Future regulations give certainty to the recycling industry for the long term, but prompt support is needed to ensure the industry continues to develop
Recyclers warned the packaging industry that they needs support now to ensure enough supply will be available for future pledges and legislative targets at Packaging Europe's recent Sustainable Packaging Summit in Amsterdam.
Mapping the sustainability challenge
Delegates at the summit heard there is growing concern across the value chain around how to bridge the gap between now and 2030 to ensure the recycling industry can survive and continue necessary growth. In the interim years there are significant challenges in the market for recyclers which risk the secure availability of supply that brands and packaging companies need to reach desired recycled content goals in the future. Recyclers stated the industry in Europe is currently in decline, with a swathe of closures recently announced across the region and a lack of investment. Higher fixed costs in Europe, such as the price of electricity, hamper recyclers' ability to remain competitive on world scale, along with subdued demand for recyclates, exacerbated by low cost virgin material and rising imports.
Brands noted less focus on sustainability from consumers and companies impacted by reduced consumer confidence and spending. Combined with the availability of lower cost virgin alternatives, this is said to be weighing on the urgency to increase recycled content as companies focus on the bottom line to manage the wider economic challenges the industry is facing.
The industry must maintain sustainability momentum, and that sustainability must remain an advantage for companies for the recycling industry to continue to develop, delegates said.
Navigating regulatory landscape
Uncertainty in the market is hitting investment hard, and regulation is a fundamental step to providing clarity and stability for the European industry, but comes with its own challenges.
The Packaging and Packaging Waste Regulation (PPWR) — which passed through the corrigendum procedure at this week's EU plenary and is now expected to be adopted by ministers on 16 December — is the first time that the waste hierarchy will be regulated consistently across EU member states. This is expected to ease uncertainties in the industry and add confidence in investments and further business planning as and when confirmed.
The regulation is the most wide-reaching and ‘most challenging', due to the divergence of industries and interests across the value chain, Wolfgang Trunk, policy officer for the European Commission, said. "It is not perfect" he said, but considering the complexities "we can be content with what is now in the text. There are a lot of issues there, but we are convinced we can remedy and mitigate any concerns. We had to suffer a lot of national derogations at cost of harmonisation, or the scaling up of internal market benefits".
Once the text is published the industry will try to adapt to the new framework. Trunk said it is only then the commission will observe the developments and as a backup and as last resort make amendments for specific streams or products which have encountered difficulties as a result of the regulation to come up with a solution.
Positive sentiment regarding PPWR was shared by delegates, with may affirming that the industry is ready to move forward to meet the new requirements and quick action is needed to develop and implement the secondary legalisation that is anticipated. But the secretary-general of packaging organisation Europen Francesca Siciliano Stevens reaffirmed that the regulation does not go far enough in securing the single EU market and safeguarding European competitiveness on the global level.
The drawbacks of a fragmented market, with varying national regulation and extended producers responsibility (EPR) schemes, were also highlighted, with delegates calling for a singular circular market. Some participants feel that harmonisation remains the weakest part of the regulation, and that political agendas have remained a barrier to overcome these difficulties. It is hoped that swift adoption of secondary legalisation, harmonised standards and the issue of necessary guidance will smooth the adoption of the PPWR.
A proposed EU Circular Economy Act, presented in Ursula von der Leyen's policy guidelines upon her re-election as the president of the European Commission in July, was mentioned as a possible measure to reduce the exposure of the recycling industry to cheap virgin polymer prices. But, given the complexities and length of these legislative processes, recyclers may be entitled to reservations on how effectively this will support them in the short term.
Reporting headache
Packaging companies represented at the summit asked regulators to consider the need to reduce the reporting burden to help circular economy development. Frequent references were made to a ‘tsunami' of regulation, and the burden of reporting challenges around accurate and credibility in data were highlighted across the value chain. Non-harmonised EPR is a concern for the industry, with each member state implementing their own regulations. For global brands there could be upwards of 25 different policies with varying implications to adhere to in Europe alone. Participants called for clear standards and guidelines, as well as and harmonisation in data collection and reporting methodologies across the region in order to navigate the forthcoming headwinds.
