The purpose of this study was to explore, with supporting evidence, the mechanics and systems elements required to create an eco-modulation system in the UK that can facilitate and reward the eco-design of electrical and electronic equipment (EEE) in a cost-effective manner. Any UK system must work in accordance with the current Extended Producer Responsibility (EPR) legal framework and the UK’s existing waste management strategies on recycling and would seek to reward resource efficiency at the design phase by enabling the reduction of waste generated and reducing negative environmental externalities through, inter alia, the use of less environmentally harmful substances and the extension of products’ lifetime. In the last two decades, the EU has sought to incentivise the eco-design of EEE through multiple policy packages, notably the WEEE Directive, the Eco-design Directive, and the Waste Framework Directive. All three Acts were introduced in the 2000s and have since been amended and recast to expand their scope and level of ambition. The Waste Framework Directive in its three iterations to date has restated the need for Extended Producer Responsibility (EPR) to support the eco-design of products to minimise the impact of waste management systems on the environment. These Directives form part of the EU laws retained since the UK’s departure from the European Union. EPR states that the financial and organisational burdens of managing the end-of-life (EOL) of products sit with the producer. Whilst some theories regard EPR as a wider policy tool to decrease the overall impact of a product, over the last decades the main operational exploitation of the principle has been linked with EOL management: based on the “polluter pays” principle, EPR is expected to internalise costs, associated with WEEE arising and management, within product costs, relieving governments of the financial and administrative burdens of managing the end-of-life (EOL) of WEEE. In addition, it aims at reducing the environmental impacts associated with WEEE management through increased recycling rates. This study restricts the focus of analysis on the recycling costs as opposed to the lifecycle of products. The modulation of the EOL compliance costs that producers pay into the producer compliance schemes, known as eco-modulation, has increasingly been proposed as an incentive mechanism to overcome the failure of EPR in encouraging producer ecodesign. Such eco-modulation systems see producers’ EPR fees and obligations adjusted based on the level of eco-design integrated within their products, while also leading to a differentiated distribution of costs among producers based on their alignment with modulation requirements.