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Competitiveness of the recycling industries

The Commission lists the major difficulties encountered by recycling businesses in achieving or maintaining viability, and proposes a package of measures capable of solving these problems.

ACT

Communication from the Commission of 22 July 1998: The competitiveness of the recycling industries [COM(98) 463 final - Not published in the Official Journal].

SUMMARY

The Communication constitutes a partial response to the Council's invitation, formulated in its Resolution of 24 February 1997 on a Community strategy for waste management [Official Journal C 76, 11 July 1997], to explore various measures which could contribute to the better management of waste in the Community.

The Commission states that the recycling industries are confronted with insufficient demand, precarious market structures which are not very competitive and excessive competition from "virgin" (non-recycled) raw materials. If the markets operate correctly, the recycling sector could become profitable in an increasing number of cases and generate significant energy savings as well as a large number of new jobs.

Some of the problems connected with viability can be traced to the structure of the recycling industry, which is characterised by the co-existence of two major types of source of waste (industry and household consumption), with households generating more heterogeneous and lower quality waste than that which industry produces. This situation has favoured a waste collection structure characterised by the vertical integration of the various activities involved up to the sorting level. Increasing the scale of operation and greater specialisation could give rise to considerable savings in both branches.

Despite the disparity between the different branches of recycling, it is possible to identify a number of factors of competitiveness common to both branches. These concern production, the supply of and demand for recycled products and the ways in which the markets operate.

The factors operating at the production and supply level identified by the Commission are:

  • structural aspects, notably the increase in the cost of recycled products, caused by the growth of domestic as opposed to industrial waste;
  • technical aspects affecting the cost of collecting and sorting, such as the complexity of products and insufficient information on them, which impedes their rapid dismantling.

At the demand level, the competitiveness of recycling activities is hampered by:

  • the processing industries' lack of interest in recycled raw materials on account of their technical features, the limited possibilities for their use and the negative image associated with them;
  • the absence of pertinent industrial standards or the tendency for some standards or specifications to ignore or to discriminate against recycled materials or products.

Finally, the Commission identifies the following factors affecting the functioning of the markets and the business framework:

  • a lack of transparency, revealed by the almost total absence of indicators and statistics, and market fragmentation. This fragmentation is caused to a large extent by the lack of technical standards or common testing methods;
  • a lack of consistency in the way in which existing Community regulations are applied (in particular, those relating to the definition, classification and transfer of waste), which contributes to the fragmentation and distortion of the market.

On the basis of this analysis, the Commission identifies four types of action which could make recycling companies more competitive and boost activities in this sector: standardisation, the development of the market and of its transparency, measures in favour of innovation and regulatory measures.

Among actions in the area of standardisation, the Commission proposes:

  • the review of industrial standards to ensure that design favours the aptitude of products for recycling and to eliminate obstacles to the use (by private operators and for public contracts) of secondary raw materials;
  • the substitution of hazardous substances by other substances in products;
  • the harmonisation of specifications and testing methods for recycled products;
  • the development of marking systems aimed at facilitating the identification of substances and at aiding consumers to separate types of waste.

The following actions could help to develop the market and make it more transparent:

  • the creation of exchanges for recyclable waste and secondary raw materials;
  • a study of the savings to be made when using secondary raw materials throughout the life cycle of a product;
  • improvement of the knowledge of markets through the compilation of statistics and studies of long-term trends for supply and demand.

Innovation can be stimulated by the following measures:

  • targeted use of the 4th and 5th Framework Programmes for research;
  • dissemination of research results and examples of good practices or national practices;
  • development of quality management strategies in recycling businesses;
  • use of the Community training programmes.

The Commission advocates the following regulatory measures:

  • increased transparency of the regulatory framework and better supervision of its transposition;
  • simplification of Community legislation (in particular administrative procedures) and its correct application;
  • increased use of market-based instruments (taxes, duties and charges) and regulatory instruments (regulation of the landfilling of waste), to ensure that recycling is a competitive solution compared with other methods of waste disposal, such as landfilling;
  • the drawing up of new regulatory measures to reduce the volume of hazardous substances, to increase the amount of recycled materials in some specific products and to encourage selective collection and the composting of biodegradable waste. The Commission will also study whether specific waste streams with a high quantity of recyclable waste or a high content of hazardous substances should be targeted through legislation.

The Commission plans to organise a Forum on Recycling, which will bring together all interested parties in the public and private sector, to examine various ways of making the competitiveness of the recycling industry more competitive. The Forum will also evaluate whether it is useful and feasible to set up a European Recycling Centre.

RELATED ACTS

Communication from the Commission of 21 December 2005: "Taking sustainable use of resources forward: A Thematic Strategy on the prevention and recycling of waste" [COM(2005) 666 final - Not published in the Official Journal]. This strategy sets out guidelines and describes measures aimed at reducing the pressure on the environment caused by waste production and management. The main thrust of the strategy is on amending the legislation to improve implementation, and on preventing waste and promoting effective recycling.

Proposal for a Directive of the European Parliament and of the Council of 21 December 2005 on waste [COM(2005) 667 - Not published in the Official Journal].

The aim of this proposal is to revise the framework Directive on waste. The proposal incorporates the content of the Hazardous Waste Directive and the Waste Oil Directive into the new Directive. It also introduces an environmental objective, clarifies certain concepts (recovery, disposal of waste), and sets out procedures for establishing minimum quality standards. This proposal for a Directive requires Member States to draw up national waste prevention programmes.

Last updated: 16.08.2006

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