Legislation update - Spring 2018

In the latest update, we focus on the topic of plastic waste, namely plastic packaging. We look at a number of emerging laws and initiatives in this area and what they mean for our customers and the industry.

Launch of trailblazing UK Plastic Pact

The UK Plastics Pact, a collaborative initiative that will create a circular economy for plastics, was launched on 26 April 2018. It brings together businesses from across the entire plastics value chain with UK government departments and NGOs to tackle plastic waste. SUEZ recycling and recovery UK was a founding signatory of this ambitious initiative with a goal to transform the UK plastic packaging sector by meeting four targets by 2025:

• 100% of plastic packaging to be reusable, recyclable or compostable

• 70% of plastic packaging to be effectively recycled or composted

• Take action to eliminate problematic or unnecessary single-use packaging items through redesign, innovation or alternative (reuse) delivery models

• Average recycled content across all plastic packaging to be 30%

EU adopts plastics strategy

The first ever Europe-wide strategy on plastics was adopted on 16 January 2018 as part of, what the EU describes as, a “transition towards a more circular economy”. Under the new plans, all plastic packaging on the EU market will be recyclable by 2030; the consumption of single use plastics will be reduced; and the intentional use of micro-plastics will be restricted. However, plastic recycling as a whole will remain at a 55% target.“With more plastic being collected, improved and scaled up, recycling facilities should be set up, alongside a better and standardised system for the separate collection and sorting of waste across the EU.”

An extra €100 million of financing will be made available to drive investment and innovation in the industry, with the hopes of finding ways to develop a more efficient recycling process and removing hazardous substances and contaminants from recycled plastics. The EU also confirmed it will work with “partners” around the world to come up with solutions and develop international standards. There is currently a consultation for stakeholders to provide input, opinions and data in preparation of the follow-up to the Plastics Strategy, in relation to marine litter, particularly from single use plastics and fishing gear.

Chinese National Sword

China notified the World Trade Organization that it will stop accepting shipments of waste plastic and unsorted paper by the end of 2017, as part of a campaign against “foreign garbage”, which it says is polluting China’s environment through contamination. China dramatically reduced the number of import shipments of waste plastic and unsorted paper in January 2018. The restrictions only allow for a contamination rate of 0.5% compared to the previous 5%, which is significantly more stringent than other end destination markets.

In 2016, China imported 7.3 million tonnes of waste plastics, accounting for 56% of world imports. Operation National Sword 2017 follows Operation Green Fence, launched in 2013 to reduce the amount of poor quality waste entering Chinese ports from overseas.

The waste industry in the UK is facing new challenges due to the surplus of material caused by significant changes in quality criteria. The most affected are mixed recycling collections. However, in anticipation of restrictions placed upon inbound recyclable materials by the Chinese Government, SUEZ sought to secure alternative Asian and European offtake markets for its recyclable material products early in 2017. We have been successful in securing capacity in alternative markets and, as such, have not directly exported any material to China since April 2017.

Our teams are working closely with our international trading partners to secure new longer term markets whilst, in the short term, we are working with UK based markets and traders. The key issue for SUEZ is the increasing need to focus on the quality of feedstocks at our MRFs and the efficiency of our sorting processes. We are working with our customers to ensure feedstocks are appropriate, and also with our staff at our sites to enhance the quality controls and sorting processes.

Review of packaging recycling obligations

The National Audit Office (NAO) has announced a review into packaging recycling obligations – commonly known as the PRN system. The government announced on 09 March that it will review the effectiveness of the PRN system. Packaging recycling obligations apply to all companies that handle a certain amount of packaging each year, and require companies to demonstrate that they have recycled a portion of that packaging. Companies comply by buying packaging recovery notes (PRN) from reprocessing companies in the UK, or from companies exporting waste for recycling abroad. The National Audit Office states the review will include whether the government has good oversight of the scheme’s performance against its objectives. It will also consider if the approach to preventing fraud and non-compliance is robust enough.

Recently, the PRN system has come under scrutiny, particularly with regards to export PRNs, with calls for government to better support domestic reprocessing of materials. SUEZ is participating in a number of Defra-sponsored workshops to look closely at the PRN design, its performance and options to improve or replace the system.

DEFRA investigates producer responsibility

Parliamentary Under Secretary of State for the Environment, Thérèse Coffey, continues to hint that changes to producer responsibility regimes for waste in the UK are likely to be contained in the waste strategy, due out later this year. There are expectations that the waste strategy could see producers imposed with either tougher voluntary or regulatory measures, ranging from new items, such as mattresses, through changes to rules governing packaging waste. Extended producer responsibility (EPR) and deposit return schemes are very much on the government’s radar and we expect to see more from them in the coming months as they refine the strategy. SUEZ is feeding into the evidence gathering process and has recently developed its own position which we have shared with Defra.

Deposit return scheme

SUEZ’s research into deposit return schemes (DRS) was launched at the end of March 2018. SUEZ commissioned consultancy, Oakdene Hollins, to undertake a global review of DRS systems and their impact on recycling rates, recycling quality and litter reduction. We were keen to add our thoughts into the debates underway in Whitehall and in Scotland where DRS schemes are openly being supported. Our focus was on getting the right system that could work for ‘on the go materials’ (namely plastic drink bottles and cans).

EU updates to waste and resource strategy

In December 2017, it was agreed at EU level to update a number of key pieces of legislation. These included The Waste Framework Directive, Packaging Waste Directive, Landfill Directive and Directives on Electrical and Electronic Waste, on end-of-life vehicles, and batteries and accumulators and waste batteries and accumulators. The main aim to these updates is to have clearer definitions of key waste concepts and binding targets at EU level for waste reduction to be met by 2025, 2030 and 2035. These targets will have stricter methods and rules to calculate the progress made towards them practically for the separate collection of waste; reinforced implementation of the waste hierarchy through economic instruments; and additional measures for member states to prevent waste generation.

Additionally these changes will lead to minimum requirements for extended producer responsibility schemes. Producers under these schemes are responsible for the collection of used goods, sorting and treatment for their recycling. Producers will be required to pay a financial contribution for that purpose which is calculated on the basis of the treatment costs. Secretary of State for Environment, Food and Rural Affairs, Michael Gove, suggested in February that the UK would look to move from weight based targets of material captured to resource efficiency.

Update on Brexit

The UK has already signalled that it will pass the revised waste directive into law once it leaves the EU. The revisions are linked to the Circular Economy Package and are planned to be approved before the UK leaves the EU. The upcoming UK waste and resource strategy is expected to be a focus in the revised Waste Framework Directive. Representatives of the Environmental Policy Forum (EPF), including CIWM, have urged the House of Lords to take “crucial” environmental considerations into account during their scrutiny of the EU Withdrawal Bill. As well as transposing the principles of environmental protection, the EPF called on peers to ensure that the legislation provides parliament with appropriate scrutiny, closes the governance gap by introducing a new independent body, and enables “collaborative working” with the devolved nations.

The forum called on the House of Lords to ensure the bill includes plans for an “independent, well-resourced” expert body to take on the “investigative” role of the EU Commission. They also called on the body to be funded by the UK Assemblies and Parliaments, in a similar way to the National Audit Office. Much of these issues will be addressed in Defra’s Resource and Waste Strategy, to be released in October 2018.

HMRC Plastic Tax consultation

In his spring financial statement (13 March), Phillip Hammond, Chancellor of the Exchequer announced a call for evidence on how changes to the tax system could be used to reduce the levels of single-use plastic waste. The consultation document, entitled: “Tackling the plastic problem: using the tax system or charges to address single-use plastic waste”, notes that financial measures do exist in the environmental sector including the Landfill Tax and the PRN packaging waste regulations. The consultation documentation adds that government will seek to explore how changes to the tax system or charges could be used to reduce the amount of single-use plastics which end up as waste. Whilst the overall reaction to the launch of the consultation has been positive, some have questioned how a potential ‘tax on plastics’ could work in practice. In particular the retail sector, which, while ‘recognising the need to do more to reduce plastic’ has claimed that a “comprehensive strategy which considers all materials and resources” will be necessary to reduce waste across all materials.

We are preparing our response, and are generally in favour of taxing unnecessary plastics, in particular the single-use plastics that are so prevalent in our ‘on the go’ culture. Our current position is: ‘single-use tax should focus on removing the unnecessary and extended producers responsibility should focus on making the necessary more sustainable.’

• Avoid unnecessary plastics: through a single-use plastics tax
• Consider the design of necessary plastics to improve their ability to be ‘harvested’ and recycled into products
• Recycle necessary plastics where it is economically and environmentally the right thing to do [support the principle of EPR (extended producer responsibility), DRS (deposit return for some material types) and PRN (packaging recovery notes) upgrade to fully support the recycling of household collected materials through to recycled secondary resources]
• Recover energy from plastics where not economically or environmentally possible to recycle and where their replacement would need more fossil oils to be consumed
• Sequest fossil plastics in landfill when the economy does not consume fossil oils
• If plastics move to renewable sources (bio plastics) then recycle and recover energy (burning renewable plastics makes renewable energy).

Defra’s 25 year plan

The release of “A Green Future: Our 25 Year Plan to Improve the Environment” saw government’s pledge to use resources from nature more sustainably and efficiently and minimising waste. They also set targets to eliminate all avoidable waste by 2050 and all avoidable plastic waste by the end of 2042. Other targets include reducing food supply chain emissions and waste; reducing litter and littering; improving management of residual waste; cracking down on fly-tippers and waste criminals; reducing the impact of wastewater and, lastly, maximising the value and benefits we get from our resources, doubling resource productivity by 2050. Although the plan set out some well-intentioned targets the substance of how this will be delivered is expected to be present in the upcoming UK waste and resource strategy.