EIMPack Economic Impact of the Packaging and Packaging Waste Directive. Literature Review

Transcription

1 EIMPack Economic Impact of the Packaging and Packaging Waste Directive Literature Review June 2011

2 Legal notice This report consists of a study based on existing information from literature. It was prepared as part of the work programme of EIMPack - Economic Impact of the Packaging and Packaging Waste Directive, financed by European Investment Bank. The European Investment Bank or any person or company acting on behalf of the Bank is not responsible for the use that may be made of the information contained in this report. Research team Member list Rui Cunha Marques (Principal Investigator) Carlos Oliveira Cruz (Researcher) Nuno Ferreira da Cruz (Researcher) Pedro Carvalho (Researcher) Pedro Simões (Researcher) Team member Sandra Faria Ferreira (Research grant) Tânia Correia (Research grant) Marta Cabral Pereira (Research grant)

3 Executive Summary Executive Summary The studies conducted to this date and the official figures of Eurostat show that the targets set for the recovery and recycling of packaging waste in the Directive 94/62/EC have been, in general, successfully achieved by the Member States. In fact, in countries that already had national policies for the management packaging waste (encompassing prevention, reuse, recycling and energy recovery) the impact of this European regulation was so much as expected. In 2006, the targets set by the Directive 94/62/EC were considered to be optimal in a report from the Commission (drawing in two commissioned studies). If one reduces environmental benefits to the amount of waste diverted from landfills, then it is valid to state that the Directive has been a remarkable success. However, the literature is still scarce in terms of widening the scope of what constitutes environmental benefits/costs and in providing a comprehensive assessment on the environmental externalities connected with recycling. The study by Pira and Ecolas (2005) estimated that packaging recovery has 4-9% additional costs when compared with a no-recovery scenario and only 3% more when compared with a no-directive scenario. In truth, this does not seem to constitute a high macro-economic impact; however, several problems were identified in terms of the functioning of the internal market (especially regarding beverage containers). The implicit goals of promoting green packaging and eco-design were not achieved to a great extent. Using 1995 has a reference year, waste recycling in the European Union has increased by 18%. Besides, energy recovery has also increased (from 96 kg per capita in 2005 to 120 kg per capita in 2008). With no additional Community legislation, it is expected that, considering the period, waste generation increases around 7%, recycling reaches 49% (in 2008 it was around 40%) and landfilling decreases 10% (stabilising at around 28%). Several producer responsibility systems have been implemented by the Member States (MS) and the Green Dot compliance scheme is the most common in Europe. The industry June 2011 i

4 Executive Summary pays a fee based on the amount and the type of material of the packaging placed in the market. These fees are intended to support selective collection, sorting and recycling of packaging waste, although there is a lack of discussion on whether the industry should cover these costs adopting a purely financial or an economic perspective. Waste management strategies within the European Union should be developed according the so-called waste hierarchy. First, the MS should concentrate on prevention and only then consider reuse, recycling, energy recovery and landfilling as last resort. Although prevention at the source is the only way to decrease the amount of waste, in practice this is very difficult to accomplish, since it also affects the life-cycle of packaged products. To accomplish such goals as reduced material consumption in production, durable design of products, use of low-waste products, green procurement and extending the product life time, a change of paradigm (from waste management to resource management) is required. Despite the many theoretical benefits of reuse, it is a documented fact that the market share of non-reusable packaging is growing. Recycling requires the active participation of households (trade and industry waste recycling does not present so many challenges) so that an efficient sorting of waste can be achieved. Besides, factors like limited land resources or population density influence the cost-efficiency of recycling of packaging waste. Hence, the optimal recycling rates can vary from one country to another. It is however undeniable that higher recycling rates lead to lower refuse collection and treatment costs while reducing energy and natural resources consumption. Incineration (with energy recovery) of packaging waste is also a good alternative to landfilling since it presents lower opportunity and environmental costs. However, incineration must be strictly controlled to avoid harmful air emissions. Some very recent studies have been emphasizing that the inclusion of different waste management solutions should be regarded as an integrated strategy and not as exclusive alternatives. Both the incineration of waste and the recycling of material are necessary to reduce the amounts sent to landfills and their coexistence makes sense from an economic perspective. The incineration of waste does not imply necessarily a decrease in the current recycling rates. Although, in theory, recycling is the most environmentally sound option, it does not allow for the recovery of energy (it actually uses energy in the process). However, waste-to-energy should be seen as an important part of waste management strategies. June 2011 ii

5 Executive Summary The life-cycle of packaging waste involves several steps ranging from its cradle to grave encompassing several environmental and economic impacts. Distinct methodologies to quantify and valuate these impacts were identified in the literature review, for example, Life-Cycle Assessment, Financial and Environmental Life-Cycle Costing and Cost-Benefit Analysis. The integrated waste management, considering the selective collection, incineration with energy recovery, recycling and composting of organic waste, revealed an increase in negligible financial costs compared to the environmental benefits achieved. For instance, Walker et al. (2004) reported that the Nova Scotia solid waste-resource system produced net savings of between 21.5 million and million, comparing with the pre-system almost entirely dependent on landfilling. Perhaps more decisively, Massaruto et al. (2011) claim that the optimal source separation level should be around 50%, being this value regarded as a recycling critical threshold above which the positive externalities no longer outweigh the financial costs. Even though one can find in the literature evidence that the return system for containers can be more efficient in terms of costs for society (even considering high recycling rates; White, 2001), the underlying idea is that the costs and benefits of both reuse and recycling systems have the same order of magnitude. In the last major assessment of the economic and social impacts of the Directive 94/62/EC in the European Union (Pira and Ecolas, 2005) it is indicated that the compliance with the recycling and recovery targets implied an increase of 200 million per year in total costs compared with the previous scenario and that this Directive will hardly cause a significant macro-economic impact. June 2011 iii

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7 Tables of Contents Table of Contents Page EXECUTIVE SUMMARY... I 1. INTRODUCTION EUROPEAN DIRECTIVE 94/62/EC ON PACKAGING AND PACKAGING WASTE CASE-STUDY RESEARCH Germany France Poland The Netherlands Romania UK Spain Portugal TECHNICAL STUDIES Introduction Prevention Reuse Recycling Incineration Composting ECONOMIC STUDIES Introduction Cost-Benefit Analysis (CBA) CONCLUDING REMARKS European Directive 94/62/EC on Packaging and Packaging Waste Case-study Research Technical Studies Economic Studies...96 REFERENCES...99 June 2011 v

8 List of Figures List of Figures Figure 1.1 Packaging waste life-cycle (considering selective collection) Figure 2.1 Packaging waste policy evaluation Figure 3.1 Illustration of materials (orange) and financial (grey) flows in the packaging chain, household stream only Figure 3.2 Responsibility and management of MSW in Portugal Figure 3.3 Recycling and recovery rates of packaging waste Figure 4.1 OEDC working definition on waste minimisation agreed at the Berlin Workshop Figure 5.1 General life-cycle of a product system Figure 5.2 Net costs of waste management costs Figure 5.3 Total costs of waste management options Figure 5.4 Life-cycle costing of the corrugated board boxes Figure 5.5 Life-cycle of paper/cardboard packaging June 2011 vi

9 List of Tables List of Tables Table 2.1 Recycling and recovery targets (Directive 94/62/CE and Directive 2004/12/CE) Table 3.1 Recycling and recovery targets ( ) Table 3.2 Recycling and recovery targets Table 3.3 Desired achievement rates Table 3.4 Proposed business targets Table 3.5 Recycling and recovery targets for Table 3.6 Quantities (tonnes) taken-back, by material and respective targets Table 3.7 MSW produced by waste management options Table 3.8 Packaging waste produced, by material (tons) Table 4.1 Summary of the ranges of optimal recycling rates per MS Table 4.2 Key system boundary assumptions in the LCA of paper and cardboard Table 5.1 Marginal savings of the solid waste-resource management system vs. the pre- Strategy system Table 5.2 Total annual costs of different collection vehicles Table 5.3 Revenue from 100 % of recovered materials Table 5.4 The comparative CBA among various waste treatment options Table 5.5 Private costs estimates for landfilling and incineration ( /tonne)...83 Table 5.6 Environmental costs estimates for landfilling and incineration ( /tonne) June 2011 vii

10 Acronyms Acronyms ALARA As Low As Reasonably Achievable APA Portuguese Environment Agency BAU Business-As-Usual CBA Cost-Benefit Analysis CDL Container Deposit Legislation CFR Code of Federal Regulations DRS Deposit-Refund Systems DSD Duales System Deutschland EEA European Environment Agency EPA Environment Protection Agency EPR Extended Producer Responsibility EU European Union GDP Gross Domestic Product GHG Greenhouse Gas GIS Geographic Information System HSWA Hazardous and Solid Waste Amendments LCA Life-Cycle Assessment LCC Life-Cycle Costing MEMSW Management Entity of Municipal Solid Waste MEWM Ministry of Environment and Water Management MI Market-Incentive MS Member States MSW Municipal Solid Waste June 2011 viii

11 Acronyms NEPA National Environmental Protection Agency NWMP National Waste Management Plan NWMS National Waste Management Strategy NUWP National Urban Waste Plan PEI Packaging Environment Indicator PERN Packaging Waste Export Recovery Note PERSU Strategic Plan for Municipal Solid Waste Management PET Polyethylene Terephthalate PPW Packaging and Packaging Waste PRN Packaging Waste Recovery Note PRO Producer Responsibility Organisation RCRA Resource Conservation and Recovery Act RWMP Regional Waste Management Plans SEA Strategic Environmental Assessment SIG Integrated Management System SIGRE Integrated System for the Management of Packaging Waste SMAUT Systems for Municipal Solid Waste Recovery and Treatment SPV Sociedade Ponto Verde (Green Dot Company) SSL Source Separation Level UK United Kingdom URW Unsorted Residual Waste US United States UCTS Upstream Combination Tax/Subsidy WEEE Waste of Electrical and Electronic Equipment WKC Waste Kuznets Curves WRAP Waste & Resources Action Programme WtE Waste to Energy June 2011 ix

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13 1. Introduction 1. Introduction Packaging is any product used to contain, protect, move, handle, deliver and present goods, both raw material and processed products from the producer to the user or consumer, including all "disposable" items used for the same purposes. It can be made of various materials, such as plastic, cardboard, glass, metal or wood. When it reaches end-of-life, packaging becomes waste that must be treated properly. For glass containers, given the material specific features (hygienic, versatile, non-absorbent, inert and high recyclability), the reuse option could be preferable from an environmental standpoint followed by recycling when its returnable cycle finishes. For the case of plastic packaging, the best treatment option is recycling. However, plastic is a material with high calorific value for incineration, being advantageous in terms of energy production. From an environmental perspective, the recycling of packaging (when reuse is not a feasible option) is almost always the preferable treatment option because it allows for the production of secondary raw materials, reducing the consumption of primary raw materials as well as the amount of waste incinerated and/or landfilled with the consequent production of gaseous emissions and leachate. However, from an economic perspective, this treatment option is not necessarily the best for all circumstances. Figure 1.1 presents a general outline of the possible strategies of routing and treatment of the various types of packaging. The packaging waste that is usually sent for recycling can have three different origins: the selective collection and sorting done at the composting and incineration (metal) facilities. The selective collection can be performed by bring systems (drop-off containers), kerbside (door-to-door) and/or drop-off centres and it counts on the participation of citizens/consumers and on their environmental awareness as key aspects to ensure its success. June

14 1. Introduction Bring system Kerbside Drop-off centre Sorting station Transfer station Composting Incineration Recycling Landfilling Main option Alternative options Costs to determine Figure 1.1 Packaging waste life-cycle (considering selective collection). Generally, the environment and economy face opposite directions. However, more research and development studies and waste management policies are emerging in an attempt to develop more environmentally-friendly, economic and even socially favourable management strategies. Therefore, it is important to understand how costs associated with the life-cycle of waste, in particular packaging waste, are distributed. The main goal of the EIMPack Project is to evaluate the economic impacts resulting from the implementation of Directive 94/62/EC on packaging and packaging waste, assessing whether the current state of affairs is satisfactory when compared with alternative strategies or if it is advisable to make a revision of the targets imposed to the Member States (MS). Bearing this in mind, the proposed work plan includes the following: June

15 1. Introduction Investigation on how the extra-costs are distributed among stakeholders and through the whole life-cycle of packaging waste; Determination of the economic rate of return of environmental protection through a cost-benefit analysis. In this first phase of the project, a literature review was conducted, focusing essentially on legislation issues at national and international levels and presenting some case-studies. Technical aspects related to the various options for packaging waste collection and processing are also presented. At this stage, the research team tried to realize where the literature stands in terms of understanding what the optimal recycling rates are, considering all the impacts of recycling and its alternatives and all the associated costs, including fees, eco-values, etc. Finally, the economic studies have primarily focused on the life-cycle of packaging waste and on the methodologies for the environmental quantification and valuation, as well as on cost-benefit analysis related to the end-of-life of waste, in general, and packaging, in particular. June

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17 2. European Directive 94/62/EC on Packaging and Packaging Waste 2. European Directive 94/62/EC on Packaging and Packaging Waste The proposal for a Directive on containers of liquids for human consumption was presented in 1975 with the aim of promoting the use of refill packaging. The objective was to encourage the adoption of measures to reduce the environmental impact of used packaging, reduce energy consumption and preserve raw materials. The MS would be compelled to develop programmes envisaging the reduction of packaging waste and the increase of the share of refillable and/or recyclable packaging in household waste (Eichstadt et al., 2000). In the 80s some MS started to realise that due to the running out of landfill space and to the political and social opposition to new incinerators, packaging waste was a national problem. Germany, the Netherlands, Denmark and Belgium initiated political processes with respect to the packaging waste problem; the so called Danish Bottle Case and the German Packing Ordinance had special importance in this context (Eichstadt et al., 2000) and were regarded as some of the key factors to drive the development of the European Packaging Directive. The Directive 85/339/EEC, adopted in 1985, was concerned only with liquid beverage containers for human consumption. It only required the MS to promote selective collection, recovery and educate consumers. This Directive failed to achieve a desired degree of harmonisation, since it allowed for the use of mandatory measures to promote refilling or recycling at a national level, and failed to attenuate the trade effects of differing national recycling schemes (Eichstadt et al., 2000). In 1977, the marketing of soft drinks in one way bottles and cans was prohibited in Denmark. The commission attempted to motivate the Danish government to adapt its regulation to the requirements of a single market; however, By mid-1979 the Commission had not yet decided whether it considered the Danish regulation as a justified unilateral action to protect the environment or as a violation of the duty to avoid trade restrictions, June

18 2. European Directive 94/62/EC on Packaging and Packaging Waste (Eichstadt et al., 2000: 5). In 1980, Denmark allowed the market of beer and soft drinks only in licensed refillable containers. Foreign producers of beverage and packaging and trade groups outside Denmark protested to the Commission arguing that the ban protected the Danish beverage internal market. Furthermore, the Danish beverage producers were allowed to fill cans and sell them in the territories of other MS. In 1984 the Danish government allowed foreign producers and importers to sell beverages up to a maximum quantity in non-licensed containers with their own deposit and collection systems (Gehring, 1997). Afterwards, the European Court of Justice decided that the Danish regulation was incompatible with the principle of free movement of goods but, as the MS were allowed to conduct their own environmental policy, it was accepted (Gehring, 1997). In 1994, the Directive 94/62/CE on Packaging and Packaging Waste (PPW) was adopted under article 100A of the Treaty of Rome, which means that, legally speaking, it is a harmonisation Directive and not an environmental Directive (Bongaerts and Kemp, 2000). The PPW Directive has three main drives that gather environmental as well as single market goals (Bongaerts and Kemp, 2000): (1) reduce the impact of packaging and packaging waste on the environment; (2) harmonise national legislation on packaging and packaging waste in order to prevent barriers to trade and market distortions; (3) ensure free movement of packaged goods. Directive 94/62/EC required that, by 2001, each MS had to: Recover 50% of packaging waste (with maximum 65%); Recycle 25% of packaging waste (with maximum 45%); Recycle at least 15% by weight of each individual packaging material. In 2004, Directive 2004/12/EC came into force in order to update Directive 94/62/ EC and redefine targets for packaging and packaging waste recovery and recycling for The targets were to recover a minimum of 60% by weight of packaging waste, and to recycle 60% by weight of metals, 22.5% by weight of plastics and 15% by weight of wood (the global target for recycling was 55%, with a maximum of 80%). June

19 2. European Directive 94/62/EC on Packaging and Packaging Waste Table 2.1 Recycling and recovery targets (Directive 94/62/CE and Directive 2004/12/CE). Directive 94/62/CE Directive 2004/12/CE Deadline Recovery Global Glass Recycling Paper/ Cardboard Metals Plastic Wood 31/12/ % 25% 15% 15% 15% 15% 31/12/ % 55% 60% 60% 50% 22,5% 15% The Directive laid down a hierarchy for packaging waste management strategies but failed to put in place a framework resulting in an adjustment of the packaging waste management systems in several MS, becoming an internal market directive rather than an environmental directive (Bongaerts and Kemp, 2000). More than shifting towards more radical strategies, the underlying idea of the PPW Directive was to start a learning process, founded on periodic assessments of the results attained and, at first, relying on the solutions already in place in some MS (regarding selective collection, sorting, etc.). Bongaerts and Kemp (2000) described the implementation of the PPW Directive in France, Germany and Finland concerning requirements and policy principles. Also the technological results were described in terms of recovery, recycling and reuse. The methodology used was a comparison of the application of the PPW Directive in these three countries on some aspects such as: the legal implementation, the similarities between the PPW Directive and national regulations; recycling rates for packaging waste and technological outcomes. It was concluded that (page 39): ( ) the Directive should not be evaluated on the basis of the costs incurred and benefits achieved but on the basis of promoting the best trajectory for packaging and best trajectory for packaging waste management, accepting that what is the right strategy differs with the point of view taken and may differ among MS and even within MS. It seemed that the Directive did not promote the best trajectory for packaging waste from an environmental point of view and did not have a significant impact on recycling and recovery. The Directive did not lead to some desirable outcomes such as (Bongaerts and Kemp, 2000): a reversal of the trend towards one-way packaging ; a reduction in packaging volumes; encouraging more green packaging materials; promoting the design of packages for better reuse and recycling. June

20 2. European Directive 94/62/EC on Packaging and Packaging Waste When compared with the EU Legislation, the United States (US) rules on recycling differ by not existing at a federal level (the issue is handled at a state and local government level). The Resource Conservation and Recovery Act (commonly referred to as RCRA) was the US primary law governing the disposal of solid and hazardous waste (Vogel et al., 2010). The Congress passed the RCRA in 1976 to address the increasing problems that the US faced regarding the growing volume of waste (both from municipal and industrial circuits). The RCRA, which amended the Solid Waste Disposal Act (from 1965), set national objectives for (USEPA, 2011): protecting human health and the environment from the potential hazards of waste disposal; conserving energy and natural resources; reducing the amount of waste generated; ensuring that the waste is managed in an environmentally-sound manner. To accomplish the proposed objectives, the RCRA established three interconnected programs among which the solid waste program encourages states to develop wide-ranging plans to (USEPA, 2011): Manage nonhazardous industrial solid waste and municipal solid waste (MSW); Set criteria for MSW landfills and other solid waste disposal facilities; Prohibit the open dumping of solid waste; Enforce source reduction and recycling; Promote the safe disposal of MSW. The RCRA was amended by the Congress in 1984 with the passing of the Federal Hazardous and Solid Waste Amendments (USEPA, 2011). After this, the RCRA has been amended on two other occasions: The Federal Facility Compliance Act of 1992, (reinforced the RCRA at Federal facilities); and the Land Disposal Program Flexibility Act of 1996 (provided regulatory flexibility for land disposal of certain types of waste). The RCRA provides the general guidelines for waste management in the US; it includes a Congressional mandate directing the Environment Protection Agency (EPA) to develop a set of guidelines to implement the law. These guidelines, translate the general mandate of the law into a set of requirements for EPA and the regulated community. The regulations are published in the Federal Register and EPA may revise the proposed rule based on both internal review and public comments (USEPA, 2011). All final rules are assembled annually and incorporated into the Code of Federal Regulations (a comprehensive collection of all federal regulations enforced by all federal agencies). In 2007, US citizens generated 760 kg (per capita) of waste (the French 540 kg, the British 570 kg, and the German 580 kg, OECD, 2010). State and local governments have implemented several policy mechanisms to reduce MSW (including packaging waste), for June

21 2. European Directive 94/62/EC on Packaging and Packaging Waste instance (Vogel et al., 2010): deposit-refund schemes, minimum recycling content requirements, community recycling programmes, and disposal bans. Several states have developed deposit-refund systems to promote the recycling of beverage packaging. The state of Oregon (US) passed the first bottle bill requiring refundable deposits on all beer and soft-drink containers in 1971 (however, it was primarily intended to mitigate littering rather than to encourage recycling). In another example, the City of Columbia, Missouri (US), passed a bottle bill in 1977 and it became the first local container-deposit regulation in the US (remaining the only local initiative until 2002, Vogel et al., 2010). To avoid landfills and incinerators, several states and local governments have developed recycling programmes enabling the recycling of various materials. Such programmes remain exclusively at a state and local levels because national laws do not allow EPA to establish federal regulations on recycling (Vogel et al., 2010). To facilitate recycling, a few number states banned packaging that is particularly difficult to recycle, such as aseptic drink boxes, which are made of paper, foil, and plastic layers that are difficult to separate (this was the case of Maine); furthermore, in Connecticut, a similar process occurred with plastic cans. According to Vogel et al. (2010: 18), in 1991, President George Bush issued an Executive Order to increase the level of recycling and procurement of recycled-content products. Afterwards, in 1993, President Bill Clinton ordered federal agencies to purchase paper products with at least 20% (increased to 30% in 1998) post-consumer fibre and requested EPA to create a list of environmentally-sound products. Between 1989 and 2007, several attempts to pass a nationwide law regarding the recycling of beverage packaging were ultimately unsuccessful. In the US, the dynamics of the regulation of packaging waste are quite different from Europe (Vogel et al., 2010); first and foremost, the federal government has no major role in setting recycling or recovery standards (nonetheless, the actions of the federal government have not prevented state or local governments of pursuing their own strategies). There has been innovation at the state level and ambitious programmes to reduce and recycle packaging waste have been developed. Even though the US has been a source of policy innovation in several fields, there is no significant policy diffusion in the specific case of packaging waste recovery and recycling. Conversely, in the EU, the dynamics of the interaction between the MS and the community authorities has become much more palpable. Three factors are responsible for this: two of them are structural and one is political (Vogel et al., 2010): June

22 2. European Directive 94/62/EC on Packaging and Packaging Waste (1) In the EU, the MS play a direct role in the policy-making process through their representation in the Council of Ministers (this provides leverage to the MS to shape EU policies indeed, many European environmental standards have their origin at the national level); in the US, states are not formally represented in the federal government (e.g., the senators and representatives from a US state enjoy less influence over national legislation than does a MS representative in the Council of Ministers). (2) The European single market is more recent and its institutions are still more fragile than in the US, where the federal government has a real supremacy over interstate commerce since the adoption of the US. Constitution (i.e., the EU seems more sensitive to the effects of different strategies on its internal market than the US federal government); the US federal government seems to be indifferent to the great disparities in state or local packaging waste regulations (only regulations restricting imports of hazardous waste have been challenged by federal authorities, Stone,1990). (3) The impact of the green constituencies in the European Parliament contrasts with the fact that after the Republican Party s capture of both chambers of Congress in 1994 (followed by the two-term Republican presidency starting), relatively few strict environmental rules were adopted. In short, while the US federal government exercises far more extensive authority than the EU in any sector, the EU environmental policy is now more centralised (Vogel et al., 2010). In the past few years various studies were made to perform an ex post examination of the impact of the PPW Directive in the MS. Bongaerts and Kemp (2000) described the implementation of the PPW in terms of requirements and policy principles. Moreover the technological results are described in terms of recovery, recycling and reuse. Costs of compliance are mentioned in Perchard et al. (2005), EEA (2005), Pira and Ecolas (2005), ARGUS (2001) and Cagnot et al. (2000). The environmental, economic and social impacts are described in Pira and Ecolas (2005) and the internal market aspects of the Directive in Perchard et al. (2005). The European Environment Agency also prepared a pilot study on the effectiveness of packaging waste management systems in selected countries (EEA, 2005). June

23 2. European Directive 94/62/EC on Packaging and Packaging Waste The report by ARGUS (2001) had the objective of providing an overview over the different management systems (in operation) in each MS, identifying the management, technical and economic problems involved in packaging waste management systems, and to drawing up scenarios for each MS for the years 2006 and Based on available information, for each MS, two scenarios were developed for 2006 and The objectives of the scenarios consisted in analysing the viability of the established systems, meeting higher recovery targets and identifying the problems that could arise in terms of collection, sorting, recovery capacities and marketing of the secondary raw materials. The general approaches and the systems implemented in each MS differed widely in the scope and extent of preventive measures and reuse systems and in the scope of the mandatory global recycling targets and specific targets (according to the packaging material) and the extent of the producer responsibility. Nevertheless, the PPW Directive has had positive effects in promoting the development of selective collection. The Directive has also provided a considerable incentive to research and to technical innovation in sorting and recycling and has brought an important contribution to the citizen s awareness of the environmental dimension of waste, contributing to increase public participation in waste management. The report by ARGUS (2001) argued that an increase of the initial targets of the PPW Directive was possible from a technical point of view and several MS already had achieved recycling rates higher than the 2001 EU targets. At that time, the authors stated that the growth of packaging generation meant that recycling targets would have to be increased or prevention/reuse targets would have to be introduced in order to maintain the level of packaging waste to be disposed of in landfills. In most of the MS, the challenge was to improve the quality and extent of packaging waste collection since they influence the effectiveness (and efficiency) of the systems. The prevention and reuse of packaging (and the respective definitions) still require further attention on the legislative framework for the management of packaging waste. Pira and Ecolas (2005) made an evaluation of the impact of the Directive in the EU-15, from an environmental, economic and social perspective. A Life-Cycle Assessment (LCA) approach was used to assess the environmental impacts. Three scenarios were analysed: no recycling and no recovery (scenario 1), recycling and recovery rates in the absence of the Directive (scenario 2) and the current situation with the Packaging and Packaging Waste Directive in place (scenario 3). For scenario 1 (no recovery) the percentage of MSW sent to landfill or incineration with energy recovery was the same as used in RDC June

24 2. European Directive 94/62/EC on Packaging and Packaging Waste and Pira (2003) determined through consultation with a network of companies, the data was from the year For scenarios 2 and 3, recovery and recycling rates were estimated for the period The systems studied consisted in household kerbside collection of aluminium, steel, PET bottle waste; household bring scheme for glass; industrial collection for corrugated board and PE film. From an economic perspective the categories studied for each scenario were: The changes in compliance costs (investment costs, operating costs, administrative costs, administrative burden to companies, implementation costs for public authorities); Changes in output; Impact on the internal market (changes in the market shares and trade patterns) Impacts on innovation and technological development; Economic cohesion. For the systems studied in Pira and Ecolas (2005), the majority revealed that the environmental impacts have reduced with packaging recovery and recycling. Nonetheless (page I), only a small part of packaging recovery and recycling is directly related to the effects of the PPW Directive. Indeed, in some MS the national policy measures in place before the Directive guaranteed at least the same recovery and recycling rates. According to the study (page III), packaging recovery only causes around 4-9% of additional costs compared to no recovery and around 3% compared to a likely scenario in the absence of the PPW Directive (results valid for the period 1997 and 2001). A complementary report was developed by Perchard et al. (2005) with the objective of answering some questions related to the impact of the directive on the internal market from an economic and social point of view (especially the reuse systems and to compare existing packaging and packaging waste management arrangements with those that might have happened without the PPW Directive). It also discussed the impacts of national measures in distinguishing between domestic producers and importers of packaging, the costs of producer responsibility imposed in some MS and the costs and benefits of producer responsibility from an internal market perspective. The study was based on the legislative situation that existed in the EU on In most aspects, the Directive has reached its goals. The measures that aimed at managing beverage containers have undoubtedly resulted in discrimination between domestic producers and importers of packaging, but little evidence of this outside the beverage sector can be seen (Perchard et al., 2005). However, the authors go on by stating that there are serious internal market June

25 Cost-effectiveness Effectiveness Institutional analysis Task 2 Literature Review 2. European Directive 94/62/EC on Packaging and Packaging Waste issues regarding beverage containers legislation. The industry is very concerned about the fact that the increasing tendency to use taxation to steer packaging waste policy has a serious potential to hinder the internal market and requested the Commission to reexamine the taxes that have been introduced, to determine whether these measures were truly justified. Nevertheless, the Commission says that the MS do not have to justify setting taxes at a particular level (Perchard et al., 2005). The European Environmental Agency (EEA) has conducted a pilot study in 2005 (EEA, 2005) regarding the effectiveness of packaging waste management systems in five EU MS making an ex-post policy effectiveness evaluation (in terms of their contribution to fulfilling the environmental objectives specified in the Directive and national targets) and assessing the progress in this policy area for the period 1997 to This study evaluates the effectiveness of packaging waste management systems in Austria, Denmark, Ireland, Italy and the United Kingdom (UK). The reporting on environmental measures is a comprehensive framework for approaching such evaluations. In the case of packaging waste policy evaluation, a restricted version of this framework was used and applied to each MS (Figure 2.1). The study does not include an analysis of wider environmental impacts. The data used was the Directive's quantitative reporting requirements. Directives and regulations Objectives Indicator of system functioning Design and implementation of system Inputs Indicator of implemented measures Schemes, taxes Measures Indicators of costeffectiveness Indicators of effectiveness Quantities recycled + recovered Outcomes Source: adapted of EEA (2005) Figure 2.1 Packaging waste policy evaluation. June

26 2. European Directive 94/62/EC on Packaging and Packaging Waste For each of the five selected MS the analysis covered the following (EEA, 2005): The objectives of the packaging waste management system (Directives and regulations); The inputs (resources for developing and putting measures in place); The measures and the outcomes (e.g. quantities recycled); The institutional and administrative arrangements in place to implement and administer the system; The distribution of responsibilities among the relevant organisations, legal and administrative measures. The effectiveness and the outcomes were measured in terms of quantities of generated, recovered or recycled packaging waste (EEA, 2005). Although the Directive does not focus on prevention, this issue was analysed for each MS. This study used expenditure on packaging waste systems to estimate costs (expenditure and costs may differ expenditure is closer to private and public investment, costs refer to all direct and indirect costs, shadow prices and opportunity costs associated, EEA, 2005). Net overall cost (financing needs minus alternative disposal costs not-incurred) could to be more relevant to measure the real costs of achieving the targets. It is concluded that, in general, economic instruments are efficient and entail a relatively low cost. Four out of five investigated MS have chosen a system that makes producers responsible. As a whole, the systems include a number of measures to improve recovery and recycling, however efforts on prevention of packaging waste are not usually incorporated. The GHK (2006) report examined costs of compliance due to the PPW Directive with the objective of providing ex post estimates of net costs of the Directive to the sector. In terms of cost, the impact is comparatively modest in total but it is increasing on a yearly basis, especially in countries where packaging recycling systems were less d eveloped in the early 90s. The annual net extra cost of the additional recycling attributed to the Directive in Perchard et al. (2005) evaluation was estimated to be 227 million, in 2001 (GHK, 2006). The way it has been passed on to consumers and the extent to which this cost is distributed across the packaging waste logistic chain, municipalities and other actors varies among the MS. The Directive was written to protect the integrity of the EU internal market derived from the packaging and recycling laws and systems being established by individual MS. However, the study of GHK (2006) mentions several concerns, especially regarding the reliability of data: when legislation is applied for the first time there can be significant problems with June

27 2. European Directive 94/62/EC on Packaging and Packaging Waste data availability, reliability and consistency; at a national level, comparison within time series may not be valid and estimates of cost-effectiveness may be affected; the impacts of other policy instruments working in the same area as the measure under evaluation need to be considered and stripped out; the freedom given to the MS in determining how to achieve the targets implies that the actual costs of implementing the Directive cannot be predicted with confidence, before knowing in detail what mechanisms individual MS intend to adopt; models based around a typical European recycling model are difficult to construct due to the wide variation in recycling and counterfactual disposal costs along the EU and because there is no reliable data from the early 90s; the internal market aspects of the Directive define rules that prevent costs to business arising by removing barriers to trade, and preventing new barriers from being set. The report from the European Commission (COM, 2006) made an ex-post assessment of environmental, economic, social and internal market aspects of the Directive and an evaluation of the need for additional measures for the prevention and recycling of packaging waste and the free circulation of packaging in the internal market. To prepare this report, two studies that have been mentioned before, were commissioned: (Pira and Ecolas, 2005 and Perchards, 2005). In this report, the commission considered that the targets contained in the PPW Directive were optimal and should remain equal to give the opportunity to all MS to achieve them. It was concluded that prevention can be promoted through incorporating in the waste framework legislation an obligation for the MS to develop waste prevention programmes. The application of measures should be adapted to consumption and distribution patterns. The Directive (particularly in the beverage sector) has not achieved its internal market objective. This is partly due to incorrect implementation of the provisions of the Packaging Directive, but also due to the increasing number of unilateral measures leading to a partitioned market (COM, 2006: 10). There was an objective of the Commission to evaluate the need for action that could be taken on the EU level to avoid constraints regarding the internal market in the future. Progress towards the proper enforcement of the essential requirements and harmonised definitions and reporting procedures across MS will further contribute to the creation of a level playing field for all economic operators (COM, 2006: 10) The Commission intended to include an assessment of the progress made by the MS in preventing, recycling and recovering waste in the 2010 review of the Thematic Strategy on the prevention and recycling of waste. June

28 2. European Directive 94/62/EC on Packaging and Packaging Waste In COM (2011) a review of the progress towards the achievement of the objectives defined in the Thematic Strategy on the Prevention and Recycling of Waste was carried out. This strategy was adopted in 2005 by the EU and its main objective is for the EU to become a recycling society that seeks to avoid waste and uses waste as a resource. The Strategy identified seven key actions to achieve its objectives (COM, 2011): Implementation and enforcement of existing EU waste legislation; Simplification and modernisation; Introducing life-cycle thinking in waste policy; Waste prevention; Improving the knowledge base; Development of recycling standards; Further elaboration of the EU's recycling policy. On the Development of recycling standards a document on the best available techniques for the Waste Treatment Industries (published in 2006) is mentioned in the European Commission (2006). As stated in COM (2011: 5) in 2008, the revised Waste Framework Directive introduced a 50% target for recycling of municipal waste, comprising at least paper, metal, plastic and glass; and a 70% target for construction and demolition waste (both to be met by 2020). By progressively diverting certain wastes from landfills, the implementation of the Landfill Directive helped promoting the recovery of resources from waste. COM (2011) presents an assessment of the progress made on the achievement of the long term objectives of the strategy. The main conclusions achieved were that waste recycling in the EU has increased in 2008, 5% compared to 2005 and 18 % compared to Energy recovery from waste has also increased (from 96 kg per capita, in 2005, to 102kg, in 2008). Moreover, around 1.3% of the EU-27 total energy production comes from incineration of urban waste. COM (2011) showed that recycling can provide new economic opportunities. Indeed, scrap contributes between 40% and 56% of input into EU bulk metal production and waste management and recycling provides between 1.2 and 1.5 million jobs. The illegal export of waste is an on-going problem difficult to quantify. Nevertheless, since countries are implementing regulation on this matter, things may improve to achieve EU goals. Future trends are also explored in COM (2001: 8): Without additional waste prevention policies, waste generation is expected to increase by up to 7% from 2008 to ; With full implementation of existing waste acquis, recycling would increase from 40% in 2008 to 49% in Landfilling would decrease by 10% and stabilise at 28%. More prevention and recycling could lead to additional significant benefits as expected in the Landfill Directive. Further implementation of EU waste June

29 2. European Directive 94/62/EC on Packaging and Packaging Waste legislation and increased prevention and recycling could lead to additional greenhouse gas emission reduction. Recycling is expected to continue to offer economic opportunities whilst contributing to the resource efficiency of the EU economy and job creation in the waste recycling market can amount up to half a million jobs (COM, 2011). Compliance with EU targets on waste collection, recycling and landfill diversion will remain a priority and some MS will have to make serious efforts to meet those EU targets. The main conclusions achieved were that (COM, 2011: 9): Continuous efforts are needed to improve the knowledge-base: new indicators are needed to measure progress towards a recycling society and to map waste and material streams and resource flows ; Improving the competiveness of EU recycling industries is essential for the generation of jobs in the EU ; Waste policies can help develop the markets of secondary raw materials ; New market mechanisms favouring secondary raw materials should be explored ; Materials having negative environment and health impacts over their entire life cycle, including on energy use and climate change should be better targeted ; Continuous efforts will be achieved to improve stakeholder participation and raising public awareness. The notion of Producer Responsibility appeared in the Rio Earth Summit in The underlying idea is to protect the environment by looking to the producers, in this case, of packaged products, and make them responsible for the disposal or recovery of the resulting waste. In OECD (2005), a framework for assessing the costs and benefits of Extended Producer Responsibility (EPR) is suggested. As it was already suggested, EPR is an environmental policy approach under which the responsibility of producers for their products is extended to include the social costs of waste management (including the environmental impacts of waste disposal). This study highlighted the importance of the evaluation of such programs. The evaluation can improve the performance of policy instruments and the communication among the stakeholders and the public about the aim, implementation and effects of the policy. The methodology suggested in OECD (2005) is designed to be applied to EPR programmes characterised by obligations on the producer concerning the collection ( take-back ) of packaging waste or end-of-life products (being the producers the ones bearing the financial responsibility for the costs of their waste management). June

30 2. European Directive 94/62/EC on Packaging and Packaging Waste There is a large variety of different types of producer responsibility legislation and schemes in the EU. For industrial packaging waste, industry itself or producer responsibility schemes normally operate and cover the costs of collection of packaging waste. This is also the case for household packaging waste in some MS such as Germany or Austria. In many other MS, the operation of the collection schemes is mainly the responsibility of municipalities which are financially supported by producer responsibility schemes to a varying degree (Pira and Ecolas, 2005: viii). Some advantages of using producer responsibility schemes are shifting waste management costs from the public sector back to the private sector and encouraging the consideration of life-cycle impacts in the design phase. Obviously, the producers can pass the responsibility to the consumer through increasing product prices. The main differences in the implementation of the concept of producer responsibility across MS lie on the financial responsibility for packaging used by households. It ranges from covering the costs for recovery of glass and paper-cardboard only, to systems where the industry is supporting the costs of collection, sorting, recycling/recovery for all municipal packaging waste. The coverage of costs between private actors (compliance scheme) and public sector (municipalities) is mainly a result of the balance of power between these actors. (ARGUS, 2001: iv). June

31 3. Case-study Research 3. Case-study Research 3.1 Germany The PPW Directive was transposed to the Germany national legislation through the amendment of the Packaging Ordinance in The Duales System Deutschland (DSD) had the objective of organising the recycling system and was founded in September 1990, about 9 months before the Packaging Ordinance came into force (Eichstadt et al., 2000). The DSD assumed the responsibility for the selective collection and recycling of packaging waste substituting the take-back obligations of retailers. The DSD collects licence fees from fillers and, in return, the fillers receive the right to print a green dot on their packaging. The collection activities are carried out by either private or public local waste management companies. Glass and paper are collected separately, while plastics, compounds, aluminium and tin-plate, the so-called light-weight fraction, are collected together. For plastic and certain other compounds, further subsidies are necessary to make recycling economically viable (Eichstadt and Kahlenborn, 2000). The Packaging Ordinance obliges packaging producers to ensure that the collected packaging waste is recycled. Private and public waste operators working for the DSD benefited significantly from this legislation, as the collection and sorting of the dual system guaranteed substantial economic growth. The Packaging Ordinance was the first step towards the privatisation of the traditionally municipally-run household waste sector (Eichstadt and Kahlenborn, 2000). The DSD framework was challenged with several problems during its initial stages. The capacity for the recycling of plastic packaging waste, the contracting of collection and separation and the free riding among fillers was common (Eichstadt and Kahlenborn, 2000). The fulfilment of collection quotas was another problem and high subsidies were necessary to make plastic recycling economically viable. Due to DSD s economic struggles, in October 1993, the fees were raised. As reported by Eichstadt and Kahlenborn (2000: 31) the new licence fees were based on weight instead of volume and June

32 3. Case-study Research were dependent on the recyclability of the material. The German Packaging Ordinance was enacted before the PPW Directive and contained more severe requirements. Consequently the Directive did not have a major influence on packaging recycling in this country. A report in the framework of the OECD Project on EPR started in 1995 by focusing on the analysis of the economic efficiency and environmental effectiveness of various approaches to EPR (OECD, 1998). At that date, two case-studies have been analysed: the Dutch Packaging Covenant and the German Packaging Ordinance. These two cases had distinct features, for instance, the Dutch system relied on a negotiated agreement while the German system was compulsory. Both approaches were carefully evaluated, providing a good basis for comparison. The Packaging Ordinance made Germany the first country to introduce binding requirements for the recycling and recovery of packaging waste (OECD, 1998). This report investigated the economic aspects and environmental impacts of the German innovative legislation (at that time). The German experience therefore provides valuable information. The report analysed problems and benefits experienced while implementing a Producer Responsibility Organisation (PRO), using the Green Dot System and assessed of the economic and environmental impacts of the Ordinance. The problems detected were related to implementation, namely (OECD, 1998): Free riders (waste without Green Dot licenses entering the DSD system); Identifying responsible parties (extensive discussions on the responsibilities of each player were undertaken); Double payment for waste management services under PRO schemes (duplication of collection services); The PRO as a monopoly (the Green Dot system has been criticised for having created profitable waste management monopolies, at the expense of consumers); Misinterpretation of the Green Dot Symbol (the Green Dot could be confused by consumers as being a sign of green packaging); Ownership of the material (i.e. the ownership of the packaging waste corresponds to the ownership of the bin/container were it was deposited?); Public participation and information (creating an environmentally aware public is essential). Bailey (2002) examined the economic benefits of environmental taxes and other marketbased mechanisms based on studies of the PPW Directive, highlighting the importance of market mechanisms for the environmental policy. The focus was the use of economic instruments in Britain and Germany. The importance of market-based mechanisms for environmental policy was reaffirmed by the author. Although increased recycling in Britain and Germany cannot be attributed directly to economic instruments, it seems that the June

33 3. Case-study Research investment in recycling infrastructure has developed as a consequence of those instruments. The study has pointed out that incentive market-based mechanisms are constrained by demand price inelasticity (Bailey, 2002). The Green Dot did not have an impact on consumption and the absence of pressures in the system has induced economic inefficiencies. By contrast, Britain has increased recycling at a significanty lower relative cost by adopting market-based pricing (Bailey, 2002: 250). Overall, there was an increase of recycling rates after the implementation of the Packaging Ordinance (FEA, 2000 and Bailey, 2002). The packaging ordinance was amended on January 1, 2009 (5 th amendment) and this change put an end to the obligation of marking packaging participating in a household collection system such as the one implemented by DSD (PRO, 2009). The trade mark Der Grüne Punkt on packaging is legally no longer necessary (but still recommendable). DSD has changed its arrangement from a licensing contract (the use of the trademark and participation in the packaging recovery organisation of DSD) to a modular arrangement. Separate and independent contracts are offered for the isolated use of the Green Dot logo and for services rendered as a packaging recovery organisation. The new trademark arrangement gives the packer the right to use the trademark on sales packaging circulated in Germany, for the payment of a license fee based on tonnage. The option of using the trade mark with an affix Not valid in Germany without such payment is no longer possible. All use of the Green Dot trademark on packaging in this country has to be covered by a valid trade mark contract with DSD (PRO, 2009). BOX 1 Germany Legislation Packaging Ordinance of 1991, amended in 2009 Green Dot System Dual System Deutchland Waste generation per capita (Kg) Deposit onto or into land per capita (Kg) Incineration per capita (Kg) Packaging Waste per capita (Kg) ,6 195,8 195,9 195,4 PWW Directive target for 2008 (%) Recovery rate (%) 86, ,4 94,7 94,8 60 Recycling rate (%) 69,6 68,2 66,5 66,9 70,5 55 Paper/Cardboard (%) 82,7 82,1 80,2 80,2 87,7 60 Glass (%) 81,5 82,6 82,4 83,7 82,2 60 Plastic (%) 44,4 39,1 41,3 42,7 47,3 22,5 Metals (%) 82,6 84,5 88,8 89,5 91,7 50 Wood (%) 34,5 34,5 30,0 30,2 28,8 15 Source: Eurostat June

34 3. Case-study Research 3.2 France France had packaging waste legislation in force before the implementation of the PPW Directive; namely, the 1975 French Waste Act and the Decree that dealt with household packaging. This law was modified in 1994 to include industrial and commercial packaging. As a result, France has about 18 years of PPW recycling experience (Nicolaides and Associates, 2010). In France the implementation of the PPW Directive has been attained thanks to four pieces of legislation (Simon, 2000): the decree of April 1, 1992; the decree of July 13, 1994; the decree of November 18, 1996 and the decree of July 20, Since the publication of the decree of April 1 (1992) placing the responsibility of packaging recovery on the producers, importers and distributors of domestic packaging, selective collection was developed under the responsibility of local communities (Le Bozec, 2008). The Decree stipulates two possibilities for these industries: they can either be responsible for the treatment of packaging waste themselves, or contribute to the creation of a licensed organisation which will manage the packaging waste for them. Most industries chose the second alternative by joining Eco- Emballages (Defeuilley and Lupton, 1998). Again, this private, non-profit company was created as an initiative of the industry; as it happens in other MS, the shareholders of Eco- Emballages are product and packaging material manufacturers, importers and trading companies. Eco-Emballages (the Green Dot company of France) is responsible for supporting separate collection, sorting, recycling and/or recovery. This entity provides a guaranteed recovery for all the secondary materials according to the contractual quality standards. The producers of packaged products pay a financial contribution for each packaging and receive in exchange the right to put a green dot on the packaging, discarding the responsibility of packaging waste management. The decree 92/377 sustains that producers of packaging deemed for final use in households have to communicate to the Agency for the Environment and the Control of Energy (or, in the Frenc acronym, Agence de l'environnement et de la maîtrise de l'énergie Ademe), the statistical data concerning the quantity of packaging waste put on the market and the quantities effectively collected and recovered. Local authorities have absolute discretion regarding the separate collection techniques and the design of the facilities to be utilised. The first available economic assessments showed that the municipalities engaged in separate collection and sorting do not always benefit from sufficient support from Eco- Emballages (Simon, 2000 and Defeuilley and Lupton, 1998). The estimates were made by Eco-Emballages on a national basis. The financial support seemed to be sufficient for municipalities that are characterised by (Simon, 2000): June

35 3. Case-study Research High population (hundred thousand of inhabitants); Strong involvement in incineration with energy recovery; Well-organised collection schemes with a high frequency. However, a large number of urban municipalities were confronted with insufficient support from the Green Dot company. In rural municipalities difficulties were even higher (due to lower packaging flows and additional collection schemes, Simon, 2000). The industry was not motivated towards recycling because its financial requirements would increase the support from Eco-Emballages and this would be reflected on the green dot value. On the other hand, the producers would have to take back more materials (plastic is the material with less economic value). Incineration has been the first choice for recovery in some municipalities, due to a lack of promotion of other recovery techniques such as recycling. In 1998, Defeuilley and Lupton (1998) pointed out that if the running conditions of recycling were not improved (by then the process was characterised by high uncertainty and had insufficient support), then municipalities would tend to adopt a more secure and stabilised technique, with well-defined relationships with the market (like the selling conditions of energy), which is the case for incineration with energy recovery. At that time, the Directive did not induce any major change in regard to the existing technological trajectory (based on the treatment of waste, as opposed to the prevention of waste), mainly because the objectives were not constraining enough (Simon, 2000). For most materials the targets set be the Directive were not high enough to induce technological changes. However, plastic would be expected to have problems in achieving the targeted recycling rates. Simon (2000) argues that depending on future innovation on recycling technologies, prevention could play a better role. June

36 3. Case-study Research BOX 2 Packaging Legislation Green Dot Company France Lalonde Decree N of April 1, 1992, in force since January 1993, setting out conditions for the collection and the recovery of packaging waste produced in households. Decree N of July 13, 1994 on packaging waste for which the holders are not households. Decree N on the disposal of household waste which contains the quotas set by the European Packaging Directive Decree N of July 20, 1998 related to the environmental requirements in the design and manufacture of packaging Eco-Emballages S.A PWW Directive target for 2008 (%) Waste generation per capita (Kg) Deposit onto or into land per capita (Kg) Incineration per capita (Kg) Packaging Waste per capita (Kg) ,2 199,7 200,5 199,9 Recovery rate (%) 61,4 63,5 64,1 67,4 65,2 60 Recycling rate (%) 50,7 53,3 54, ,2 55 Paper/Cardboard (%) 76,5 80,9 84, ,9 60 Glass (%) 58,7 59,7 59,5 61,6 62,7 60 Plastic (%) 17, ,1 22,5 22,5 Metals (%) 53,0 56,8 65,2 64,4 60,2 50 Wood (%) 20,2 20,9 20,1 20,9 18,9 15 Source: Eurostat 3.3 Poland Poland has joined the European Union on 1 May 2004, and since then, there was an adjustment of Polish national legislation to EU standards and several legal regulations and norms in the domain of packaging were aligned with community requirements. The issue of packing has received plenty of attention, turning packaging waste recycling mandatory procedures in acts and ordinances. The most important legal acts in Poland, regarding the problematic of packaging ecology, include (Alwaeli, 2009): The Act of 27 April the Environmental Protection Law; The Act of 27 April the Act on Waste with further amendments; The Act of 11 May on packaging and packaging waste; The Act of 21 January defined new entrepreneurs duties concerning the management of certain waste, product charge and deposit fee. The Act of 21 January 2005 resulted in an imposition to achieve a 50% recovery level and a 25% recycling level for packaging waste (all kinds of packing) before 31 December In fact, every economic operator who introduced packaged products into Polish June

37 3. Case-study Research territory was required to recover 50% of all its packaging before 31 December Importers had to achieve at least 60% recovery and 55% to 80% recycling (Alwaeli, 2009). The Rekopol Recovery Organisation has been founded by the leading Polish and international economic operators (packers/importers of packaged products) with the objective of securing and representing their interests (in accordance with the contractors' financial responsibility which is imposed on them for their packaging waste recovery and recycling). The Rekopol obligations were set by the Polish law, after incorporating European Directives. Therefore, in order to fulfil the obligations mentioned above, Rekopol focus on developing the selective collection systems regarding packaging waste. Indeed, Rekopol is a Green Dot company based on a non-profit principle and it supports selective collection systems financially and through social education. Rekopol cooperates with Polish municipalities in the range of selective collection by a system jointly created by Rekopol and local authorities, which comprises 165 municipalities (including 4 intermunicipality associations, Rekopol, 2011). In 2003, Rekopol introduced the separate collection of beverage containers, ensuring the collection, sorting and recycling of this material and the selective collection of coloured and white glass (Rekopol, 2011). In Poland, the required levels of recycling from 2002 to 2007 were achieved, or even exceeded in some cases (Alwaeli, 2009). This has been accomplished, in great part, by the fact that Poland has been a member of the European Union since 2004, which encouraged the implementation of packaging waste management activities. As highlighted by Alwaeli (2009: 614): The product charge for non-fulfilment of required recycling levels created an additional stimulus. Nevertheless, achieving the higher targets that have to be attained by 2014 may prove to be more difficult. Alwaeli (2009) argues that the inexistence of an integrated packaging waste management system is one of the main threats (furthermore, selective waste collection and waste sorting is still not carried out or pursued on a large scale). This integrated system would facilitate the stable management of this kind of waste, compliant with European requirements. June

38 3. Case-study Research BOX 3 Legislation Green Dot Company The Act of 11 May on packaging and packaging waste; Poland The Act of 21 January defined new entrepreneurs duties concerning the management of certain waste, product charge and deposit fee. Rekopol Recovery Organisation S.A PWW Directive target for 2014 (%) Waste generation per capita (Kg) Deposit onto or into land per capita (Kg) Incineration per capita (Kg) Packaging Waste per capita (Kg) 89,4 91,9 95,8 82,2 109,7 Recovery rate (%) 42, , ,6 60 Recycling rate (%) 28,3 29,5 37,1 48,2 42,9 55 Paper/Cardboard (%) 39, ,1 67,1 60 Glass (%) 27,3 27,4 34,4 39,7 43,8 60 Plastic (%) 17, , ,9 22,5 Metals (%) 22,7 31,2 43,8 29,9 37,5 50 Wood (%) 20,1 16,9 20,6 47,8 26,3 15 Source: Eurostat 3.4 The Netherlands In The Netherlands, five periods can be distinguished in packaging waste policy history (Rouw and Worrell, 2010: 483): three voluntary agreements ( ) and two regulatory periods ( ). The discussion on waste reduction started at the end of the 70s. The selected groups of material which seemed to receive the highest priority were synthetic and packaging materials. The Policy Memorandum of Prevention and Reuse of Waste Materials set targets for the priority groups. In 1988, around 300 companies and the government agreed to voluntarily implement the first Packaging Covenant (Covenant I). With this covenant, producers and importers were exempted from individual company responsibility and potential national waste management regulation. Focusing mainly on packaging prevention, the target of Covenant I was to reach 3% less packaging newly introduced on the market in 1997 and 10% less packaging material in 2000 (when compared to 1986, Rouw and Worrell, 2010). The Netherlands transposed the PPW Directive by means of a Ministerial Regulation (Agreement Packaging and Packaging Waste) published on July 4, 1997 and entered into force on August 1, With Covenant II, the new packaging in the market in 2001 was allowed to grow with a factor equal to 90% of national income using 1986 as the reference year. The covenant stated that producers and importers had to apply the so-called ALARA (As Low As Reasonably Achievable) principle, to allow for the maximisation of packaging prevention June

39 3. Case-study Research (Rouw and Worrell, 2010: 484). Covenant III took place on December 4, 2002 (Rouw and Worrell, 2010: 484): The growth of packaging material use was not allowed to exceed more than two-thirds of GDP growth in 2005, compared to the new reference year It contained targets to accomplish the reduction of litter. When Covenant III was enacted, the government was preparing measures to ensure the accomplishment of the targets of the PPW Directive (as table 3.1 shows the Netherlands national targets are more ambitious than the ones in the PPW Directive). From this moment on, companies became responsible for the prevention, collection and recycling of their packaging waste. After the implementation of the third Covenant, there was a need for the cooperation of local authorities. Hence, industry representatives, the Association of Dutch Communities and VROM signed a Framework Agreement on 2007 (only applicable to packaging waste generated by households). Starting on January 1, 2008, companies are required to pay for the use of packaging materials through a tax on packaging materials. The major goal of the carbon-based packaging tax is to meet national targets to recycle 32% of plastic packaging by 2009, 38% by 2010 and increasing to 42% by This is in line with the targets from the PPW Directive. The tax finances a Waste Fund which is intended to support the separate collection of plastic packaging material from households at the local level (Bio, 2009). Table 3.1 Recycling and recovery targets ( ). Material National Targets Glass 90% Paper/Cardboard a 75% Plastic 2009:38% 2012:42% Metal 85% Wood 25% Total recycling Total Recovery 2008:65% 2010:70% Until 2008:70% 2010:75% a beverage cartons are included since Covenant III source: (Rouw and Worrell, 2010). Nedvang was founded in 2005 by the Dutch producers and importers of packaged products or packaging materials, distributors and trade organisations. Since December 18, 2007, Nedvang is the central organisation supporting producers and importers of packaged products to meet their requirements regarding the recycling/recovery of June

40 3. Case-study Research packaging waste (PRO, 2011). Nedvang, a non-profit company, is a mediator between producers, importers and distributors and waste management and waste processing/recycling companies, local authorities and the national government. Nedvang has helped designing the infrastructure for the collection of both household and commercial waste in the Netherlands. It reports on a yearly basis to a special committee, organised by the Dutch Environment Ministry, including the organised municipalities, packers and importers (PRO, 2011). The study by Rouw and Worrell (2010) found empirical evidence showing that after 2000, packaging consumption increased at a higher rate than expected, suggesting that the policy measures were not effective in achieving the policy targets. The highest packaging recycling rates were achieved during the first period ( ). Despite the fact that Dutch packaging policies were more progressive than European policies, since 2000, they did not allowed to achieve the policy targets. It seems that more consistent packaging policy measures and targets could improve the effectiveness of the policies (Rouw and Worrell, 2010: 491). BOX 4 Legislation System of Compliance Netherlands 1988 Memorandum Prevention and Reuse of Waste Materials Packaging Covenant I 1994 Law Environmental Management 1997 Agreement Packaging and Packaging Waste Packaging Covenant II Packaging Covenant III Decree on Packaging and Paper and board Management Framework Agreement 2008 Packaging Tax Nedvang PWW Directive target for 2008 (%) Waste generation per capita (Kg) Deposit onto or into land per capita (Kg) Incineration per capita (Kg) Packaging Waste per capita (Kg) 197,4 205,2 168, Recovery rate (%) 92,5 91, ,5 95,1 60 Recycling rate (%) 58,5 59,4 70,2 69,8 72,4 55 Paper/Cardboard (%) 70,3 71, ,8 96,4 60 Glass (%) 75,8 77,6 83,6 85, Plastic (%) 19,3 22,1 32,5 33,7 36,4 22,5 Metals (%) 85,9 83,9 81,3 83,3 86,3 50 Wood (%) 33,4 38,6 39,1 31,7 36,1 15 Source: Eurostat June

41 3. Case-study Research 3.5 Romania Romania has joined the European Union on January 1, The national legislation on packaging began to be adapted to EU requirements since 2005/2006, namely by Government Decision no. 621/2006 (amended by the Government Decision no. 1872/2006) on the responsibilities of the stakeholders regarding selective collection, and by Order no. 927/2005 on the data reporting procedures regarding packaging and packaging waste (REPAB, 2010). Transition periods were defined for the targets concerning a wide range of waste policies. The targets of the PPW directive must be achieved by Romania until the end of Currently, Romania is benefiting from EU funds for financing recycling programs and other systems for a sounder waste management (Agentschap, 2011: 6): Approximately 1 billion EUR, EU co-funded resources, have been allocated for the implementation of the integrated waste management systems at county level for the period and, according to industry experts, an estimated 300 million EUR will be invested over the period With the funds and government s commitment, the waste management sector in Romania is expected to increase in the coming years. Until 2013 the waste management programs will be financed through a Sectoral Operation Program (SOP Environment), under the priority axis 2.1 Development of integrated waste management and waste management infrastructure expansion. As mentioned earlier, Romania has to meet some ambitious targets and investments related to waste management, as part of its commitments to the EU (Agentschap, 2011): Increase the sanitation coverage to 84% by 2013 and to 100% by 2017 (coverage was 54% in 2009); Build 40 new sanitary landfills in 33 counties; Close approximately 100 non-compliant landfills; Meet the PPW Directive until The latest available data (see box 5) shows that in 2008 only around 33% of packaging waste was recycled, arguably due to the limited existence of selective collection (REPAB, 2010). The Romanian waste management market is expected to be quite active in the next few years. Indeed, the total market for waste management equipment and technology was estimated to be around 50 million EUR in 2008 and increase to about 80 million EUR in 2017 (Agentschap, 2011). June

42 3. Case-study Research As it can be deduced from the targets imposed by the EU regarding the Romanian waste sector and from what is (arguably) hindering the current recycling rates, the first priorities should be increasing selective collection and building new (and compliant) sanitary landfills. Before 2007, the targets for packaging waste recovery and recycling were phased out, starting from 15% and 12% (respectively) in 2004, to 34% and 28% (respectively) in 2007 and reaching 60% and 55% respectively in 2013 (Agentschap, 2011). Nowadays, packaging waste recycling in Romania is still far from European standards (with the exception of paper/cardboard and metal, as can be seen in box 5). Despite the fact that more than 200 companies have a license for glass collection (Agentschap, 2011), in 2007 only 16,6% of glass packaging was recycled (however, this figure improved substantially in 2008). One of the factors that contributes for such a low recycling rate is that there is only one large glass manufacturer in Romania (Stirom) which has a limited processing capacity (20-25% of the total necessary quantity, Agentschap, 2011). Another factor is the fact that the financial incentive for glass collection is small and transportation is particularly expensive due to the large distances and rather poor road infrastructure in Romania (Agentschap, 2011). Nevertheless, one should expect that the pressure to meet the Community targets will force the central and local governments to find a way of accelerating the recycling of this material. In a similar fashion to what happens in other MS, packers/importers can delegate the responsibility of recovering packaging waste to licensed entities. These licensed entities should organise the integrated management of the packaging waste generated by the economic operators with whom they have a contract. In Romania, the most important licensed company is EcoRom Amabalaje, the entity which manages the Green Dot Scheme in this country. This entity is established by the industry and acts as an intermediate in fulfilling environmental protection by observing the commitments to reach packaging waste recovery and recycling targets. EcoRom Ambalaje aims at meeting the recovery and recycling targets of the package materials introduced in the market by the companies that manufacture or import packaged products. It was founded in 2003 by a group of companies active on the domestic market; to date, more than 1,400 companies benefit from the service provided by Eco-Rom Ambalaje in Romania (EcoRom, 2011). In the very beginning of the packaging waste policy in Romania (2005 and 2006), the Romania Green Dot company implemented pilot projects on selective collection and, later on, created a nation-wide program taking into account the lessons learned. During 2009, with the help of the investments carried out by EcoRom, over 3 million inhabitants from 73 Romanian localities had access to some sort of selective collection (EcoRom, 2011). June

43 3. Case-study Research Several players have a role in the Romanian waste policy: the Ministry of Environment and Forestry is mainly responsible for environmental policy and legislation; having a scope of activities similar to other European environment agencies, the National Environment Protection Agency is responsible for licensing, monitoring and reporting, regarding all economic activities that have an impact on the environment; the National Regulatory Authority for Municipal Services is a sector-specific regulator; and the National Guard for Environment is responsible for control and law enforcement in the environment sector. The National Waste Management Plan (and respective Strategy) was developed by the Ministry of the Environment; it focuses on the encouragement of prevention of packaging waste through source reduction in the amount of packaging products. This plan should be revised every 5 years (Agentschap, 2011). To implement the National Waste Management Plan at the regional level, eight Regional Waste Management Plans were developed, containing targets to comply with National and EU objectives. Projections for the necessary investment in equipment and facilities have also been set up in the RWMP (Agentschap, 2011). BOX 5 Romania Legislation 2005 Order no Government Decision no. 621 Green Dot System Eco - Rom Ambalaje S.A PWW Directive target for 2013 (%) Waste generation per capita (Kg) Deposit onto or into land per capita (Kg) Incineration per capita (Kg) Packaging Waste per capita (Kg) 52,7 60,7 59,7 54,4 Recovery rate (%) 25,1 35,7 36,6 40,7 60 Recycling rate (%) 23,0 28,6 30,6 33,5 55 Paper/Cardboard (%) 51,1 55,7 61,2 61,6 60 Glass (%) 10,2 7,5 16,6 34,7 60 Plastic (%) 11, ,3 15,5 22,5 Metals (%) 53,7 77,2 55,1 51,0 50 Wood (%) 5,1 3,3 8,6 8,3 15 Source: Eurostat June

44 3. Case-study Research 3.6 UK The PPW Directive was implemented in the UK by the Producer Responsibility Obligations (Packaging Waste) Regulations in These regulations aimed at creating a system of producer responsibility. The UK, in contrast to what happens in most MS, has selected a very unique system. This system makes producers (economic operators that handle more than 50 tonnes of packaging per year and have an annual turnover of over 2 million) responsible for meeting their share of the PPW recycling and recovery targets, based on their role in the logistic chain and on the amount of material handled in the previous year (Defra, 2010). The UK does not have a true "Green Dot Scheme" and despite being licensed for those organisations who wish to display the symbol, the use of the trademark is not compulsory in the UK. The management of the trademark is carried out by a subsidiary of Valpak (the Green Dot Licensing Company) and comparable licensing arrangements are open to other compliance schemes for their own membership (PRO, 2011). Economic operators must obtain evidence (i.e. obtain Packaging Waste Recovery Notes PRNs, and Packaging Waste Export Recovery Notes PERNs) to show that they have discharged their legal obligation to recycle and recover packaging waste, passing this responsibility to another (licensed) entity. These certificates are issued by accredited packaging waste reprocessors and exporters, respectively (Defra, 2010). An accredited reprocessor/exporter can issue PRNs/PERNs to the amount of packaging waste recycled or recovered. Proceeds from their sale to producers are intended to finance improvements in the packaging waste collection and reprocessing infrastructure across the UK (implying a non-profit character to the system as well). These evidence notes have two functions (Defra, 2010): Register the amount of recovery/recycling undertaken on the behalf of producers; Ensuring that the producers help funding the recycling/recovery operations, when they do not carry out their own recycling. As it is explained in the comprehensive report by Defra (2010: 34), PRNs/PERNs have a market value which depends on relative supply and demand ( ). The value of PRNs/PERNs is not proportional to the value of the material. The total economic value of a tonne of material is the combination of the intrinsic value of the material plus the PRN value at the prevailing rate June

45 3. Case-study Research based upon supply or demand. Therefore, a low value material may be collected because it is subsidised by the added value of the PRN, in order to meet the targets. Equally, a high value material may be collected for its own worth even if recycling targets have been met (e.g. aluminium and high value polymers). Bearing this in mind, one can infer that if the recycling of packaging waste is insufficient to achieve the imposed targets, the PRN price increases, encouraging recycling (at an interesting economic rate for the operators). Furthermore, the more difficult or expensive packaging waste materials are to collect and recycle, the smaller the quantity that gets recycled, making the PRN/PERN more expensive. Figure 3.1 shows the flow of materials and money between the crucial actors in the UK household packaging waste system. Local authorities Finance collection and disposal services In-house waste services or waste management companies collect, sort and sell waste packaging Accredited reprocessors / exporters Pay for the waste material (including a share of their PRN revenue Recycle/export materials Issue PRN/PERNs, for which they charge producers Householders But products and dispose of the packaging Producers manufacture, convert, fill and sell packaging; obtain PRNs/PERNs to discharge their obligation Source: authors elaboration based on Defra (2010) Figure 3.1 Illustration of materials (orange) and financial (grey) flows in the packaging chain, household stream only. For commercial waste and industrial waste, the situation is similar in many aspects. Usually economic operators pay waste management companies (or local authorities) to collect their recyclable waste, even if they also have direct contracts with reprocessors or exporters (Defra, 2010). The Producer Responsibility Obligations (Packaging Waste) Regulations 2007 impose on exporters an obligation to be accredited by the appropriate Agency before they can issue a PERN, as an attempt to ensure that the packaging waste sent for reprocessing outside June

46 3. Case-study Research the UK effectively gets recycled/recovered. The Producer Responsibility Obligations (Packaging Waste) Regulations 2008 (Amendment) have set new recycling and recovery targets for de period (please see table 3.2). Table 3.2 Recycling and recovery targets. Material Glass (%) Aluminium (%) Steel (%) Paper/Board (%) Plastic (%) Wood (%) Recovery (%) After its 2007 consultation on packaging waste recycling targets, the government proposed new targets for 2011 and As the report by Defra (2010: 16) states, these were to be included in the Regulations in due course. However, the market data on where these targets were based on have changed significantly due to the global economic downturn. Defra (2010) intends to revisit and adjust the proposed 2011 and 2012 targets. The desired achievement rates estimated by Defra (2010) are shown in table 3.3. Table 3.3 Desired achievement rates Paper (%) Glass (%) Aluminium (%) Steel (%) Plastic (%) Wood (%) Total Recycling (%) Overall Recovery (%) This level of achievement requires the following business targets (Defra, 2010): June

47 3. Case-study Research Table 3.4 Proposed business targets Paper (%) Glass (%) Aluminium (%) Steel (%) Plastic (%) Wood (%) Total Recycling (%) Overall Recovery* (%) *of which a minimum of 92% recycling (see overall recycling targets) The targets proposed by Defra (2010) take into account the minimums imposed by the PPW Directive, are based on analysis of the future recycling capacity and potential end markets. They are intended to be stretching for individual materials (but still being achievable), and are likely to result in improvements in the packaging waste recycling rates. To increase the quantities to be recycled it is expected an increase in the investments on selective collection systems (primarily from households) and sorting (and also on reprocessing capacity for plastics). Preferably, part of this investment will come from PRN/PERNs. It is expected that higher long-term targets will provide an income stream for reprocessors/exporters, and stimulate the material availability. According to the findings of Defra (2010), the proposed targets will result in a greater range of materials collected for recycling and will be an additional incentive for Local Authorities to collect packaging materials as additional funding becomes available from private sources. June

48 3. Case-study Research BOX 6 United Kingdom Legislation Producer Responsibility Obligations (Packaging Waste) Regulations 1997 Compliance System Packaging Regulation (1998) Packaging (Essential Requirements) Regulations 1998 Packaging (Essential Requirements) Regulations 2003 Producer Responsibility Obligations (Packaging Waste) Regulations 2007 Valpak Waste generation per capita (Kg) Deposit onto or into land per capita (Kg) Incineration per capita (Kg) Packaging Waste per capita (Kg) 170,9 170,7 172, ,7 PWW Directive target for 2008 (%) Recovery rate (%) 55,6 60,7 62,1 63,8 65,5 60 Recycling rate (%) 49,7 54,4 57,5 59,3 61,5 55 Paper/Cardboard (%) 68,2 74, ,3 79,7 60 Glass (%) 43,7 52,5 51,4 55,2 61,3 60 Plastic (%) 18,7 21, ,5 23,7 22,5 Metals (%) 42,1 47,4 53, ,9 50 Wood (%) 56,8 54,6 72,8 76,5 76,5 15 Source: Eurostat 3.7 Spain Spain transposed the PPW Directive into the Packaging and Packaging Waste Act 11/97. This law states that there are two options available to packager/importers: a Deposit and Return System, or joining an Integrated Management System (PRO, 2010). This Act is complemented by the Royal Decree 782/98 that sets out details on the operation of compliance schemes. The Royal Decree 252/2006 changed the recycling and recovery targets of the 1997 Packaging and Packaging Waste Act (see table 3.5). Table 3.5 Recycling and recovery targets for Targets for 2008 (RD 252/2006) Recycling 55-80% Recovery >60% Material Paper and cardboard Glass Metals ( Aluminium and steel) Plastic Wood 60% 60% 50% 22.5% 15% June

49 3. Case-study Research Ecoembes (a Green Dot company) was founded by the Spanish trade and industry in order to develop the Integrated Management System and already includes more than 12,000 member companies, having signed agreements with nearly 100 local and regional authorities (PRO, 2010). Ecoembes has the responsibility of running systems for the selective collection of household packaging waste and ensure the subsequent treatment and packaging waste recovery (minimising the impact of packaging waste). This is undertaken in accordance with the national and regional legislation that transposes the PPW Directive. In 2000, the Environment Ministry laid down the National Urban Waste Plan (NUWP, Puig-Ventosa, 2008).The underlying goals of the plan were to prevent the production of waste, to increase selective collection and recycling and to encourage other types of waste recovery. The NUWP included six programmes related to almost every type of waste management strategy/process available: waste prevention, recycling, packaging, composting, energy recovery and final disposal. The National Prevention Programme established that the amount of urban waste generated should reduce 6%, so that in 2002 the total waste production would return 1996 levels (Puig-Ventosa, 2008). To achieve this objective, the plan included specific provisions like pay-as-you-throw charges. The actions carried out by all administrations and sectors involved during the implementation of the NUWP, including construction and improvements of infrastructure and the crafting of different management models contributed to the improvement of municipal household waste management. However, packaging waste maintained a parallel increase with economic and population growth. An objective of this Plan was to promote priority management options, prior to disposal, such as reusing, recycling and other forms of recovery. Being a competence of local authorities, there is a huge variety of collection schemes operating. However, most systems rely on drop-off containers. There are very few detailed studies on the relevance of having different collection systems. The focus is still on refuse collection (Puig-Ventosa, 2008). Most local governments tend to outsource the collection services to private companies, although there are a small number of municipally-owned utilities. In general, waste treatment of refuse takes places at infrastructure owned by local or regional authorities, while, packaging waste is carried straight to recyclers after sorting operations (Puig- Ventosa, 2008). Almost all reusable packaging for wine, beer, water and soft drinks are for the foodservice industry. The objective of the NUWP on this issue should be promoting June

50 3. Case-study Research the reuse of packaging agreements with the packer and distributor sector, in order to reduce the amount of packaging waste generated and increase recovery rate (PNIR, 2006). The Second National Urban Waste Plan for was approved in 2008 having three main priorities: reduce, reuse and recycle. It sets out the guidelines and the main measures to be implemented, which are developed in thirteen specific plans for each type of waste. The NUWP II is based on the principles of self-sufficiency and proximity and has the follow basic objectives (Menéndez and Cañete, 2010): To promote correct waste management through the creation of new infrastructure and the improvement of the existing facilities; To reduce waste production, giving priority to the options that less affect climate change; To promote the correct treatment of waste and eliminate illegal landfills; To increase the responsibility of the involved agents: public authorities and services, companies, consumers and users. BOX 7 Spain Legislation Packaging Law 11/1997 of April 24, 1997 Royal Decree 782/98 of April 30, 1998 Law 10/1998 of April 21, 1998 Order 50/1998 of December 30, 1998 Green Dot System Ecoembalajes España, S.A PWW Directive target for 2008 (%) Waste generation per capita (Kg) Deposit onto or into land per capita (Kg) Incineration per capita (Kg) Packaging Waste per capita (Kg) 174,4 179,7 181,5 187,6 175,7 Recovery rate (%) 53 56,1 60,7 62,1 65,4 60 Recycling rate (%) 47,4 50, ,3 59,1 55 Paper/Cardboard (%) 63,3 69,2 71, ,4 60 Glass (%) 41,1 44,4 50,6 55, Plastic (%) 20,1 20,7 22,4 23,3 24,4 22,5 Metals (%) 56,0 59,7 62,3 62,8 67,8 50 Wood (%) 43,0 43,9 49,8 61,0 58,2 15 Source: Eurostat June

51 3. Case-study Research 3.8 Portugal In Portugal, almost 5 millions tonnes of MSW are produced by approximately 10 million inhabitants every year; approximated 2 millions tonnes are packaging waste. The PPW Directive was first transposed to Portuguese law in According to the national legislation, economic operators placing packaging in the market are responsible for the management and final disposal of packaging waste. This responsibility can be transferred to a properly licensed entity. The Sociedade Ponto Verde (SPV) set up the Integrated System for the Management of Packaging Waste (SIGRE in the Portuguese acronym) in order to fulfil its legal and environmental obligations through the organisation and management of a circuit guaranteeing the take-back, recovery and recycling of nonreusable packaging waste. SPV is the Green Dot entity operating in Portugal and is a private, non-profit organisation founded in November 1996 with the objective of promoting the selective collection, take back and recycling of packaging waste. Several economic agents participate in the SIGRE and in all the stages of the packaging life-cycle producers of raw materials and packaging, packers, distributors and waste management operators. The activities of SPV involve the following (SPV, 2010): Signing contracts with packers for packaging waste management, in return for a Green Dot Fee, Signing contracts with systems for MSW recovery and treatment (SMAUT in the Portuguese acronym) accepting the obligation to pay them financial compensation for the added cost of selective collection and sorting of packaging waste, Signing contracts or agreements with collection operators dealing with trade and industry packaging waste, Signing contracts with companies or organisations guaranteeing the take-back and recycling of packaging waste; Preparing annual reports and research and development programmes. The SPV licence presents the recycling targets, by material and overall, in tonnes. June

52 3. Case-study Research Table 3.6 Quantities (tonnes) taken-back, by material and respective targets. Targets (Ton) Real (Ton) Targets (Ton) Real (Ton) Targets (Ton) Real (Ton) Glass Paper/Cardboard Plastic Steel Aluminium Wood Total Source: (SPV 2010) In 2009, SPV accounted for 354,424 tonnes of household packaging waste sent for recycling, in which 326,683 tonnes came from selective collection and the other 22,851 from complementary flows (pre-treatment of composting and incineration) (SPV, 2010:39). Since 1994, and through a series of legal documents, several SMAUT were created throughout the country. To date, there are 23 SMAUTs in mainland Portugal. The Strategic Plan for MSW Management (PERSU in the Portuguese acronym) was published in 1997 and revised ten years later, in 2007 (PERSU II). A diagnosis was made and the priorities were clarified: the development of prevention, reuse and recycling policies, and the creation of treatment and final disposal systems were the main objectives of the Plan (Magrinho et al., 2006). With the present packaging waste management structure, the responsibilities are normally shared by different entities, namely the municipalities, the SMAUT (usually supramunicipal public entities) and the SPV. These entities carry out their activities according to the legislation. MSW management activities are controlled and supervised by the Portuguese Environment Agency (APA). The APA is the National Waste Authority; accordingly, it proposes, develops and monitors the implementation of strategies for waste management. The APA is responsible for licensing waste management operations and the operators of specific waste streams, and has administrative and operational control over waste flows. The APA promotes the reliability and regulation of the organised market of waste. June

53 3. Case-study Research Generally, refuse waste collection is carried out directly by municipalities, whereas the responsibility for separate collection changes from region to region and can be undertaken by the municipalities or the SMAUT (see Figure 3.2 for an overview of the relevant players). SMAUTs (Management Entities of MSW) Responsible for the MSW final disposal, for the sorting of the recyclable materials coming from the separated collection and for its further sending to SPV. They can assure the separate and mixed collection of MSW SPV (Green Dot System) Responsible for receiving recyclable packaging waste and to the IR RI (Recycling Industry) Assures the recycling of waste materials Municipalities As a rule they are responsible for the mixed waste collection and sometimes for separate collection PE (Private Enterprise) Assure the separate collection in some commercial establishments and others Citizens (MSW genaration) Industry MSW generation up to litres/day per producer Trade and Service (MSW genaration) Mixed MSW Circuit Sorting at Source Circuit Source: authors elaboration based on Magrinho et al. (2006) Figure 3.2 Responsibility and management of MSW in Portugal. The SMAUTs are responsible for waste treatment, recovery and disposal. The responsibility of those entities, as far as the recycling process is concerned, consists of collection (in most of the cases) and sorting of the separately collected packaging waste. After sorting, the packaging waste is guided towards the Green Dot System, where SPV is responsible for receiving the sorted packaging waste and for guiding it towards the recycling industry. All entities involved in MSW management are responsible for the organisation of campaigns to develop awareness and a positive attitude of the citizens regarding the environment, the need for recycling and the need for an active participation. In the last years, the production of MSW has increased, reaching 5,151, tons (1,39 Kg/inh.day) in In terms of final disposal, 65,5% were sent to landfills, 16,9% to energy recovery and 10,4 % to selective collection (table 3.7). June

54 3. Case-study Research Table 3.7 MSW produced by waste management options. Total Energy Organic Selective Total Landfill Production recovery recovery Collection Production per capita (t) (%) (t) (%) (t) (%) (t) (%) (t) (kg/inh.day) , , , , , , , , , , , , , , , , , , , ,39 Souce: APA (2010a) In 2008 were produced tonnes of packaging waste were produced in 2008, corresponding to an increase of 25% relatively to 2004 (see table 3.8). Table 3.8 Packaging waste produced, by material (tons). Glass Paper/Cardboard Plastic Metals Wood Total The total of packaging waste recovery has increased in the last years. The paper/cardboard packaging waste has achieved the higher increment between 2004 and In 2008, the 2010 Directive target for total recovery of packaging waste was achieved. In sum, Portugal has achieved the Directive targets for 2010 in the year of 2008 for total packaging waste recycled and recovered. In terms of the targets of packaging recycling by material, the plastic and glass targets were not achieved, unlike other materials (APA, 2010b). June

55 3. Case-study Research Source: authors elaboration based on APA (2010b) Figure 3.3 Recycling and recovery rates of packaging waste. BOX 8 Legislation Green Dot System Portugal Decree-Law N.º366-A/97 of December 20, 1997 (modified by Decree-Law N.º162/2000 of 27 th July 2000 and Decree-Law N.º92/2006 of 25 th May ) Ordinance N 29-B/98 of January 1998 The Decree-Law N 407/98 of December 21, 1998 for essential requirements and maximal concentration of heavy metal Sociedade Ponto Verde S.A PWW Directive target for 2011 (%) Waste generation per capita (Kg) Deposit onto or into land per capita (Kg) Incineration per capita (Kg) Packaging Waste per capita (Kg) 136, ,7 161,5 168 Recovery rate (%) 48 50,9 55,9 59, Recycling rate (%) 41 44,3 51,4 56, Paper/Cardboard (%) 55,6 59,8 68,2 81,8 87,8 60 Glass (%) 38,6 40, ,9 51,8 60 Plastic (%) 10,5 15,8 15,4 15,3 19,1 22,5 Metals (%) 55,1 60,4 61,5 62,5 64,8 50 Wood (%) 66,1 58,4 73,3 71,0 64,5 15 Source: Eurostat June

56 June

57 4. Technical Studies 4. Technical Studies 4.1 Introduction The waste management strategies developed in accordance with EU policies follow the so-called waste hierarchy. First, it considers the prevention of the generation of waste (waste prevention). Second, if it is not achieved, the waste must be dealt with in the following order of priority: reuse, recycling, energy recovery (incineration) and finally, landfilling (Björklund and Finnveden, 2007), as illustrated in Figure 4.1. Prevention at the source is the only way to decrease the amount of waste and reduce resource consumption (Jacobsen and Kristoffersen, 2002). It is a complex process that affects both the life-cycle of packaging and the life of packaged products. Measures such as avoiding or even eliminating certain packaging and/or reducing the weight of the packaging have as main objective to help producing less packaging waste (COM, 2006). Following the waste hierarchy, reuse comes next. This is an important strategic component necessary for reducing substantially the quantities of packaging waste produced. It works especially well in the case of transport packaging, especially in beverage packaging (Golding, 1999). Recycling is an option commonly used for waste management (SEC, 2009) and requires the active participation of people, particularly the household activities related to the sorting of waste, which makes critical the awareness and motivation of families to recycle (Hage et al., 2009). Another alternative to landfilling is the incineration, which is better in terms of opportunity costs and environmental costs (Zoboli and Mazzanti, 2008). The incineration allows for savings in transport costs and requirements for sanitary landfills, by reducing the waste volume. However, the incineration process must be strictly controlled to avoid emissions of pollutants into the environment (Daskalopoulos et al., 1997). The composting of MSW (a specific type of organic recovery) is another alternative to landfilling. Being a form of recovery, this process helps to achieve the objectives set by the PPW Directive (Paggi, 1997). Moreover, composting reduces the quantity of waste sent for landfilling. June

58 4. Technical Studies Waste minimisation Prevention Reduction at source Reuse of product Quality improvements Recycling Energy recovery Pretreatment Preventive measures Waste management measures Source: adapted from Jacobsen and Kristoffersen (2002) Figure 4.1 OEDC working definition on waste minimisation agreed at the Berlin Workshop Prevention Preventing packaging at the source is a complex procedure, which influences the entire life-cycle of packaging but also the life-cycle of the packaged products. It can only be achieved through the changing of production, consumption and distribution patterns. (COM, 2006). Waste prevention should be a top priority among waste strategies, since it is the only way to decrease the amount of waste and reduce the dilapidation of resources (Jacobsen and Kristoffersen, 2002). It is a long-term process that requires a change in behaviour of households, producers and other participants in the economy (Salhofer et al. 2008). Waste prevention is divided into quantitative prevention (reducing the amount of waste generated) and qualitative (reduction of the hazardousness of the waste generated) 1. However, in practice, prevention can be seen as a special case of quantitative prevention (COM, 2003). The main objective of waste prevention methods envisaging avoiding or even eliminating certain packaging and/or reducing the weight of packaging is to help producing less waste. Despite the apparent simplicity of prevention targets, their implementation raises a 1 It cannot be assumed that all hazardous types of waste are equally dangerous; hence, one should consider the possibility of developing a "hazardousness" index for waste (COM, 2003). June

59 4. Technical Studies number of problems, as it is the case of weight-related targets that would disfavour heavier packaging materials, but are not necessarily worse for the environment (COM, 2006). During the revision of the Directive 94/65/EC, in the concept of Packaging Environment Indicator (PEI) was introduced. It consists of a conceptual tool that measures the environmental impact of packaging (Pira and Ecolas, 2005). This indicator provides guidance to companies on the key environmental impacts for consideration in the LCA and life-cycle thinking approaches (COM, 2006). Dehoust et al. (2010) intend to provide a compilation of German and international waste prevention measures, which will serve as the basis for the creation of a national waste prevention programme in Germany. The measures were presented as tables and descriptive analysis regarding the targets, the levels and the qualitative assessment of their impact on waste prevention. The study provided some preliminary conclusions, as the fact that the measures taken are a very broad range that covers almost the complete list of examples of Annex IV of the Waste Framework Directive. This provides a good basis for a national prevention programme in Germany. Another objective of the programme was the purpose of serving as a strategic reference framework for coordinating actions at the federal, state and municipal levels. And the success of objective measures, such as reduced material consumption in the production, durable design of products, use of low-waste products, green procurement and extending the product life time depend strongly on the existence of appropriate conditions, obtained through the use of legal tools and economic incentives. Furthermore the support through intensive information and motivational programmes is crucial for the success of prevention strategies. Coggins (2001) presents examples of waste prevention measures. In the UK, despite the relevance given to policies and end-of-life measures, Coggins noted the importance of producer and householder responsibility, and listed different policy examples. The aim is to promote "integrated product policies" in which all products are designed under a "cradle to grave" evaluation of economic and environmental costs and benefits. That is, a change of waste management to resource management. Salhofer et al. (2008) quantify and analyse the prevention potential for selected casestudies (advertising material, beverage packaging, diapers, food waste and waste from events). These authors show the theoretical potential for prevention (relative to waste type, measure, time and region) for the specific case of the city of Vienna. The results reveal that the prevention potentials can reach an order of magnitude of around 10% of June

60 4. Technical Studies the relevant waste stream (as for example the advertising material and beverage packaging), which only prevents around 1-3% of MSW. The authors emphasize that it is difficult to accurately estimate the impact of waste prevention measures on waste quantities due to the unavailability of basic data needed for evaluation (methodological shortcomings), such as market data on the quantity of sold beverages in reusable and non-reusable packaging. Lilja (2009a) and Lilja (2009b) focus on the prevention of waste and material efficiency, in Finland. A primary objective of this author was to analyse the differences between a discourse based on the concept of waste prevention and another one based on the concept of material efficiency, studying the strengths and weaknesses of each type of strategy based on criteria such as synergies, the semantic aspects, the legal context and applicability of monitoring. The author suggests that the change of the speech on waste prevention for material efficiency is necessary. In his opinion, in the future prevention will be replaced by the concepts of material efficiency and eco-efficiency. Lilja (2009b) aimed at examining the challenges and opportunities in implementing a sector-specific negotiated agreement for promoting waste prevention and material efficiency for the Finnish industry. Based on an agreement on energy efficiency, he developed a framework for an agreement on material efficiency. This agreement represents a platform for dialogue between the Ministries and the industrial organisations for setting specific targets for material efficiency, waste recycling and waste prevention. It also presents a vision of the interaction between the negotiated agreement and other policy instruments. The purpose of the report by Jacobsen and Kristoffersen (2002) was to support and inspire waste minimisation in the EEA member countries. It highlights some of the most successful waste minimisation initiatives, through the introduction of a catalogue of examples of waste prevention, recycling and cleaner technologies. Emphasis is given to case-studies on the prevention and recycling of waste; 10 cases were selected and analysed, providing adequate information and allowing for an overall assessment of practical performance. Five themes were included in the analysis, namely the producer responsibility, voluntary agreements, legislative requirements, information programmes and waste taxes. The authors note that there are already several initiatives to encourage waste recycling and prevention (although most of them are only applied at the local level) although there is still a need for continuous cooperation and exchange of technological and organisational experiences to achieve progress in waste management. The casestudies present promising solutions that can inspire future initiatives on waste prevention. June

61 4. Technical Studies Evidence from Mazzanti and Zoboli (2009) support the claim that to achieve a more sustainable dynamics of waste generation and disposal, the focus of policy actions, which so far have been more aimed at disposal and recycling, should be redirected to the prevention of waste at the source (in theory, one of the priorities of EU waste policy). The main objective of this study was to provide preliminary empirical evidence, using a European panel data, on Waste Kuznets Curves (WKC) and waste policy effectiveness in the EU, distinguishing between socio-economic and policy factors. There are other studies that, while focusing on sustainability, point out the need for the existence of measures for waste prevention as a means of achieving a reasonable and sustainable waste management. For example, Ngoc and Schnitzer (2009) emphasize the possibility of having the concept of waste prevention leading to the creation of an ecosystem in a loop of materials. Furthermore, McKerlie et al. (2006) refer to the lack of emphasis on the legislation on waste prevention in Canadian stewardship programs. 4.2 Reuse Since the quantity of packaging waste produced can be substantially reduced, reuse is a very important strategic component. Reuse systems for packaging operate very successfully for transport packaging, especially in beverage packaging. Although the reuse of packaging is mainly present in the beverage industry, there are also other (smaller) reuse systems, such as dairy products, sweet preserves and vinegar/oil (Golding, 1999). Several studies have been conducted in order to understand to what extent reusable containers are preferable to one-way packaging. There is a general agreement on the fundamental patterns of the results, although the conclusions are mixed when considering absolute values (COM, 2006). One cannot argue that reusable packaging is better for the environment than the one-way packaging in all situations; indeed, it is necessary to analyse the number of trips and average distances transported between filling, consumption, collection and reuse (PRO, 2008). In general, reuse systems are preferable when there are shorter distances and higher rates of return. On the other hand, one-way packaging can be better whenever distances are too high or the rates of return are low (Pira and Ecolas, 2005; COM, 2006). June

62 4. Technical Studies Pira and Ecolas (2005) provide a brief description of success stories within the EU, namely, the systems in Germany, Austria, Norway and the UK. This report shows that, in overall terms the market share of reusable packaging is decreasing while the market share of non-reusable packaging is growing. This study assumes that, in general, the maximum distance for an environmentally viable reuse system is within 100km to 1.000km in terms of total social cost (the internal, external and environmental costs combined). Once again, it was concluded that reusable containers are more suitable for short distribution distances (based on a limited number of available case studies) and one-way packaging are better for long transport distances; for medium distribution distances the costs are approximately the same. However, concerning the internal costs alone, one-way containers are cheaper (considering the cases analysed). Hence, companies have a strong financial motivation to opt for one-way packaging. In these cases it may be interesting to implement measures to support reuse. In the author's opinion, the decision about whether or not it is appropriate to implement these support measures should be a political decision, because different viewpoints are valid. Golding (1999) shows the trend in reuse packaging systems in the EU as a whole and for each individual MS. The author also presents the streams of goods in the EU-internal trade that are relevant for reuse packaging systems. A detailed analysis of the players and their roles is also provided, as well as the contextual conditions that support the decision to use (or not) reuse packaging systems. The author goes on by analysing the different legal activities of the 15 EU-member governments, focusing on how they support or hinder the actual reuse of packaging and showing which are the most effective and successful instruments to stabilise and support reuse packaging systems. The detailed analysis of costs of one-way and reuse packaging, for the filler and retailer companies, shows that reuse packaging is more interesting for fillers while one-way packaging provides advantages to retailers by minimising their handling costs. Investments in reuse packaging systems are 1.5 to 5 times higher than the ones involved with one-way packaging systems. The (currently) inexpensive costs of energy and raw materials support one-way packaging and, at the same time, the cost of labour makes reuse packaging unattractive. Regarding the appreciation of legal instruments, it is concluded that, presently, there are only a few command and control instruments in force in the EU- MS, namely: bans on some of the one-way packaging in Denmark; compulsory orders for reuse packaging by the retailers; permits/quality control for reuse systems in Finland and Denmark; June

63 4. Technical Studies taxes on new one-way packaging (Belgium, Denmark and Finland); compulsory deposits on one way packaging in Germany. There are also legal instruments that are not currently used in EU-member states, such as tradable permissions for one-way packaging and standardisation of reuse packaging. The tradable permissions for one-way packaging contain two aspects that make them impractical for the beverage packaging market: the impossibility of controlling billions of packaging units within the internal EU-market and the fact that the first issue of permissions would raise several problems that would be against the interest of supporting reuse packaging in the market. It is unlikely that standardisation would be applied within the group of fillers, since they are just too numerous and they are not in direct contact with wholesalers and retailers. The author has proposed a double-track set of legal instruments in order to achieve an indirect internalisation of external costs. On the one hand, ambitious recycling targets should be implemented to establish the levels of reuse and one-way packaging. And on the other hand, a tax system for all packaging should be established in order to get the full internalisation. He has also proposed the implementation of ambitious recycling targets that establish reuse and one-way packaging, and a tax scheme for all new packaging brought in to the market. Most studies dealing with reuse of packaging focus on the analysis of beverage packaging. For instance, Platt and Rowe (2002) address the following questions: what environmental and economic benefits could refillable beverage containers bring to the US? what policies effectively promote refillable beverage containers? which policies can best be applied to the US? In the period studied, the authors found that the beverage containers in the US are designed for single use and that after being used only one third is recycled (the remaining two thirds go to landfills). Despite the many potential advantages of reuse, both environmental (lower solid waste generation and lower use of energy and water) and economic (reducing the public cost of waste management and creating jobs), the beer and soft-drink industries in the US have dismantled their reuse systems, unlike what happens in many European countries and a few Canadian provinces that have policies with the specific goal of requiring or promoting reusable containers and/or economic incentives to use them (at least in 2002). Survey results indicate that where reuse laws are in place most consumers support them or prefer refillable over one-way containers when purchasing beverages. The few existing policies are the only safeguards that have kept June

64 4. Technical Studies reuse systems running. Despite being supported by the beverage industry in some markets, these systems are threatened by financial pressures to use one-way packaging. The adoption of Eco-taxes on one-way containers can be one of the only ways of preserving and promoting reuse, without sacrificing choices in beverage packaging. Based on the primary purpose of diverting glass from landfills, the Waste & Resources Action Programme (WRAP) commissioned a study to investigate the barriers and opportunities for the wider adoption of refillable glass beverage containers in the UK. Lee et al. (2008) document the findings from this study. Over the past decade, there has been a dramatic decline in reuse in the UK. This situation can be explained possibly by the change in consumer behaviour, the growth of supermarkets and the improvements of oneway packaging. This study has identified a number of barriers to increase the use of reusable glass containers in the UK: the environmental benefit of reuse depends on factors such as the transport distances, trip rate of refillables and the recycling rate of the one-way systems; the refillable filling lines are more expensive, slower and require more space than one-way systems; the reluctance of retailers to engage in reuse systems; packaging differentiation; the dominance of imported products; the difficulty for voluntary refillable systems to maintain market share and capture rates in countries with affluent economies where convenience is an important factor; the scuffing and other imperfections and general wear seen on refillable bottles yield a negative brand image; Although the PPW Directive cites the encouragement of reuse, the laws implemented by the MS with explicit incentives to use refillable containers have been challenged in the European courts, because such laws are interpreted as favouring local businesses and restricting internal markets. The study also presents some opportunities for increasing the use of refillable glass containers in the UK. Indeed, some retailers have developed local sourcing strategies as a direct consequence of the negative press associated with food miles. The brand owners and retailers are beginning to include the carbon impact associated with products on labels and there is a growth of veggie box home deliveries and other similar schemes. In addition, the study has identified numerous examples of innovation within the field of refillables developed to overcome these barriers. June

65 4. Technical Studies Ferrara and Plourde (2003) consider the decision-making process of an industry which produces a given generic product but has to choose between the quality levels of its two packaging options, refillable versus that of non-refillable containers, and their respective market shares. With this work the authors try to understand the importance of the heterogeneity of consumers and what is the producers' response to this reality in the evaluation of the various packaging regulations, using a quasilinear utility function, in which it is assumed that each consumer buys only one unit of the commodity. The paper states that the choice of the container type depending on environmental impacts is certainly difficult, but it is also an empirical issue which is independent of the market mechanism. Moreover, it is stated that the role of consumer heterogeneity on the market share performance of reusable containers is undeniable and more than simply a justification for current packaging trends (p.11). Grimes-Casey et al. (2007) also analyse the choice between disposable and reusable bottles. They use a game theory approach in the problem of packaging reuse to assist decision-makers and simultaneously show the benefits to producers and consumers of choosing the environmental friendly strategies of reuse of product and high return. The paper provides a simple model which finds the optimal bottler strategy as a function of the bottlers expectations of consumer cooperation. Apparently, despite the higher costs involved, most bottlers opt for the use of disposable bottles, a fact that can be attributed to a smaller probability that reusable bottles will be returned for deposit. The results suggests that if the bottler could be sure that consumers would be always willing to return refillable bottles even at low deposit rates, he would also be willing to use refillable containers (which gives them lower costs as well as lower life-cycle environmental impacts). Tsiliyannis (2007) studied the glass packaging in Greece, for the period of 1995 to 2006, in order to try to answer specific questions: what is the minimum reuse/recycling rate during economic expansion; what is the minimum reuse/recycling rate during economic contraction; which is the minimum information required to determine these rates; which are the maximum variations in consumption, production and net imports; and can environmental gains be achieved at lower costs over a period of time. He proposed a flexible policy, in terms of an annually modified reuse/recycling rate, which reduces the impacts without excessive effort by following economic trends. The study results show that higher environmental gains can be achieved at a lower cost through the June

66 4. Technical Studies use of cleaner recycling technology and the implementation of flexible policies on packaging with low reuse/recycle rates and high consumption. The author emphasizes that arbitrary recycling or reuse rates can lead to increased impacts on production, while a fixed rate appropriate for a growing economy may result in higher costs to consumers during economic slowdown. The choice of product packages is subject to change with each consumer purchase. Consumer preferences are important in explaining the packages mix in a given period of time. Thus, Sjolander (1996) studied the impact of implementing an environmental tax on the market shares of different types of packaging for carbonated beverages, between 1967 and 1983 in Sweden. The sales of beverages were compiled in four categories of packaging: refillable glass bottles, non-refillable glass bottles, non-refillable plastic bottles, and cans (metal cans). The implementation of a non-marginal tax on beverage packages has led to an increased use of refillable glass bottles, but also to an increased use of cans, and to a progressive elimination of non-refillable glass bottles. A possible explanation for the increased market share of cans is the lack of substitutability between cans and glass containers. The results of this study show that a tax can significantly influence consumer package choice in beverage delivery systems. Tomkeviciute and Stasiskiene (2006) examine the possibility of reducing beverage packaging waste by applying Deposit-Refund Systems (DRS) and the prospects for the use of this system in Lithuania. The main objectives of the study were to analyse the refillable beer bottles system, identify obstacles to implementation of the DRS, perform the LCA of refillable and non-refillable glass beer bottles, assess the costs of refillable and non-refillable disposable bottles, assess the responsiveness of consumers to DRS and develop proposals for the implementation of the DRS in Lithuania. The authors emphasize the idea that economic measures are effective solutions to environmental problems, and the DRS has been applied by several countries in order to reduce the amount of packaging waste. Thus, they concluded that the DRS represent an effective measure to reduce the amount of packaging waste. The deposit paid for beverage packaging provides an incentive for consumers not to send empty bottles to landfill, but the DRS is one of the most expensive measures, so its application requires making it as environmentally friendly as possible. The LCA of glass beer bottles (refillable and disposable) revealed that the most effective is to use only 20-30% of the reusable bottles, since the environmental impact depends on the number of times each bottle is used. The process of reusing June

67 4. Technical Studies bottles requires more energy and water (for washing), thus contributing to greater volumes of wastewater and more emissions of carbon dioxide. Under the strategy for action on education for sustainable development and global citizenship of the Welsh Assembly Government, Harris and Probert (2009) investigated the feasibility of reducing beverage packaging waste, by promoting a reusable cup campaign in Swansea University. They used a choice experiment to determine the preferences of staff and students, whose results showed the viability of an initiative like this. However, its success depends on understanding the market and, fundamentally, providing financial incentives to encourage behavioural change by university staff and students. A waste minimisation project of this type would have the dual function of reducing waste at source and at the same time promoting cultural change. In the last two decades, the Netherlands has given special attention to the volume of packaging waste produced. In this period, new policies and technological innovation have influenced the way products are packed and how the resulting waste is managed. In order to gain a better understanding of how individual management options have led to a change in the amount of final waste in the period 1986 to 1999, Chappin et al. (2005) conducted a decomposition analysis. The analysis showed a breakdown of the final residues in four different types of beverage packaging materials (cardboard, glass, metal and plastic) and provided a vision of the effects of change in product consumption, material substitution, changes in packaging size, lighter packaging concepts, product reuse and recycling of materials. The main conclusion is that the greatest reductions in final waste production have been obtained through product reuse and recycling of materials. The authors emphasize the importance of encouraging reuse and recycling, especially the reuse of products whose contribution to reduce final waste is significant, but applies only to a limited number of types of packaging. Finally, Ross and Evans (2003) examine whether a reuse and recycling strategy for a plastic-based packaging that substantially diminishes the amount of waste intended to go to landfills also necessarily leads to reduce the overall environmental burden. The assessment of the resources and environmental effects assessed over the life-cycle of packaging incorporated fossil fuels consumption, greenhouse gas emissions and photochemical oxidant precursors. The results clearly show that reuse and recycling strategies of plastic-based packaging can provide significant environmental benefits. The authors concluded that the recycling and especially the reuse of plastic products can June

68 4. Technical Studies substantially reduce energy consumption throughout the life-cycle of packaging because a significant amount of energy is required to process raw materials. 4.3 Recycling Recycling is a waste management strategy commonly used because, under some circumstances, it can be cheaper than landfilling. Even before the PPW Directive entered into force, significant quantities of packaging were recycled (COM, 2006). This process allows for a more responsible management of natural resources because, on the one hand, it decreases the amount of waste sent to landfill or incinerators, and on the other hand, it enables the mitigation of environmental impacts by replacing the use of raw material (SEC, 2009). Reducing the environmental impacts of resource use can be achieved by avoiding the environmental impacts of the extraction and transformation of primary raw materials in production processes (COM, 2003). The success of recycling schemes depends on the waste fractions being as pure as possible. Sorting at source and carrying out separate collection of these fractions are not always easy tasks regarding household waste (small quantities with high levels of contamination). Industrial and trade waste is easier to collect and recycle, since quantities are bigger and, usually, it is more homogeneous (Jacobsen and Kristoffersen, 2002). The yearly increase of the quantities of packaging waste produced forced EU countries to face this problem. Hence, legislation was enacted both at the European and national level, with the main aim of promoting the adequate levels of packaging waste recovery and recycling. The targets were defined as percentages of packaging waste recovered and recycled (computed through the aggregate weight of packaging introduced into the market). This obligation of compliance led Smith et al. (1999) to investigate whether the results of the recycling of plastic containers held by the end of 1997 in the UK would allow achieving the proposed goals for The estimates obtained, despite the rapid growth of the recycling rate since 1990, suggested that additional measures would be necessary. Similarly, Magrinho and Semiao (2007) sought to investigate the possibility of achieving the target values mandated in the national and European legislations. By analysing the development of recycling of packaging waste from 2002 to 2011 for the operator of MSW operating in the region of Lisbon, the authors presented a decision-supporting tool for managers of MSW and policy-makers. They applied a mathematical model with three different scenarios in order to forecast the recycling rates on the dry basis (the dry mass June

69 4. Technical Studies of waste material) of different packaging waste types. The results depicted that only two of the scenarios would ensure the accomplishment of the recycling rates, although additional and different efforts were still required. The EEA (2007) report analysed the approaches and combinations of policy instruments that the EU-25 are taking in managing their municipal waste, particularly in the context of the Landfill Directive, with the aim of sharing best practices and exchanging national-level experiences across Europe. The EEA and its Topic Centre on Resources and Waste Management have conducted a survey of MSW policies and trends across the EU-25 and consolidated the results into a set of 25 countries, available in eu/etcwmf/publications/card. The case-studies consisted in three country groupings in the EU-25, according to the strategies for diversion of municipal waste. The first group encompasses countries which maintain high levels of both material recovery (mainly recycling and composting) and incineration, and which have relatively low landfilling levels. The second group gathers countries with high material recovery rates and medium incineration levels and where there is a medium dependence on landfilling. The third group contains those countries whose material recovery and incineration levels are both low and whose dependence on landfilling is relatively high. It is concluded that the MS must find their way towards meeting common waste management goals. The EEA intends to map out the use of different waste management strategies to identify the critical success factors that entail an effective strategy. Some measures led to a decrease in landfilling of waste after the very first year of their introduction. Indeed: In countries with high levels of material recovery it appears that a ban on the landfilling of waste with organic content has been an effective measure in reducing the amount of municipal waste going to landfill ; and in countries with low material recovery and incineration, the introduction of separate collection systems for packaging waste successfully decreased landfilled waste in the first year (p. 18). Nicolaides and Associates (2010) followed the methodology used in EEA (2005) with the objective of obtaining useful information concerning recycling on islands and in countries that include islands. The project concerned the management of packaging waste (glass, metal, plastic and paper) and Waste of Electrical and Electronic Equipment (WEEE). It seems that political decisions were taken based on the prospect of making use of any possible innate energy resources, including waste-to-energy conversion. Several main conclusions were drawn from this study, such as: June

70 4. Technical Studies the elimination of waste in landfills is reduced, largely due to limited availability of land; there is a lack of a large market for recycled materials; the distance for recycling and recovery from the mainland is problematic; the inconvenience of the seasonal demographic variations caused by the growing tourism sector puts greater pressure to solve the problems of waste disposal and energy planning; the measures implemented in the islands lead to the promotion of various actions for recycling, as opposed to the mainland. the implementation of recycling in the islands does not always follow the rules of the financial market, so that recycling is done despite the fact that it is not financially viable; recycling in the islands is kept at low levels and is not as effective as in the continent. Research by Alwaeli (2010), Rouw and Worrell (2011) and Tsiliyannis (2007) analyse the evolution of recycling or, particularly, the recycling rates for a given country and for a specific time interval. Alwaeli (2010) analysed and compared the targeted and achieved recycling levels of packaging waste, in Poland, for the period The author found that the required levels of packaging waste recovery and recycling have been achieved and in some cases even exceeded. Rouw and Worrell (2011) evaluated the impacts of the packaging policy in the Netherlands for the period of 1986 to The analysis showed that by the year 2000 the Dutch packaging policies were more effective, although the quantities of packaging waste were small. After 2000, the increase in packaging consumption, higher than expected, suggests that policy measures taken have not been very effective. Based on the fact that fixed recycling rates may lead to an increase in environmental impacts, Tsiliyannis (2007) proposed a flexible environmental reuse/recycling rate, adjusted for economic trends. The combined reuse/recycling rate was applied to the study of glass packaging in Greece, from 1995 to Greater environmental gains can be achieved at a lower cost through the implementation of mechanisms that sanction packaging solutions with high consumption and low reuse/recycling rates, and by using cleaner technologies for recycling. Larsen et al. (2010) tried to answer the following questions: to what extent can the recycling rate be increased through improved collection systems, respecting the organisational and technical limitations? And what are their economic and environmental June

71 4. Technical Studies consequences? Of the five alternative scenarios studied in a municipal waste management system, the kerbside collection is the one that would provide higher recycling rates and the collection of recyclables at recycling centres is discouraged. In general, the results showed that increasing the recycling rates promotes a reduction in the municipal costs for collection and treatment of waste and a better environmental performance when compared to incineration (the alternative destination for packaging waste). On the other hand, Mourad et al. (2008) analysed the effects that increasing the recycling rate for cardboard used in aseptic packaging for long-life milk would have on natural resource consumption, emissions to air and wastewater in Brazil. The results showed that increasing the recycling rate would reduce overall pollutant emissions, as well as natural resource and energy consumption. The RDC and Pira (2003) report identified optimal recycling rates by weighting the environmental benefits of recycling with the implementation costs of policy measures. A LCA was carried out to determine the environmental, social and economic impacts and the monetary valuation of these impacts in a cost-benefit analysis (CBA). The scenarios were determined according to three parameters: population density, MSW management options available (in alternative to recycling i.e. landfilling or incineration), and type of selective collection. For each scenario the recycling rates were obtained by data collection and the internal, external costs and sum (social costs were calculated). The environmental inputs and outputs were modelled in line with the requirements of ISO and ISO140416, using the Pira International LCA model PEMS 4.7 (inventory analysis). Afterwards the CBA methodology was applied, including the economic valuation of the environmental impacts. The economic valuations used in this study are mainly based on damage cost estimates by hedonic pricing methods or willingness-to-pay studies. Also, an attempt has been made to determine the employment created. A combination of factors determined the ability of a MS to meet a specific recycling target, namely: the packaging mix of the MS; the proportion of population living in high and low population density areas in the MS; the proportion of landfill and incineration with energy recovery available in the MS; the proportion of companies producing small and large quantities of packaging waste (for commercial and industrial packaging applications only). Optimal recycling rates were determined according to key parameters: population density (low or high) and MSW treatment (landfilling or incineration). The optimal recycling rate June

72 4. Technical Studies per application for each MS was calculated by combining the optimal recycling rate per application with the characteristics of each MS. Depending on the MS, the optimal recycling rate varies from 40% to 72%. Table 4.1 Summary of the ranges of optimal recycling rates per MS. Global Target Industrial waste Global Target Household waste Global target (Industrial + Household waste) Min Max Min Max Min Max Austria 56% 74% 42% 60% 49% 67% Belgium 54% 70% 42% 65% 48% 67% Denmark 54% 70% 53% 66% 53% 68% Finland 57% 73% 35% 48% 48% 63% France 53% 72% 45% 68% 50% 70% Germany 56% 72% 45% 71% 51% 72% Greece 53% 70% 39% 52% 46% 61% Ireland 50% 67% 27% 38% 40% 54% Italy 54% 71% 44% 65% 49% 68% Luxembourg 54% 70% 46% 66% 50% 68% The Netherlands 55% 71% 44% 64% 51% 68% Portugal 57% 75% 46% 64% 47% 65% Spain 50% 66% 47% 65% 49% 65% Sweden 59% 76% 44% 54% 52% 66% United Kingdom 56% 72% 39% 64% 49% 69% EU 54% 71% 45% 65% 50% 68% Source: RCD and Pira (2003) It is possible to devise incentive mechanisms that aim at reducing the amount of solid waste and preserving natural resources. Bor et al. (2004) and Hage (2007) looked at measures to encourage the recycling of packaging waste applied in Taiwan and Sweden. The government of Taiwan implemented a new market-incentive system, as a way of economic incentive for recycling different kinds of packaging containers, by applying product charge and subsidy policies. The empirical results showed that the new MI approach stimulated and established a recycling market for packaging waste. Based on a cost-effectiveness analysis, the recycling policy designed by Bor et al. (2004) is a possible solution to solid waste management in countries, such as Taiwan, that have limited land resources. In addition to analysing the incentives structure, Hage (2007) also examined the effectiveness of the Swedish producer responsibility ordinance. In particular, he studied the ability of the system to induce producers to use less paper packaging and to June

73 4. Technical Studies meet the objectives related environmental cost effectively. This author also discusses a hypothetical upstream combination tax/subsidy scheme (UCTS system) 2 that could be a better solution to the waste management problem than the present one in this country. The results showed that both systems would perform well, fulfilling two important criteria of cost effectiveness. Using the packaging fee in the current system and packaging tax in the UCTS system provides similar incentives to an output effect. By subsidising collection and recycling, which induces a decrease in the price of secondary material, both systems also encourage the use of secondary materials rather than raw materials. Although neither of the systems encourages enough of design for recyclability, the Swedish producer responsibility seems to be somewhat more effective than the UCTS system. Since the UCTS system will not provide to the packaging paper producer any incentive to design the packaging for increased recyclability. The analysis of the transformation and transaction costs of both waste management systems suggests that it may be difficult to determine a priori what the system will minimise the overall waste management costs. Still on the concept of EPR, Nachman (2010) examined different approaches for the to implementation of the EPR in South Africa, focusing in particular on their effectiveness in stimulating recovery of post-consumer packaging material for recycling. EPR is an environmental policy approach where the producer s responsibility for a product is extended to the post-consumption stage of the product s life-cycle, including its final disposal. It was found that, unlike the case of mandatory regulations imposed by the South African government, voluntary industry initiatives can be effective in stimulating waste recovery in a developing country context. But this does not imply that voluntary initiatives are always more effective than mandatory regulations. For the case under study, the authors argued that mandatory regulations in the plastic bag industry served as a stimulus to recovery in the glass and PET industries. The greatest incentive to voluntary initiatives in these industries has been the desire to avoid punitive regulations like those imposed on the plastic bag industry. Raising the awareness and motivation of families to recycle is also an important aspect. The act of recycling by households is a voluntary activity, and especially motivated by environmental reasons. Studies by Berglund (2006), Bruvoll et al. (2002), Defeuilley and Lupton (1998) and Perrin and Barton (2001) tried to understand the motivations and participatory behaviour of households in terms of recycling, taking into account the effort 2 The UCTS system combines an output tax on produced intermediate goods with a subsidy granted to collectors of recyclables. June

74 4. Technical Studies (time and cost) spent on waste sorting. Hage et al. (2009) analyse more specifically the determinants of the recycling efforts of packaging waste in Swedish households. The study emphasis was on the importance of the interaction between economics and normbased motivations. Overall, the results confirmed that both economic concerns and moral obligations influence the rates of recycling at a household level. In particular, convenience matters (in this study it is seen as an economic cost on families) and it influences the rate of recycling. That is, the proximity of housing to the collection points increases the rates of waste recycling. These rates are also positively influenced by the fact that they contribute to environmental protection. These results also indicate that the authorities and the recycling industry could increase recycling rates, maintaining the same levels of existing collection, through information campaigns. An important conclusion of this paper is that future policies should preferably be presented in "packages", giving equal importance to the moral obligations of individual recycling efforts and the measures introduced to facilitate households efforts. Petersen and Berg (2004) sought to measure volume weights and analyse the characteristics of recyclable materials delivered to the recycling station in the municipality of Borlänge, Sweden. An investigation that had as its main motives to facilitate future planning of collection intervals and the bin/container volume, as well as studying public attitudes towards recycling stations and waste management. The results for the volume weights of paper/newsprint and paper, plastic, metal and glass packaging were provided for Despite the small number of interviews presented in this paper, the results show general trends in public attitudes in Borlänge. Most users of the recycling station went by car and stated that the main purpose of the trip was not the visit to the recycling station. This shows that the optimisation of the location of recycling stations is required, preferably close to the houses or on routes travelled on the way to other activities. Also important is a proper sizing of containers and optimisation of collection techniques and routes, because the recycling station with overloaded containers generates a lower participation rate. The results of the interviews also indicate that the inhabitants of Borlänge who use the recycling station have found a way to incorporate the waste separation in their daily lives, with the help of information, design of the collection systems and environmental concerns. A cost-efficiency analysis of recycling in four countries (France, Germany, the Netherlands and the UK) including the comparison with alternative treatment routes (incineration with energy recovery, disposal in landfill) covering the various materials (glass, plastics, paper June

75 4. Technical Studies and board, tinplate, aluminium) and sources (household and non-household packaging) was performed by Cagnot et al., Even though this study focuses on household packaging, it analyses the costs and cost-efficiency of the various treatment possibilities for non-household packaging. The state-of-the-art of packaging recycling in each country was assessed at a certain point in time (1997 for recycling rates and 1998 for costs), taking into account the effects of the implementation of the Directive on recycling. The cost analysis performed is close to the methodology of value-chain analysis: the various financial flows (costs and revenues) were layed down for each single step from collection to recycling. The financing need defined by the total costs minus revenues from the sale of sorted materials, is the amount of financial injections necessary to render recycling profitable from a recycler s point of view. Since the financing need essentially corresponds to the amount covered by packaging recovery systems (including contributions from tax payers), this study mainly focuses on this type of costs and the way they are shared between the various actors. The population density is an important factor, influencing the cost-efficiency of packing recycling. Environmental benefits, however, are reduced by higher transport distances only to a smaller extent. The recycling costs need to be compared to the costs of alternative waste treatment. The evaluation of the environmental impacts and benefits of alternative treatment routes of presently recycled packaging waste shows that, for the mix currently recycled in the four countries, recycling is more favourable compared to incineration with energy recovery, as well as landfilling (p. 127). Bartelings et al. (2005) state that the higher the landfill taxes the higher the recycling or incineration rates. Municipalities that charge a unit-based price for waste collection will make households notice the effects of the landfill tax (by an increase in the price for waste collection) providing an incentive towards recycling. In municipalities that charge a flat fee for waste collection, households will not be encouraged to recycle. However, the increase in the landfill tax will only provide a small price incentive to recycle. Most of the municipal solid waste is already incinerated so the price increase of waste collection due to the landfill tax will be slight (p. 65). On the environmental impacts issue, OECD (1998) referred to a DSD study at the time on the ecological effects of different plastic recovery processes revealed that material recycling (separated monofractions) has less environmental impact that all other recovery processes, provided that the secondary product substitutes raw material in a relation close to 1:1. If the lower quality of the secondary product requires per cent more material June

76 4. Technical Studies to have the same functions as the raw material, recycling loses its environmental benefits compared with recovery processes (blast furnace reduction agent, BASF thermolysis, KAB hydration) or special energy recovery in a fluidised bed combustor. Obviously, incineration with energy recovery or gasification processes bring more environmentally benefits than landfilling. For paper products, results have concluded that recycling is almost always environmental better. The effectiveness of the existing recycling structures for glass, paper and cardboard have been improving. Furthermore, new recycling structures were created for the recycling of lightweight packaging leading to environmental benefits by substituting primary resources. From an ecological point of view, the thermal treatment of plastic packaging in a waste incineration plant, even for small-scale plastic packaging (especially comparing with a continuous advancement of recycling technologies), does not perform as well as material recycling (Cantner et al. 2011). 4.4 Incineration The waste management strategies developed in accordance with EU policies follow the so-called waste hierarchy. According to this strategy, first, one must avoid generating waste (waste prevention), but if this is not possible, the waste must be treated in the following order of priority: reuse, recycling, energy recovery (especially incineration) and landfilling (Björklund and Finnveden, 2007). Incineration is a method of processing combustible waste from households, commercial and industrial sources (Daskalopoulos et al., 1997). It is an alternative to disposal in landfills, representing a relatively better alternative in terms of opportunity costs and environmental costs (Mazzanti and Zoboli, 2008). The residues of incineration have reduced up to 90% in volume and 70% by weight of the original bulk material. This allows for savings in transport costs and landfill requirements. The incineration process also removes organic (biodegradable) waste components, thus eliminating the possibility of landfill gas and leachate generation when the residues are landfilled. This process must be strictly controlled to avoid emissions of pollutants into the environment (Daskalopoulos et al., 1997). Villanueva and Wenzel (2007) conducted a review of nine LCA studies (encompassing a total of 73 scenarios) that compared different management options for paper and June

77 4. Technical Studies cardboard waste. This study had three main objectives: to analyse the consistency of the findings presented in the literature review, identifying the main methodologies of LCA applied to paper waste management, and finally, discuss whether it is correct to use the LCA methodology to guide policy decisions in the management of paper and cardboard waste. While there are disparities in terms of geographic location and definitions of systems for recycling/disposal, in general, the results confirm that the recycling of paper and cardboard waste has higher environmental benefits than the alternatives (incineration or landfilling). The study identified the most significant assumptions in the LCA comparisons of different management options for paper and cardboard waste. The 15 key assumptions identified (see Table 4.2) cover the three phases in the life-cycle of paper: the raw materials (forests), paper production and disposal/recovery. The choice of these key system boundary issues is very important because it influences the results of the LCA, particularly the assumptions regarding the generation and use of energy and raw materials. Table 4.2 Key system boundary assumptions in the LCA of paper and cardboard. Phase in the life cycle of paper Key system boundary assumptions Raw forestry Paper production Disposal/energy recovery materials/ 1 Alternative use of land/wood included? 2 Saved wood used for energy? 3 Wood marginal Virgin paper 4 Electricity marginal 5 Steam marginal Recycled waste paper 6 Electricity marginal 7 Steam marginal 8 Energy export from virgin paper included? 9 Which is the main alternative to recycling: incineration or landfilling? 10 Emissions from landfill included? 11 Energy from incineration substitutes heat? 12 Energy from incineration substitutes electricity? 13 Alternative use of incineration capacity included? 14 In which ratio does recycled paper substitute virgin paper? (1:1 or 1:0.8 or 1:0.5 or other) 15 Handling of rejects and de-inking waste from paper recovery included? Source: Villanueva and Wenzel (2007) Also Massarutto et al. (2011) have compared different solutions for waste management, but in this case for MSW. The intention was not to identify "the best" solution, but to June

78 4. Technical Studies establish a ranking between different waste management options for a typical area of north-central Italy. They compared six different scenarios, characterised according to the source separation level (SSL) and the technologies used for the treatment of materials obtained from the separate collection and the unsorted residual waste (URW). Through a life-cycle costing (LCC) model, the authors sought to refute the assumption that the cost of collection is constant, regardless of the SSL. They argue that the increasing SSL causes decreasing returns of recycling and increases the unit cost of waste management. The authors emphasize the idea that different waste management strategies should be regarded as integral parts of a strategy and not as alternatives. Both the recycling of materials and the incineration of waste (with energy and heat recovery) are needed to effectively reduce the amount of waste sent to landfills. The results suggest that the ideal rate for the SSL is around 50%. The increase of this level would only generate higher financial costs that would outweigh the benefits. It is argued that a more balanced strategy would be the scenario with a drop-off separate collection system that allows for the direct incineration of URW. According to the authors, the direct incineration of URW is one of the most effective and economic options, because it has high levels of energy efficiency and heat recovery. Heat recovery from MSW can be used in district heating networks. Finnveden and Ekvall (1998), based on seven European LCA studies, tried to draw conclusions about the environmental advantages of recycling over incineration of paper packaging materials, and discuss the incineration against the recycling of other materials. The results seem to show that the total energy consumption is lower when the paper packaging materials are recycled instead of incinerated. In cases where the fossil fuels are an alternative energy source, the incineration of paper packaging can reduce CO 2 emissions. But if solid waste (or biofuels) is the alternative energy source, increased recycling, in general, leads to reduced emissions of greenhouse gases. It was suggested that solid waste will be the alternative energy source for the near future in incineration, if the paper packaging waste is all recycled. Björklund and Finnveden (2007) and Sahlin et al. (2007) studied the effects of introducing a waste incineration tax in Sweden, whose purpose would be to increase the incentive to materials recycling and biological treatment. Björklund and Finnveden (2007) presented the results of a LCA of the Swedish waste incineration tax proposal, in the context of a larger research project concerning the development and testing of a framework for Strategic Environmental Assessment (SEA). This paper intended to assess the life-cycle environmental impacts of the waste incineration tax proposal (a weight-based tax on June

79 4. Technical Studies waste incineration) and to investigate the optimal design of such a tax. Four alternatives were compared, reflecting differences in waste policy: No-action (Alt 0) - examines the hypothesis of avoiding the introduction of the waste incineration tax, but keeping all other means of control planned; Waste incineration tax SEK 400 per tonne (Alt 1) - presented as being the most effective and realistic tax level; Maximise energy recovery (Alt 2a), and minimise greenhouse gas (Alt 2b) - these alternatives, which only differ in the treatment of organic household waste, explored the potential of reaching greater environmental improvements than those achieved by Alt 1. In Alt 2a, which aims to maximise the recovery of energy, this fraction is incinerated. And Alt 2b, which aims to minimise emissions of greenhouse gases, organic household waste is treated by anaerobic digestion. The results suggest that a waste incineration tax of 400 SEK/tonne, illustrated in Alt 1, results in environmental improvements for most, but not for all environmental impact categories. However, these improvements would be relatively small compared with the potential improvements achieved through the scenarios Alt 2a and Alt 2b. The authors suggest a more elaborate tax design, in which the tax level would partly be related to the fossil carbon content of the waste. The detailed analysis also reveals that the greatest improvements are achieved by reducing landfilling and increasing recycling. Sahlin et al. (2007) investigated the degree to which material recycling and biological treatment will increase due to the introduction of a waste incineration tax, in Sweden. They examined two differently formulated taxes: (1) average fossil tax, based on the estimated average fossil content of the total incinerated waste; (2) specific fossil tax, applied only on the fossil carbon content of the waste in each incineration plant. A model spreadsheet was developed to estimate the net marginal cost for alternative waste handling (i.e., the marginal cost of alternative treatment minus avoided cost of incineration). The value of the households time required for source separation was taken into account. The model focused on the nine largest fractions of household waste currently being sent for incineration (about 85% of the total weight): food waste, newsprint, paper packaging, soft and hard plastic, diapers, other paper waste and non-combustible waste. The results indicated that the incineration tax will have a more significant increase on the biological treatment of kitchen and garden waste, which could increase by 9%. The information could be a key factor in transferring the governing force of the tax to the households, as well as improving the household attitudes in terms of materials recycling. June

80 4. Technical Studies In the work of Jamasb and Nepal (2010) different options for waste management have been studied, in particular waste-to-energy (WtE), regarding economic and environmental aspects. Focusing on the management goals of the EU Directives, they applied a social cost-benefit analysis using different scenarios for the UK. WtE obtained through MSW incineration, besides being a waste treatment option, allows obtaining a more clean energy compared to that of the coal-fired power plants. The authors emphasize the possible compatibility between WtE and recycling, arguing that WtE does not necessarily imply a decrease in recycling rates, and that these two management options can coexist. The results indicated that (p. 1352) "WtE is a socially cost-effective waste management option as compared to coal power and that meeting the EU directive targets will realize much of these benefits", but to be able to exploit all the potential of WtE it is necessary to develop distribution networks of heat and energy. Although recycling is the most environmentally favourable option, this does not allow for the recovery of energy, so the WtE should be seen as an important component of the strategy for waste management (as of the energy and environmental policies). Wenisch et al. (2004) also studied WtE but by conducting an LCA sought to assess the technical and environmental effects 3 that pre-sorting of household waste have in the treatment process. This assessment was based on the data from a sample of an urban and semi-urban geographical area, the so called "Grand Lyon", in France. The analysis focused on material recycling, incineration of domestic waste, energy recovery (energy recovery) and disposal of waste. As one would expect, the selective collection improves the working conditions of incinerators, in terms of technical effects. However the loss of energy produced in waste incineration implies that the environmental benefits obtained from recycling offset the additional use of other energy sources. An increased rate of energy recovery from incinerators could also be beneficial in environmental terms. 3 Technical effects: the load factor of incinerators, the net calorific value of waste, the treatment of flue gases, the recycling of bottom ash and the treatment of fly ash. Environmental effects: the resource depletion, air toxicity, the acidification, the greenhouse effect, water pollution and production of waste. June

81 4. Technical Studies 4.5 Composting Organic recovery, and, more specifically, composting (aerobic treatment) of MSW is another alternative to landfilling. Besides reducing the quantities of waste sent to landfills, composting also helps to achieve the objectives set by the PPW Directive (Pagga, 1998). Hence, this technique is often regarded as a fundamental part of integrated waste management. It consists in a biological process carried out by micro-organisms in controlled conditions, that produces stabilised organic waste (compost) from the biodegradable components of MSW (Directive 94/62/EC). After the removal of contaminants and impurities, this compound can be used as a fertilizer (a source of nutrients and minerals) on horticultural and agricultural crops and/or landscaping activities (Renkow and Rubin, 1998). Many of the materials used in packaging are organic and, in principle, prone to be treated biologically. So composting does not just consist of yard waste and food debris from households, but also of paper, cardboard, wood or biodegradable plastic (Pagga, 1998). However, composting requires a rigorous separation of waste, it is necessary to remove all the unwanted materials such as batteries, glass, metal and non-biodegradable plastic, this sorting process usually makes composting quite expensive (Renkow and Rubin, 1998). To provide information on the costs of MSW composting and compare them with other waste management strategies, Renkow and Rubin (1998) present the results of 19 MSW composting facilities in the US. The results show that the cost of composting of MSW was on average $50 per tonne in They also show that there are only a few composting facilities that receive some benefits from the sale of the compost produced (furthermore, there is no evidence of preference between public or private delivery) at the date of the study. Composting of MSW could not be justified on financial terms, being a more expensive option than landfilling in most cases. It can, however, be a competitive alternative in areas where the cost of landfilling is very high. Composting also competes with incineration (with energy recovery) for the same waste stream, a fact that increases the costs of both alternatives. Answering the question of what is the best waste management strategy in terms of sustainability involves at least three issues: financial affordability, environmental effectiveness and social acceptability. Aye and Widjaya (2006) compared different alternatives for waste management, particularly for the waste from traditional markets in June

82 4. Technical Studies Indonesia. This is the second largest waste stream in Indonesia and is composed mainly of organic waste. Among the different options for managing the organic fraction of MSW, the authors compared composting (compost production), biogas production (production of biogas and compost), landfilling (landfill gas production to electricity generation) and the most common disposal method (open dumping) as the baseline case. Evidently all options are better than the current open dumping in terms of environmental impacts. The biogas production option has the lowest environmental impact while the engineered landfilling for electricity generation has the greatest impact (yet with lower impact than the baseline case). Surprisingly, composting appears to be the best option for the organic fraction of MSW management of traditional markets of Indonesia among all the alternatives compared. Under these circumstances composting seems to be an economically advantageous option with moderate environmental impacts. To understand what are the benefits of biodegradable packaging waste management and what it is the need to create new legislation, Davis and Song (2006) discussed the effects of this type of packaging in terms of landfilling, incineration, recycling/reuse and composting. To accomplish this, they made a comparison between biodegradable packaging and packaging with other materials (especially the traditional oil-based plastic packaging) in the UK. Biodegradable packaging should not be sent to landfills due to its tendency to release methane under anaerobic conditions. They are also unsuitable for conventional recycling, but there are no conflicts with incineration. However, the most appropriate waste management strategy for biodegradable packaging is composting. Composting is a form of recovery of materials (a PPW Directive target), but to facilitate the process the authors suggest the introduction of certificates of biodegradable packaging materials and the collection of these to be made with organic waste. "By using local or regional composting facilities, the total waste to landfill could be reduced, in addition to the reduction of transportation costs and associated emissions" (p.158). In terms of costs, composting is seen in several European countries as the most economical management option, but this does not apply in the UK where landfilling is still the cheapest alternative. For biodegradable packaging to be successful it is essential that conditions are created for a proper collection, transport and treatment. The associated costs can be high, but the environmental rewards in the long term, will also be high. Klauss and Bidlingmaier (2004) conducted a pilot project in the city of Kassel, Germany, with the main objective of assessing if it was possible to label biodegradable packaging properly so that consumers were able to correctly identify and separate the conventional June

83 4. Technical Studies packaging (e.g., plastic bags) and discard them along with organic waste. Biodegradable packaging was introduced, then collected together with organic waste and transported to a composting facility. The quality of the compound obtained was evaluated and the safety of their use in agriculture was tested. The results indicated a correct identification and separation of biodegradable packaging, having been collected together with organic waste. The quality of the compost produced has not changed due to the presence of biodegradable packaging, and its application is safe for agricultural purposes. June

84 June

85 5. Economic Studies 5. Economic Studies 5.1 Introduction The first work envisaging the evaluation of waste management costs were carried out in the late 60s (Hirsch, 1965). At that time, waste management mainly consisted in nonselective collection and landfilling. Since then, studies have begun to analyse the relationship between costs and certain variables, especially the different types of market and the catchment areas (Lombrano, 2009). Over the years, environmental protection issues began to acquire economic meaning. Preventive measures, such as selective collection and recycling, were implemented in order to reduce landfilling. In addition, waste disposal technology has been diversified (e.g. incineration with energy recovery). Simultaneously, the practitioners and academics widened the scope of their studies to include benchmarking of management options and processing technologies that result in benefits for the environment and the economy (Lombrano, 2009). The life-cycle of a product involves several steps ranging from the extraction of raw materials for their production ( cradle ) to its final disposal when the product becomes a residue ( grave ) (Kuta et al., 1995). Figure 5.1 shows that all those steps have inputs and outputs which are responsible for various environmental impacts affecting the social welfare where some outputs have no market price. Therefore, an economic valuation of these impacts should be undertaken. Most of the studies that surveyed the economic life-cycle of PPW are based on an environmental analysis of that same life-cycle, usually referred to as LCA. June

86 5. Economic Studies Energy Energy Energy Energy Energy Raw Materials Acquisition Materials Manufacture Product Manufacture Product Use or Consumption Landfill, WTE Conversion, Recovery, Recycle, Reuse Environmental Pollution Environmental Pollution Environmental Pollution Environmental Pollution Energy Environmental Pollution Product Reuse Material Recycling Figure 5.1 General life-cycle of a product system. Source: adapted from SRMG (2009) LCA is a decision-support tool that encompasses the identification and quantification of energy and materials (inputs) consumed and waste (outputs) released to the environment. The assessment of the environmental impacts allows for the evaluation and implementation of procedures to carry out environmental improvements (Barton et al., 1996). According to the literature, environmental valuation (usually named environmental LCC) consists in the measurement of ecological impacts of a LCA system in monetary terms. On the other hand, a financial LCC determines the economic impacts of each system. The financial costs are all internal costs of a system (Reich, 2005). The balance between all internal and external impacts is defined as a cost-benefit analysis (CBA). In terms of waste management, a CBA provides a monetary valuation of the impacts (including environmental) from the collection, sorting, transport, recycling, incineration with energy recovery and landfilling. In short, this economic analysis allows for the comparison of the internal (financial) and external (environmental and social) costs of the several options available, as it is reported in RDC and Pira (2003). June

87 5. Economic Studies 5.2 Cost-Benefit Analysis (CBA) The literature entails some studies that apply this type of analysis to evaluate the costs and benefits of various urban solid waste management scenarios. In the EcoRecycle Victoria (2003) and Walker et al. (2004) reports, similar approaches were taken. Economic models have used a range of costs and benefit parameters, for instance: Processing and transport costs; Environmental externalities; Waste transfer taxes; The sales of secondary raw materials; Environmental damage costs in terms of gas and water emissions and resource use. Extreme scenarios were analysed. The parameters which are varied under the scenarios are landfill charges, saleable output prices and environmental impact valuation data (EcoRecycle Victoria, 2003, p. 3). The high scenario encompassed the most optimistic estimates for those parameters, in opposition to the low scenario. Walker et al. (2004) estimated that the Nova Scotia solid waste-resource system produced net savings of between 21.5 million and million, comparing with the pre-system as shown in Table 5.1. When a fuller range of costs and benefits is included in the analysis, a system based on composting, recycling, and high rates of waste diversion is found to be more cost-effective than a system almost entirely dependent on landfilling (EcoRecycle Victoria, 2003). June

88 5. Economic Studies Table 5.1 Marginal savings of the solid waste-resource management system vs. the pre- Strategy system. Pre-Strategy Costs ( ) Operating costs and amortizations Cost per capita 39 Post-Strategy Costs and Benefits ( ) COSTS Low High Operating and amortized capital costs Beverage container recycling program (net) Used tire management program (net) Stewardship programs RRFB operating and administrative costs Non-deposit materials Derelict vehicles Household hazardous waste program Nuisance (value of time) Cost to increase participation Total costs Cost per capita Indirect costs total BENEFITS Low High Employment benefits (direct) Employment benefits (indirect) Reduction of greenhouse gas emissions Reduction of air pollutant emissions Extended landfill life Avoiding siting costs Avoiding compensation Export revenue Tourism Energy savings from recycling RRFB diversion credits RRFB approved programs RRFB investment Total benefits Benefits per capita Net annual cost () or benefit ( ) Annual cost () or benefit per capita ( 12) 88 Net savings compared to pre-strategy cost Annual savings per capita Source: adapted from Walker et al. (2004) (Values based on actual currency conversion, $1 = 0,69) Beigl and Salhofer (2004) compared different MSW management systems, in a selected area in Austria, regarding their LCA and associated costs. Three scenarios, with and June

89 5. Economic Studies without recycling and separate collection (bring system and kerbside collection), were defined. The study considered the transport movements from private delivery and regional companies and the treatment processes. The study included ecological impact analyses and cost comparisons for the overall waste management systems and for the individual waste types (paper, plastic, metal and glass). Recycling was clearly favourable in terms of the acidification and net energy use categories. On the other hand, recycling with kerbside collection presented fewer emissions than non-recycling scenario and even than recycling scenario using the bring system. The environmental benefits of kerbside collection are due to lower fuel consumption in collection services comparing with private transports. Regarding cost analysis, small differences between recycling and non-recycling scenarios were found. However, shorter transport distances encourage the recycling scenarios due to the higher percentage of the transportation cost when compared to the non-recycling scenario. Reich (2005) also studied ways of linking economic analysis and LCA of municipal waste management systems; a Swedish municipality was used as case-study. A financial and environmental LCC was used and different treatment processes (such as incineration, biological treatment, materials recycling and landfilling) were analysed. The results obtained in both analyses showed the same trend. In general, great differences in the total financial costs of the various treatment scenarios were not observed, except on landfill that turns out to be a more expensive alternative due to external heat production resulting in about 4 million per year. Transportation and collection were important cost contributors (about 1.2 million per year), but substantial differences among the different scenarios were not found. The emissions and resource use costs were also identified as important fractions of total costs for MSW management. A new methodology for modelling regional solid waste management was applied by Shmelev and Powell (2006). They focused on the integration of three different approaches to spatial-temporal analysis of MSW management systems. An LCA inventory was carried out in order to identify the inputs and outputs from those systems. On the other hand, a joint optimisation approach allowed for assessing the best solutions in environmental and economic terms. A geographic information system (GIS) approach provided a tool for the identification of waste management facilities, environmental and social impacts of transportation, as well as the analysis of environmental impacts on valuable ecosystems. These methods were implemented in a South West region of England. A solution which integrated the results obtained considering several scenarios (based on the changes of June

90 5. Economic Studies waste treatment capacities regarding landfill area) was the main conclusion of this work. It was shown that an increase of total system management costs by a factor of 1,82, would make it possible to reduce the total environmental damage by a factor of 2,99. The environmental damage was calculated according to the following formula: k k I Ik * * k 1 k 1 ED where: ED is the total environmental damage; I k is the score of the area around the k th waste treatment plant; γ I is the coefficient of the environmental damage associated to the emission type n; E n k corresponds to the emissions quantified by LCA method of the n th type (n = 1,,N). n k Environmental and economic studies of MSW management scenarios in Wales were developed by Emery et al. (2007), taking into account the general public concerns and the waste managers and planners needs. The combination of a LCA tool and an economic model was required. Four different scenarios were defined, namely the Do nothing, the Wales recovery targets including kerbside recycling, the Landfill Directive targets and the Burn all. The economic model included costs and the employment and recovery percentages attained using different types of waste collection vehicles (refuse vehicle, split refuse vehicle, regular and specialist kerbside vehicles) and waste treatment options (landfill, thermal treatment, incineration and recycling with kerbside collection). The costs related to each type of collection vehicle are presented in Table 5.2. Variables Table 5.2 Total annual costs of different collection vehicles. Units Refuse collection vehicle Split refuse collection vehicle Regular kerbside vehicle Specialist kerbside vehicle Annual mileage miles Fuel /year Oil /year Wages driver /year Wages operatives (x2) /year Insurance /year Hire costs /year Total /year Source: adapted from Emery et al. (2007) (Values based on actual currency conversion, 1 = 1,11) June

91 5. Economic Studies The costs of several options presented were evaluated for different household participation and materials recovery rates, as shown in Figure % Participation & 65 % Recovery 100 % Participation & 100 % Recovery Cost ( per tonne) Landfill Kerbside Caged Kerbside Specialist Split Vehicle Thermal Pre Treatment Incineration Scenario Source: adapted from Emery et al. (2007) (Values based on actual currency conversion, 1 = 1,11) Figure 5.2 Net costs of waste management costs. Considering the materials revenue (Table 5.3), the total costs of waste management options were substantially reduced (Figure 5.3). Reviewing various waste management options, the best scenario was found to be the high household participation and recovery rates combined with a collection vehicle with great capacity for holding recyclable materials. Table 5.3 Revenue from 100 % of recovered materials. Material Mass (tonnes) Price ( /tonne) Total price ( ) Ferrous metals Glass Non-ferrous metals Paper recyclable element Plastic dense Green waste n/a 0 Total n/a not applicable Source: adapted from Emery et al., 2007 (Values based on actual currency conversion, 1 = 1,11) June

92 5. Economic Studies % Participation & 65 % Recovery 100 % Participation & 100 % Recovery Cost ( per tonne) Landfill Kerbside Caged Kerbside Specialist Split Vehicle Thermal Pre Treatment Scenario Incineration Source: adapted from Emery et al. (2007) (Values based on actual currency conversion, 1 = 1,11) Figure 5.3 Total costs of waste management options. The studies carried out by Pickin (2008) and Cleary (2009) compare some of the work already cited and also more specific (Consonni et al. 2005) or older (Craighill and Powell 1996) research. Some inconsistencies in the parameters considered and in the systems boundaries (which separate internal components of the systems from external entities) were observed. But a quantitative analysis of the system boundary effect on the overall results was not raised by Cleary (2009). However, in general, waste management options studied by the authors did not appear to have significant influence in the ranking of the preferred types of MSW treatment. Lombrano (2009) also developed a study based on the CBA of MSW management systems, this time focusing on the Italian case. The main objective of the work was to provide clear guidelines to the managers in the public-sector, observing if the performance of this sector depends, somehow, on privatisation policies. The results follow the general trend of previous studies. An integrated waste management directed to the separation and recovery of waste, avoiding or minimising landfilling continues to be the most advantageous in economical and environmental terms. On the other hand, no correlation between privatisation and cost-efficiency was observed (Bel and Fageda, 2009). In fact, the study showed that waste management companies performance does not depend on June

93 5. Economic Studies private capital, but rather on the type of technologies used and on the extent of the area covered by waste management. Jamasb and Nepal (2010) evaluated the economic and environmental aspects of two different scenarios of waste management options in the UK, focusing on energy production from the waste (the so-called waste to energy, WtE). A first scenario (business-as-usual, BAU), based on the waste management policies for the year 2005/2006, was compared with a second one, looking at the UK legislation following the implementation of the EU Directives. A CBA based on specific waste treatment options and carbon prices was carried out. In CBA, the following costs were considered: Direct private costs including operation and maintenance costs ( raw materials extraction, labour costs, plants/equipments maintenance and training programmes (p. 1343)); Indirect private costs covering the required land to locate the plant and the capital costs; Private benefits that include the revenues from WtE plants ( landfill fees, energy sales, recycling of metal post-incineration and the sale of combustion residuals (p. 1344)). External costs and benefits encompassing the environmental damage from transportation and waste treatment (incineration with or without heat and electricity recovery, landfill with or without energy recovery, composting and recycling). Other costs associated to the plant efficiency, the waste stream composition and to the waste management and electricity generation. Table 5.4 shows the comparison among several waste treatment options. June

94 5. Economic Studies Table 5.4 The comparative CBA among various waste treatment options. Facilities Incineration E (with electricity recovery only) Incineration E&H (with heat and electricity recovery) Landfill A (without any form of energy recovery) Landfill B (with energy recovery) Recycling /Composting (MRF source separated) Private costs (per tone of waste) Investment and O&M = 51,23 Facility size = tonnes Investment and O&M = 68,18 Facility size = tonnes Investment and O&M = 9,12 Facility size = tonnes Investment and O&M = 7,7 Facility size = tonnes Investment and O&M = 19,7 Facility size = tonnes External costs (per tone of waste) Damage from emissions to the air (mainly NO x and SO 2) = 50 CO2 = 2,55 (low) - 12,03 (high) Disamenity impacts = 8 Total = 60,55-69,67 Damage from emissions to the air (mainly NO x and SO 2) = 28,18 CO2 = 2,55 (low) - 12,03 (high) Disamenity impacts = 8 Total = 38,73-48,21 Global warming (mainly consist of CH4) = 8 CO2 = 2,13 (low) - 10,04 (high) Damage from leachate = 1,5 Disamenity impacts = 10 Total = 21,63-29,54 Global warming (mainly consist of CH4) = 5 CO2 = 1,27 (low) - 6,01 (high) Disamenity impacts = 10 Total = 16,27-21,01 CO2 = 0,31-1,49 Pollution from transportation = 0,16 Total = 0,47-2,65 O&M: Operation and Maintenance Source: adapted from Jamasb and Nepal (2010) The results indicated that the goals of waste management under the EU Directives were socially more profitable than the current practice. The WtE could be an important part of the waste management and renewable energy policy, but to achieve the full potential of WtE, the development of heat distribution networks was required. Dijkgraaf and Vollebergh (2003) also carried out an economic study focused on energy production in the Netherlands. Two final disposal of waste (landfill and incineration) were compared. Tables 5.5 and 5.6 show the private and environmental costs for those options. The private costs corresponded to estimates obtained in a study from the Ministry of Finance, including capital investments and abatement technologies required by environmental regulation. The environmental costs were calculated by weighting the impacts (measured by a LCA methodology) by a set of shadow prices for environmental damage (p. 11). June

95 5. Economic Studies Table 5.5 Private costs estimates for landfilling and incineration ( /tonne). Landfilling Incineration Gross private costs Private cost savings: Energy recovery 4 21 Materials recovery 0 3 Net private costs Source: adapted from Dijkgraaf and Vollebergh (2003) Table 5.6 Environmental costs estimates for landfilling and incineration ( /tonne). Landfilling Incineration Gross environmental costs 26,36 45,95 Environmental costs: Emissions to air 5,85 17,26 Emissions to water 0,00 0,00 Chemical waste 2,63 28,69 Land use 17,88 0,00 Source: adapted from Dijkgraaf and Vollebergh (2003) The results indicated that a WtE plant has much higher costs than a modern landfill, which makes it hard to understand the logic of the hierarchical approach on waste treatment options. The landfill with energy recovery is much cheaper but its efficiency is considerably lower than in the WtE plant. On the other hand, Massarutto et al. (2011) modelled six scenarios, considering different source separation levels (SSL) and technologies of materials processing, applied to two hypothetical areas in order to represent a typical scenario of central northern Italy. The scenarios were labelled according to the type of collection (D-drop-off and K-kerbside) and targets achieved in each one (D35 and D50 corresponding to 35 % and 50 %, respectively, of total waste collected separately, excluding organic waste, K50 and K65 corresponding to the kerbside goals being extended to the organic waste). At this level, a crucial question relates to the fact that to achieve higher rates of SSL, the worsening quality of materials collected is expected and, therefore, more waste from sorting to treatment is produced. But from an economic perspective, would it pay off? June

96 5. Economic Studies Massarutto et al. (2011) provided a comparative assessment of various scenarios with the adoption of a LCC approach. The study was conducted through a detailed meta-analysis of literature and verified through a series of interviews with operators in different locations. As it shown in previous studies, the need to consider waste management as an integrated process is emphasized. The materials recycling and energy recovery from waste incineration are, clearly, appropriate options for minimising the waste flows to be landfilled. However, a recycling critical threshold for an SSL of 50 %, above which no positive externalities outweigh the financial costs, was found by the authors. It was further shown that the intensive kerbside recycling is only profitable if recycling rates are very high, which implies not only very high SSLs (above 75%) but also a high quality of collected materials. Thus, lowering collection rates, using drop-off separate collection and opting for direct incineration of residuals appeared to be a more balanced strategy, especially if the efficiency of energy recovery is really high. White (2001) developed a report conducting to a CBA due to the implementation of Container Deposit Legislation (CDL) in New South Wales. Furthermore, RDC and Pira (2003) and Pira and Ecolas (2005) reported the results of the cost-effectiveness of the implementation of the PPW Directive 94/62/EC. Similar approaches were used in these studies, considering three scenarios: (1) without recycling; (2) includes the management system before the implementation of the Directive; and (3) incorporates management systems derived from the implementation of the resulting legislation. White (2001) argued that the introduction of national legislation should have no impact on the financial viability of kerbside recycling in Wales. He also concluded that a return system for containers is a more efficient option in terms of costs to society due to the reduction of the load of transportation and the infrastructure costs, the increase of the number of stores and the return rates. In environmental terms, the reuse of packaging by refilling (mainly glass bottles and plastic containers) can provide great benefits, even more than high recycling rates. However, RDC and Pira (2003) report showed that the costs and benefits of reusable and non-reusable packages had the same order of magnitude, considering the targets of the packaging directive. They concluded that the optimal recycling rates of plastic packaging, taking into account the total social costs (internal + external costs), were not very high (min. 28% and max. 38%). This is because the plastic have a high calorific value and its incineration can be more advantageous due to the benefits resulting from energy production. Pira and Ecolas (2005) stated that the costs of the scenario without recycling were slightly lower than the costs of scenario 3 (considering June

97 5. Economic Studies the PPW directive implementation). Compared with scenario 2 (baseline policy), in 2001 only 3.3% of the total costs of packaging recycling was due to the effects of the implementation of the PPW directive, corresponding to 200 million per year. Thus, it was concluded that the goals of the PPW Directive could be achieved without causing a substantial macro-economic impact. A report on the sustainability evaluation of selected materials and technologies (Ramos et al., 2004) assessed and compared all costs related to the life-cycle of a corrugated board box. A new aspect of the packaging, with or without communicative devices affixed, was evaluated. Figure 5.4 presents the LCC of the corrugated board boxes. CC1 Raw & anciallary materials extraction Raw materials transport (ship USA/Scandinavia to NL+ truck in NL) Corrugated board sheet manufacturing Road (NL) CC2 Selling or delivery point (Excluded) Road (USA) (Excluded) Road (NL) CC4 Shipment (NL to USA) CC3 Box manufacturing and loading at greenhouses in Delft (NL) End-of-life (Excluded) Source: adapted from Ramos et al. (2007) Figure 5.4 Life-cycle costing of the corrugated board boxes. Communicative devices allow for a better packaging of certain products (vegetables) until they reach the point of sale. The relative humidity was the communicative device affixed. The CC1 represents the cost of the purchased box, which includes raw materials, June