Opinion of the Economic and Social Committee on "The development of outlets for food and non-food packaging waste"

(2000/C 51/04)

On 29 April 1999 the Economic and Social Committee, acting under the third paragraph of Rule 23 of its Rules of Procedure, decided to draw up an own-initiative Opinion on "The development of outlets for food and non-food packaging waste".

The Section for Agriculture, Rural Development and the Environment, which was responsible for preparing the Committee's work on the subject, adopted its opinion on 16 November 1999. The rapporteur was Mr Verhaeghe.

At its 368th plenary session (meeting of 8 December 1999), the Economic and Social Committee adopted the following opinion by 112 votes with 1 abstention.

1. Introduction

1.1. In presenting this own-initiative opinion, the Economic and Social Committee is seeking to contribute to the discussion currently under way on a number of fronts within the EU on the recycling of waste, and packaging waste in particular. The key element of this discussion is the forthcoming revision of Directive 94/62/EC on packaging and packaging waste. This directive is essentially concerned with targets for the recycling of packaging waste, which are currently fixed at 25% as a minimum and 45% as a maximum by weight of the packaging placed on the market. Five years after its introduction, this directive has improved levels of non-recovered packaging waste and the management of household waste. This achievement shows that, in its present form(1), the directive is undoubtedly a first step in the right direction. The present opinion must also be viewed in the light of the debate within the Recycling Forum set up at the start of the year (this forum intends to submit a number of recommendations to the Commission by the end of 1999 on ways of tackling the difficulties faced by the EU recycling industry), as well as the Commission's future follow-up to these recommendations (in the form of a communication to the Council and the European Parliament).

1.2. The intention is not, of course, to repeat the substantial work carried out by the Recycling Forum, which deals mainly with the economic, technological and legal aspects of waste recycling, or to issue an opinion on the proposed revision of Directive 94/62/EC, which the ESC will look at another time. The present own-initiative opinion asserts the ESC's determination to deal with the basic issues underlying the results - the achievements as well as the shortcomings - of the recycling sector. The depletion of natural resources and the importance of conserving our environment make it essential to retain an approach to recycling which is proactive, forward-looking and geared to the need to develop outlets. However, the Committee also feels it is essential to address the economic considerations connected with packaging waste recycling. Indeed, the idea of sustainable development meshes both environmental and economic factors.

1.3. The present opinion focuses in particular on the difficulties involved in the recycling of waste packaging of consumer goods. Not because recycling difficulties are more acute in the consumer goods packaging sector(2) than in other sectors but because this particular issue is very complex and enjoys a high profile, given the large number and wide range of players involved(3). Moreover, the sector now has a certain track record which makes it possible to conduct an initial assessment.

1.4. The ESC's special contribution to discussion of this issue stems from its specific role as a platform representing the various social and economic players. It is well placed - after more than a decade of helping to establish environmental policies in the general area of waste management - to come up with - via this own-initiative opinion - a convergent approach, based on sustainability, which takes into account the issue of packaging and packaging waste as a whole.

2. Difficulties arising in the recycling of packaging waste

2.1. Up to now, in addition to approaches aimed at prevention and reuse, the preferred solution for reducing the amount of packaging waste sent for landfill or incineration without energy recovery has been recycling. The packaging Directive 94/62/EC duly sets out the minimum and maximum recycling targets to be reached in the Member States. Transposition of this directive into national legislation has given rise to systems for selective collection and sorting of packaging waste. This has provided a new boost for packaging waste recycling techniques and initiatives, and resulted in a radical change in the situation on the recycling markets.

2.2. While the active involvement of most European consumers asked to sort their waste as part of selective collection schemes is to be welcomed, we recognise that, over the past few years, the expansion of these selective schemes has generated an oversupply of recyclates. To date, demand for products made from recyclates has not risen in the same proportion as the supply of recycling materials obtained by selective collection. To a greater or lesser degree this is true of virtually all packaging materials. Some imbalances relate to cyclical pricing factors, while others are more structural in nature and are due to a shortfall in the development of outlets. However, a distinction must be made between two categories of packaging waste: those such as glass, paper, cardboard and metal for which recycling channels have existed for decades; and others such as plastics, where recycling is relatively new.

2.2.1. The expansion of recycling facilities for the first packaging category did not stem from environmental concerns. It was driven solely by profits to be made whenever demand for virgin materials or other higher-quality recyclates (such as manufacturing offcuts) outstripped supply. Selective collection campaigns were conducted from time to time to meet the needs of the moment. The costs involved were relatively low since the intention was above all to cream off the best of the waste on offer, in other words, to confine collection to readily available amounts. The establishment of permanent selective collection and sorting systems driven by environmental considerations has often meant very much higher collection costs and resulted in recyclate supply outstripping demand, and its overall reclaim value dropping to a point where - despite the savings to be made by using recyclates rather than virgin materials - it generally no longer covers the costs of selective collection and any sorting. Such oversupply of recyclates may even lead to negative reclaim values.

2.2.2. The growth in recycling of packaging waste in the second category, i.e. most plastic packaging waste, has been due mainly to environmental concerns rather than to market forces, which have played a very marginal role. As a comparison of the costs of selective collection and sorting with the price of virgin raw materials shows, there is often no economic justification at the moment for recycling second-category packaging waste (current technologies mean that the recycling sectors for plastic packaging waste are not always in a position to offer a sufficient number of outlets or to pay a price covering the costs of selective collection and sorting i.e. such that recyclates are competitive with virgin raw materials.

2.3. As things stand, the recycling of most packaging waste leads to a persistent and financially significant chain deficit. The aggregate cost of selective collection, sorting and recycling very often exceeds the market value of recyclates. Depending on the types of funding used in the selective collection and sorting systems in question, this loss is met by consumers when they buy packaged products which are part of a contributory packaging waste recycling scheme or by taxpayers when they pay municipal waste management charges. "Green dot"(4) and other waste charges have now reached considerable proportions and are very likely to increase over the coming years once selective collection and sorting systems have gathered full pace in all the Member States.

2.4. This internalisation of costs, which makes for less strain on the environment, is one of a range of economic tools for environmental policy based on the polluter pays principle, which seek to induce operators - including consumers - to be more respectful of the environment. The Committee hopes to see an improvement and expansion of recycling, but would call for some degree of caution with regard to the associated economic conditions. Beyond a certain threshold in the amount of waste collected selectively, there is a noticeable tendency for the costs of selective collection and sorting of packaging waste to rise as an exponential function of the amount of waste collected and sorted. The cost per tonne rises as the selective collection rate expands and increasingly marginal packaging waste is tackled. The danger lies in the resultant potential for financial drift in the wake of (i) the rise in selective collection and sorting costs and (ii) the production of a high volume of recyclates which the market is not prepared to accept without a substantial increase in additional financial resources. The Committee feels that the rising cost of packaging waste management is inevitable, but that increases should be kept within acceptable proportions, in keeping with the expected environmental benefit(5).

2.5. Although most Member States publish statistics and indicators relating to the recovery of packaging waste, the amount of packaging waste sent for landfill or incineration with no energy recovery, or the costs of the different systems for the recovery of packaging waste or the return of reusable packaging, it is often difficult to compare and combine these data, despite the adoption of EC arrangements for the publication of statistics. This situation is a result of the different definitions of packaging and packaging waste, recovery methods, methods used to calculate packaging waste recovery indicators and any methods used to calculate costs. This leads to a certain amount of confusion, which does not simplify discussion of the issue of packaging waste recycling.

3. The search for solutions: points of departure and background

3.1. Environmental policies are a relatively recent development, as is the use of economic tools to induce operators to be more respectful of the environment. The impact of such moves is often difficult to predict, particularly in very innovative sectors such as packaging, and in little-known sectors such as waste processing and recycling were a few years ago. As well as increasing recycling and other forms of packaging waste recovery, Directive 94/62/EC has had the beneficial effect of:

- steering the packaging sector towards technical innovations such as reducing packaging weight and incorporating recyclates;

- helping improve expertise and transparency in the waste processing and recycling sectors (in terms of statistics, financial and logistical considerations etc.);

- instilling awareness into the general public about the environmental impact of (packaging) waste.

3.2. Given the new expertise and experience gained over the past few years, it is useful, not to say necessary, to adjust packaging waste recovery policy in the light of the opportunities and errors observed. The necessary corrections will get under way all the more quickly, the more willing the relevant players are to embark on forward-looking, focused dialogue(6).

3.3. Packaging is not an end in itself. It must not be considered separately from the product it contains and the associated patterns of consumption. Packaging is continually evolving in line with the requirements of the many players operating at the various links in the product manufacturing-distribution-consumption chain. Packaging is a basic element in the quality of life we enjoy as consumers today. It fulfils an essential and varied role in terms of storage, hygiene, protection, safety, information, comfort, etc.

3.4. The Committee recognises that tension exists between developments in contemporary lifestyle and consumers' tastes on the one hand, and the drive for prevention-led environmental policy on the other. Ever smaller families mean smaller food portions wrapped in more packaging. An ageing population needs more convenience goods, which often involve easy-to-use packaging. Paid employment outside the home is spreading across the whole population - both male and female; this in turn leads to more convenience food and the like, which often requires extra packaging. Packaging manufacturers now have to meet a new challenge, brought on by these sociological developments, in a way which is consistent with a prevention-led approach to protection of the environment.

3.5. The environmental impact of packaging waste has reached such proportions that action is essential. Protection of the environment merits our full attention. Sustainable growth must be a key criterion of the quest to find ways of tackling the problem of recycling packaging waste. The approaches selected must promote a pattern of economic growth which respects the natural and human environment of present and future generations. In terms of acceptability and sustainability, this means meeting the appropriate economic, environmental and social yardsticks. The role of packaging in the protection of human health must not be neglected.

3.6. The Committee would also stress the significance of educating and training present and future consumers. Consumers will only be able to make a positive contribution if they are made aware of the importance of the environmental issues posed by packaging waste and are able to make choices which reflect their aspirations.

3.7. The Committee stresses the need for an environmental policy capable of ensuring in the long term not only a high level of environmental protection but also a viable recycling sector, which does not rely on ongoing financial support for recyclates. From a long-term point of view, packaging waste should be seen as a source of materials or source of energy which could increasingly be utilised in place of certain natural resources currently used as raw materials or fuels; these materials or energy will prove to be competitive when all the environmental costs related to the use of natural resources are taken into account in the price of these resources.

4. Some possible remedies

4.1. In order to find a structural solution to the difficulties arising from the lack of outlets for selectively collected and sorted packaging materials, the Committee proposes drawing up an action plan comprising a number of mutually reinforcing measures designed to encourage the development of recyclate outlets (point 4.3). In tandem with the establishment of this action plan, the Committee would also stress the need to take economic considerations into account in Member States' environment policies as they relate to packaging waste and to give priority to approaches which allow an optimum balance to be struck between economic and environmental factors (point 4.2).

4.2. Seeking an economic/environmental optimum in the management of packaging and packaging waste

4.2.1. Against the backdrop of environmental policy based on the internalisation of environmental costs and in line with the concept of sustainable development the Committee draws attention to the need to carry out an analysis to determine the economic/environmental optimum(7). Cost-effectiveness analyses can be used to combine technologies and management methods (prevention, reuse, recycling, energy recovery) in such a way as to ensure maximum reduction of pollution related to packaging use and packaging waste management, at minimum cost.

4.2.2. Cost-effectiveness analyses would ensure that Member States are better equipped to evaluate and choose the packaging-waste prevention and reduction methods they use to attain the targets set by European legislation. The optimum combination of methods and technology, in terms of cost-effectiveness, essentially depends on the following factors:

- the local features specific to each state, region or even municipality (4.2.2.1);

- economic cyclical fluctuations (4.2.2.2);

- the fact that for each packaging material a recovery method exists which is chosen in accordance with the material's technical characteristics and the state of technology at the time (4.2.2.3).

4.2.2.1. Each Member State, each region - even each locality - has features - including geo-demographic factors, consumer habits, tourist activities, requirements with respect to raw (or secondary raw) materials, fuels - which are more suited to certain recovery methods than to others. It is important to concentrate on such methods, while respecting the environmental standards in place, instead of adopting uniform practices which make it impossible to take advantage of local opportunities. This delegation of responsibilities at local level should be completely transparent for all parties concerned: consumers, and those in the distribution, production and recovery sectors. In view of this, the principle of subsidiarity when selecting the optimum mix of methods for attaining packaging waste recovery targets.

4.2.2.2. Cyclical fluctuations in market values could justify temporarily changing recovery techniques used for a particular material - while continuing to comply with environmental standards - in order to eliminate gluts and avoid excessive fluctuations in market values.

4.2.2.3. There is a technologically preferable method, given the current state of the art, for each type of packaging material. In this connection, a clear distinction must be made between (i) material of non-organic (mineral) origin and (ii) material of organic origin. The non-organic category includes glass, steel and aluminium. Their physico-chemical features allow virtually unlimited recycling, without material loss or risk to health. The same cannot be said of organic materials, these being either cellulose-based (such as paper and cardboard) or synthetic-based (such as plastics, which are for the most part derived from hydrocarbons). Using current technologies, these materials offer limited options for recycling. They suffer loss of quality if they are repeatedly recycled and use of their recyclates may pose health risks. On the other hand, they have a very high calorific value, particularly in the case of plastics derived from hydrocarbons(8) for which energy recovery is an alternative to recycling. Steps should be taken to promote energy recovery of this kind in the same way as recovery methods such as composting or biomethanisation, which are suitable for paper and cardboard and some types of plastics.

4.3. Blueprint for action to develop outlets for waste-packaging recyclates

4.3.1. The Committee proposes establishment of a blueprint for action, reflecting its desire to support and encourage the recycling of packaging waste. The approach needs to be based on participation of all those involved in the chain of production, use and disposal of packaging. And it should take account of the economic constraints faced by these players. The blueprint should comprise:

- greater backing for research, innovation and development of new recovery techniques for packaging waste (4.3.2);

- identification and development of new markets for recyclates (4.3.3);

- introduction of CEN standards for recyclates (4.3.4);

- more responsibility for the various packaging waste sectors (4.3.5);

- development of constructive dialogue with consumers/citizens (4.3.6);

- continual improvement of the EU statistical monitoring system (4.3.7).

The Committee considers that a coercive or repressive approach should be avoided. Instead, action should be taken to encourage incentives - such as tax deductions or consumer reward schemes - for companies affected by the issue of consumer goods packaging and for consumers/citizens.

4.3.2. Greater backing for research, innovation and for development of new recovery techniques for packaging waste

4.3.2.1. It is necessary to optimise the entire packaging process, from packaging design to the recovery of packaging waste. All the relevant players should be involved, particularly universities and collective organisations, so that ideas and aspirations can be acted on and, if need be, desirable and acceptable changes can be made to behavioural patterns. From a socio-economic angle, new methods may generate new jobs, provide genuine added value and help to boost the EU's economic growth.

4.3.2.2. The Committee also proposes that all new technical developments in packaging and packaging materials be subject to a quantitative and qualitative assessment of their effect on the environment, and that every effort be made to ensure that their final disposal is of no risk to current or future generations.

4.3.3. Identification and development of new markets for recyclates

4.3.3.1. The Committee calls for a pro-active policy targeting the identification and development of new markets for recyclates. It proposes:

- development of industrial applications which provide outlets for recyclates to be included in EU-assisted research (Fifth Framework Programme) and new application programmes;

- review of unjustified regulatory criteria which prevent the use of products made from recyclates. In the Committee's opinion it would be helpful to draw up an inventory - covering all Member States - of products for which different regulatory criteria(9) prevent the use of recyclates without justification on health or safety grounds. Subsequently, on the basis of this inventory, the potential outlets for the recyclates should be quantified, and the appropriate standard-setting authorities requested to adapt the relevant standards where this is justified;

- use of products and packaging manufactured from recyclates by all public institutions operating at local, national and Community level, with publication of a certificate issued by a competent agency.

4.3.4. Introduction of CEN standards for recyclates

4.3.4.1. The Committee stresses the need for CEN standards guaranteeing consistent quality in products composed of recycled materials.

4.3.5. More responsibility for the various packaging waste sectors

4.3.5.1. For our purposes, a "sector" comprises raw material producers, manufacturers of packaging material and packaging, their users, recycling firms and intermediate trade. In conjunction with the approaches outlined above, the Committee advocates giving extensive responsibilities in packaging matters to each of the sectors involved, following the lifecycle approach(10) and a general overview which takes into account economic, environmental and health-related aspects. It would then be up to each sector, taking account of its specific characteristics and the technical, ecological and economic options available, to instigate proactive, acceptable prevention and recovery methods in order to attain the objectives set out in the directive, thus avoiding the gluts experienced in periods of economic downturn by local authorities and/or organisations which have set up selective collection and sorting systems.

4.3.6. Development of constructive dialogue with consumers/citizens

4.3.6.1. Constructive dialogue with consumers/citizens is a necessary adjunct to the approaches outlined above, since consumers/citizens share the heavy responsibility of making choices which future generations will not come to regret. Clear, objective information is needed to ensure that these choices can be made with full knowledge of the facts about all the possible packaging waste management options: prevention, reuse, recycling, energy recovery and the associated costs. To this end, an ongoing awareness campaign is necessary, starting with children, so that people are involved from an early age and throughout their lives. Industry, public authorities and the media still appear to have much to do in this field. It is true that the problems surrounding packaging and packaging waste are by no means easy to explain, but consumers/citizens are receiving too many contradictory messages. Consumers/citizens also feel that not enough attention is paid to their views on packaging, which they often deem to be unnecessary and sometimes misleading. Constructive dialogue is the only way to facilitate creative remedies which meet their increasing environmental aspirations. Once again, if this dialogue is to be effective, transparency is essential in the following areas: the price to pay; cost breakdown; market mechanisms; damage to the environment (consumption of natural resources; earth, air and water pollution) including health risks.

4.3.7. Continual improvement of the EU statistical monitoring system

4.3.7.1. In order to improve the quality and comparability of the statistics published by Member States, the Committee recommends that the measuring methods used are indicated or, where appropriate, that new measuring methods are defined. It also recommends the introduction of a databank covering the socio-economic factors associated with the recovery of packaging waste. Using tools, such as the analysis of packaging lifecycles in conjunction with "value-chain" analysis for the different recovery methods, would also make it possible to assess the relative value(11) of the different packaging waste management strategies adopted by the Member States, in terms of both economic and environmental factors. In all of these areas, the European Environment Agency could play a very useful part. Furthermore, in view of the fact that the interpretation of definitions varies between Member States, the Committee suggests that, instead of simply making comparisons between Member States, progress made by each Member State should be measured on the basis of an analysis over time of the impact of their policy on packaging and packaging waste.

5. Conclusions

5.1. Given the benefits ensuing from the implementation of Directive 94/62/EC, the Committee calls for incorporation in European legislation of a pro-active policy on packaging-waste recycling and for ambitious recovery targets for all categories of packaging material without exception. This is essential given that the EU is densely populated - inevitably giving rise to the Nimby ("not in my back yard") syndrome - and is poor in terms of raw materials and energy resources. At the same time, the Committee emphasises that sustainable development requires the adoption of environmental policies aiming to strike a balance between economy and environment. Provided that the targets set in European legislation are met, the Committee proposes that Member States be given a degree of freedom in choosing a combination of methods (prevention, re-use, recycling, energy recovery) which enables them to achieve, at the lowest cost, the objective of preventing or reducing the environmental impact of packaging or packaging waste while complying with current environmental standards. Such standards must act as the common "bottom line".

5.2. The Committee stresses the need to make consumers/citizens aware of the packaging waste issue and to train them, from an early age, to adopt environment-friendly behaviour. It also calls for genuine dialogue between industry, public authorities, the media and consumers/citizens through collective organisations. Such dialogue should be based on partnership and shared responsibility for the environment of future generations.

5.3. Aware of the difficulties currently encountered in relation to the recovery and, in particular, the recycling of packaging waste, the Committee considers it necessary to adopt a pro-active policy based on participation, incorporating all those involved in the chain of production, use and disposal of packaging, and taking account of the economic constraints faced by these players. With this in mind, it proposes that a blueprint be drawn up for the development of outlets for recycled products. This should comprise:

- greater backing for innovation and for development of new recovery techniques for packaging waste;

- identification and development of new markets for recyclates;

- introduction of CEN standards for recyclates;

- more responsibility for the various packaging waste sectors;

- constructive dialogue with consumers/citizens;

- continual improvement of the EU statistical monitoring system.

5.4. All of these suggestions reflect the Committee's desire to see environmental policy on packaging and packaging waste progress towards an ambitious and pro-active approach focusing on prevention and recovery of packaging waste. Such an approach would safeguard sustainable development and would be more firmly anchored in partnership between all those affected.

Brussels, 8 December 1999.

The President

of the Economic and Social Committee

Beatrice RANGONI MACHIAVELLI

(1) We also refer to the ESC Opinion of 24 March 1993 on the Proposal for a Council Directive on packaging and packaging waste which gave the broadest endorsement to the directive in its present form.

(2) Including the primary, secondary and tertiary packaging of consumer goods in so far as they serve a common purpose. In terms of prevention, these three packaging types are often considered collectively. For example, an increase in the weight of primary packaging coupled with a cut in the weight of secondary packaging may result in less weight overall.

(3) These include: government, ordinary citizens, local authorities, manufacturers of packaging materials and packaging, manufacturers and distributors of consumer goods and operators involved both in waste collection and sorting and in recycling.

(4) With regard to "green dot"-type charges, the funding system is designed to incorporate into the price of the packaged product sold to the consumer a fee paid in advance by the product manufacturer or the party responsible for placing the product on the market. Examples of "green dot" schemes include Germany's DSD, Eco Emballages in France and FOST Plus in Belgium.

(5) By environmental benefit, we mean advantages obtained through the reduction of pollution and problems resulting in practice from lack of environmental management.

(6) We would also point out that, although it is generally agreed that all recycling activities are more environmentally sound than other methods of recovery, there is as yet no universally recognised method of verification able to furnish conclusive proof that this is the case.

(7) Compared to cost-benefit analysis, cost-effectiveness analysis is a more recent method which has the advantage of not requiring the quantification of environmental damage and the expression of this damage in monetary terms. These elements of cost-benefit analyses make for very uncertain findings.

(8) This method fits in very well with the lifecycle of plastics: they are generated mainly from a fuel (oil); in a second phase, they are processed into packaging material and, in a final phase, can easily be turned back into fuel. The energy recovery of packaging waste saves non-renewable natural resources, while making it possible to exploit the very major development opportunities and advantages which plastic packaging affords consumers. The strict condition here is that the entire process be carried out in an environmentally sound way, i.e. in compliance with appropriate environmental standards.)

(9) Several innovative recycling procedures have been abandoned due to a lack of outlets for the resulting products, the main reason being standards, often based on custom, which are set out in the specifications but not necessarily justified on safety or hygiene grounds.

(10) From the choice of materials to the methods used to prevent the packaging becoming waste.

(11) This would make it possible for a genuine benchmarking exercise to be carried out, and the cost drivers and best practices to be identified.