How do modulation approaches compare across jurisdictions — and what will the EU's harmonised grades change?¶
Fifteen-plus national modulation systems now operate on incompatible bases — a fragmentation with real consequences, since a design signal that differs across every market a producer serves is, for that producer, barely a signal at all. This article compares the operating approaches as systems: the design axes on which they differ; the instructive extremes (Germany's nullified mandate, the Netherlands' deliberate ratchet, Quebec's polymer penalties, Oregon's life-cycle bonuses, the UK's state-run gates); the fragmentation problem the comparative literature identifies as a first-order weakness; and the regime that will restructure the entire landscape — the EU Packaging and Packaging Waste Regulation's harmonised recyclability grades, the largest modulation experiment ever attempted, whose mechanism and timeline are widely misreported and set out precisely here. It closes with what a fair test of modulation would require, and how close the current experiments come.
1. The design axes¶
Modulation systems differ on five axes, and jurisdictions have combined them in nearly every permutation:
Who sets the differential. The scheme itself (most of Europe historically), the state directly (France's mandated schedules; the UK's administrator-set fees), or the state's framework with scheme implementation (the US statutes). The governance finding of the first article — modulation strength tracks the state's hand — makes this the most consequential axis.
The basis. Observed end-of-life cost (implicit modulation); declared design attributes (bonus/malus); assessed recyclability bands (Italy, the UK's red/amber/green); or full life-cycle evaluation (Oregon, alone).
The sign structure. Bonuses only (Oregon); maluses dominant (France's escalating penalties); both (Colorado's proposal); or penalty-as-exclusion (Quebec's 2027 polymer surcharges, approaching de facto bans through a fee schedule).
The dose. From decorative (the €0.02 mobile-phone modulation in French electronics) through material (the UK's 20% red-rating uplift) to the frontier cases: the Netherlands' deliberately doubled recyclate discount and Quebec's 75% PVC penalty.
The verification depth. Self-declaration (most schemes), audited declaration (Citeo's ≥15% annual audits), assessed rating (the UK methodology), or independently reviewed life-cycle assessment (Oregon).
2. The instructive extremes¶
Four systems mark the corners of the design space, each carrying a transferable lesson.
Germany: the nullified mandate. Section 21 of the Packaging Act obliges the competing dual systems to incentivise recyclable design against the register authority's annual minimum standard — and competition has nullified the obligation, since no system can penalise the packaging of clients it is trying to retain. Modulation, the German case establishes, is a public-goods instrument that a competitive compliance market undersupplies by construction; German policy discussion has consequently moved toward a statutory fund outside the fee system. The lesson: modulation cannot be a competitive variable, which is why France harmonised schedules across its schemes by decree as early as 2017, and why the EU's endgame (Section 4) is harmonisation by regulation.
The Netherlands: the ratchet. Verpact doubled its recycled-content discount to €0.20/kg in 2025 specifically to strengthen the incentive — the one documented case of a scheme raising a differential on explicit signal-strength grounds. As revealed preference about dose from inside a scheme, it is the closest thing to an admission in the record that historical differentials were too small (the evidence article).
Quebec: penalty as exclusion. The announced 2027 structure — 75% on PVC, 50% on PLA and other degradables — abandons the nudge register entirely: these are surcharges calibrated to drive polymers out of the market, material bans enacted through a tariff. The design questions it raises are constitutional as much as economic (a fee schedule performing legislation's work), and its results, either way, will be the strongest dose evidence anywhere.
Oregon: the LCA gate. Bonuses only, each requiring ISO-conformant life-cycle assessment with independent critical review — importing rigour (the only system whose incentive cannot reward an attribute that worsens overall impact) at a compliance cost that excludes small producers, and carrying the OECD-flagged caution that recyclability-only fees can misdirect design. Oregon's guidance states the point plainly: some recyclable items are more environmentally impactful than non-recyclable alternatives.
The UK sits between the extremes and is the most consequential near-term test: a state-set, methodology-driven gate system (collection, sortation, reprocessing, application) applied to the whole market from Year 2, with a fixed 20% red uplift and published rates — the largest administered modulation rollout to date, arriving with a built-in natural experiment (flat Year 1, modulated Year 2) that nobody has yet committed to evaluate.
The full landscape, arranged on the axes of Section 1:
| Jurisdiction | Who sets | Basis | Sign structure | Dose (headline) | Verification |
|---|---|---|---|---|---|
| France (Citeo) | State-harmonised by decree | Attributes + disruptor lists | Malus-dominant, escalating | To 25% malus; penalties may exceed base fee under AGEC | ≥15% of declarations audited annually |
| Germany | Statute (§21); dual systems implement | Annual minimum standard | Nominal | Nullified by competition | Register-level |
| Italy (CONAI) | Scheme, cost-anchored | Recyclability bands | Banded | ~4:1 across bands; €51–922/t from Oct 2026 | 1,200+ targeted controls/yr |
| Netherlands (Verpact) | Scheme, deliberately ratcheted | Recyclability assessment + recyclate discount | Bonus-weighted | Discount doubled to €0.20/kg (2025) | Assessment-based |
| UK (PackUK) | State administrator | Red/amber/green methodology gates | Banded | Red = 1.2× amber; green ≈ −9% | Administered rating |
| Quebec (ÉEQ) | Designated scheme under modernisation | Polymer-targeted malus + ecodesign bonus | Penalty-as-exclusion | 75% (PVC) / 50% (PLA) announced for 2027 | Schedule-based |
| Oregon (CAA/DEQ) | Statute + rulemaking | Life-cycle assessment | Bonuses only | 10–30% of base fees by tier | ISO LCA with independent review |
| Colorado / California | Statute + agency | Categories (simplified initially) | CO proposal includes maluses | Modest; CA deferred granularity two years | Developing |
3. The fragmentation problem¶
For a multinational producer, the systems above are simultaneous and contradictory: an attribute earning a bonus in one market can draw a penalty in a second and be ignored by a third; recyclability is assessed against different infrastructures, different lists of disruptors, and different verification standards in each. The comparative literature treats this as a first-order weakness, not an inconvenience. The OECD's 2021 review warned that divergent modulation sends "mixed signals" to global producers; the structural assessment by Reid Lifset and colleagues (2023) identifies criteria fragmentation as one of the compounding reasons design incentives have been muted — any single scheme's signal is diluted for a producer designing packaging for many markets, since a design change that pays in one jurisdiction may not pay anywhere else.
The dilution mechanism deserves precision, because it is strongest exactly where modulation is weakest. For a durable good sold across many markets, the modulation in any single country may be too small to justify a separate product variant at all — the producer designs one package for the world, and the design responds, if to anything, to the sum of coherent signals, not to any one scheme's bonus. Fragmentation thus interacts multiplicatively with the dose problem: fifteen incompatible small signals are not fifteen chances to bind but one diluted signal that does not.
The fragmentation was not inevitable: the 2018 EU mandate contained a harmonisation hook — Article 8a(4)(b)'s "harmonised criteria" — that the Commission never used, leaving each member state to build its own basis (the history). North America is now repeating the pattern with its own accent: seven US state programs and five Canadian provincial ones, no US federal mechanism at all — and, as the continent's first voluntary counter-move, the harmonised-ecodesign-guidelines initiative announced in November 2025 by five Canadian producer organisations (Circular Materials, Éco Entreprises Québec, Multi-Material Stewardship Manitoba, SK Recycles and Recycle BC), building on the Quebec organisation's framework and targeting national guidelines by the end of 2026. Its notable feature is what it is not: a collaboration among regulated entities rather than an intergovernmental institution — coordination by the private parties, in the absence of any public mechanism, with the fragility that implies. The general rule the record supports: harmonise the criteria, not the fee levels — align what counts as recyclable and how it is verified, while letting fee magnitudes reflect genuinely different local costs.
4. The restructuring event: the PPWR's grade-linked regime¶
The EU regulation converts modulation from national discretion into harmonised hard law, and its mechanism deserves precise statement because it is widely misreported.
The grades. Article 6 and its annexes define recyclability performance grades — A (≥95% of weight recyclable against design-for-recycling criteria), B (≥80%), C (≥70%). Packaging below 70% is "technically non-recyclable" and banned from the market from 1 January 2030; grade C is banned from 2038, making B the floor. A second assessment layer — "recycled at scale," based on volumes actually collected, sorted and recycled — applies from 2035.
The criteria timing. The design-for-recycling criteria and grading methodology per packaging category arrive by delegated acts due 1 January 2028 — the regulation supplies the thresholds; the acts supply the test protocols. A December 2025 Commission omnibus proposed delaying this deadline, with no confirmed new date at the time of writing.
The fee linkage. Article 45 then requires EPR fee modulation by recyclability grade (with recycled content, reusability and substances of concern as further bases), biting eighteen months after the relevant delegated acts enter into force — that is, grade-linked modulation becomes mandatory around mid-2029 at the earliest, slipping one-for-one with any delay to the acts.
Three observations complete the picture. This is the answer to the never-delivered harmonised criteria of 2018 — arriving eleven years later as directly applicable regulation rather than guidance, and resolving the fragmentation problem for the world's largest single market at a stroke. It is the natural experiment that will effectively settle the empirical argument of the evidence article: one grading system, one market, mandatory fee linkage. And its architecture embeds a verdict on that argument already: the 2030 and 2038 deadlines are enforced by market prohibition, with fees as the intermediate gradient. The designers of the largest modulation experiment in history did not trust fees alone to move design — the bans are the backstop, and their presence is the most authoritative institutional reading of the evidence to date.
5. What a fair test would require — and how close the experiments come¶
The consolidating review of this literature (Lakhan, 2026) specifies the conditions under which modulation's design hypothesis could actually be tested, and they organise the forward agenda. A fair test requires differentials large enough to plausibly exceed switching costs — not the historical fractions of small fees; stable, auditable criteria announced in advance, since a signal that changes yearly cannot be designed against; central oversight strong enough to prevent the competitive nullification and governance dilution documented across the record; and — the condition the field has failed at completely — causal evaluation: exploiting the accumulating natural experiments with difference-in-differences designs, producer-level linkage of fee exposure to product-level change, and independent audit of scheme-reported redesign cases.
Scored against those conditions, the current experiments are a mixed set. Quebec's 2027 escalation and the Dutch ratchet meet the dose condition for the first time; the UK meets stability and oversight (state-set, published, pre-announced) at a modest dose; the PPWR will meet stability, oversight and harmonisation at continental scale, with dose delegated to member-state fee-setters and a prohibition backstop where fees fail. What no experiment yet includes is the evaluation apparatus: no scheme has opened its declaration-level data, no regulator has commissioned the difference-in-differences study its own rollout enables, and the first jurisdiction to do so will convert a decade of assertion — on both sides — into knowledge at trivial marginal cost.
6. Where the argument stands¶
The comparison yields four propositions. First, the operating systems differ more in governance than in mechanism — who sets the differential, and against what resistance, predicts more than the tariff design does. Second, fragmentation has been a self-inflicted weakness: the harmonisation instrument existed from 2018 and went unused, and the multinational producer's diluted signal is the price. Third, the frontier has moved from mechanism to dose: after fifteen years of decorative differentials, three jurisdictions are finally administering doses calibrated to bind, and the next five years will produce the first real evidence about strong modulation. Fourth, the EU has already placed its bet — harmonised grades with prohibition backstops — and in doing so has converted the modulation question from "does it work?" to "what happens when a continent runs it at scale with bans behind it?" The empirical chapters of this literature, unusually, have publication dates: 2028 for the criteria, 2029–30 for the fee linkage and the first ban, 2038 for the endgame.
References¶
- Lakhan, C. (2026). Ecomodulation of Extended Producer Responsibility Fees: A Literature Review. Working paper, Circular Innovation Hub, York University — the fair-test conditions and cross-jurisdictional framework.
- Regulation (EU) 2025/40 (PPWR), Arts. 6 and 45 and annexes — the grades, thresholds, ban dates and fee-linkage timing; the December 2025 omnibus delay proposal as reported at the time of writing.
- Directive (EU) 2018/851, Art. 8a(4)(b) — the unused harmonisation hook; Eunomia guidance (2020), commissioned and never formally adopted.
- Laubinger, F. & Brown, A. (2021). OECD Environment Working Paper No. 184 — the "mixed signals" warning and harmonise-criteria-not-levels recommendation.
- Lifset, R., Kalimo, H., Jukka, A., Kautto, P. & Miettinen, M. (2023). Waste Management 168, 189–201 — criteria fragmentation as a compounding challenge.
- Scheme and statutory documentation: §21 VerpackG and the German statutory-fund discussion; Verpact 2025 tariff revision; ÉEQ announced 2027 fee structure; ORS 459A.944 and Oregon DEQ ecomodulation guidance (including the recyclability-is-not-an-environmental-verdict caution); Defra/PackUK modulation policy statement and RAM documentation; the five-organisation Canadian harmonised ecodesign guidelines initiative (announced November 2025, target end-2026).
- The arrêté of 7 July 2017 — France's cross-scheme harmonisation by decree, the precedent for Section 4's logic.
Verification note: the PPWR mechanism is stated from the regulation's text and timing provisions, with the delegated-act delay proposal flagged as unresolved; no draft delegated act was public at the time of writing. See Sources and method.