EPR Systems for Packaging -

Transcription

1 EPR Systems for Packaging - Experiences from Germany Sabine Bartnik Santiago de Chile, 13th of December 2017

2 What we talked about What we talk about Petra G. Hilke/Shotshop.com Animaflora2016 / Fotolia.com 2

3 Extended Producer Responsibility basic principle government and management authorities: regulations and controlling importer, bottler, producer, distributer pay for each kilogram packaging of the products they put on the domestic market organisation of all system tasks pay for waste management, communication, littering. waste management / recycler municipality 3

4 Overview of developments

5 More recyclables than residual waste in 2013 in Germany Source: Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety 5

6 Number of selected waste management facilities in Germany The circular economy is with about employees and around 70 billion turnover one of the most important industries in the German enviromental economics. There are more than 15,000 waste treatment plants in Germany. Source: Federal Ministry for the Environment, Nature Conservation, Building and Nuclear Safety 6

7 Germany: Plastic consumption (2015) 15 M tons plastic consumption 12,06 M tons processing volume 3,94 M tons others (Adhesives, fibre, varnish, ) Processing by sectors (percentage) Packaging 13,3% Construction/ building 2,3% 3,1% 3,9% 3,0% 6,0% 10,5% 35,2% Vehicles Electrical/ electronics Household goods Furniture Agriculture Medicine 22,7% Other Source: bkv-gmbh.de consultic study

8 Development of packaging consumption in Germany ( ) Material vs kt kt kt Kt kt kt kt % Glass 2, , , , , , Plastic 2, , , , , , Plastic Plastic composites Total 2, , , , , , Paper/board 6, , , , , , Papier Papier composites Beverage cartons Total 6, , , , , , Aluminium Aluminium Alum. Composites Total Tinplate Weißblech Tinplate comp Total Sheet metal/steel Wood 2, , , , , , Cork Rubber Others Ceremic Textile Total All materials in total 15, , , , , , without aluminum lid on tinplate cans 2 incl. aluminium lid on tinplate cans Source: Umweltbundesamt, Aufkommen und Verwertung von Verpackungsabfällen in Deutschland 2015, Autor: Kurt Schüler GVM mbh, Mainz 8

9 Influences on the packaging consumptions Changing in style of living. Long distance trade developed quickly in the last years a higher amount especially of paper and cardboard packaging. Trend towards small filling sizes and pre-portioned units (more single-person households). The out-of-home consumption of food and beverages is increasing (service packs e.g. coffee-to-go, increasing consumption of plastic bottles for drinks ). Final consumers in private households and in businesses are increasingly convenience oriented (less cooking at home, more convenience foods). The producers offer increasingly differentiated, innovative products and services that assign an increasing variety of functions like dosage, portioning handling (increasing use of plastic closures, more complicated plastic closures). 9

10 Collection of Lightweight Packaging (LWP) Germany Separated collection main collection system: kerbside collection via Gelber Sack (yellow bags), Gelbe Tonne (yellow bin) or Wertstofftonne (recycling bin including material identical waste made of plastics and metals) bring systems as exemptions in some municipalities: collection via recycling centers. LWP after collection Waste containers for LWP (yellow bin) bag for LWP (yellow bag) 10

11 Important services of an EPR-System/PRO 1. Developing a concept for a sustainable and practicable waste management. 2. Establishing the organizational structure. 3. Installation of an infrastructure for the collecting of packaging. 4. Installation of an infrastructure for the recycling. 5. Communication, waste advice, training, special education, etc. 6. Activities against littering and for pollution control. 7. Installation of a functional control system. => All these tasks should be defined in a law 11

12 A dual system operates in a broad context Associations and platforms Packaging and product manufactures Customers Shareholders Media and opinion leaders NGOs Employees Retailers Waste management industry Consumers Policy-making Suppliers and service providers Administration Municipalities 12

13 From DSD as a monopolist to a dual system of multiple system operators - (PRO) producer responsibility organisations At the beginning

14 At the beginning Situation in Germany in the late 1980s Household waste was mainly landfilled. There were too few incineration plants. It looked as if the waste disposal sites in Germany were going to overflow. A waste emergency was feared. Packaging waste had a relevant share of the residual household waste and household type commercial waste (50 % of volume and 30 % of weight). There were only systems for returnable glass bottles and only separate collection of nonreturnable glass and paper/cardboard in Western Germany. In Eastern Germany the SERO-System was established people could return materials to the SERO-buying sites. The amount of packaging put on the market was steadily growing. The first step: 12/1988 Ordinance on the return and collection of plastic beverage containers came into force and in consequence of this regulation a refillable plastic bottle was developed. 14

15 The startup phase (1) The packaging ordinance became a controversial issue. Not only politics put pressure on the producers/distributers. The basic idea: All distributers had to take back the packaging waste at the point of sale unless they took part in a dual system. The retailers were worried about becoming the nation's landfill Companies concerned were looking for the alternative. September 1990 the DSD Der Grüne Punkt Duales System Deutschland Gesellschaft für Abfallvermeidung und Sekundärrohstoffgewinnung mbh was founded. 95 founding shareholders (packaging industry, trading companies, brand-name producers e.g. ALDI, Tetra Pak, Bahlsen, Karstadt,..) 15

16 The startup phase (2) 1991 DSD started building up the system and established the separate collection in some districts. Different models of collection were tested the part of the packaging ordinance concerning the sales packaging and the take back obligations came in to force. That dual system had to be installed as an area covering take back system. There should be a collection system in each district/town (within a federal state). DSD was obliged to tune the dual collection system to the municipal collection systems. That required agreements with each of the public waste management authorities (district or town). The first contract for construction and operation with the disposer included collection and sorting. DSD had to conclude contracts with 404 private or municipal disposal companies (546 collection districts). Long duration of the contracts with the disposer for building up the infrastructre 16

17 The startup phase (3) The monopoly: DSD was the only collective take-back-system for sales packaging. Participation in DSD was open to all companies. The profits could not be distributed to the shareholders profits had to be transferred to revenue reserves. At the beginning the Green Dot was a sign for taking part in the dual system. You had to pay the licence fee for using the Green Dot and taking part in the system. But the dual system was obliged to collect all sales packaging waste in the yellow bags and bins regardless of a Green Dot. The disposer was payed by DSD according to the input and in terms of the defined recycling groups. The federal cartel office prevented the DSD from expansion of activities to collect packaging in industry and commerce. DSD was responsible for the recycling and had to reimburse the costs for the disposal of residues. In the first years the disposers had to hand over the sorted material for free. The European Commission saw this as a violation of the competition rules. The response: DSD enabled the disposal partners to recover the materials in their own responsibility. 17

18 A Monopoly - Dual System ( ) Collection Sorting Material recovery Monetary flow DSD funds der Grüne Punkt Guarantors for recovery Additional payments to municipalities Fees from system participants Distributor 1 Distributor 2 Distributor Distributor: Producers or retailer of packaging material who is the first to bring the package into the system (the first who places it on the German market). The distributor is responsible for paying the system fees. 18

19 A sorting plant at the beginning Plastic Films Hollow Articles (Bottles) Mixed Plastic Beverage Cartons Other Composites Aluminium Tinplate Screen Sorting Cabin Magnetic Separator Waste Bunkers Bagopener 19

20 The crisis in 1993 In 1993 the dual system was in financial crisis for some reasons: The collected amount of waste increased faster and more than expected. More free riders than expected led to less revenues. The first guarantor for plastic packaging, VGK, failed. The DKR was founded and DSD became a shareholder of 49.6 % - the chemical industry held the other 50.4 %. The costs of disposing of residual waste remaining after sorting were higher than expected (more residual waste in the collection bins and the higher collection amount). The failure of the system was prevented. E.g. the disposer waived the payment of bills with an overall amount of 350 million DM. In response to the situation the contracts were changed and a price quantity scale was introduced. And after another change LWP was paid depending on the output (01/1996). 20

21 Some criticisms of the first packaging ordinance and the system Competition concerns No obligation to tender for disposal services and material cartels (the industries of the different materials) formed so called guarantors e.g. GGA for glass. Financing Free riders and Self Disposers. The distributers were not forced to participate in the DSD. Problem of recovery rates Recycling instead of mechanical recycling especially not enough mechanical recycling of plastics focus on feedstock recycling. Decreasing share of refillable beverage packaging. 21

22 Strengths, for example Creation of the infrastructure according to the requirements. Development and promotion of new technology. Transparency of license fees. Easier to check who is participating in the system. Easier to monitor the mass flow. The effects of changes in the system also had a direct impact on the system operator. One operator = one contractor for the waste management companies and for the municipalities/ public waste management authorities. One system operator is responsible for the public relation of the system. 22

23 Green dot licence fees (1994) other Materials other Composites Beverage Cartons Plastic Aluminium Tinplate Paper/Cardboard Glass 0,20 0,56 0,40 0,15 DM/kilo 2,10 1,69 2,95 1,50 DM/kilo - 1,00 2,00 3,00 4,00 In addition there is a fee calculated per unit according to the volume or surface: Volume > 50 ml to 200 ml >200 ml to 3 litre > 3 l DM/unit to ,007 to 0,009 0,012 Surface >150 cm² to 300 cm² >300 cm² to cm² >1.600 cm² DM/unit 0,001 to ,006 0,009 23

24 Calculation of the fees (basic principles) Underlying data - amounts - prices - capacities Disposal costs model - user-pays principle - price determination due to cost Fee model (calculation of requirements) - cost covering principle Fee (DM/kilo) - for each type of material 24

25 The road to competition

26 After some years (DSD still a Monopoly) The packaging ordinance was substantially revised in Recycling targets instead of collection and sorting targets. A mechanical recycling target for plastics was introduced. Duty to tendering collection, sorting and recovery. The numerator for calculating the targets changed: Now the amount of packaging that takes part in the dual system became the numerator (instead of the sales packaging placed on the market). Technical progress less sorting plants with higher capacity and new technology: 1998 no automatic sorting of plastic types and only 22 % of the LWP was sorted in plants with automatic separation of beverage cartons Only 4 years later (amount of types of sorting the LWP): - 10 % of LWP in sorting plants with automatic separation of plastic types - 59 % of LWP in sorting plants with automatic separation of beverage cartons 26

27 From monopoly to competing dual system operators 2001 the European Commission decided, that DSD had to open the collection system to competitors (other dual system operators). The combination of licence fee and the labeling (Green Dot) duty had to be abolished. The licence sign prevented the entry of foreign companies. The Green Dot was no longer a clear sign of system participation. Until 2002 DSD still had a monopoly as a dual system/system operator, but there were some individual take-back-systems. And in the background were the preparations of further potential system operators the first competitive system operator of DSD appeared and was approved the obligatory deposit on beverage packaging came into force. These beverage packaging were no longer allowed to take part in the dual system (this was a large amount of packaging waste: PET-Bottles, aluminium and tinplate cans dual system with less licence fees and on the disposal side material with a high market value was missing. 27

28 From monopoly to even more competition All system operators could use the same collection system. In the first years of competition DSD called for tender in the field of collection and the other dual system operators had to follow. Each system operator organised the sorting on his own. Later a clearing house had to be established by the dual system operators (coordination of the tenders for collection, calculation of the market shares) - due to its market share each dual system operator had a share of the calling for tenders. Reversal of duty: Since 2009 every sales packaging filled with goods that typically occurs at the private consumer had to take part in a dual system. There were less possibilities of exception, but they were used to a maximum extent. 2014: these possibilities were restricted even more with the result of rising amounts of packaging taking part in the dual system. 28

29 Dual Systems Growing Number of Competitors System Operator (current name) Start of Operations Der Grüne Punkt Duales System Deutschland GmbH 1993 Landbell AG 2004 (2006)* Interseroh Dienstleistungs GmbH 2005 EKO-PUNKT GmbH (until ) 2006 (2008)* Reclay Systems GmbH 2007 (2008)* BellandVision GmbH 2008 Zentek GmbH & Co. KG 2008 Veolia Umweltservice Dual GmbH 2009 Vfw GmbH (since 2012 part of the Reclay Group) 2009 Recycling Kontor Dual GmbH & Co. KG (RKD) 2012 ELS Europäische Lizenzierungs Systeme GmbH 2015 Noventiz 2017 * In parentheses the year from which the system operator was active throughout Germany. Source: Federal Cartel Office, Sektoruntersuchung duale Systeme, 12/2012 (survey of the federal cartel office) 29

30 One way sales packaging private households (and equal collection points) Possiblities until 2014 Obliged companies Financing of licence fees Option 1 (obligation on principle) system operators Joint authority Option 2 Self-take back system retailer Option 3 Separate system for commercial waste Equal collection points One system operator as the organiser of call for tenders (collection) System of joint user refund claim Recycling Sorting Collection Collection Collection municipality municipality municipality 30

31 The dual system operators and their shares Certified accountants calculate the share of each single dual system operator based on total licensed amount (during the year based on budgeted figures) Every single dual system operator pays for collection in every single territory (approx. 450) according to its share ( key ) After collection every system operator takes over his share for sorting and recovery Operators of dual systems report their amounts (budgeted figures) to the accountant of the clearingpoint (Clearinghouse ) operators of dual systems in Germany about producers / distributers selling packed products pay licencing fees to private dual systems (operators) 31

32 Who are the competitors where does competition take place? Producers/distributors of packaging System operators (performance, contribution fees, compliance, ) Collection Sorting Recycling 32

33 Competition - one system and multiple system operators What has to be taken into account/ what is needed : A dual system with competing operators that work together but don t break the rules of competition (influence of the anti trust authority). A mechanism to divide the collected amount by market share. Requirements how to calculate the market shares. The waste is collected and has to be recycled but the real market share can only be calculated after the collection took place. The market share is calculated based on estimated data. What if a system calculated wrong and the real market share was much higher. But the collection and recycling according to the estimated share already had taken place. 33

34 Development of disposal costs of packaging waste under the dual system From 25 (2000) to 12 per resident and year Quelle: Download am Some reasons: amortisation of sorting plants, procedures are established, prices lower because of competition, implementation of compulsory deposit, less innovation 34

35 Turnover of the German dual system (sales packaging) The overall turnover of the dual system in Germany (sum of all operators) decreased from around 2 billion per year to about 1 billion per year in At the moment the amount is higher than in Turnover of the EPR-System (all operators) for packaging from 1993 to 2011 (Bill. ) First and second step of the compulsory deposit on oneway beverage containers Source: Federal Cartel Office, Sektoruntersuchung duale Systeme, 12/2012 (survey of the federal cartel office) 35

36 Costs relevant influencing factors Collection system (mixed packaging or collection of separate material fractions, bring or kerbside system, container provision and collection frequency) Volume trends Operating costs in the field of sorting Prices of secondary raw materials, raw material prices Costs for residual disposal (fees and collection system of residual waste) Development of charges to be paid to the municipalities Increasing recycling targets General price development Ratio of the participation amount to the market quantity 36 36

37 Lightweight packaging in the dual system Costs in Germany in 2015 Overall costs for collection, sorting, recycling and municipal services: lightweight packaging 284 /t Collected amount of lightweight packaging: 2.4 million tons in 2015 Overall costs for lightweight packaging: 682 million in 2015 Data: cyclos

38 Operative disposal costs LWP Details on LWP Federal Cartel Office 12/2012 Collection 328 m 137 /t Sorting + Recovery 229 m 95 /t Associated Costs 1) 105 m Operative Disposal Costs in total 2) 44 /t 663 m 276 /t Calculations of cyclos on LWP m 145 /t 229 m 95 /t 105 m 44 /t 682 m 284 /t Collection Quantity LVP 2,4 m t 2,4 m t 1) Only 80 % of associated costs are shown here. 20 % of associated costs are calculated for glass and paper/cardboard. 2) This amount does not include overhead expenses (administration, acquisition, communication). 38

39 Effects of EPR the German dual system Long term effects of the dual system in Germany (still in process): EPR-systems help to establish a market for secondary raw materials. Potential of the market for recycled materials. Development of high quality recyclates CO2 avoidance costs (17 per metric ton of CO2 saved) - they are low in relation to other measures. Promotion/support of technical process in processing (sorting and recycling) Ambitious targets spur dual systems and waste management companies (long term investments) A necessary goal: Design for recycling - effects on the packaging production it is not only about less material but the best material for recycling. Economic benefits of the dual system (now 960 million euros an increase to 1.33 billion euros is forecasted as possible) source: Economic outlook for plastics recycling the dual system s role Results of study conducted by the RWI (institute of economics), Essen,

40 Targets in form of rates during the time of the Monopoly Material Collection (reference: total volume of packaging) Sorting (reference: collected packaging) resulting recycling rate From From From Collection Sorting Resulting recycling rate Glass 60 % 70 % 42 % 80 % 90 % 72 % Paper/ Cardboard 30 % 60 % 18 % 80 % 80 % 64 % Tinplate 40 % 65 % 26 % 80 % 90 % 72 % Aluminium 30 % 60 % 18 % 80 % 90 % 72 % Plastic 30 % 30 % 9 % 80 % 80 % 64 % Composites 20 % 30 % 6 % 80 % 80 % 64 % Alternative: 50 % in total of the packaging put on the market ( only from to ) The sorted materials should be recycled. The sorted materials should be recycled. 40

41 The Targets Rates Material since 1993 Since July 1995 Since Since Since Since ) Glass 42 % 72 % 70 % 75 % 80 % 90 % Paper/ Cardboard 18 % 64 % 60 % 70 % 85 % 90 % Tinplate* 26 % 72 % 70 % 70 % 80 %* 90 %* Aluminium 18 % 72 % 50 % 60 % Plastic 9 % 64 % 50 % recovery 30 % mechanical recycling 60 % recovery 36 % mechanical recycling 90 % recovery 58,5 % mechanical recycling 90 % recovery 63 % mechanical recycling Beverage Cartons % 80 % Composites 6 % 64 % 50 % 60 % 55 %** 70 %** The target nominator Packaging put on the market Packaging taking part in the system 1) From 2019 the Packaging Law will come into force * From 2019 the material changes form tin to ferrous metals ** excl. Beverage Cartons 41

42 Million tons Development of collection and licenced LWP packaging (dual system) Collection Licenced LWP Source: Bundeskartellamt, Sektoruntersuchung duale Systeme, 12/2012 (survey of the federal cartel office) 42

43 Recovery rate in total in Germany Recovery rate = ratio between quantity recovered and total packaging market quantity (in this case not the quantity licenced!) Shares in % Glass Paper and board Tinplate Aluminium Plastic Beverage cartons n.a In the past two decades, the recovery quota (private consumers) over all fractions increased from 37.3 to 94.1 percent Source: GVM Recyclingbilanz/DSD 43

44 Recycling balance for packaging waste (achieved rates) Recycling balance for packaging Quotas in the current Packing Ordinance Glass: 75 % Tin: 70 % Aluminium: 60 % Plastics: 60 % (36 % mechanical recycling) Composits: 60 % Glass Tin Aluminium Plastics Liquid board Total The graph shows the recovery rate of sales packaging at the end consumer level (recovery volume/ circulation volume); Source: Gesellschaft für Verpackungsmarktforschung (GVM) 44

45 Sorting lightweight packaing flowchart (different plastic types) Packaging COLLECTION container/ bag / bring system SORTING bag opener residue < 20 mm classification mm > 220 mm wind sifting wind sifting NIR paper/tetra/pet magnetic separation NIR tetra NIR tetra eddy current separation NIR standard polymer NIR mixed plastics NIR paper and board tetra non-ferrous metals mixed plastic (rigid) PE PP PS PET paper and residue ferrous metals / board tinplate mixed plastics film sorting products 45

46 Deposit on single-use beverage packaging

47 Compulsory deposit for certain one-way beverage packaging Initial entry into force in 2003: At the beginning the take-back-obligation was linked to the place of sale. It was not that comfortable for the consumer. The result was that significantly fewer bottles were returned. As a result, traders generated a surplus due to higher income than deposit costs. Since May 2006 the system had to be standardized and the consumer had to be enabled to return the deposit packaging and get the deposit back in return in each store. Therefore in 2005 the trade sector established the DPG Deutsche Pfandgesellschaft GmbH (German Deposit Company) (for more see: The DPG provides the legal and organizational framework for settlement of the deposits (deposit clearing) between those companies participating in the system. 47

48 Simplified presentation of the deposit circulation Distributer/ Bottler (EIV) Wholesaler 0,25 0,25 The distributer/bottler who puts the filled beverage packaging on the market first must be the first in the supply chain to raise the deposit. They can commission a service provider with the billing. The Billing via service provider service provider is approved by the DPG. 0,25 Retailer 0,25 Invoice No recycling targets in the packaging ordinance Consumer 0,25 Retailer Recycling 48

49 Labelling of a one-way bottle within the compulsory deposit system cyclos GmbH 49

50 - Additional information - Examples of licence fees in some European countries

51 Netherland - Avfalfonds Packaging material per kg 2013 / 2014 / Glass Paper and cardboard Aluminium Plastics Biodegradable plastics Other metals Woods Other materials Deposit bottles Beverage cartons Other compounds Plastic bottles without deposits % VAT have to be payed on this contributions in addition 51

52 France Basic fee by weight of material (EUR per kg) Packaging material 01/ / /2011 Since / / /2011 Steel Aluminium Paper & board Beverage carton (liquid food carton) PET and HDPE from bottles Other plastic bottles Other plastics Glass Other materials

53 Belgium - Prices Fost Plus Packaging material per kg in 2012 per kg in 2016 Glass Paper and cardboards (> 85% cellulose) Steel (> 50%) Aluminium (>50%; >50 µm) PET and HDPE from bottles Beverage carton Other recyclable materials Other, non recyclable materials Additional: a licence fee between 0,1 and 6 cent per packaging unit has to be payed. 53

54 Austria (ARA) Packaging material (household sales packaging) per kg in Glass (one-way) Paper Sales packaging FE-Metal Aluminium Plastic (incl. bags) Beverage Cartons Composites Wood Biogenic material Textiles

55 Contact: Sabine Bartnik Managing Director Office Osnabrück cyclos GmbH Westerbreite Osnabrück Phone: Office Berlin cyclos GmbH Reinhardtstraße Berlin Phone: cyclos 55