‘Europe has to seize momentum to hit targets’

Europe, a leading force in the global race to create a circular economy and a region that is committed to deliver ambitious climate targets, may very well miss its 2030 circularity targets. There are at least two reasons these targets are at risk. One is related to Covid-19 and the other the demand for recyclates.

During the first wave of the Covid-19 pandemic, targets to halve waste by recycling more by 2030 across Europe was put under severe pressure. In many EU countries collectors stopped collecting recyclable waste separately. This was particularly pronounced when some municipalities moved to combined collections.

Based on our own experience this was not the case in Netherlands and Belgium, but, by all accounts, was the case in hard hit Southern European countries. Mixed waste led to greater contamination of waste streams which, in turn, led to less recycling. At the time, and under extreme pressure to keep essential services running, there was little option. But now, we can learn from the situation and take steps to ensure it doesn’t happen again during the second wave.

Demand for recyclates is another challenge that could impact Europe’s ability to meet its challenging targets. In order to achieve the conditions required for a circular economy, governments in consultation with industry, need to create sustained demand for recycled materials. For this to be successful, this demand must be less dependent on the fluctuations of virgin commodity prices. Only by government stepping in and taking action can the recycling industry invest the significant capital required in order to meet that growing demand. Our recommendation? Governments, business and industry must work together to ensure Europe’s sustainable objectives are not compromised.

No silver bullet, but a golden mix of answers

This is a complex assignment that requires, on the one hand ‘guidance’ from the European Union and its member states and, on the other, a range of solutions.

Multiple policy tools

Complex problems demand more than one policy tool in order to solve market imperfections. Multiple such tools exist including first a stimulus of demand for secondary materials such as tax incentives, labelling, subsidies and minimum recycled content requirements.

Second, the introduction of disincentives for the destruction of reusable materials. This has been introduced through taxes on landfill and incinerator usage, and incoming carbon taxes. Third, driving awareness and stimulation of innovation by means of subsidies. This would be delivered by introducing subsidies to industry in order to make quality recycled products more affordable to the end consumer/user.

They all make sense. But to create immediate and direct impact, to be able to change course to reach our European 2030 climate targets, we, at Renewi, are of the opinion that two measures must be prioritized and implemented across the EU: solid regulation and stimulating incentive.

Solid regulation

Stimulating disincentives are as important as the incentives to create space for recycling. A minimum percentage of secondary materials in end products in conjunction with incineration and CO2-taxes to discourage the use of prime material, makes recycling more viable. UK Firm regulation – whether it is an incentive or a disincentive – demands quick action and firm implementation to gain traction.

“Stimulating disincentives are as important as the incentives to create space for recycling”

For example, the simple requirement for a minimum percentage of secondary raw materials or recyclates in certain end products would give a sustained basis to the demand for recyclates and thus make the ambitious European recycling rates more achievable. Just look at the UK, which understood the sense of urgency and approved the Plastics Tax that will take effect in April 2021. This tax is designed to provide a clear economic incentive for businesses to use recycled material in plastics packaging. This, in combination with stimulating disincentives, will have the most powerful impact in the short term.

Encouraging innovation

To stimulate the supply of high-quality recyclates, Europe can play an important role by encouraging innovation and leveraging the scale of the Union. This can be delivered through the introduction of minimum treatment standards at a European level. These already exist on a national level in Belgium and the Netherlands for various waste streams. Installing minimum standard values for the treatment of waste across Europe would expand the addressable market for new innovation.

EU wide

Both policy tools outlined above need to be pan European if they are to be truly effective, and to prevent unfair competition of producers that operate without these rules. Let’s not delay.

Now is the time.

Covid-19 has been and remains a crisis, but climate change is a looming catastrophe and time is not our friend. These measures can be implemented quickly and will play a key role in ensuring we meet the 2030 recycling targets. Now is the time to take decisive action to stimulate the circular economy. To tackle the risk of short-term policy making that could undermine the EU’s long-term circular economy objectives.

Why wait till 2030 to create both a more stable demand for and sustainable supply of recyclates? The opportunity for the EU to play a prominent role in the essential transition to circularity is here. I urge policymakers, industry, colleagues and consumers to open up this debate and work together to come up with a practical solution quickly. Sustaining tomorrow today.