Hot on the heels of its consultation on the circular economy (which closes on 20 August 2015), the European Commission has issued a related consultation on the functioning of waste markets in the EU. This second consultation closes on September 4 2015.
The aim of the waste markets consultation is to obtain a better understanding of the nature and the extent of regulatory failures causing undue distortions to EU waste markets for recycling and recovery. The information gathered during the consultation process is intended to contribute to a study, commissioned in January 2015, on the legislative and policy options for improving the efficient functioning of waste markets in the EU.
There is often a wide gulf between the letter of the law and the regulatory reality when it comes to waste markets. The Commission notes in the consultation that under existing EU rules, waste to be prepared for re-use, recycled or subject to other recovery activities should move freely within the EU, without any unjustified restrictions (other than those imposed for specific reasons, such as that the person transporting the waste has previously being convicted of making illegal shipments). However, in some cases regulatory failures resulting from policy and legislative action at EU, national, regional or local level may hinder the efficient functioning of waste markets and fail to ensure the optimal implementation of the waste hierarchy. Such failures often result from the application and interpretation of legal requirements, such as the EU Waste Framework Directive (2008/98/EC).
The consultation focuses on three main areas:
• The identification of the main perceived regulatory failures. “Regulatory failures” are defined as situations in which the regulatory environment hampers the efficient functioning of the waste markets and fails to ensure optimal implementation of the waste hierarchy.
• Obstacles to the functioning of waste markets connected to the application of EU waste legislation or other EU legislation. The Commission is particularly interested in obtaining views on the drivers and causes of regulatory failures and obstacles to the efficient functioning of waste markets. The consultation provides a long list of possible drivers and causes of regulatory failures, including: different interpretations of the definition of “waste” under the Waste Framework Directive; the distinction between “recovery” and “disposal”; the application of the “proximity principle”; and the application of national end-of-waste criteria.
• Obstacles to the functioning of waste markets that are arising from national, regional or local rules or requirements and decisions which are not directly linked to EU legislation. Again, the Commission is seeking views on the drivers and causes of such market distortions and the consultation provides a long list of potential drivers and causes, including: differing taxes; the development of waste treatment networks leading to local overcapacities or under-capacities for different types of waste treatment; the inefficient use of available capacity in recycling or energy recovery in a neighbouring country or within any particular country; the “gold plating” of controls on waste and waste shipments; and the distribution of roles and responsibilities for municipal authorities and private companies in waste management.
Without pre-judging what respondents to the consultation may say, it seems likely that the definition of “waste” in the Waste Framework Directive will be singled out as a particular obstacle to the functioning of waste markets across the EU. Part of the problem with the definition of waste is the way in which it has been interpreted by the courts (particularly the European Court of Justice/Court of Justice of the European Union). This lack of legal clarity over the definition of waste, combined with over-zealous interpretation by regulators, has frequently stifled innovation and pushed waste down, rather than up, the waste hierarchy.
The consultation seems to suggest that regulation can be a barrier to the efficient functioning of waste markets. While this is undoubtedly true in some respects, regulation is also vital to provide legal certainty and to provide a stable climate for investment in new waste treatment infrastructure. Those responding to the consultation may therefore wish to reflect on how Defra’s withdrawal from policy making on waste has affected the functioning of waste markets in England.
For those wishing to engage further in the debate, the Commission is holding a stakeholder meeting on 12 November 2015 in Brussels.
King & Wood Mallesons
Angus Evers is a Partner in King & Wood Mallesons’ Planning & Environment Group and is one of the co-convenors of the UK Environmental Law Association’s Waste Working Party.