Catalysing responsible production: Evaluating the impact of EPR system on manufacturing enterprises

Abstract

Responsible production has become increasingly vital in the global sustainability discourse, particularly in manufacturing. The extended producer responsibility (EPR) system is a critical policy mechanism that encourages manufacturers to reduce their environmental impact. Despite its growing significance, comprehensive studies assessing its effectiveness are sparse. Our research aims to address this gap by evaluating the influence of the EPR system on responsible production practices in European manufacturing enterprises. We employed the difference-in-differences (DiD) method to assess the impact, analysing panel data from 27 manufacturing enterprises across the Czech Republic, Poland, Slovakia, Romania, Estonia, Hungary, and Bulgaria, from 2010 to 2022. This method was chosen to mitigate endogeneity concerns. The results from the DiD analysis reveal a statistically significant positive impact of the EPR system on the circular material use rate, with an average increase of 10,5%. These findings indicate that the EPR system effectively enhances circular material use within the electronics manufacturing industry, a critical sector for advancing environmental sustainability.