THE NATIONAL PACKAGING COVENANT LESSONS FROM EUROPE

1
THE NATIONAL PACKAGING COVENANT LESSONS FROM
EUROPE

• Packaging Council of Australia
• Pennant Hills Golf Club,
• Beecroft, New South Wales
• 26 May 2005
• David Perchard

2
SETTING TARGETS IN THE ABSENCE OF DATA - 1

• Commission proposal for a Packaging Packaging
  Waste
• Directive, July 1991
• Within 10 years (i.e. allowing for negotiation
  and transposition time, by July 2006),
• 90 recovery (i.e. recycling ,composting energy
  recovery)
• 60 recycling
• 10 for disposal but only as a residue from
  collection sorting activities (i.e. packaging
  waste must not be taken directly from the
  household to the landfill)

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SETTING TARGETS IN THE ABSENCE OF DATA - 2

• The Directive as finally adopted, December 1994
• set targets to be achieved after 5 years (i.e.
  allowing for transposition into national law, 6½
  years)
• provided for a review of practical experience
  over that period, with a view to substantially
  increasing the targets for the next 5-year phase
• In the event, the second set of targets will only
  bring the other member
• states up to the existing recycling rates of the
  front-runners
• The European Environment Agency report to the
  Commission on the
• effectiveness of packaging waste systems in 5
  member states (Jan 2005)
• concluded that
• the indications are that recycling is reaching
  its upper limits in some
• countries

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SETTING TARGETS IN THE ABSENCE OF DATA - 3

• Remember the Commissions original proposal !
• 90 recovery after 11½ years
• 60 recycling after 11½ years

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SETTING TARGETS IN THE ABSENCE OF DATA - 4

• Lessons for Australia
• Dont be too ambitious before you know the facts
• Set medium-term, not long-term targets
• - dont lock yourselves into assumptions that
  might be wrong
• - remember that priorities may change over time
• The initial targets can and should be reviewed in
  the light of experience, and the bar raised if
  necessary

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THE PRACTICAL LIMITS OF PACKAGING RECYCLING - 1

• Setting a recycling target requires recognition
  of the leakage at every
• stage in the process
• recycling rates are sensitive to changes at any
  stage

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THE PRACTICAL LIMITS OF PACKAGING RECYCLING - 2

• You need to build a set of assumptions for each
  stage in the process
• before deciding on a realistic outcome
• There is little point trying to recycle flexible
  plastics, composites, or
• flimsy or contaminated paper
• That might leave rigid packaging as around 65 of
  household
• packaging waste
• Thus

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THE PRACTICAL LIMITS OF PACKAGING RECYCLING - 3

• If we assume that
• tonnages of sales packaging and of transport
  packaging are roughly equal
• 15 of packaging (by weight) is sales packaging
  discarded away from home
• you collect just 39 of packaging from households
  for recycling
• then to achieve an overall 65 collection rate,
  you would need to collect
• 79 of commercial industrial packaging and
  away-from-home sales
• packaging
• Do-able but difficult
• However, collection isnt recycling ..

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WHAT DO WE MEAN BY RECYCLING ? - 1

• Until 1997, when it was amended to take account
  of the EU Directive,
• the German Packaging Ordinance of 1991 had two
  sets of targets for
• household packaging
• percentage of each material that had to be
  collected
• from 1993, 20-60, depending on material
• from 1995, 80 for all materials
• percentage of each collected material sent for
  reprocessing
• from 1993, 30-70, depending on material
• from 1995, 80 -90, depending on material
• i.e. for glass, 80 x 90 72, for plastics 80
  x 80 64
• But always input to recycler, not output
• And the same in the Directive (Commission
  Decision 97/138 requires
• member states to report on tonnages sorted for
  recycling)

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WHAT DO WE MEAN BY RECYCLING ? - 2

• So although the Directive defines recycling as
  the reprocessing in a
• production process of the waste materials for
  the original purpose or for other purposes,
• what matters is that the EU only measures input
  to a recycling plant
• The NEPM and Covenant define recycling as to
  recover the product and use it as a raw material
  to produce another product,
• which implies that Australia is going to measure
  output
• After taking account of moisture, contamination
  and process losses, you may find a difference of
  perhaps 30 between input and output (even more
  if your sorting isnt great, considering that a
  lot of material put out for kerbside collection
  is not packaging)

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WHAT DO WE MEAN BY RECYCLING ? - 3

• Therefore, if recycling is to be measured
  according to output, collection
• rates have to be increased accordingly

Which starts to look less do-able or at least,
very challenging for a first-stage target
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WHAT DO WE MEAN BY RECYCLING ? - 4

• Lessons for Australia
• You must do research urgently to test these
  guesstimates
• What is the approximate split between
• - sales packaging discarded at home
• - sales packaging discarded away from home
• - packaging discarded on commercial,
  industrial and institutional premises?
• What do recyclers say is the difference between
  input and output?

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RECYCLE WHAT YOU CAN COLLECT, OR WHAT YOU CAN
REPROCESS ? - 1

• First impact of high German recycling targets was
  export of German packaging waste to neighbouring
  countries
• Collection of German waste was subsidised by DSD,
  so it was more economic for foreign recyclers to
  use German material than locally-generated waste
• To protect their own collection infrastructure,
  neighbouring countries set their own recycling
  targets the Directive was intended to restore
  order to the EU Internal Market
• National and EU plastics recycling targets were
  generally regarded as unachievable a lot was
  exported to Asia for recycling or surreptitious
  disposal
• Subsequent growth of Chinese economy means that
  Asian plastics recyclers are now paying high
  prices for European waste

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RECYCLE WHAT YOU CAN COLLECT, OR WHAT YOU CAN
REPROCESS ? - 2

• As an engineering-based economy, Germany expected
  to recoup cost of its expensive packaging waste
  system by developing advanced recycling
  technology which it could sell worldwide
• Hence from 1994 DSD concentrated on developing
  (and funding) plastics recycling infrastructure
  in Germany, while other countries looked for the
  cheapest outlet (which was rarely Germany)
• German competition authorities have gradually
  eroded DSDs monopoly, and in a competitive
  situation the preference for recycling within
  Germany is at an end and Asian recyclers offer
  better prices
• Europe is a major importer of packaged goods from
  Asia, so it makes sense for our plastics board
  to be recycled there but what happens when the
  Asians no longer need European material, and
  European recyclers have been driven out of
  business?

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RECYCLE WHAT YOU CAN COLLECT, OR WHAT YOU CAN
REPROCESS ? - 3

• The Japanese system works differently the Law
  for the Promotion of
• Sorted Collection and Recycling of Containers and
  Packaging (1996)
• aims to balance collection with recycling
  capacity in Japan
• Each year, the authorities announce amount to be
  collected recycled, taking account of previous
  years and growth in recycling capacity
• This recycling obligation is set for each type
  of pack and each product sector
• A recycling coefficient is calculated by
  dividing the amount placed on the market by the
  recycling obligation
• Recycling obligation household packaging
  placed on the market
• x weight of the pack
• x recycling coefficient

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DATA COLLECTION METHODOLOGY - 1
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DATA COLLECTION METHODOLOGY - 2

• Lessons for Australia
• Different methods of calculating packaging
  placed on the market produce very different
  results
• Different figures for packaging placed on the
  market produce very different recycling rates
  when applied to the same recycled tonnages
• We recommend that Australia considers data
  collection methodologies very carefully

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DATA COLLECTION METHODOLOGY - 3

• Reliance on national trade statistics has been
  abandoned (except by Denmark), as these are no
  longer reliable in the EU Single Market
• In member states with Green Dot systems,
  members report through them, and the
  organisations carry out a reality check by
  benchmarking against other companies and previous
  years
• Some member states (but not all) attempt to
  estimate the number of free-riders
• Some conduct various cross-checks, but this means
  that when different sources yield conflicting
  results, subjective judgements have to be made on
  which data to use and which to ignore

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DATA COLLECTION METHODOLOGY - 4

• Ireland bases its estimates on sampling the waste
  stream this has produced spectacularly high
  results because of failure to take account of
  moisture, contamination and seasonal differences
  ( 20)
• In the Netherlands, companies responsible for
  about 60 of the Dutch market are sampled
• - They report the tonnages they place on the
  market, their turnover and NACE code (which
  determines the product sectors they are active
  in)
• - Total turnover of companies reporting is
  compared with total turnover for each sector
  according to the National Statistical Office, and
  packaging tonnages scaled up accordingly

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DATA COLLECTION METHODOLOGY - 5

• The pitfalls of calculating household packaging
  recycling

The reported data - packaging recycled as a
proportion of the tonnages licensed by the Green
Dot organisations These may exceed 100 because
of unlicensed packaging (free riders and
non-packaging material) which consumers have put
into the Green Dot system (average 25, but up
to 50 in big cities) Also, protocols for age
of packaging in mixed paper collections (range
from 25-50 packaging)
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POSSIBLE SPECIAL MEASURES FOR BEVERAGE
CONTAINERS - 1

• The Perchards report for the Commission on the
  implementation of the
• Directive and its impact on the EU Internal
  Market to be published
• shortly at http//europa.eu.int/comm/environment/
  concluded that
• any form of intervention to protect refillable
  containers mild enough to avoid (illegal) market
  distortions is unlikely to achieve its intended
  goals in the face of powerful market forces such
  as consumer choice
• CDLs do not improve the efficiency of recycling
  systems collection arrangements for
  non-beverage packaging are still needed, and one
  system is cheaper than two
• deposit systems are not necessary for the
  achievement of high recycling rates

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POSSIBLE SPECIAL MEASURES FOR BEVERAGE
CONTAINERS - 2

• Of the 8 member states which have
• shown most commitment to packaging
• waste management policy, the deposit
• states Denmark, Finland and Sweden
• have not achieved higher recycling
• rates than non-deposit states Austria,
• Belgium, France, Germany and the
• Netherlands

Glass
Plastics
Metals
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FUNDING MECHANISMS WHAT THEY COST AND WHAT
THEYRE WORTH - 1

• In the EU, brandholder-run recovery organisations
  collect fees (usually-weight-based) from the
  packaged goods industry and use them to develop
  collection and sorting infrastructure
• Where public policy allows, they have
  concentrated on non-household packaging, as this
  is cheaper to collect but as the higher
  material-specific targets for 2008 kick in, this
  will no longer be possible
• In 8 of the EU-15 countries Austria, Belgium,
  France, Germany, Luxembourg, Portugal, Spain and
  some extent Sweden they have always been
  required to concentrate on household packaging
• In Austria, Belgium and Germany, they pay the
  full cost of household packaging waste
  management in most EU-15 countries, they pay
  the additional cost of segregated collection

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FUNDING MECHANISMS WHAT THEY COST AND WHAT
THEYRE WORTH - 2

• These systems have been very successful in
  providing long-term strategic direction to ensure
  that collection infrastructure was put in place
  to meet national and EU targets
• We estimate that in 2001 industry bore about
  2.8 bn out of a total cost of packaging recovery
  in EU-15 of 4.3 bn
• ( 4.8 bn out of 7.3 bn)
• This represents 12.7 per capita out of a total
  cost of 19.3 per capita
• But it does not include companies internal admin
  costs, which are impossible to quantify but in
  many cases have been considerable

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FUNDING MECHANISMS WHAT THEY COST AND WHAT
THEYRE WORTH - 3

• This 4.8 bn per year in 2001 (and rising every
  year) has been spent on getting towards where
  Australia already is, with 90 of households
  served by kerbside collection systems
• So why would you need it?
• The average person probably buys 1500 packaged
  goods per year
• We do not believe that an extra 13 on prices
  over a year (plus the unknown overhead cost that
  would be passed on) would
• - serve as a strong price signal to consumers to
  change their purchasing behaviour, or
• - justify an administrative edifice to raise and
  disburse this funding
• Is it worth arguing over whether Australian
  should pay 1 cent per item
• through their local taxes or through product
  prices?

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ECO-DESIGN OF PACKAGING - 1

• The Covenant talks about designing packaging with
  the environment in
• mind, and here the EU does have something to
  offer
• a set of standards based on a management systems
  approach
• designed to ensure that packaging designers and
  purchasers
• - ask themselves the right questions,
• - implement the answers,
• - document what they have done for future
  reference
• (and for inspection by the enforcement
  authorities), and
• - revisit these issues at regular intervals,
• or whenever there is a significant pack change

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ECO-DESIGN OF PACKAGING - 2

• On packaging minimisation, users must identify
  the critical area
• governing the achievable limit for source
  reduction, i.e. if the packaging
• is reduced further, it will fail to meet the
  listed performance criteria
• product protection, packaging manufacturing
  process, packing/filling process, logistics
  (including transport, warehousing and handling),
  product presentation and marketing, user/consumer
  acceptance, information, safety, legislation and
  any other relevant issues
• If no critical area is identified, the pack does
  not comply with the
• standard and the potential for (further)
  reduction must be investigated
• Once the critical area has been identified, the
  standards user must
• prepare a statement of conformity

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ECO-DESIGN OF PACKAGING - 3

• The European (CEN) standards
• EN 134272004, Packaging Requirements for the
  use of European Standards in the field of
  packaging and packaging waste
• EN 134282004, Packaging Requirements specific
  to manufacturing and composition Prevention by
  source reduction
• EN 134292004, Packaging Requirements for
  relevant materials and types of reusable
  packaging
• EN 134302004, Packaging Requirements for
  packaging recoverable by material recycling
• EN 134312004, Packaging Requirements for
  packaging recoverable in the form of energy
  recovery, including specification of minimum
  inferior calorific value
• EN 134322000, Requirements for packaging
  recoverable through composting and biodegradation
  Test scheme and evaluation criteria for the
  final acceptance of packaging

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A MORE HOLISTIC APROACH TO EU PACKAGING POLICY -
1

• There is a need to create a consistent policy at
  Community level to
• encourage recycling in general. This needs to
  take account of the
• various environmental impacts and even trade-offs
  involved. The aim is
• to recover and recycle wastes to levels that make
  sense, i.e. to the
• point where there is still a net environmental
  benefit and it is
• economical and technically feasible.
• Today's environmental problems require that we
  look beyond a strictly
• legislative approach and that we take a more
  strategic approach to
• introducing the necessary changes in our
  production and consumption
• patterns.
• (Commission, 2001)

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A MORE HOLISTIC APROACH TO EU PACKAGING POLICY -
2

• Raw material consumption is no longer considered
  a major problem, as
• the market adjusts, but there is a real problem
  with certain renewable
• resources, such as fish and clean water. Climate
  change is the top
• priority, and this has implications for energy
  policy. Thus, there is a case
• for shifting the focus away from the management
  of solid waste and
• towards energy conservation.
• For packaging, that shift in emphasis would make
  lightweighting
• important but the spotlight will move away from
  packaging. As
• packaging represents such a small proportion of
  total waste, it will no
• longer be a priority waste stream but will slot
  in to broader policies.
• (Commission, 2004)
• That sounds rather like the Covenant approach!

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WHAT AUSTRALIA CAN TEACH EUROPE - 1

• It is ironic that Australia is trying to move in
  the direction of EU-style policies just when the
  EU is trying to establish the sort of flexible,
  integrated approach already enshrined in the
  Covenant
• We looked at how the EU legal framework might be
  restructured and the Packaging and Packaging
  Waste Directive repealed to take advantage of the
  holistic approach now envisaged, but we decided
  that we would be better off with the status quo
• - Member states will not want the funding
  structures dismantled, so they will keep
  legislation to ensure that
• - Danger of losing the protection of EU Internal
  Market harmonisation and gaining nothing in
  return
• - In any case, industry has adjusted to the
  present arrangements

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WHAT AUSTRALIA CAN TEACH EUROPE - 2

• Thus there is nothing much that Australia can
  usefully teach
• Europe, because of where the EU is today
• The key is to avoid setting up a rigid edifice
  that cannot
• easily be adapted to a changing world
• Up to now Australia has avoided getting itself
  tied down, and
• it is important to retain flexibility as far as
  possible

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CONTACT DETAILS

• DAVID PERCHARD
• Perchards
• 1 College Street
• St Albans, AL3 4TA
• United Kingdom
• Phone [phone]
• Fax [phone]
• E-mail DavidPerchard_at_perchards.com
• Website www.perchards.com