Extended producer responsibility: the new law on waste and contaminated soils
Published on 26th Apr 2022
The new law on waste has reinforced the extended producer responsibility regime and producers must adapt their business models to the new waste management obligations. The law includes new developments with respect to the previous legislation that are of particular interest, such as the imposition of obligations on ecommerce platforms.
The Spanish environmental legislation has designed a liability framework that aims to comply with the "polluter pays" European principle by placing the environmental liability and the financial, organisational, and other kinds of obligations on the producers of certain products that generate waste during their life cycle.
Extended producer responsibility was previously regulated by Act 22/2011, of 28 July, on waste and contaminated soils. However, Act 7/2022, of 8 April, on waste and contaminated soils for a circular economy (hereinafter, the Spanish EPR Act) came into force on 10 April, revising and updating the existing extended producer responsibility legislation by incorporating the amendments that Directive (EU) 2018/851 introduced in the Waste Framework Directive.
As a preliminary comment, it is important to note that although the Spanish EPR Act provides for a broad list of obligations for the different producers involved, the law does not directly impose these obligations on producers. On the contrary, these obligations must be delimited by the corresponding implementing regulations of the Spanish EPR Act on a sector-specific basis. An example of these implementing regulations would be Royal Decree 110/2015 on waste electrical and electronic equipment, which imposes specific obligations on producers of these products. In this sense, we must be cautious and see how the enactment of the Spanish EPR Act influences the potential modification of Royal Decree 110/2015, among other things.
Expanding the definition of product producer
One of the new features added by the Spanish EPR Act would be expanding the definition of "producer of the product". Formerly, individuals who produced waste in the course of their economic activity were considered producers and were, therefore, subject to the extended producer responsibility regime. However, the Spanish EPR Act expands the definition of producer of the product to include ecommerce platforms. Thus, the Spanish EPR Act sets forth that ecommerce platforms shall assume a subsidiary liability for the actual producer's failure to comply with the obligations corresponding to them, provided that they are established outside of Spain and are not registered in the existing registers on extended producer responsibility. In this respect, ecommerce platforms may have to assume the role of producer in certain cases and, consequently, fulfil their financial, reporting and, -where applicable- organisational obligations.
In relation to the above, and subject to what may be determined in future implementing regulations or interpreted by the authorities, we have interpreted in a very preliminary manner -and taking into consideration the purpose we understand the modification we comment on herein has- that by "ecommerce platforms" the Spanish EPR Act could potentially be referring to those operators of online intermediation services (in accordance with the provisions of Regulation (EU) 2019/1150) through which producers offer their products to end consumers. In this sense, we understand that it would be necessary to narrow down the concept of "ecommerce platform" for the purposes of the Spanish EPR Act in order to objectify as much as possible the scope of the law.
In addition, we should note that such subsidiary liability of ecommerce platforms would be laid down in the very definition of "producer of the product" set out in the Spanish EPR Act, but it would not be developed in the provisions of the same piece of legislation. Therefore, we would entertain some doubts on how such responsibility will be enforced by the authorities and whether future implementing regulations will provide more detail in this respect.
For the time being, the definition of "producer of the product" only specifies that ecommerce platforms may carry out a single registration in respect of all the products concerned for which it assumes the status of producer of the product (as explained in the previous paragraphs) and shall keep a record of these products.
Compliance with extended producer responsibility obligations
Similar to what was established under the former waste and contaminated soils legislation, producers may fulfil the financial and organisational obligations arising from their product responsibility through collective systems. Financial and organisational obligations may include (among others) taking responsibility for the organisation of waste management or providing information on the marketing of products that become waste through their use and on the management of waste. On the other hand, producers shall, in principle, comply with all other obligations on an individual basis. These obligations may include designing products in such a way that they minimise environmental impact and waste generation throughout their life cycle.
Likewise, compared to the regime established by the former legislation on waste and contaminated soils regarding extended producer responsibility, the Spanish EPR Act includes three new obligations that we anticipate will have a significant impact from a consumer laws standpoint. These are as follows: (i) to increase the warranty periods for both new and repaired products, (ii) to guarantee the consumer's right to repair and, (iii) to provide information on possible early obsolescence practices.
In our opinion, the imposition of these obligations is consistent with the recent European consumer initiative on the sale of goods, whose transposition into Spanish law regulates product guarantees, among other things. In this regard, we recall that Spanish consumer law has extended the warranty period for goods -during which the trader would assume liability for the non-conformity of the goods- from two to three years from the delivery of the goods. It will be interesting to see whether the development of the obligations imposed by the Spanish EPR Act through the corresponding regulations will encourage the extension of these warranty periods through commercial guarantees or simply reinforce the warranty period established under consumer laws.
Sanctioning regime
Although the update embodied by the new legislation on waste regarding the sanctioning regime does not exclusively apply to infringements on extended producer responsibility, it should be noted that the amount of the maximum administrative fine that may be imposed for infringements of the provisions of the Spanish EPR Act may reach EUR 3.5 million. We recall that the maximum administrative fine under Act 22/2011 could potentially reach 1.75 million EUR.
Wrap up thoughts
The Spanish EPR Act includes the basic rules on extended producer responsibility and expressly provides for their regulatory development by the Council of Ministers for each waste stream. It also recognises the power of the Autonomous Regions to establish additional protection rules, if necessary. It should be noted that any regulation that develops the basic legislation envisaged by the Spanish EPR Act shall abide by the minimum requirements contained therein.
