Jakarta (ANTARA) – The Indonesian government is strengthening its commitment to a circular economy by implementing Extended Producer Responsibility (EPR), a policy that mandates businesses to remain accountable for their products through the recycling stage.More than an additional obligation, EPR serves as a strategic instrument to improve efficiency, enhance competitiveness, and open new markets based on sustainable materials.Under the EPR framework, product design, material sourcing, and waste management are integrated into a single, cohesive business strategy.The goal is clear: to increase the utilization of recyclable materials within the industrial sector.To achieve this, the government is encouraging a paradigm shift in industry—from packaging designed for immediate disposal toward products that are durable, highly recyclable, and offer greater economic value.Apart from contributing to efficiency, the circular economy and EPR implementation also play a role in the reduction of greenhouse gas emissions. Through the avoided emissions approach, industries that use circular materials can cut their carbon footprint while simultaneously reducing their reliance on raw materials.However, full-scale EPR implementation faces significant challenges. These include limited domestic supplies of recycled raw materials with consistent quality and quantity, as well as gaps in recycling technology and infrastructure.To date, recycled raw materials are still largely required as blending components to prevent downcycling and maintain product quality.Market perception also remains a challenge, as recycled products are often still viewed as inferior. At the same time, price sensitivity forces industries to carefully assess the costs of transitioning to circular materials to maintain profitability. Addressing challengesTo address challenges related to the quality of recycled products, the Ministry of Environment is currently preparing a more measured and data-based EPR strategy.This includes drafting clear regulations on the roles of producers through Producer Responsibility Organizations (PROs), the government, and waste managers, as well as promoting policy harmonization across sectors to avoid regulatory overlap.Strengthening waste collection and processing infrastructure is also critical. Without accessible systems for consumers and businesses, EPR risks remaining largely theoretical.From a financing perspective, the government has emphasized the importance of a fair EPR scheme. Under this framework, EPR costs will be internalized proportionally into product prices, accompanied by incentives for compliant producers. Disincentives will be imposed on free riders, including importing companies.The government has also committed to providing technical assistance for manufacturers, business partners, and informal waste management actors to ensure a comprehensive and sustainable EPR ecosystem.Through this phased approach, EPR is no longer viewed as a regulatory burden but as a strategic opportunity.For national industries, the circular economy is not only an environmental agenda but also a gateway to global supply chains that increasingly demand green and sustainable products.The Indonesian Soft Drinks Industry Association (ASRIM) has emphasized that EPR regulations must be designed fairly, ensuring equal treatment for large, medium, and small industries, including both local and national business players.ASRIM noted that while companies are generally ready for broader EPR implementation, tangible government support and regulatory clarity are essential to ensure meaningful impact.Industry players also highlighted that the draft EPR regulation currently being prepared already includes provisions for PROs and clearly delineates roles between the government and the private sector.Despite the absence of standardized governance and formal regulations, ASRIM said many of its members have already taken the initiative to implement EPR, with some even establishing their own PROs.PROs play a crucial role in helping businesses meet their EPR obligations more systematically. They act as partners in managing post-consumer waste while fostering collaboration among industries, associations, and waste management agencies.The government, therefore, must ensure that PROs can operate effectively down to the regional level.Importantly, EPR fees are intended solely for managing post-consumer packaging waste, not for general waste management. This focus aims to boost recycling activities and the use of recycled materials.ASRIM emphasized that the synergy between the government, industrial associations, and the private sector is needed to ensure the EPR policy not only encourages administrative compliance but also generates tangible impact on waste reduction and builds an inclusive circular economy for all business players.Ultimately, EPR should not be seen merely as an environmental mandate but as a tool for economic transformation.When designed in a balanced manner and implemented collaboratively, EPR enables large, medium, and small industries to grow together within a more efficient and sustainable ecosystem.Through EPR, the industrial value chain extends beyond factories and markets to include the recycling sector, micro, small, and medium enterprises (MSMEs), and the informal economy—segments historically left on the margins.In this way, EPR plays a vital role in driving inclusive economic growth, creating added value and jobs, and strengthening national industrial competitiveness while ensuring no one is left behind.With phased implementation, regulatory certainty, and strong government–private sector synergy, EPR is expected to become a key foundation for Indonesia’s sustainable economic growth and its response to increasingly urgent environmental challenges.