What are eco-fees?

The term eco-fee has entered the vernacular as a synonym for a product fee or to refer to the remuneration paid to a recovery organisation for widespread waste (WSW) by its members.

The legal definition of a product fee is given in § 1, item 7 of the Ordinance for Determining the Order of Payment and the Amount of the Product Fee:

The “product fee” is the fee payable on plastic shopping bags and on products that generate general waste after use, as well as on vehicles acquired for personal use by bringing them into the country from another EU Member State or importing them from outside the EU.

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The term eco – fee

Popular synonyms for the term eco-fee are a remuneration or a contribution to a RO.

This means the agreed remuneration paid to the members of the RO for carrying out activities to meet their
obligations to achieve the relevant objectives under the WSW Regulations and the WMA.

In other words, persons who place on the market products that generate WSW after their use bear the so-called extended producer responsibility and, by paying an eco-fee to the RO, transfer their obligations to achieve the respective targets for separate collection, reuse, recycling and/or recovery of the waste resulting from the use of their products.

The distinguishing features of the product fee and the eco-fee (remuneration/contribution) are:

  • To whose account are the payments made: to the Enterprise for Management of Environmental Protection Activities ( EMEPA) of the Ministry of Environment and Water or to the RO of the WSW;
  • Grounds for payment: products placed on the market by a person who does not meet the targets for them or products placed on the market by members of a RO;
  • Nature of the obligation: voluntary payment to the account of the EMEPA, agreed remuneration between the RO and its member or payment to the EMEPA as penalties in case of non-compliance with the obligations by the persons determined by order of the Minister of Environment and Water;
  • Expenditure: by the EMEPA – for waste management projects and facilities, or by the RO – for the establishment of a system and the achievement of targets for separate collection, reuse, recycling and/or recovery of the respective type of WSW on the territory of the Republic of Bulgaria.

The Ordinance for Determining the Order of Payment and the Amount of the Product Fee, adopted by Decree No. 76 of the Council of Ministers on 12 April 2016, regulates when, how, by whom, for what, in what amount and with what documents the product fee is paid and certified, as well as the procedure for its refund.

Introduction of eco-fees in Bulgaria

In connection with the accession of the Republic of Bulgaria to the European Union and the negotiations on the Environment chapter, the requirements of the European directives in this area were introduced in the legislation with an agreed grace period until 2011.

By Decree No 137 of 29 June 1999 adopting a tariff for fees for products after the use of which WSW is formed (Official Gazette, No 60 of 02.07.1999, in force from 03.01.2000), fees for these products were introduced.

Staged obligors under the Tariff are manufacturers and importers of pneumatic tires, motor vehicles, packaged goods, batteries and accumulators, oils, and electrical and electronic equipment.

The tariff was adopted on the basis of Article 36 of the repealed Law on Limiting the Harmful Impact of Waste on the Environment, which stated that fees are payable for products that form hazardous or WSW in the process of their manufacture or after their final use.

Until the adoption of the regulations for the respective type of WSW and the establishment of the RO, the fees were paid into the account of the National Fund for Environmental Protection (now EMEPA).

With the emergence of the first RO in the period 2004 – 2006, the persons who placed on the market products, after the use of which WSW is formed, acquired the right to choose – to pay a product fee to the EMEPA or to become members of the RO and to pay a fee for fulfilling their obligations under environmental legislation.

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The concept of a product fee/eco-fee

The WMA regulates the principles and objectives, measures and activities of waste management, including WSW.

The underlying principle is the extended producer responsibility under the Waste Framework Directive (2008/98/EC), which has been introduced in the WFD.

Pursuant to § 1, item 35 of the SP of the WMA

‘extended producer responsibility scheme’ means a set of measures taken to ensure that product manufacturers are financially responsible or financially and operationally accountable for waste management as a stage in the life cycle of a product after it has become waste.

In line with this principle, product manufacturers should take financial and any other responsibility to:

  • Prevent and reduce waste generated in their production;
  • Implement measures in the design and manufacture of products to facilitate pre-treatment and recovery, especially reuse and recycling, of their materials and product components (e.g. incorporation of reusable components or prevention of the content of materials and substances posing an environmental risk);
  • Implement eco-design requirements to facilitate the reuse and recycling of post-consumer waste from marketed products;
  • Label and mark of the appliance in a legible, visible and durable manner;
  • Provide users with written information in Bulgarian on the meaning of the marking and how to fulfil their obligations;
  • Fulfil obligations taking in consideration the waste management hierarchy for the WSW generated.

Bulgaria has an established system for separate collection, recycling and recovery of WSW, which is a prerequisite for meeting the targets of the regulations.

Extended producer responsibility applies to 6 types of WSW:

  • Packaging waste – since 2004
  • End-of-life motor vehicles (ELVs) – since 2005.
  • Waste electrical and electronic equipment (WEEE) – since 2006.
  • Waste oils and petroleum products (WO) – since 2006.
  • Waste batteries and accumulators (WBA) – since 2006.
  • End-of-life tyres (ELTs) – since 2011
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Pursuant to Article 14 of the WMA, persons placing on the market products, after the use of which widespread waste is generated, shall be responsible for their separate collection and treatment, as well as for achieving the respective targets for separate collection, reuse, recycling and/or recovery, set by the regulations under Article 13, para. 1.

Individuals have the right to choose how they will fulfil their obligations:

  • As a member of the RO or
  • By fulfilling their obligations individually.

Persons who do not fulfil their obligations in either of the two ways provided for shall pay a monthly product fee to the EMEPA in a fixed amount.

In cases where obligors are members of RO, they shall pay remuneration which shall be determined on a market basis.

Depending on its market share and on the basis of an analysis of the economic situation in the country, each RO assesses the remuneration it sets for the performance activities.

Usually, RO set their remuneration as a percentage of the product fee – i.e. the remuneration of the organisations is lower and therefore obliged persons prefer to become their members instead of paying a product fee to the EMEPA.

Moreover, the contracts concluded between RO and their members relieve the latter of all administrative and other formalities.

In return for the remuneration received, RO shall undertake to carry out the duties of their members in compliance with all regulatory requirements, conditions and measures of the permit issued and in accordance with the approved WSW management programme.

European directives set quantitative targets for four types of mass wastes:

  • ELVs
  • WEEE
  • WBA
  • Packaging waste

In Bulgaria, quantitative targets have been set for the collection, reuse, recycling and recovery of six types of WSW – those listed above + ELTs and WO.

European directives require each Member State to report on the implementation of directives at national level at a specified period.

According to the information available on the European Commission’s website, Bulgaria meets the targets set.

This is also due to the regulation related to the achievement of targets through collective recovery systems and the eco-fees introduced for them. The question logically arises

given that the concept of setting up collective systems to meet targets for WSW has produced good results in terms of waste management, is it appropriate to introduce it for other wastes (e.g. textiles and hazardous waste)?

This is a matter for the future, as an informed decision needs to be taken involving all stakeholders based on market analysis and the policies applied.