The Waste Chaos Is Growing, And So Is The Regulatory Chaos
A Personal View By Henning Wilts
Both the European Commission and the German government have set ambitious targets with regard to the market for recycled plastics: According to the EU Strategy for Plastics in the Circular Economy, the European market volume for recycled plastics is to grow four-fold by 2030, and the German Federal Ministry for the Environment also announces in its Five-Point-Plan for Less Plastic and More Recycling that it wants to significantly increase the demand for recycled plastics. The ambitious plans are set against a sobering reality: a patchwork of diverse regulations that send very different signals along the entire value chain. There is no clear line in the EU on what the future of plastics in a circular economy should look like.
[Manufacturers Side] Design and Product Chaos
In order to get product suppliers and manufacturers to make plastics more recyclable, EU member states are increasingly relying on economic incentives. Simply put, those who make recyclability part of their designs, for example for packaging, should be required to pay lower licence fees to the Dual Systems. Regulations like this are already in place in France and Italy. In Germany, Paragraph 21 of the Packaging Act requires similar measures from all dual systems.
However, the multitude of different regulations for each country is very difficult to get a handle on for the producers of packaging who, after all, tend to be globally active companies. It is often cheaper for them to simply pay higher licence fees. In Germany alone, there are different assessment systems by which one and the same packaging material can be assessed differently with regard to its recyclability.
[Recycling Side] Collection and Recycling Chaos
The chaos continues when it comes to the specifications for collection and recycling. Different countries have different separation systems based on different recycling rates. Where deposit systems are in place, they are not compatible across countries and therefore create incentives for all sorts of deposit fraud.
The debate on the chemical recycling of plastic waste in Europe has reached a maximum level of confusion. Some countries, such as Germany, have so far taken a relatively clear position that such processes should not count towards recycling quotas for packaging. In neighbouring countries such as the Netherlands, the debate is quite different — with corresponding consequences for the assessment of what is ‘recyclable’ packaging in either country.
But even within Germany, key requirements such as the Commercial Waste Ordinance on the separate collection of plastic waste, among other things, are implemented and monitored extremely differently. This has the expected effect on the collection quality, which varies greatly from one federal state to the next.
[From Transport to End Consumer] The Chaos Is Global and Spreads into the Industry
The list of contradictory and inconsistent regulations could be continued almost indefinitely, for example when it comes to the permitted use of recycled plastics in different types of packaging, to criteria for labels for environmentally friendly packaging aimed at consumers, to the requirements for the transport of pre-sorted plastic waste, which is regulated very differently between the EU member states, but also between the German federal states. For example, what may be transported from the sorter to the recycler subject to manageable environmental requirements in one country is classified as hazardous waste in the next and may therefore only be transported with special vehicles.
Many of these different regulations reflect the diversity of waste management infrastructures, cultural characteristics or historically developed legal philosophies. The conditions for the circular economy in the Netherlands are different from those in Bulgaria, as are those in the Ruhr region compared to the Uckermark in Germany, for example. Of course, it must be possible to take this into account when designing regulations that can be adapted.
If one considers the permitted use of recycled plastics in sensitive areas of application, it is understandable that some countries without the necessary technical infrastructure for monitoring such regulations are often rather cautious and, because of that level of caution, can be restrictive. They are well aware of the risks that could arise for the consumer if upper limits for contaminants, for example, were exceeded.
Lack of Consistent Regulations also Affects Price
Conversely, however, more attention must be paid to how massively the national and municipal regulations described above hinder the emergence of a European market for recycled plastics. There is an abundance of studies that point to the massive cost advantages of a real circular economy in plastics. But such advantages are not realised in practice, partly because the market for virgin materials is so much more uniform, standardized and thus more efficiently organised than the market for recycled plastics.
The potential savings of producing plastics from household waste instead of crude oil are swallowed by the chaotic bureaucracy of these requirements. An economist would call this ‘transaction costs’. Even companies that want to operate sustainably end up sticking to the use of primary plastics optimised for decades. Once they have had to deal with the detailed regulations of the European member states, or even further afield in the global market as to where and when which recycled plastics may be used, they tend to lose heart.
A lack of clarity and small scale of production then also result in a lack of trust among the companies, which in turn creates further obstacles in terms of psychology and business management. In addition, there is the crucial factor of economies of scale: Generally speaking, the larger the plant, the larger the market, the lower the average costs. The very small-scale market for recycled plastics — because its regulations are very compartmentalised — competes with some of the largest companies in the world that have perfected the production of primary plastics– and have only been able to survive for this reason.
From the perspective of the circular economy, there is an urgent need for political consideration: Where do the advantages of small-scale and differentiated regulation outweigh the disadvantages, where would a strengthened circular economy bring greater ecological, but also socio-economic advantages? On the other hand, could more flexible forms of regulation be found that reconcile the interests of both sides?
There is still time to change
Often enough, it would only be easily feasible harmonisations that could, for example, promote a green public procurement policy. Is there really a need for national colour specifications for products such as garbage containers, which would then make it more difficult for foreign manufacturers to produce the recycled plastics to make them? A state of affairs that means that too many of these are still made from virgin plastics?
In all of this, it is often overlooked that we are running out of time to be having this discussion: There still is time for Europe to become a pioneer for the circular economy of plastics and to implement it according to its own ideas. However, it is becoming apparent that China, for example, is investing heavily in this sector. China has long since taken on a global pioneering role when it comes to publications in scientific journals or patent applications. So it is foreseeable that in the near future such considerations will no longer be driven by Brussels or Berlin, but by Beijing.
It is therefore urgently required to turn the above-mentioned ambitious goals into reality and to create the appropriate framework conditions for the necessary transformation process.
The current chaos may benefit those who are still profiting from the linear economy in the short term. In the medium term, the question is whether the income generated from the circular economy is to be generated in Europe or elsewhere. Just like the question of whether we still want to have a say in setting environmental standards for the market for recycled plastics or whether we will be beholden to other regions of the world, as in the market for crude oil.
Time is pressing!
This article has originally been published in the below linked report.
