A law has been published to reform the extended responsibility of producers and importers (EPR)

Pepeliaev Group advises that on 4 August 2023 amendments were published to Federal law No. 89-FZ “On production and consumption waste” dated 24 June 1998 (the “Law”).[1]

Previously, we informed you that the relevant draft law had been put before the State Duma. The final version of the law that the Russian President signed contains a number of amendments which are described in more detail below.

EPR was introduced in Russia in 2015 in order to offer a strong inducement for producers and importers to recycle waste from products they put into circulation in Russia. It was anticipated that such regulation would significantly increase the amount of waste that is being recycled and would reduce the volume of waste that is being piled up at landfill sites. However, this did not happen in practice. Some companies avoided EPR, while proceeds from environmental charges were insufficient for the state to finance setting up the infrastructure that is necessary for waste to be recycled, namely: waste sorting and waste treatment plants. Nor did the state manage to attract private investments for these purposes.

In connection with the above, the Russian Government (the “Government”) has been developing for several years a draft law which should have reformed this area. After long discussions, the Government put the draft law before the State Duma in April 2023. Three months after the draft was submitted, the Duma's members voted in favour of the draft law during the second and third readings at once. On 4 August 2023, the law was signed by the President and officially published.

The main part of the amendments will come into effect starting from 1 January 2024.[2] The Law provides for a number of transitional provisions which describe how EPR should be performed during the period until 2027.[3]

Responsibility for recycling packaging has been shifted

As expected, responsibility for recycling packaging of goods which were produced in Russia has been shifted from producers of such packaged goods to producers of the packaging.[4] If a producer also produces packaging for its product, it must ensure that waste is recycled from the use of both the product and the packaging (irrespective of its principal line of business).[5]

A producer that packages its product by packaging being heated up, stretched or divided into pieces is not obliged to ensure that waste from such packaging being used is recycled.[6]

Recycling the whole volume of packaging

The final version of the draft law has preserved the provision that a 100% waste recycling rate be introduced for packaging. Starting from 1 January 2027, producers and importers of packaging will be obliged to ensure that all volumes of packaging produced in Russia and/or imported into its territory are recycled (or pay the environmental charge).[7] Until 1 January 2027, packaging should be recycled according to the rates below:[8]

• in 2024 – according to the rates to be established by the Government;
• in 2025 – 55%;
• in 2026 – 75%.

The moment when an obligation arises to ensure that waste is recycled

The original version of the draft law stipulated that the obligation to recycle product waste arises for producers at the earliest of the following dates:[9]

• the day on which goods or packaging have been despatched (transferred);
• the day on which payment is made in full or in part against forthcoming supplies of goods or packaging;
• the day on which damaged or defective goods or packaging are written off.

In its final version of the Law, the above list has been supplemented with another date:

- if a producer packages its products in packaging that it itself produces, it accrues the obligation to ensure that such packaging is recycled on the date on which packaged products are despatched or full or partial payment is received for future supplies of such products (irrespective of whether the products have been included in the list of products and packaging waste from the use of which is to be recycled as approved by the Government).[10]

As regards goods and packaging that were imported from member states of the Eurasian Economic Union (EAEU), the recycling obligation arises for importers after they record the goods/packaging within their accounts.[11]

As regards goods and packaging imported other than from member states of the EAEU, an importer is obliged, before the date on which a customs authority releases such goods and packaging for internal consumption, to:[12]

• pay the environmental charge; or
• submit a notification of its intent to independently recycle product waste to the unified federal state system for recording product waste (in Russian, abbreviated to ‘EFGIS UOIT’).

The following must be attached to the notification: a bank guarantee or a surety agreement concluded with a waste recycler who has been included in the register of recyclers. The bank guarantee will be issued and a surety agreement be concluded for the amount of the environmental charge. The maturity of the bank guarantee and the term of the surety agreement should not expire earlier than 15 October of the year following the one in which the above bank guarantee was issued and the surety agreement was concluded.[13] The obligation to draw up a template surety agreement has been vested with the Russian Ministry of Natural Resources and the Environment.[14]

New recycling rules

The Law contains provisions ruling out the possibility of delegating compliance with waste recycling rates to the Russian environmental operator (REO) or an association of producers/importers.

Therefore, producers/importers of goods and packaging may perform recycling by using the following methods only:[18]

• by using their own infrastructure to recycle product waste;
• by entering into an agreement with recyclers of product waste which have been included in the special register.

Creating a register of recyclers

The Law provides that EFGIS UOIT will contain information regarding waste recycling, including the following:[19]

• about whether such persons have equipment to recycle product waste;
• about the production capacity of such equipment.

Waste recyclers will individually submit such information to be included in the register.[20] An application that is filed for a person to be included in the register of recyclers also constitutes an application for a field assessment to be conducted with respect to such person as to whether the information is accurate which was stated in the application for the person to be included in the register of recyclers.[21]

Rosprirodnadzor will maintain the register of recyclers according to the procedure to be established by the Government.[22] Rosprirodnadzor will also conduct a field assessment and adopt a resolution for information to be entered or disallowed from being entered into the register of recyclers.[23]

Rosprirodnadzor should conduct a field assessment within 30 days after an application is received at FGIS UOIT for information to be entered in the register of recyclers. If Rosprirodnadzor does not conduct such field assessment within the above time period, then, if there are no grounds for information to be disallowed from being entered into the register of recyclers, the regulator is required to adopt a resolution for the information to be entered in the register. Rosprirodnadzor retains its right to conduct a field assessment within 6 months after an application was received for information to be entered into the register of recyclers.[24]

The Law contains an exhaustive list of grounds for information to be disallowed from being entered in the register of recyclers, including the following:[25]

• inaccurate information is indicated in the application and/or documents enclosed with it;
• no documents have been filed regarding a recycler having equipment required to recycle product waste;
• goods (products) which are being produced using waste/recyclables are inconsistent with the list established by the Government.

If the list of goods (products) that a recycler produces using waste and the production capacity of the equipment change, information to this effect must be entered into the register.[26] If production capacity and the amount of goods produced from waste increase, Rosprirodnadzor will conduct an assessment of whether the above meet licensing requirements and will amend the register only after doing so. No such assessment will be conducted if such indicators reduce.[27]

If a recycler does not perform the recycling for which a relevant contract provides and if it violates certain recycling requirements, the recycler will become obliged to pay the environmental charge with respect to the waste which has not been recycled (or was recycled with violations).[28] It apparently follows from this rule that a contracting party that transferred waste to be recycled will be released from such an obligation.

Provisions have been also included in the adopted Law which relate to a ban on the recycling of product waste at the expense of the recycling of other product waste (other than products and packaging included in the same group).[29]

Moreover, the requirement was preserved which was proposed in the original version of the draft law, stipulating that product waste can be arranged to be recycled only by using such waste for the production of goods/products (but only provided that the types of waste being recycled and the goods/products being produced correspond to the special lists). However, in the new version the Government (rather than the Ministry of Natural Resources and the Environment together with the Russian Ministry of Industry and Trade) has been appointed responsible for adopting such lists.[30]

Recognising that recycling has not been performed

The Law provides for cases when recycling is not recognised to have been performed, with such cases being, among others:[31]

• a recycling contract has been concluded with a person who is not in the register of recyclers;
• a certificate indicates a volume of product waste which could not have been in fact handled by the recycler since the latter, for example, has exceeded the maximum production capacity of its equipment;
• obligations have not been performed under a recycling contract owing to it having been terminated.

A recycler being excluded from the register

The Law contains a list of grounds for a legal entity or an individual entrepreneur to be excluded from the register of recyclers:[32]

• a person has applied to be excluded from the register of recyclers;
• a licence has been terminated for the recycling of waste of hazard classes I - IV if information regarding the equipment that the recycler owns and uses to recycle waste of hazard classes I - IV has not been confirmed based on the result of a field assessment, or if the recycler produces goods (products) by using waste from the use of goods of hazard classes I - IV;
• an application has not been filed within statutory deadlines for amendments to be made to the register of recyclers after an order was received requesting that amendments be made in connection with changes in the production capacities and/or in the list of produced goods (products);
• the fact has been identified that the recycler did not pay the environmental charge owing to its failure to ensure that waste is recycled on two and more occasions; recyclers that have been excluded on this ground may not be reinstated to the register of recyclers for two years after their exclusion;[33]
• a recycler has refused to perform its obligations under a surety agreement which was entered into with an importer of goods that are imported other than from member-states of the EAEU; further, recyclers that have been excluded on this ground may not be reinstated to the register of recyclers for two years after their exclusion.

Interacting and working within EFGIS UOIT

The Law provides for an obligation of producers and importers of goods to submit to EFGIS UOIT reports regarding the volume of goods and packaging produced in Russia or imported into Russia, including:[34]

• regarding the volume of goods and packaging produced in Russia or imported into its territory;
• regarding independent recycling (if performed).

The Government will determine in more detail the procedure and forms according to which information and documents should be submitted.[35]

Rosprirodnadzor and REO will interact with persons that recycle product waste via FGIS UOIT. Orders and applications will be forwarded via a personal account on the website of the information system.[36]

Control and supervisory measures

The Law has regulated in detail the procedural aspects of how compliance with the obligation should be checked to ensure that product waste is recycled. The above control and supervisory functions will be performed by Rosprirodnadzor, in cooperation with REO, which may transfer to the former information that has come into REO’s possession.[37]

Recycling coefficients

Provisions have been included in the Law which are designed to encourage the development of a closed-loop economy requiring that special coefficients will be applied to the recycling rates during the production of goods with the use of recyclables.[38] Rates of the environmental charge will differ depending on the features of a particular product, including, among others, such product being easy to recycle and a demand for secondary raw materials obtained as a result of products being recycled.[39]

Powers of state authorities

The Law stipulates that the Government will establish the procedure for collecting the environmental charge, including how such charge is assessed and offset, and how amounts that were paid or collected in excess should be refunded.

Rosprirodnadzor will be vested with control over whether the environmental charge is paid correctly, in full and within the statutory deadlines.[40]

What to think about and what to do

The Law will affect a wide range of companies, including producers and importers of goods and packaging. The conditions under which recyclers operate will undergo drastic changes.

In planning their activity producers and importers are required to first take into account the agreement to enter into a recycling contract only with persons who have been included in the register of recyclers and the requirement for recycling packaging in the amount of 55% in 2025, 75% in 2026 and 100% starting from 1 January 2027.

Help from your adviser

Pepeliaev Group’s specialists are ready to provide legal assistance to producers and importers of goods and to recyclers with regard to how EPR legislation should be applied, including such matters as:

• entering into contracts with recyclers and drawing up documentation in pursuance of such contracts;
• calculating the environmental charge;
• interacting with Rosprirodnadzor. 

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[1] Federal Law No. 451-FZ “On amending the Federal Law ‘On production and consumption waste’ and individual items of Russian legislation” dated 4 August 2023.

[2] Article 7(1) of the Law.

[3] Article 7 of the Law.

[4] Clauses 6 and 10 of article 24.2 of the Law on production and consumption waste as amended by the Law.

[5] Article 24.2(7) of the Law on production and consumption waste as amended by the Law.

[6] Article 24.2(6) of the Law on production and consumption waste as amended by the Law.

[7] Article 24.2(4) of the Law on production and consumption waste as amended by the Law.

[8] Article 7(5) of the Law.

[9] Article 24.2-1(1) of the Law on production and consumption waste as introduced by the Law.

[10] Article 24.2-1(3) of the Law on production and consumption waste as introduced by the Law.

[11] Article 24.2-1(2)(1) of the Law on production and consumption waste as introduced by the Law.

[12] Article 24.2-1(10) of the Law on production and consumption waste as introduced by the Law.

[13] Article 24.2-1(10) of the Law on production and consumption waste as introduced by the Law.

[14] Article 24.2-1(16) of the Law on production and consumption waste as introduced by the Law.

[15] Article 7(8) of the Law.

[16] Article 7(9) of the Law.

[17] Article 7(10) of the Law.

[18] Article 24.2-1(3) of the Law on production and consumption waste as introduced by the Law.

[19] Article 24.3(1) of the Law on production and consumption waste as amended by the Law.

[20] Article 24.2-3(2) of the Law on production and consumption waste as introduced by the Law.

[21] Article 24.2-3(4) of the Law on production and consumption waste as introduced by the Law.

[22] Clauses 1 and 18 of article 24.2-3 of the Law on production and consumption waste as introduced by the Law.

[23] Clauses 4-6 of article 24.2-3 of the Law on production and consumption waste as introduced by the Law.

[24] Clauses 8-9 of article 24.2-3 of the Law on production and consumption waste as introduced by the Law.

[25] Article 24.2-3(7) of the Law on production and consumption waste as introduced by the Law.

[26] Clauses 7-9 of article 24.2-3 of the Law on production and consumption waste as introduced by the Law.

[27] Article 24.2-3(14) of the Law on production and consumption waste as introduced by the Law.

[28] Article 24.2-2(5) of the Law on production and consumption waste as introduced by the Law.

[29] Article 24.2-1(4) of the Law on production and consumption waste as introduced by the Law.

[30] Clauses 5-6 of article 24.2-1 of the Law on production and consumption waste as introduced by the Law.

[31] Article 24.2-1(13) of the Law on production and consumption waste as introduced by the Law.

[32] Article 24.2-1(19) of the Law on production and consumption waste as introduced by the Law.

[33] Article 24.2-3(20) of the Law on production and consumption waste as introduced by the Law.

[34] Article 24.2-2(17) of the Law on production and consumption waste as introduced by the Law.

[35] Clauses 17-20 of article 24.2-1 of the Law on production and consumption waste as introduced by the Law.

[36] Article 24.4(2.2) of the Law on production and consumption waste as amended by the Law.

[37] Article 24.2-4 of the Law on production and consumption waste as introduced by the Law.

[38] Article 24.2-1(15) of the Law on production and consumption waste as introduced by the Law.

[39] Clauses 67 of article 24.5 of the Law on production and consumption waste as amended by the Law.

[40] Article 24.5(14) of the Law on production and consumption waste as amended by the Law.