Annex J. EPR in Korea1
1. Description of EPR set-up
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Legal context
EPR scheme was set up in 2003 for electric products, tyres, lubricant, fluorescent lamps, styrofoam float and packaging. The Act on Resource Recirculation of Electrical Waste and End of Life Vehicles and the act on the Promotion of Saving and Recycling of Resources state that producers and importers are responsible for restricting the use of hazardous substances in their products, collecting and recycling end of life products. Sellers are responsibility for collection.
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Governance and Enforcement
The Korea Environment Corporation (KECO) monitors compliance by obliging producers and importers to report sales and imports as well the waste collected and recycled (reports are submitted on an online portal and include data on the use of hazardous substances and recyclable components in vehicles, and WEEE). KECO confirms these data and verifies appropriate waste treatment through on-site inspections. PROs are accredited by KECO based on financial stability and potential contribution to the recycling industry’s development. If a producer or PRO fails to comply with the obligations the Ministry of Environment imposes a fine up to 30% surcharge (see Table J.1). Producers other than those producing WEEE with a yearly output of less than one billion KRW and importers of less than three hundred billion KRW are exempt.
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Allocation of responsibilities (distribution of roles, financial flows)
The national government creates and implements EPR regulation. Local governments are responsible for improving collection and recycling as well as encouraging reuse. Private waste collectors also exist, who sign contracts with apartment buildings and sell the collected recyclables to the recycling industry. Producers and importers of EPR products label their goods with information related to disposal and recyclability (see Figure J.1), collect and recycle their end of life products or pay recycling fees to the relevant PRO. Consumers are responsible for separating and disposing their waste.
Source: Heo, H. and M.-H. Jung (2014), Case study for OECD project on extended producer responsibility, Republic of Korea, Case study prepared for the OECD, www.oecd.org/env/waste/gfenv-extendedproducerresponsibility-june2014.htm.
An Advance Disposal Fee (ADF) is charged to producers and importers of goods, materials and containers that are hard to recycle (including pesticides, hazardous chemicals, anti-engeeze solutions, chewing gum, disposable diapers, cigarettes and plastic products not included in the EPR scheme such as PVC pipe, toys and kitchenware). The fees are used for local government subsidies to establish waste treatment facilities. A deposit/refund system has been set up for beverage producers, which equals to around 40% of the cost of manufacturing one bottle. In addition to the EPR schemes, there are complementary policies. These include: a pay as you throw unit price (for non-recyclable waste), separated collection and a recording system for charging bulky waste. The local government can also subsidize or lend funds needed to recycling and waste disposal facilities as well as recyclable materials (e.g. the Special Accounts for Environmental Improvement was set up in 1995 by the Korea Ministry of Environment as a centralised account to fund investments in environmental protection, and KECO provides financial assistance through low interest rate loans to SMEs in the recycling industry seeking technical consulting).
2. Environmental effectiveness
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Collection and recycling rates
With EPR in effect since 2003, the quantity of recycled products and packaging materials gradually rose to 1 519 thousand tonnes in 2012 – equal to 62% more than in 2002. During the 21st century, the overall recycling rate increased almost by 103%, while landfill use decreased by 31%. The number of obliged companies and recycling facilities rose from 2 747 and 218 in 2003 to 4 567 and 627 in 2012 respectively. The number of producers per recycling business rose from 6.6 in 2003 to 7.3 in 2012.
The Ministry of Environment publishes a yearly recycling rate based on the quantity of products on the market, previous recycling rate and recycling capacity (see Table J.2). Exporting end of life PET bottles for recycling is restricted to less than 20% (currently only at around 0.1%). For other waste products – such as battery, lubricant, fluorescent lamp, and electronics – export is not an approved recycling method.
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DfE
Producers are obliged to develop recycling technology, resource efficiency design, and restrict the use of hazardous substances and produce (or import) easier-to-recycle products.
3. Economic efficiency
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Cost efficiency
Savings on landfill expenses amount to KRW 2 888 billion and KRW 3 055 billion has been generated from selling recycled goods and materials. Also, it is estimated that up to 9 769 jobs were created over ten years (see Table J.3). There are currently six PROs, where usually 70-90% of funds collected are used for recycling and 1-5% is allocated for information and public awareness campaigns (funds are generally not used for sorting or collection). PROs’ costs are fully covered by the recycling fees whereas KECO is funded by the special account. There is only one PRO per EPR product. PROs are in fact considered public institutions, even though they are private non-profit organisations. Fee levels are set by the PROs, however the standard recycling fees for each EPR product published by the government are taken into account (these standard fees are based on the estimated expenses related to collection and treatment).
4. Key issues and possible reforms
The overall recycling target set for all EPR products equals to only 33% of the capacity of all the recycling facilities combined. Furthermore, the supply chain of recyclable products and materials is unstable and their added value remains low. Thus, there is a plan to launch an online market which will provide demand and supply information of recyclable products and materials. The Ministry of Environment has also integrated all packaging PROs into one association to reduce administrative costs. Recycling rates were also be set for WEEE – both annually and for the long-term – as of 2014 (at 3.9 kg per capita). Additionally, there is a plan to expand the WEEE EPR scheme to more products (up to 50 different products, including small sized WEEE). An ELV EPR scheme will be launched in 2015.
Note
← 1. Full source available at: Heo, H. and M.-H. Jung (2014), Case study for OECD project on extended producer responsibility, Republic of Korea, Case study prepared for the OECD, www.oecd.org/env/waste/gfenv-extendedproducerresponsibility-june2014.htm.