sou · H9B324 · 2021-04-15 00:00:00 — A study of appeal cases related to MSW management was conducted as part of the 2016 study14. The main findings were: •several cases in the courts of appeal in 2014-2015 were related to the appeal of a household claiming that they should be freed from paying waste fees due to the small amount (or none) of waste produced on the premises. These appeals were normally rejected. •several appeals were initiated by environmental authorities that claimed that the municipality should not have maintained the free choice of property owners to choose a transport service provider. Many of the cases were returned to the waste authority for new consideration. Several cases continued to Supreme Court. Some were approved because there were sufficient private services available. •in some cases, a private waste management company appealed the decision to switch from free choice to municipally tendered waste transport. The decision was upheld: it did not breach the right for free enterprise. •three appeal cases demanded 42 § exemptions from municipal monopoly of MSW management. All appeals were rejected. Two of the appeals were rejected because the appeal was presented by the waste transport company, not the waste producer itself. •some cases were about delegating administrative power to municipal waste companies. This conflicted with Constitutional . Findings from Regulatory Impact Assessments of the legal revisions As described above the coverage of the municipal monopoly on MSW has been changed in three phases. In addition, regulations related to MSW transport and in-house services have been revised. The same basic arguments for and against restricting the municipal monopoly have been presented in the Government Proposals in various formulations and backed up with verification from studies and monitoring data. The following is a summary of these findings. As the scope and the quality of the assessments have improved in each cycle, the latest documents are usually more detailed and convincing. However, when comparing the findings with the status in it is important to notice that the exemption of industrial MSW was performed already in 2007 and the latest revisions and their justifications are not about company MSW. The study in 201615 summarized that the legal implications of removing certain MSW from the municipal monopoly on MSW are following: -municipal waste by-laws no longer apply to these wastes -these waste producers would have to take responsibility of procuring the transport and treatment of these wastes instead of municipalities -the municipal waste treatment services would no longer be available to these waste producers, except for case-by-case municipal decisions to provide “secondary” or market-based services -municipal waste advisory services are not offered to these waste producers. These changes have impacts on the economy of municipalities, private sector WM companies, the concerned waste producers and the environment. The regulation of MSW can be assessed from the point of view of the main stakeholders16: 1)companies, restaurants, retail shops generating MSW 2)waste generators in the public service sector 3)private waste transport and treatment companies 4)municipalities and municipal waste companies and their contracting partners 5)stakeholders in EPR schemes related to MSW 6)state and regional environmental and waste management authorities 7)households, inhabitants The impacts on waste producers and waste management companies include economic impacts, impacts on innovation, impacts on the administrative burden and impacts on competition between SMEs and big companies. The impacts on municipalities can be different in big and small cities, rural municipalities, and municipalities with difficult transport conditions (e.g. arctic region, archipelago). The impacts on authorities include the impact on compliance monitoring, availability of waste data for reporting and planning, administrative burden related to complaints and appeals. Environmental impacts include impacts on promoting or obstructing achievement of recycling goals and pollution prevention. Social impacts include impacts on employment, ensuring essential services to public health, prevention of risks of illegal waste management etc. These impact categories are reviewed in the following focusing only on the most relevant ones regarding each stakeholder group. The waste incineration capacity has been mostly established by energy companies based on waste flow commitments from municipalities. The municipalities were forced to buy incineration capacity, because the EU landfill directive set restrictions to accepting organic waste at landfills. Because of restrictions to the municipal monopoly the total capacity of waste incinerators is now bigger than the waste flow controlled by the municipal monopoly. This causes challenges in fulfilling the financial commitments between municipalities and the incinerator companies. In many cases the agreements between municipalities and incinerator owners include sanction in cases where the municipality does not deliver the agreed flow of waste to the incinerator. In many regions the MSW that has been transferred to free choice is not enough to justify new investments in incineration capacity. As evidence for this, much of this MSW has been received by the municipalities based on the secondary or free market agreements. of the MSW received by the municipalities outside of the municipal monopoly in 2015 came based on long-term agreements from private waste management companies that have collected the waste from their clients, but do not have access to incineration services. came from waste transporters on a case-by-case basis. was received based on agreements directly with waste producers. The private sector waste flows are divided between various actors and none of them are controlling enough waste to initiate new investments for incineration. If they do not want to use the free capacity in incinerators controlled by the municipalities, this may lead to increased import of MSW for incineration abroad. This could lead to underutilized capacity in municipally controlled plants and thus financial 16following annex to the consultant contract: Frågor for jämforande studier. challenges to municipalities and their WM companies. Only big private sector operators would have the negotiating power to enter similar contracts with incinerator companies. This could give them a major advantage compared to smaller private actors. All the services of the municipal WM companies are financed through waste fees collected from waste producers. Free services such as waste information services, municipal recycling points, campaigns, and free reception of hazardous waste from households and farms are financed with a basic fee (often called eco-fee) that is charged from households17. Earlier the basic fee was charged also from other MSW. Now that the municipal monopoly is narrower, also the budget collected from eco-fees is smaller. The smaller the waste flow controlled by the municipality is, the more difficult it is to guarantee secondary services in cases of sudden needs to accept waste that was not accounted for in budgeting. Also, the possibility for providing market-based services depends on the basic waste flow, because the free market services may not exceed (later ) of turnover. Impacts on waste producers The RIA-assessment (2016) concluded that the impact on waste producers would vary regionally and locally. There may be a lack of private sector services in sparsely populated areas and poorly accessible areas, such as the archipelago. Private waste treatment capacity will not emerge fast and it will be located near big waste generating sources. This may lead to intolerable waste costs for waste producers in some areas. In the municipal monopoly system, the transport fee is the same in all parts of the municipality. The exemption of MSW from other than household waste from municipal monopoly may open new possibilities to export MSW abroad. The restrictions for export in 109 § refer specifically to mixed MSW that belongs under municipal monopoly. Big waste producers will have more flexibility in choosing services. Clients that operate in several municipalities can procure their WM services even on a national level. Municipal services are tied to municipal by-laws and to service requirements set in the public tendering process. Big clients do not need the help of municipalities in the procurement. They can procure both the MSW services and services for all other wastes from the same contractors. Based on 42 § of the 2011 some major private sector health care companies and some big state organizations have applied for the exemption from municipal monopoly. The number of these applications have been small. This may be due to the additional bureaucracy or the strict conditions in 42 §. However, small clients may and will face challenges in finding transport and treatment services and may face unreasonable costs, especially outside of population centers. In a study in 2014 the data collected by municipalities revealed that the cost of MSW transport was higher in municipalities where the transport was procured by the property owner compared with areas with municipally tendered waste transport18. Another study in 2010 showed that when switching from free choice transport to municipally tendered transport the cost per client dropped by an average of 40 %.19 The assessment raised the question of financing the cost of “stand-by capacity” for waste treatment received by municipalities based on their “secondary responsibility”. Such reserve capacity (for example quota in incinerators) is not free of charge. It would not be fair if this would be financed by waste fees collected from households. 17https:///neuvonta/usein-kysytyt-kysymykset/ekomaksut-usein-kysyttya/ 18Tietoa kuntien jätehuollosta 2014. 19Janne Tukiainen, Ville Mälkönen 2010. Jätekuljetuksen sopimusmallien yritysvaikutukset Valtion ta-loudellinen tutkimuskeskus . Impacts on waste management business and innovations The of this revision included a specific assessment of the need to synchronize waste law with procurement law20. The total turnover of the waste transport and treatment including waste incineration is estimated at 2500 – 3000 million € per year. The share of municipal WM companies was about 400 M€ or . The share of services for MSW from public services was estimated at or 40 M€. The turnover of waste transport companies would not grow significantly, because practically all the waste covered by the municipal monopoly is already transported by private companies. If the revision leads to more tailored source separation and recycling this may increase the turnover from waste transport and treatment. However, this would probably need more regulation or other policy instruments to promote material recycling. Extensions to obligations of EPR actors would probably have more impact. The impact on innovations was assessed to be low, because the MSW flow from these waste producers is overall quite small in to enable significant investments. Other studies have concluded that the main driver for waste management investments is the regulation regarding environmental and quality requirements for recycling21. Interviews of private sector operators indicated that their view is that private sector operators are more innovative than municipal operators. Municipal operators’ opinion was that advances in biowaste management are examples of innovation and major risk taking that has been enabled by the municipal monopoly in ensuring a steady and adequate flow of waste. Municipal waste companies have in many cases offered regional platforms for private sector innovators. These platforms have provided space, access to waste flows, environmental licensing, and access to public R&D financing. Regarding private sector monopoly risks, the assessment concluded that practices in municipal tendering of waste transports can be more beneficial to small enterprises than the free choice option. In conclusion, the revision would probably not have a major impact on private sector innovation. The current conflicts between private and public sector actors in waste management may be detrimental to innovation. Impact on competitive neutrality in their report stated in 2016 the following needs to promote competitive neutrality between private and public sector business actors in waste management23: -clear separation of administrative power and operational activities -separation of operative activities into public owned companies -compliance with public procurement regulations in tendering of waste transport services 20Jätelain ja hankintalain yhteensovittaminen yhdyskuntajätehuollossa Loppuraportti 4.11.2016 21Ahvenharju, S. (toim). Ympäristöministeriön raportteja 5/2011. 22Genter, C. Innovative waste management products – European market survey. Tekes, 147/2003. 23Report from the ; Competition in the waste Management sector – preparing for a circular economy, 2016 management-sector.pdf -book-keeping and reporting of sales of public WM companies that are offered in the free market. The conclusion of the assessment was that these needs have been fulfilled with the recent revisions of the waste legislation. Impact on administrative burden As the restriction of the municipal monopoly would exempt more MSW from the scope of municipal waste by-laws there may be need for new regulations concerning the source separation and recycling of this exempted MSW. This would need more resources in compliance monitoring by municipal and regional authorities. The municipal waste administration needs to collect information of waste transporters in the national register. This would be easy under the municipal monopoly for MSW transport but can be burdening under the free choice option. On the other hand, the number of waste producers covered by the municipal monopoly will decrease, so the maintenance of this municipal register would be easier. The administrative burden for reporting MSW data to EU would be significantly increased. Collecting MSW statistics from municipalities is well organized and is not complicated by any confidentiality issues. data collection from private sector WM operators has proved to be very difficult. The administrative burden of waste producers generating MSW would increase, because they would have to manage the waste transport and waste treatment solutions themselves instead of relying on the municipal tendering (the impact would be different in municipalities depending on the choice between waste transport arrangements). For municipalities, the restriction of municipal monopoly increases the administrative burden significantly, because the municipality would have to make individual decisions on accepting the MSW based on case-by- case assessment of the conditions for the article 33 § secondary responsibility. During this study for the statistical center of was interviewed. According to the interviewee the data on MSW controlled by the municipalities is easily collected. The share of MSW from industry, services and public administration must be calculated from data from waste treatment facilities, EPR operators and individual waste producers that have a reporting obligation based on environmental permit. The division of MSW between households and services is calculated using waste generation factors that were collected in the region during the phase when MSW from services was under the municipal monopoly. When this information source is no longer available the statistical center must develop new procedures to identify waste defined as MSW from other waste types collected from the company waste producers24. Environmental and health impacts Excluding wastes from the municipal monopoly may have negative impacts because municipal WM is more regulated than privately organized WM. Municipal by-laws are applied. The municipalities as public actors must abide with recycling targets in the national or regional waste management plans. prevention is a binding obligation for public actors, but not private ones (11 §). Service quality is only defined for municipal WM services (34 §). Municipalities can and have applied waste fee incentives in promoting source separation and they subsidize waste collection from rural areas. For free market services the 24Juha Espo, Statistical center , interview 27.10.2020 municipality cannot use higher fees for mixed waste to sponsor waste fees for e.g. biowaste collection to avoid market distortion. of municipalities collect an eco-fee from waste producers, that is used for information services. These services only apply to waste within the municipal monopoly. The overall trends in MSW utilization and final disposal are shown in the following figure: Trends in MSW treatment relative to changes in municipal monopoly Blue: recycling, excluding biological treatment : composting and anaerobic digestion Red: final disposal or other vertical dotted lines: restrictions to the municipal MSW monopoly Recycling as material has been reduced by since the MSW from companies was excluded from the municipal monopoly. Part of the recyclable MSW has ended up as fuel. Generation of wastepaper in households has decreased but generation of packaging waste has increased. Consultant’s comments: To avoid negative impacts the revision may need to be amended with a government decree directed at private sector actors in MSW management. The same environmental requirements should be applied to private and public actors. Whether private sector services lead to more material recycling than with the municipal monopoly remains to be seen. It is obvious that without additional regulation the decision in the private sector between recycling and energy recovery will be taken based on market prices, not waste hierarchy. Response to questions from 1.Vem har ansvar för att samla in och behandla verksamheters kommunala avfall i ? Vilka skyldigheter följer med denna frihet att välja transportör och behandlare? The waste producer is responsible for arranging the transport of its waste to a licensed waste treatment facility or a reception facility. The waste transporter and the operator of the reception facility (avfallsmäklare) must be registered in the regionally kept register (94 §). The waste producer is responsible for the waste until it is delivered to the treatment or reception facility. The change in the scope of the municipal monopoly was not so radical in municipalities that already had a free choice of MSW transporter. Most municipalities before 2007 did not apply their monopoly to waste transport. The treatment or reception facility must keep track of the waste flow. book-keeping is also obligatory for the waste producer if the activity requires an environmental permit or if the waste generation exceeds 100 t per year. This tracking of waste must be kept 6 years and presented to the authority on request. (118-119 §). The waste data must be submitted to the producer of the waste on request. Normally producers of MSW are not obliged to report the waste flow to authorities. The trip-ticket system (121 §) is not applied to MSW. If the enterprise generating MSW or other waste cannot find waste management services for a reasonable price locally, it can request for such services from the municipality. The municipality can decide to offer such transport or treatment services following the procedures in 33 §. In this case these services are not regarded as “free market services” (see 145 a§). If the municipality takes responsibility of such company waste, the assigned waste transporter is obliged to report the amount and type of collected waste from each property to the municipality (39 §). 2.När fick verksamheterna själva ansvar för sitt kommunala avfall och hur har ansvaret förändrats . Är det någon ytterligare förändring på gång att införas som berör verksamheternas kommunala The revision of the occurred in 2007, when MSW from industry was excluded from municipal monopoly (Act 411/2007). Companies providing social, health care or education services were returned under the municipal monopoly in 2011 and then removed again by the Revision 445/2018 (except for municipal services). The municipal monopoly applies to enterprises that have their waste collected jointly (in bins or suction systems) in with both housing and enterprises or municipal units and enterprises (32.3 §). Hur stor andel av det kommunala avfallet kommer från verksamheter? Går det att specificera t ex matavfall och brännbart blandat avfall. MSW is reported to EU, but the Statistics is not publishing the division between household MSW and other sources. A study from 2015 estimated that is collected from households, from public services, is collected by EPR systems and is MSW collected from enterprises that are responsible for their own waste. Another study from 2016 estimated that municipalities control 1,6 Mt of waste and the private sector 1,0 Mt of MSW. Most of EPR packaging waste is collected from businesses, but collection from households is growing rapidly. Of the total MSW was received in 2015 for treatment by municipalities based on municipal monopoly, was received by municipalities based on case-by-case request or from the free market and of MSW was treated by private sector services. The figure 4 of this report illustrates the differences in the recycling rate of household MSW vs. non- housing MSW. There is much recycling potential especially in biowastes, but also in plastic waste and to a smaller extent in paper and cardboard. To reach a recycling or higher for MSW the source separation of non-housing MSW must be extended and sorting activity improved. National source separation regulations are proposed also for company MSW25. Vilka avfallsslag omfattas av producentansvar i . The EPR regulations cover the following products that are relevant for MSW management: -packaging from package users with a turnover > 1 M€/a -electric and electronic appliances. The EPR obligations for collecting EPR waste from households will be expanded in the revision currently in the Government Proposal. The proposed model would oblige the EPR system to pay to municipalities the cost of collecting packaging wastes from households. This proposal is objected by many organizations representing industry and trade. The current regulations on packaging EPR are proposed to be changed so that the exemption of companies with turnover below 1 M€ would be repealed. EPR regulations will be extended to several categories of single-use plastic products (SUP) with some implications on municipal waste management. 5.Vilka är miljökonsekvenserna av att verksamheterna själva har ansvar för sitt kommunala avfall (hur har behandlingsmetoder förändrats och varför. T.ex. mer materialåtervinning?) As can be seen from the columns in figure 4, the recycling rates in 2015 for cardboard, biowaste, glass and metal are better in non-housing MSW than household MSW. This is understandable, because the collection cost efficiency and the quality of raw materials from non-housing MSW is higher than for household MSW. The recycling rate for paper is better for household waste than wastepaper from other sources. Plastic was practically collected only for incineration. Source separated waste specifically collected as “energy waste” was collected and incinerated. Incineration has been practically the only available means for managing non- separated MSW, but now also centralized sorting for recycling is practiced as pretreatment before incineration. The statistics are very weak for verifying how much recycling of company MSW has grown and whether that was an impact of restricting the municipal monopoly. The figures for total MSW show a decrease in the share of recycling.