Should there be one producer responsibility organisation, or several competing ones?¶
Whether a jurisdiction should mandate a single producer responsibility organisation or permit several to compete is the loudest structural debate in packaging EPR — and, on the best available evidence, a debate about one of the system's less decisive variables. This article reviews the two models and the hybrid that every "competitive" market actually turns out to be; the evidence that competition lowers fees but that market structure barely predicts environmental performance; the two documented failure modes of competition; and the institution — the clearing house — that determines whether a competitive market works at all. The practical conclusion is a reordering of the question: which layer of the system should be competitive, and who supervises the boundary, matters more than how many organisations exist.
1. The two models, and the one hiding inside the other¶
A single mandated organisation concentrates the compliance obligation in one body — usually non-profit and producer-governed, with the state's leverage exercised through approval conditions. Quebec's Éco Entreprises Québec, Italy's CONAI, the Netherlands' Verpact, and France's Citeo (in practice, for household packaging) are the principal examples, along with every operating US state program. A competitive market lets multiple compliance schemes compete for producer clients: Germany's roughly ten "dual systems," Austria since 2015, and Ontario's several registered producer responsibility organisations.
The essential complication — and the fact that reframes the whole debate — is that no competitive market competes on collection. Nobody runs rival kerbside fleets down the same street. Every operating competitive model has converged on the same architecture: a monopoly core with a competitive shell. In Germany, one dual system acts as tender lead for a given district and the others buy in pro rata according to their market shares; competition operates on the licensing fees charged to producers and on downstream sorting and recovery contracts, not on bins. In Ontario, one organisation (Circular Materials) administers a single Common Collection System that competing organisations access under a System Access Agreement governing procurement policy, funding, access to recovered material and dispute resolution.
"PRO competition," everywhere it exists, therefore means competition for producers layered over a shared physical monopoly. The design question is not whether to have a monopoly — the physical layer always is one — but which layer should be competitive, and who supervises the boundary between them.
2. The evidence on fees: competition wins¶
The strongest causal evidence in this entire field concerns fees, and it favours competition. Arno Rasek and Florian Smuda — economists at the Bundeskartellamt, Germany's federal competition authority — published a difference-in-differences evaluation of Germany's antitrust-forced demonopolisation in the Dutch economics journal De Economist in 2018. Using packaging compliance markets in Austria, France, Luxembourg, Portugal and Italy as controls, they found that compliance prices decreased by 63% following market opening, with aggregated consumer welfare gains reaching an estimated €13 billion by 2011.
Their doctrinal conclusion deserves more attention than the headline number: "imposing a non-profit obligation on the monopolist did not substitute for the efficiency-enhancing effects of competition." Non-profit status — the safeguard on which nearly every single-organisation jurisdiction relies — is not a substitute for competitive discipline. The following article examines the study, its caveats (including that its authors are employees of the enforcing agency, and that the price decline is not decomposed from the free-riding that eroded German compliance in the same period), and the conditions under which its result transfers.
3. The evidence on performance: market structure is second-order¶
On environmental performance, the best independent comparative evidence points elsewhere. A 2025 comparative study of EU packaging systems by adelphi — a Berlin-based independent environmental research institute — found that market structure barely predicted scheme performance. What did predict it was whether producers held operational responsibility for the system and whether costs were fully internalised (the pay-or-run article treats this finding and its limits).
Advocacy exists on both sides of the market-structure question, and both sides carry commercial positions. Landbell Group and ERP — operators of competitive compliance schemes — publish evidence that competition improves collection performance, citing higher rates in competitive electronics markets; their commercial interest is in market opening. EXPRA, the federation representing non-profit and single-organisation schemes, defends the single-body model on grounds of scale, simplicity and system-wide investment capacity; its members are the incumbents. When two interested parties disagree and one independent study exists, the methodological rule is to weight the independent study — while noting that a single cross-sectional study is thin ground, and that the strongest causal evidence in the debate (the German fee result) supports the competitive side on cost even as the independent study downgrades market structure on performance. The two findings are compatible: competition disciplines fees, and something else determines outcomes.
4. The two failure modes of competition¶
Competition is not free, and both of its documented failure modes have occurred.
Foreclosure at the physical interface. The European Commission fined Austria's incumbent scheme, ARA, €6 million in September 2016 for blocking competitor entry between 2008 and 2012 by refusing access to its household collection infrastructure. Where the incumbent controls the physical layer, competition on the commercial layer can be strangled at the interface.
Compliance erosion. Part of Germany's dramatic price decline coincided with the free-riding and self-collection loopholes that undermined German compliance through the 2000s — the very problems the country's 2019 packaging act and its registry foundation were built to fix. No published work decomposes the 63% between genuine efficiency gains and obligation leakage, and honest use of the figure should say so.
Both failure modes are interface problems rather than pricing problems: a market whose boundary nobody polices. Which is why the institution described next matters more than the number of competitors.
5. The clearing house: the institution that decides whether competition works¶
If five organisations are obliged to fund collection and one physical system does the collecting, someone must determine each organisation's share of the packaging placed on the market, allocate the shared costs accordingly, and verify that nobody is under-reporting to shrink its share. That body — the clearing house — is the least discussed and most consequential institution in competitive EPR. Its essential functions are five: market-share determination; cost allocation for shared infrastructure; municipal payment coordination; verification and audit; and dispute resolution. The first, second and fourth are effectively regulatory functions — they fix financial obligations between competing commercial entities on the basis of contested data.
Three operating models illustrate the range:
Germany houses the function in the Zentrale Stelle Verpackungsregister, a private-law foundation exercising delegated sovereign powers since 2019. It calculates each dual system's market share quarterly and annually, formally in agreement with the competition authority; operates the public producer register; and runs audit guidelines (overhauled in 2023) requiring auditors to verify competing systems' reported volumes — mutual accountability, converting each participant's financial interest in the others' honesty into an enforcement mechanism. The foundation itself sits under three-way oversight: the federal environment agency for legal and technical supervision, the federal audit office for budget, and the competition authority for market conduct.
Austria uses a non-profit coordination body, entrusted by ministerial ordinance, to allocate household collection infrastructure shares and costs among competing schemes.
Ontario performs the same functions through private contract: a System Access Agreement between the participating organisations (finalised in January 2023), with a producer responsibility organisation operating committee as the governance layer. The financial terms are unpublished. This library found no public record of how inter-organisation cost allocation or commodity-revenue sharing actually works in Ontario, and no publicly documented dispute between the organisations — an absence of evidence rather than evidence of harmony. A function performed in Germany by a body under three-way public oversight is performed in Ontario by private agreement between competitors, on terms nobody outside can examine.
The design lesson generalises: if a jurisdiction chooses competition, the clearing house is the real regulator of the market it has created, and the record supports building it with a statutory foundation, an external check on share determination, mutual audit obligations, published allocation methodology, and enforceable access rights to the shared physical layer.
6. The five institutional forms in full¶
The monopoly/competition binary obscures the fact that five distinct forms operate in practice:
| Form | Examples | Distinguishing feature |
|---|---|---|
| Government-administered fund | More common for tyres and used oil than packaging | The state collects a levy and contracts services publicly |
| Single mandated organisation | Quebec (ÉEQ), Italy (CONAI), Netherlands (Verpact), France (Citeo in practice) | One body, usually non-profit and producer-governed |
| Competitive multi-organisation market | Germany (~10 dual systems), Austria post-2015, Ontario | Compliance schemes compete for producer clients |
| Tradable-certificate market | UK PRN/PERN system | No intermediary organisation; producers buy evidence of recycling directly |
| Registry-only | Ontario's regulation, as formally written | Obligations rest on producers individually; organisations are voluntary agents |
The last row is frequently missed. Ontario's regulation is written as individual producer responsibility, with the organisations as agents rather than approved compliance schemes — a distinction with legal consequences for how obligations are enforced and against whom. In practice the market behaves like a competitive multi-organisation system, but the legal architecture differs from Germany's. The UK's certificate market is the genuine outlier and the least examined: the only tradable compliance-note market in the West, with a documented fraud history, now coexisting with the newer payment scheme — producers pay local authority costs through one mechanism while discharging recycling targets through another.
Two conflations should be resisted. First, a competitive multi-organisation market is still collective producer responsibility: the monopoly-versus-competition axis concerns how many collective bodies compete for clients, not whether responsibility is individual (the Theme 1 treatment). Second, choosing a form means choosing which failure mode to guard against, and the risks attach to the form rather than to the people running it:
- Single organisation: monopoly pricing, against which non-profit status is demonstrably not a safeguard; weak incentive to raise fees or tighten targets, since the body is controlled by the fee-payers; no exit for a dissatisfied producer, which raises the stakes on formal appeal rights; and concentration of standard-setting power without corresponding accountability.
- Competitive market: foreclosure at the physical interface (Austria's €6 million fine); under-reporting to shift shared costs onto rivals (Germany's 2000s); cream-skimming of profitable territories where regulation permits it; and the substantial administrative apparatus a clearing house requires.
- Certificate market: fraud in evidence generation; price volatility uncoupled from actual system costs; and no institutional capacity to invest in infrastructure.
The Organisation for Economic Co-operation and Development's guidance balances single-organisation collusion and monopsony risks against the enforcement costs of competition, which is the honest framing: neither form is free; they differ in what they demand of the regulator.
7. How a designer should sequence the decision¶
The evidence supports a specific ordering:
- Settle operational responsibility and cost coverage first. These are the variables the independent comparative evidence identifies as predictive (the pay-or-run article). Getting them right matters more than the number of organisations.
- If choosing competition, build the clearing house before the market. Austria's foreclosure case and Germany's under-reporting era were both interface failures, and Germany's own sequence — market opened in 2003, comprehensive registry and audit apparatus in 2019 — is the cautionary example of doing it backwards.
- If choosing a single organisation, do not treat non-profit status as the safeguard. The German result is explicit on this point. Discipline must come from published fee methodology, genuine regulatory scrutiny of costs, benchmarking, and sanctions proportionate to the sums involved (the regulator-capacity article).
- Note the appeal consequence. In a competitive market, a producer's remedy against an unreasonable fee is exit to a rival. Under a monopoly there is no exit — which raises the stakes on formal appeal rights considerably, a gap now being litigated in the United States (the transparency and appeals article).
8. Where the argument stands¶
The debate over the number of organisations has consumed a disproportionate share of the field's attention relative to what the evidence says it determines. The defensible synthesis: competition demonstrably lowers compliance fees — the one rigorous natural experiment found a 63% price decline — but the best independent comparative evidence finds market structure second-order for environmental performance, behind operational responsibility and cost internalisation. Meanwhile, both documented ways a competitive market fails are clearing-house failures, and the standard safeguard for the single-organisation form has evidence directly against it.
For a reader assessing any jurisdiction's choice, the productive questions are accordingly not "one or many?" but: who determines market shares, and with what external check? Who audits the participants' reported volumes? On what terms is the shared physical layer accessed? And — for single-organisation systems — what, other than corporate form, actually disciplines costs?
References¶
- Rasek, A. & Smuda, F. (2018). "Ex-Post Evaluation of Competition Law Enforcement Effects in the German Packaging Waste Compliance Scheme Market." De Economist 166(1), 89–109. The authors are Bundeskartellamt economists; the study is peer-reviewed. Frequently miscited as volume 165 or 2017 (its online-first year).
- adelphi (2025). Efficiency and Performance of Packaging EPR Systems in the EU. Independent comparative study.
- European Commission, decision fining ARA €6 million for abuse of dominance, IP/16/3116 (September 2016).
- German Packaging Act (VerpackG, 2019), §§22–25; Zentrale Stelle Verpackungsregister market-share determination and audit guideline documentation (guidelines overhauled 2023).
- Circular Materials, System Access Agreement announcement (January 2023) — financial terms unpublished.
- Landbell Group / ERP publications and EXPRA position materials — interested-party evidence on both sides, identified as such in Section 3.
- OECD (2016). Extended Producer Responsibility: Updated Guidance for Efficient Waste Management — competition treatment.
- Fleckinger, P. & Glachant, M. (2010). "The organization of extended producer responsibility in waste policy with product differentiation." Journal of Environmental Economics and Management 59(1), 57–66. Note: frequently invoked in the one-versus-many debate, this paper does not address it — it models producers' choice between individual compliance and forming a single collective organisation, and its warning concerns collusion through the collective body ("producers systematically cooperate in equilibrium"), not the number of organisations.
Verification note: the characterisation of Fleckinger & Glachant (2010) reflects a correction made during this library's citation audit — the paper is not evidence about PRO market structure and is cited here only to flag the common misuse. See Sources and method.