Avery Dennison > Blogs > EPR and DfR 101: A Brand's Guide to Packaging in the Circular Economy

EPR and DfR 101: A Brand's Guide to Packaging in the Circular Economy

By Kejin Zhang, Sustainability Manager, Label & Packaging Materials, AMEA

14 October 2025

Introduction

The journey toward sustainable packaging is no longer defined by voluntary initiatives. While major global brands have long led efforts in areas like bottle lightweighting and increasing recycled content to meet global commitments and consumer demand, the regulatory spotlight is now turning sharply onto all brands, regardless of size. The key accelerating force? Regulation.

Across ASEAN, the drive for sustainable packaging transformation is intensifying due to new Extended Producer Responsibility (EPR) laws. With mandatory EPR already enacted in key markets like Vietnam and the Philippines, and similar plans advancing in Thailand and Malaysia, the financial burden of managing end-of-life packaging is fundamentally shifting onto producers. For every brand, large or small, understanding these mandates, and the future regulatory roadmap, is crucial for cost defence and securing long-term market access.

At Avery Dennison, we believe sustainable solutions must be practical and high-performing. We specialize in developing pressure-sensitive labels (PSL) that enable packaging circularity without compromising aesthetics or quality. Beyond product innovation, we actively collaborate with regulators and industry associations to advocate for the establishment of national Design for Recycling (DfR) guidelines, providing clear technical pathways for brands to create truly sustainable packaging.

Through our technical expertise and deep market insights, we aim to provide you with essential clarity on DfR, explaining why it is vital for brands to understand this concept now. We invite you to explore how you can make informed, proactive decisions today to confidently achieve your sustainability goals and lead the way in creating a greener tomorrow.

What is EPR, DfR, and the Relationship Between Them?

EPR is an environmental policy approach that holds producers (brands and importers) responsible for the entire life cycle of their products and packaging, particularly their post-consumer phase.

The core function of EPR is to uphold the "polluter pays" principle by shifting the financial and physical burden of managing packaging waste from local governments and taxpayers to the industry. Producers typically pay fees to a Producer Responsibility Organization (PRO), which then funds the national infrastructure required for the collection, sorting, and recycling of waste.

EPR fees are commonly charged per unit weight and vary significantly by packaging type, reflecting the actual cost of collection and processing. Since recycling flexible packaging is often more challenging than rigid plastics, for instance, the unit EPR fee for flexibles is usually higher. This initially prompts lightweighting to minimize costs. However, brands quickly reach a practical limit where further weight reduction compromises the packaging's primary function: product protection.

So, how can brands look beyond lightweighting to reduce their EPR costs? This is where DfR and Eco-modulation provide the solution.

DfR is a specific set of principles focused on optimizing packaging so that it can be efficiently and effectively recycled at its end-of-life. The primary goal is to minimize contamination and maximize material value, enabling the material to be turned into high-quality Post-Consumer Recycled (PCR) content.

DfR is leveraged through Eco-modulation, an incentive tool that is complementary to EPR. This system adjusts the mandatory EPR fees, offering financial rewards for packaging that is easier to recycle and applying penalties for packaging that is disruptive or non-recyclable.

Today, countries like South Korea and many EU nations have fully incorporated DfR into their eco-modulated fee structures. With regulations like the upcoming EU's Packaging and Packaging Waste Regulation (PPWR), the connection is becoming mandatory, where by 2030, only packaging with minimum of A, B or C recyclability scoring will be permitted to be sold in the EU market, and the EPR fees will be eco-modulated based on the recyclability score.

Avery Dennison Works in Advocating DfR in ASEAN

As a supplier of labeling solutions, Avery Dennison is actively working with key industry associations and regulators to advocate for the adoption of DfR in ASEAN. We support this initiative by educating the industry on innovative labeling components compatible with circular packaging design.

Leveraging our deep technical expertise and experience with established EU (RecyClass) and US (APR) guidelines, we help shape national DfR frameworks for ASEAN countries. We reference these proven international standards while considering the unique local collection and recycling infrastructures, ensuring the resulting national guidelines are both effective and harmonized.

Thailand Establishing EPR and DfR by 2027

Thailand is actively developing its Sustainable Packaging Management Act, which is projected to usher in mandatory EPR and eco-modulation by 2027. AD is an active contributing member under the Eco-design working committee of the Thailand Institute of Packaging and Recycling Management for Sustainable Environment (TIPMSE). We are leading the drafting of the DfR guidelines for PET (targeting beverage) and HDPE (targeting home & personal care) containers, collaborating with stakeholders from brands to recyclers to define effective, practical standards.

Vietnam Coming Next with DfR Guidelines

In Vietnam, the Law on Environmental Protection (LEP) and its guiding decree have already enacted the mandatory EPR legislation for packaging (starting 2024). This has made the drafting of DfR guidelines a high priority to steer the industry toward sustainable packaging designs. Under Vietnam's overarching Circular Economy roadmap, Eco-design/DfR guidelines for PET and HDPE packaging have been identified as a focus area, with a target to establish a voluntary guideline as early as 2026. The eventual aim is to incorporate these standards into the EPR framework through eco-modulation of fees, and AD is honored to be a contributing technical expert in this crucial process.

Sustainability in Packaging Asia by Smithers

At the recent Sustainability in Packaging Asia conference held by Smithers on June 4th-5th, 2025, AD participated as a sponsor, a panelist and a speaker. We showcased our labeling solutions that enable circularity, such as CleanFlake™ for PET and our breakthrough studies on the releasability of labels for HDPE bottles.

The key takeaway from the conference was the clear trend of accelerated regulatory development in sustainable packaging, underscored by discussions on the EU's PPWR and India's EPR regulations. This further strengthens our belief in the importance of regulation and clear guidelines as the primary drivers compelling the industry toward sustainable packaging adoption, and the need for harmonization to facilitate easier cross-market adoption of sustainable practices.

Why should companies start to look into DfR?

Even though DfR-based fee modulation has not yet been formally mandated in most ASEAN countries, the groundwork is already in progress. The call to action for brand owners, big or small, is to adopt DfR practices immediately to maximize benefits.

Be Future Ready: With the undeniable global trend toward stricter, harmonized regulations, acting now means getting ahead of regulatory pressures. It allows for a phased transition, avoiding being rushed into costly redesigns and potential fines for non-compliant packaging once modulation fees hit.

First-Mover Advantage: Brands that prioritize DfR can shape industry best practices and gain a "first-mover" advantage in the marketplace. This leads to the development of robust sustainable packaging solutions that resonate strongly with both consumers and regulators, bolstering brand reputation.

Cost Defense: Brands that adopt DfR directly reduce their EPR fees because eco-modulation rewards packaging that is demonstrably easier and cheaper to recycle. Proactive design choices transform a regulatory cost into a clear, long-term financial saving.

The transition to a circular economy is gaining unstoppable momentum, and the financial and regulatory path is clearly pointing toward DfR. Waiting for potential fee penalties to become a reality in your key markets means missing out on crucial business advantages. By proactively designing for recyclability now, you secure a competitive edge, mitigate future regulatory risk, and strengthen your brand's commitment to sustainability. We invite you to reach out to the Avery Dennison team today to understand how our technical expertise and innovative labeling solutions can help you assess your current packaging and design products that fully comply with emerging DfR guidelines.

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