In the last two decades, the principle of Extended Producer Responsibility (EPR) has been increasingly implemented for waste policy around the world. By shifting financial and operational responsibility for waste management from municipalities to producers, waste management costs are (partially) internalised in product prices. Considering that the consumer is the waste producer, EPR therefore implements the Polluter Pays Principle in an indirect way. Although one of the key policy objectives of EPR is to foster Design for Environment (DfE), the impact of EPR policies with respect to DfE remains unclear. On the basis of a literature review and case studies, this chapter provides an overview of the main challenges to strengthen DfE incentives from EPR. DfE is a broad design concept that takes the environmental impact along the life cycle of a product into account. From the perspective of waste management, DfE can refer to the development of lightweight products, the use of recycled materials, making products easier to disassemble or reducing the use of toxic materials. Assessing the extent to which EPR fosters DfE is complicated by three factors. First, due to the diversity and interaction of environmental aspects, comparing the DfE level of two products is not straightforward. For example, comparing easy to recycle vehicles with more energy-saving models requires a detailed analysis and subjective weights for distinct environmental impacts. Secondly, DfE can be driven by many other elements than EPR, such as material or transport costs. Disentangling the contribution of each driver is challenging. Thirdly, EPR can contribute to DfE by financial incentives but also by less tangible effects such as improved communication between producers and recyclers. Although anecdotal evidence highlights the importance of an improved information exchange, it is hard to measure the impact. In order to overcome the barriers for quantitative assessment, qualitative research methods are used to investigate the impact of EPR on DfE. The results suggest that EPR contributes to DfE but is seldom the triggering factor. With respect to the financial incentives for DfE, EPR schemes can be grouped into three types: Individual Producer Responsibility (IPR), variable-fee Collective Producer Responsibility (CPR) and fixed-fee CPR. Under IPR, each producer is responsible for the waste originating from its own products. Although literature highlights that IPR provides efficient DfE incentives, few IPR schemes have been implemented due to the economies of scale and convenience of industry-wide CPR schemes. The weight-based cost allocation of variable-fee CPR is typically implemented for fast-moving mono-material goods, such as packaging and graphic paper. Whereas these variable-fee CPR schemes can give effective incentives to make products lighter or to opt for different materials, they rarely stimulate other DfE aspects such as the use of secondary resources. Fixed-fee CPR schemes are typically adopted for durable or multi-material goods, such as cars or consumer electronics. Considering that all models of the same category face an identical unit cost, fixed-fee CPR schemes provide only weak incentives for DfE. In addition to the EPR type, six features significantly affect the financial DfE incentives of CPR schemes. First, fixed fees that are often used in CPR schemes for multi-material or durable goods, weaken DfE incentives. To address this challenge, modulated fees, differentiated in proportion to the environmental impact of a product, could be introduced. For example, modulation may lead to lower fixed fees for products that contain less toxic materials. However, to limit additional administrative costs, modulated fees should only focus on design aspects with significant environmental or financial gains. Second, the magnitude of the financial incentive is decisive. Low fees, such as applicable for many small consumer electronics, will hardly give incentives to make design changes. Third, the importance of the magnitude of the financial incentive stresses the relevance of the ongoing debate on full cost internalisation. The principle of full cost internalisation means that all costs related to waste management of products should be internalised via EPR. There is a consensus that EPR schemes should cover the costs of collecting and treating waste that is pre-sorted by households minus the revenues from recovered materials. However, there is debate concerning the allocation of other costs: costs for the collection and treatment of waste that is not pre-sorted by households (e.g. collected by municipalities via the residual mixed waste bag); costs for awareness raising campaigns; costs for clean-up of litter; costs for enforcement and monitoring of the EPR scheme (including auditing and measures against free-riding); R&D investment in DfE. From the perspective of DfE, more costs allocated to producers means higher financial incentives for DfE. Fourth, in order to improve DfE incentives, the ambition with respect to product range and take-back targets should be further improved for many EPR schemes. For example, the worldwide collection rates of consumer electronics via EPR are low. Fifth, EPR is implemented by countries, regions or provinces. For some products, such as food products, design and packaging are already adapted to local preferences. In such a context, incentives for DfE from a local EPR scheme will be taken into account by producers. In addition, environmental designs in one country can easily spill over to other markets. Conversely, due to the international disparity of policies, the impact of local EPR schemes is weak for consumer products that are designed for the global market. For example, financial incentives from one local EPR scheme will not be taken into account for the design of mobile phones. In order to strengthen DfE incentives for global consumer products, more international harmonisation of EPR incentives is required. Finally, since cost allocation between competitive producers is key for efficient DfE incentives, emerging technologies such as Radio Frequency Identification (RFID) can, in the future, induce design changes and may even lead to cost-efficient IPR implementation.