To What Extent Does EPR Compliance Cost Act as a Barrier to Entry for Small and Medium Enterprises in the Packaging Industry?

Extended Producer Responsibility (EPR) is an important environmental policy instrument in tackling the problem of packaging waste. With EPR systems, producers are held accountable for the environmental consequences of their products, especially at the end-of-life stage, such as collection, recycling and proper waste disposal (OECD, 2016). EPR can help to create sustainable packaging design and resource efficiency as well as the development of circulareconomy systems, but it can also generate financial, administrative and technological expenses for companies. The cost implications can be especially large for small and medium enterprises (SMEs), which typically do not have the financial, technical and human resources of a large corporation to cover these costs. The essay discusses how costs of EPR compliance are a barrier to entry for the SMEs in the packaging industry, especially in the context of India. It emphasizes direct financial costs, administrative costs and requirements, reporting costs, costs of recycling, packaging redesign and economies of scale. The essay suggests that when the cost of compliance is high, the administrative burden is cumbersome, and the technology or product packaging redesign is a significant investment, EPR can be a potential barrier for SMEs to enter the market. But SMEs are not excluded from the packaging industry because of EPR. Inefficient EPR systems can hinder innovation, sustainable packaging, recycling services and businesses based on the circular economy. The size of the barrier will thus greatly depend on the design and implementation of EPR, the size of the enterprise, availability of collective compliance mechanisms, and recycling infrastructure. Reducing the need for compliance unnecessarily while maintaining the environmental goals of EPR can be achieved through the implementation of proportionate obligations, simplified reporting requirements and targeted support for SMEs. Abstract: The Extended Producer Responsibility (EPR) scheme was introduced as a measure to combat plastic waste and promote the circular economy in the packaging industry. Extended Producer Responsibility (EPR) has been implemented to address the issue of plastic waste and encourage the circular economy in the packaging sector.