🔩 Exploring the Foundations of EPR with Manuel Asali

Interview transcript

ML (Michael Londesborough): Manuel Asali is the vice president of Nexant - energy and chemical advisory which is working with the petrochemical industry. I met Manuel at the Reactions conference in Prague in 2018, where he gave a wonderful talk that showed the need to reconcile the growing demand for plastics with the advent of the circular economy. Today we shall be connecting with Manuel over the airwaves to discuss the philosophy behind EPR - Extended Producer Responsibility, so let's talk about it.

ML: Manuel, hello and welcome. Thank you for joining. I’d like to begin with talking about EPR as a philosophy. Manuel to begin with, can we talk about definitions - when looking up definitions on the internet, perhaps the most recurrent one that I found is, if I quote: “to add all of the environmental costs associated throughout a product life cycle to its market price”. So I understand that as that we're extending the sort of the philosophy of what's happening with a certain product throughout its entire life cycle and we're trying to incorporate the costs associated with that at the beginning at market price. Is that a fair definition?

MA (Manuel Asali): Hello Michael and thank you. It's great to be here. I would say yes, it is a fair definition, but as with any definition you can have or find different angles to it. To make it a little bit more helpful perhaps for people in our industry and for producers or consumers of polymers without having to bring the whole economic definition I would think of it maybe a little bit simpler as something that says we are shifting the responsibility of the product's life cycle upstream. You can think of it in a way that you're extending the responsibility into the post-consumer stage.

ML: What we are talking about sounds like a sort of product stewardship - we're looking at the producer, we're expecting from the producers a greater responsibility to look after the materials which it is using. Is that fair?  

MA: Well, yes, it is. You can think about it almost as a spectrum, Michael. I mean, the way that our linear economy has been built up over the years is that we make things, use them and throw them away. Much of our economic development has been based on that. If you went to the entirely opposite side of that spectrum, you could also think of making products that are used almost for rent - you're renting your products and then those products come back to you. I’m not suggesting necessarily that's the way we're going to do our EPR or we're going to implement it in the chemical industry, but it's just a way of defining the philosophy. That's how you could place it.

ML: Okay, so let's talk a bit about the reasons why EPR has come to the fore. Why do you think suddenly we're interested in this philosophy?

MA: Well, EPR is part of the circular economy. If you look at the philosophy of the circular economy, there are different aspects to it, but EPR certainly becomes part of that and it's asking the question “who is liable for this?”.

ML: What do you think is driving this adoption of the EPR philosophy? What's the underlying reason for all this development?

MA: Sure, let me start with the circular economy, because it actually makes good sense. As we know the idea of the circular economy is that whatever is left, whatever is used in one process or is a waste of one process, becomes a feedstock for another process, which is what nature does - every waste in nature is used by something else and here our idea would be to replicate that. So, why is this important? Well, as we know our products have a value at the end of life, that value could also be represented in two different ways: you can think of products that can be simply remanufactured at the end of life or you could also think of reusing the molecules at the end of life to bring them back into an earlier stage of the process.

ML: I very much like the concept of a circularity in terms of molecules and the inherent value that many molecules have that we can reuse again - as a chemist, I think that's a wonderful concept. So, those are the clear reasons behind the philosophy of EPR. What do you see as the main goals? What can we achieve by using EPR?

MA: What links nicely to the reasons as well is the fact that it helps us reduce the impact of waste into the environment - that's the one end where we've seen a lot of pressure recently and it is increasing in the world of plastics for example.

ML: Right, we're looking to reduce waste, but at the same time we are looking to, I suppose, tap in again to the inherent value of the end material, right? Tell me a bit about the inherent value in some of the molecules we're talking about.

MA: Absolutely. If we find a way to sort of decouple those molecules from the end products and bring them back into the cycle, it has the added advantage that you can - let me put it in a simple way - save on resources. Instead of using virgin materials, you could use recycled materials or if we go all the way back to some hydrocarbons, you could take advantage of that waste and substitute hydrocarbons.

ML: When you're mentioning hydrocarbons, there's a clear impact of EPR on the petrochemical industry - let's explore that. Do you believe from your position that the petrochemical industry is very much adopting the philosophy of EPR?

MA: Well, the answer is: partially yes, but not entirely because there are a lot of details that need to be understood - we will be discussing who is responsible at different levels of the of the value. Let me put it in a different example: if we are making pellets in the petrochemical industry and we give those to a brand owner who then produces for example a shampoo bottle and that shampoo bottle ends up in a consumer's home - what happens to that bottle at the end of life? If you are using EPR in the broad sense, then theoretically that bottle has to come back, but who does it come back to? Does it come back to the manufacturer of the shampoo or does it come back to the manufacturer of pellets? Those things are not straightforward. I’m basically telling you that this complexity is telling us that EPR is a valuable concept, but it's not necessarily easy and it's not happening very quickly. We need to understand it and we'll give some examples later.

ML: So, there's that big issue of responsibility on “who should be doing what and at when?”. There are the incentives involved which we'll come to in due course. But for now, let's stay with the impact of this philosophy on the petrochemical industry. Could you tell me what do you think about the impact on costs - could we expect a rising costs? Or how do you think that will pan out?

MA: Well again, depending on how you adopt it, there could potentially be an increase in cost, because somebody has to carry that. Precisely we're saying: “well you're shifting the responsibility upstream” - there has to be a cost in the collection and separation and then eventually in bringing it back and reincorporating it into the value chain. However, I don't want us to think only of cost, Michael, because this also generates some opportunities and potentially some good promotional opportunities that may even allow you to sell the product at a slight premium.

ML: I very much agree. I see this as an opportunity and one of the opportunities I see is that you're mentioning there is a lot about waste and the potential cost for managing that waste, but at the moment that waste management is being done in the public sector. Now with the implementation of the EPR scheme that's going to shift to private hands, which I think is an opportunity. That has very much implications in the philosophical sense when we're going from public waste management to more of a private waste management. What's your opinion about that?

MA: I think some of it will be done privately, but I also believe in that there should be more collaboration between the private sector and the public sector. We cannot pretend that suddenly we will become experts on waste management, if there are already municipalities, governments or waste management companies that are already doing this. That is why I was thinking also of an opportunity, because there's a potential for that collaboration that can bring other value.

ML: Fantastic. That's a nice place to end this conversation – I think this philosophy is going to lead to many new, exciting opportunities. Manuel, I’d like to thank you for explaining to us a bit about the philosophy of EPR - its definition, its reasons for existence, its goals and the opportunities it will bring to us all. Thank you very much Manuel, goodbye.