking of free riders, reporting of tonnages and to allow open communication and consultation channels.
  • 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?
    Importers will be required to register with the respective PROs that cover the various packaging materials they place on the market. Polyco covers all plastic polymer types. Producers are responsible to ensure that the identified products they use are covered by an EPR scheme to manage at its end of life. This could potentially require them to sign up for membership with multiple EPR schemes, for example, Fibre Circle, The Glass Recycling Company and/or Metpac. A list of all PROs registered with the DFFE can be found on the South African Waste Information website: http://sawic.environment.gov.za/epr/search.php
  • Does Polyco intend to make the retailer or brand responsible, as imports would escape, and suppliers adhere to retailer specs?
    If it is a brand owner that imports an identified product, the brand owner would be obligated to either develop an independent scheme or alternatively join a PRO. Where identified products are imported, and the brand owner registered enterprise is not domiciled in the country, the obligation falls to the licensed agent, or the importer or retailer. In the case of unbranded imports, the obligation falls to the importer or the retailer. It is the importer’s responsibility to commit to honestly declaring all imported polymer and identified products to Polyco on a monthly basis and paying the EPR fee.
  • How will resin producers be impacted by the new regulations?
    Resin producers are part of the obliged value chain in the Polyco EPR scheme. Resin producers will collect EPR fees based on resin sales on behalf of Polyco i.e. they will play a support role in levy fee administration (processing and collection) and market research.
  • 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 levies? Will this information be on the brand owner’s website?
    The regulations make the packaging manufacturer (converter), importer and brand owner responsible for the identified products they place on the South African market. It is the responsibility of the converter to ensure that all identified products are represented by an EPR scheme with an EPR fee paid per tonne. Polyco would need to determine whether the fee is collected, to prevent double payment. Polyco is developing a database system to track levied tonnes and fees to prevent double payment.
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 5 November 2021. With regard to late sign-ups, new members’ contribution to the targets in terms of the tonnages they place on the market will be addressed with the annual updated financial plans to be submitted to DFFE.
ANSWERS TO THE MOST FREQUENTLY ASKED QUESTIONS
Section C: Fees
  • How much will the EPR fee cost and how will it be determined? By what date will we know the cost of the levy?
    The Polyco EPR fee for the various material types covered by the Polyco EPR Scheme (i.e. all plastic polymer types) was submitted to the Minister for approval on 5 November 2021. The submission included the motivation, justification and other relevant information pertaining to the determination of the fee. The Minister must then obtain concurrence on the proposed EPR Fee from the Minister responsible for finance within 60 days of submission. The EPR fees submitted to the Minister for approval are as follows: 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.

    The EPR Fee was determined in line with the requirements set out in Section 7 (3) of the EPR Regulations. The requirements are as follows:

    1. Weight of product
    2. Ease of recyclability
    3. Current demand for the material for recycling purposes
    4. Coast for establishing a collection system for the identified products
    5. Collection, transport, storage and treatment costs for separately collected waste
    6. Administrative costs
    7. Costs for public communication and awareness raising (on waste prevention, litter reduction, separate collection etc.)
    8. Costs for the appropriate surveillance of the system (including auditing)
    9. Less revenues from recycled material sales.

  • How will fee rebates work?
    Converters will be required to declare, to Polyco, the tonnages of packaging they have produced and exported out of the country and paid the EPR fee on. Polyco will then provide the Converter with a fee rebate.
  • How will converters pay on Multi-layer materials? Will converters pay on both materials purchased to manufacture multilayer packaging?
    Convertors 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 REDISA Tyre Levy was not an EPR scheme. The Money collected from the REDISA Tyre Levy was collected by National Treasury. The EPR fee will be collected by the individual PROs and utilised by PROs to implement proposed projects aimed at increasing the collection and recycling of identified products included in the EPR scheme. In order to prevent corruption, Polyco is required, as per the EPR Regulations, to submit performance and financial reports to the DFEE within legislated time frames.
ANSWERS TO THE MOST FREQUENTLY ASKED QUESTIONS
Section D: Governance
  • What will the Polyco Board look like going forward?
    The structure of the Board is in the process of being changed to be more representative of the broader industry and value chain
ANSWERS TO THE MOST FREQUENTLY ASKED QUESTIONS
Section E: Compliance
  • How do we ensure that all obliged parties are compliant with the EPR Regulations?
    Polyco will ensure that the EPR scheme developed complies with the performance requirements for a PRO. Therefore, producers that join Polyco will be compliant with the regulations. However, there are additional responsibilities with which the Producers themselves will need to be compliant. Polyco will provide a support network to assist their members in this regard. DFFE will have the ultimate responsibility to ensure that there are no free riders.
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 is developing a database that will be used to collect the data as required by the EPR Regulations. The database will be managed by an outsourced company in order to remain independent, and data will be consolidated to provide aggregated results. Budget will be allocated on an annual basis to 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.

    The database will allow reporting on the following instruments to complement the scheme:

    • minimum recycled content standards;
    • secondary materials utilisation rate requirements; and
    • recovery rates.

  • 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.

    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.
  • Has Polyco considered challenges experienced by recyclers i.e. cost of water and electricity?
    Polyco planS to support and find recyclers through the EPR Scheme using small scale projects such as Resource and Energy efficiency assistance in partnership with the NCPC and Installation of Solar-PV systems to assist in reduced energy costs.
  • Converters need guidance for recyclate applications. Can Polyco provide this guidance?
    As part the R&D component of the EPR Scheme, Polyco would be able to provide guidance for recyclate applications. 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
  • What separation-at-source mechanisms will Polyco implement? How will Polyco support municipal separation-at-source collection programmes other than Packa-Ching? Please elaborate more on waste collection points. Are you covering the entire RSA or only focusing on specific provincial areas?
    Polyco will be factoring in a municipal investment fund that will be used to engage with municipalities and identify areas of collaboration. This will allow us to support and enable separation-at-source and collection mechanisms. It is expected that this might differ from municipality to municipality as needs may differ. Packa-Ching is and will continue to be Polyco’s instrument to increase collection in rural and lower income areas. The EPR Scheme will have a national footprint across South Africa.
  • 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. For example, the Polyco EPR Scheme has set up the Municipal Initiative Fund which includes an annual amount in the budget that will allow for engagement and collaboration with local government, i.e. local municipalities. This is specifically for projects undertaken in a municipal area and projects may include the following, over and above other collaborative efforts and support that will be provided:

    • 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 does SA’s Waste Management regulations compare to international legislation? Is SA’s EPR amendment based on already existing EPR rules worldwide? Can you provide examples of similar regulations that are already working abroad?
    Although globally there are a variety of EPR schemes already implemented, it is clear is that no scheme and no country’s waste challenges are exactly the same. The South Africa legislation is informed by international best practices, which needs to apply to our system. In South Africa, the voluntary EPR has been in operation for over 10 years, and like Polyco other existing PROs have stimulated, supported and grown the recycling industry. Legislation has been developed to ensure that existing systems continue and create the opportunity for new systems to be implemented. This will have its benefits and its challenges. The South African legislation and its systems will need to evolve over time, just like the international examples have, and still do.
  • 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?
    Yes, you will be required to include tonnages of pre-existing labels, and the polymer type when paying EPR fees.
  • Does Polyco cover “other”, i.e. Polymer identification 7 type polymer like acrylic under the new EPR legislation?
    Not at this stage
  • Is Polyco working with other PROs?
    Polyco will be working with other PROs as part of the Paper and Packaging Alliance (PP Alliance). The PP Alliance is an association that comprises paper and packaging producers and some PROs of paper and packaging products. The PP Alliance aims to facilitate its members’ compliance with the EPR Regulations, facilitate collaboration in members’ common interests and form a collective front and channel in engagements with common stakeholder such as government.
  • What materials can Polyco provide their own member companies to train or keep them up to date with regulations so they may better sell Polyco membership?
    Polyco has been running webinars on the registration process and EPR Scheme over the last few months. The next set of webinars will be covering all points in the EPR Scheme and plan, ensuring that all members are able to access information required. A dedicated email address has been set up to manage any queries relating to the EPR, namely epr@polyco.co.za.
  • Are there tax breaks for paying the EPR fee?
    There are no tax breaks for paying EPR fees.
  • 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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