European Commission's Plastics Strategy

Position

BDI position on the European Commission’s Plastics Strategy

Bundesverband der Deutschen Industrie e.V.

Version: 29 May 2018

On 16 January 2018 the European Commission for the first time presented a strategy for plastics. The Commission has taken this initiative in the framework of its activities to strengthen the circular economy. In today’s world, plastics are used – inter alia – as a material for building insulation, as packaging for protection of and against goods, as lightweight construction components in mobility applications as well as in electrical and electronic appliances and can also be used as a material for the generation of renewable energy. In this respect, plastics make an important contribution to energy and material savings, and constitute an integral component of European value creation and innovation capacity.

Hence, just as the use of plastics in their wide range of applications is highly differentiated, so must also be the measures considered at the end of their service lives for recycling or otherwise recovering plastic waste in line with the waste hierarchy set out in article 4 paragraph 1 of directive 2008/98/EC (so-called Waste Framework Directive). It is positive that the European Commission recognises this challenge in its strategy. BDI therefore expressly welcomes the discussion launched by the Commission on the future role of plastics as an important component of the European economy. BDI’s position on the EU plastics strategy is set out below: Dealing with plastic waste A precondition for development of Europe-wide recycling of plastics is the establishment of comprehensive and high-quality structures for practical waste collection which is as separated as possible, sorting and recovery of these waste flows. In all areas, there is currently still considerable potential for improvement in many EU Member States. Thus, a major priority is also to ensure uniform enforcement of existing EU legislation on the circular economy in all Member States in order to arrive at a common level for fair competition in the treatment of plastic waste and in order to be able to produce and market high-quality recycled materials. In addition, to further develop high-quality processing of plastic waste and to be able to realise the new recycling requirements for municipal waste recently adopted by the European legislator, considerable investments in new recycling and other recovery processes will be required in the future. For these investments to be designed in practice and safeguarded, EU-wide planning and legal certainty for companies must be ensured, e.g. with respect to the acceptance of new recycling pathways.

A further central challenge for the future recovery of plastic waste is that landfilling of such waste continues to be a possible and cost-effective waste management route across large parts of Europe. This circumstance is in diametrical opposition to investments and high-quality processing plants. It must

thus be ensured across the EU that landfilling of municipal waste, including that which contains plastic, is consistently brought to an end in all Member States. The new provisions of directive 1999/31/EC (so-called Landfill Directive) decided recently to this end in the framework of the legislative package on the circular economy are insufficient. This is the case in particular for the long transition periods until 2035 or even, in exceptional cases, 2040. It should therefore be pointed out that the policy demands in the plastics strategy are not substantively coherent with the recently revised European legislative framework for waste recovery.

This must be taken into account for the recycling rates proposed for the EU plastics strategy. The European Commission refers in its plastics strategy, among other things, to its 2015 proposal in the framework of its EU circular economy package whereby more than 55% of all plastic packaging waste in Europe should be recycled in 2025. Established and necessary recovery processes for plastic waste – alongside recycling as processed or raw materials – also include energy recovery in efficient waste incineration plants or in the form of substitute fuels in other combustion plants. The yardstick for action in the future should also continue to be ensuring compliance with all statutory requirements in the first instance and also treating plastic waste in such a way that the recovery process achieves the ecologically best outcome. At the same time, the economic viability and technical feasibility of individual recovery processes called for in article 4 paragraph 2 Waste Framework Directive should be taken into account in order to arrive at sustainable waste management on an overall view. Depending on product type, material composition and area of use, this may call for recovery as a processed or raw material or energy.

Producer responsibility The basis for successful management of plastic waste is cooperation between all actors in value-added structures. These include producers, processing firms, manufacturers/distributors, consumers, recycling businesses and other waste management players as well as mechanical engineering firms and traders. Organised transfer of responsibility for goods and products – from their manufacture through to their return into the material cycle – must therefore be built on the basis of private-sector systems for product responsibility.

Thus, the intensification of dialogue along value-added structures called for in the plastics strategy is welcome. A decisive role in further development of the circular economy falls specifically to manufacturers and distributors of consumer goods, since they stipulate essential product specifications which may determine possibilities for the use of recycled materials or whether products can be re-used and recycled. The information flow in value-added structures on this must also be improved in future. www.bdi.eu

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In Germany, producer responsibility is firmly enshrined in the Circular Economy Act (Kreislaufwirtschaftsgesetz) and has successfully been given concrete form in several other legislative texts such as the packaging law (VerpackG), end-of-life vehicles ordinance the law on the distribution, return and environment-friendly management of end-of-life electrical and electronic equipment (ElektroG). The aim must therefore be to be able to maintain and further optimise these nationally established legislative texts. For instance, actors from value-added structures for packaging in Germany are currently deliberating in the bodies of the packaging register’s central council on creation of requirements for measurement of the packaging recyclability in accordance with § 21 VerpackG. The European Commission should therefore rethink its blanket proposal for so-called “eco-modulation” of financial instruments such as licence fees so that individually designed product responsibility systems which have already proved their worth in the Member States can continue to deploy their effects. In addition, all policy demands with regard to an overhaul of European requirements for producer responsibility must be discussed in the light of the recently revised new articles 8 and 8a of the Water Framework Directive which have yet to be implemented in the Member States.

Market for recycled raw materials The European Commission proposes in its plastics strategy inter alia that the use of recycled plastic materials in the EU should be increased from around 3.8 million tonnes a year now to 10 million tonnes in 2025. Insofar as technically and economically conceivable, a clear increase in the use of recycled plastic materials in European industry is welcome, e.g. to allow a reduction in dependence on imports of raw materials from third countries. For this objective to be pursued, there will need to be a broad and differentiated discussion on possibilities and flanking support instruments (e.g. green public procurement) for the use of recycled plastic materials. Possible support instruments should be designed to be neutral with respect to competition with other materials. It should also be borne in mind that recycled materials – just like any other material – must be tradable in a free market and that the possibilities for their use must not be limited through additional regulatory restrictions.

So-called closed-loop systems for specific waste flows are expressly to be welcomed, since product cycles which are as closed as possible can offer advantages in relation to material purity and verification of individual substances. Nevertheless, they cannot be adduced as an exemplary model for large-scale marketing of recycled materials on an international raw materials market, which would be necessary in light of the Commission’s objectives.

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It should also be remembered that this approach cannot generally be transposed to other materials and would have to be organised specifically for each individual case.

A precondition for an ongoing increase in the use of recycled materials is therefore that quality requirements demanded on the market are met. Among other things, standardisation procedures can also contribute to development of a common understanding of quality standards. This central precondition must always be discussed taking into account product specifications of particular products. For instance, those involved in value-added structures for particular types of plastic packaging can decide jointly with the European institutions how the share of recycled materials used can be progressively increased or even be enabled in the first place in order to strengthen the circular economy. In this connection, the approach chosen by the Commission of entering into a dialogue with manufacturers and distributors on a voluntary basis is welcome. However, the deadline of 30 June 2018 proposed in the plastics strategy for voluntary self-commitments (so-called pledges) does not correspond to the planning timelines needed for such decisions in all companies.

To increase the use of recycled materials, it is also necessary that this is enabled not only technically but also legally and that the overall benefit for use as a raw material is taken into consideration in line with the EU objective of sustainable development. In particular, remaining legislative obstacles to the use of recycled materials should be quantified, assessed and eliminated where necessary. In this regard, public procurement should give an important stimulus to demand for sustainable materials and products through appropriately designed award criteria. Whether and to what extent to which procurement law can also be adjusted to help reach this aim should be examined. In addition, a workable, flexible and reliable instrument must be available to measure the sustainability performance of a raw material in its particular area of use. Conversely, given the wide range and diversity of application areas and product specifications, rigid one-size-fits-all requirements for the use of recycled materials in goods and products across entire product groups are neither useful nor effective. Furthermore, massive investments in know-how, innovations and installations are needed in order to achieve the desired goal of relevant requirements and an increase in the reuse and recycling of plastic waste across the EU. The private sector can therefore only make these investments if the products which emerge from recycling processes satisfy the requirements of manufacturers and distributors. Hence, they need improved market access.

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Product design In addition, the European Commission has set out in its plastics strategy the objective that all plastic packaging placed on the market in 2030 should be capable of reuse or recycling at a reasonable cost. In the Commission’s perceptions, improved design of packaging products should make an important contribution to this end. Yet, reuse or recycling cannot be given unconditional priority over other ecological challenges linked to packaging design in this regard.

Generally speaking, plastic products have to meet a large number of statutory criteria such as standards and other requirements. Thus, the most important function of packaging is product protection. Convenience is also a desired outcome, for example in the form of simpler package sizing, marketability and cost efficiency with respect to logistics and storage requirements. On top of this, it is essential that technical specifications and provisions on product safety are met.

These wide-ranging requirements apply equally for materials and products made from primary and recycled raw materials alike. Adequate instruments for evaluating different consequences of design variants are already available through practical lifecycle analysis methods. On the basis of these investigations, conflicts of objectives can be identified and incorporated in the assessment of ecological issues. For instance, a conflict of objectives arises in the assessment of ecological benefits if a packaging improves product protection – e.g. by extending the shelf life of perishable food products – but is less suitable for recycling yet exhibits positive effects in the overall ecological performance thanks to the improved product protection. The same applies for packaging which saves energy and material in manufacture through its reduced weight but may be more difficult to recycle. Packaging developers already have at their disposal additional specific guidelines for improving management of the circular cycle.

The task of all actors involved in value-added structures must therefore be to identify conflicts of objectives and to reach the optimal decision for the packaging design in each case. In this connection, the development of norms and standards can also play an important role. Established procedures in the framework of ISO, CEN or DIN must provide the reference framework for this. Inflexible regulatory criteria for packaging design are inappropriate against the backdrop of dynamic ongoing developments in packaged goods and their hygiene, security and/or distribution requirements.

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Hence, the challenge for design lies in the compatibility of product requirements. BDI therefore thinks it a good idea to organise material flow management such that product recyclability is included in the thinking from the very outset of value-added structures of manufacturers and distributors, making allowance for the whole range of product functionalities and requirements.

Such approaches for plastics have already been developed within business jointly by material manufacturers, processing firms, mechanical engineers and recycling businesses. They should be encouraged and further developed.

Single-use plastics and fiscal measures Use of the term “single-use plastics” in the EU plastics strategy is misleading.

Single use of plastics irrespective of the service life and purpose should not automatically be classified as problematic for the environment. Rather, single-use plastics should also be channelled into high-quality recovery when their usefulness comes to an end and accordingly recycled or otherwise recovered in line with the waste hierarchy (see above). In addition, single use of certain materials and products is often the considered outcome of specific requirements on characteristics, e.g. hygiene or product stability. Plastic materials are frequently particularly good at offering the properties and meeting the requirements desired by end consumers – be they households or businesses – such as convenience, safety and hygiene. However, it is essential that infrastructures developed for collection, sorting and recovery of singleuse plastics continue to be available in the European Union and worldwide.

It is therefore BDI’s view that no prohibitive rules are necessary for singleuse plastics. Rather, the existing waste management provisions – in particular the EU waste framework directive and the EU packaging directive – should be transposed and enforced effectively in all EU Member States. If necessary, the European Commission can support this through further implementation tools such as guidelines. BDI expressly rejects new legislative provisions which lead to discrimination between products.

Unwieldy fiscal measures to reduce the absolute use of plastics at European and national level should be rejected. Such measures constitute a discrimination against certain materials. In addition, it is difficult to foresee what ecologically and economically negative consequences might arise in material use as a result of substitution effects. At the same time, the contribution made by plastics to sustainable development and to climate protection would be at risk. Similarly, fiscal measures do not smooth the path to a modern circular economy. On the contrary, a tax on plastics, plastic products or products which contain recycled plastic materials would be disproportionately complex and hence associated with a considerable administrative effort for administration and enforcement. Moreover, there would be a danger of undermining the competitiveness of German and European industry vis-à-vis www.bdi.eu

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global competitors and placing a further burden on consumers with no steering function. Thus, a tax on the use of plastics would merely generate market distortions, running counter to the efforts and commitment of German industry to develop the circular economy.

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About BDI The Federation of German Industries (BDI) communicates German industries’ interests to the political authorities concerned. It offers strong support for companies in global competition. BDI has access to a wide network within both Germany and Europe, to all the important markets and to international organisations. BDI provides political flanking for the opening of international markets. It also offers information and guidance on all issues relevant to industries. BDI is the leading organisation of German industries and related service providers. It represents 36 sectoral organisations and more than 100,000 companies with approximately 8 million employees. Membership is voluntary. 15 federal representations advocate for companies’ interests on a regional level.

Imprint Federation of German Industries e.V. (BDI) Breite StraĂ&#x;e 29, 10178 Berlin, Germany www.bdi.eu T: +49 30 2028-0 Contact Dr. Claas Oehlmann Senior Manager Telefon: +49 (30) 2028 1606 c.oehlmann@bdi.eu BDI document number: D 0932

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