One of the key objectives of EPRis to instigate design for the environment. However, in collective EPR schemes, the fee schedule set by Producer Responsibility Organisations (PROs) is typically quite simple, e.g. with fees differentiated by material and based on weight, providing only weak incentives for design change by producers. Fee modulation, changes fees paid by producers in a collective EPR scheme based on product design features andcan provide producers with specific design incentives. Policymakers can provide the regulatory framework to enable the introduction of fee modulation into EPR. 

While most OECD member countries already use economic policy instruments in support of their waste management policies, there is significant scope to strengthen and expand their use to cover the full scope of the circular economy, including measures more up-stream in the value chain, such as product design and manufacturing. A report focused on Italy identifies such opportunities and explores innovative economic instruments, such as the use of reduced VAT rates to incentivise the use of recycled content in products.