Greener Products: Mapping the Environmental Policy Drivers

Greener products

Greener products Mapping the environmental policy drivers on products and production processes

waste

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Greener products Mapping the environmental policy drivers on products and production processes Julie Hill Edited by Hannah Hislop Published by Green Alliance, September 2009 Designed by Howdy ISBN 978-1-905869-26-8 Green Alliance Green Alliance is an independent charity. Our mission is to promote sustainable development by ensuring that environmental solutions are a priority in British and European politics. We work with representatives from the three main political parties, government, business and the NGO sector to encourage new ideas, facilitate dialogue and develop constructive solutions to environmental challenges.

Acknowledgements Many thanks to Mark Barthel, Jane Dennett-Thorpe, Sara Eppel, Judicaelle Hammond, Lindsay Harris, Daniel Instone, Thomas Lingard, Jiggy Lloyd and Danny Silverstone for their input.

This report has been researched and written for, and with the assistance of, members of Green Alliance’s Designing Out Waste theme consortium.

We are grateful to all the organisations below for their support of our work. For more information on Green Alliance’s Designing Out Waste theme, see www.green-alliance.org.uk/wasteandresources

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Introduction The premise of Green Alliance’s Designing Out Waste programme is that waste comes from ‘stuff’: products and their processes of production. As a result, stuff is what we should be seeking to change.

policy process. This lack of concerted attention to what we have called the ‘secret life of stuff’, and the more joined up policy that should result, has hampered efforts by companies to redesign their products and processes.

But to understand ‘stuff’, we have to understand a lot of other stuff first: where raw materials come from and how they were extracted, how products are designed and manufactured, how they get to consumers and other businesses, how they are used, and what happens to them at the end of their useful lives.

Now, however, waste policy is being linked to both emerging product policy, and the much more prominent carbon agenda. Is this the beginning of the end for products’ secret lives?

At the same time, government responsibilities are dispersed over several departments, and all of government is embroiled in the debate about how much we can afford, or not, to spend on protecting the environment. It is against this background that we seek to understand the prospects for a joined up set of policy drivers.

Some commentators have estimated that as much as 93 per cent of production materials are not used in the final product (if including raw material processing) and that 80 per cent of certain products are disposed of after a single use.1 It is clear that much of the environmental impact of a product, including this wastage of materials, will be determined at design stage.

Design is thus a crucial lever. So greener design is not just about individual products, but whole systems of production and consumption.

Waste policy has tended, until very recently, to only address a product’s end of life. The rest of the lifecycle has been largely obscure to the

This report maps the main environmental policy drivers bearing on products and their processes of production, and makes an initial assessment of their coherence. It does so for, and with the assistance of, the companies who make up Green Alliance’s Designing Out Waste consortium.

The consortium has an interest in improving the environmental performance of their products and in analysing and critiquing the ways in which development of policy (at country, national and EU level) might help or hinder this progress.

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The questions In looking at the key environmental policy drivers on products and their processes of production, we sought to illuminate three main questions.

Are the current drivers coherent?

Where the gaps?

The main environmental policy drivers bearing on products, although developed in a piecemeal fashion, are at present reasonably complementary, although not comprehensive in their coverage.

Significant conflicts and gaps include the following: • The most significant gap is any means of setting standards for products’ environmental performance, other than on energy performance.

• Given that a large percentage of production materials are not used in the final product, a major gap is the lack of policy drivers bearing on commercial and industrial waste.

• There is tension between the mandatory requirements of the carbon reduction commitment (CRC), which targets operational energy use and voluntary approaches such as carbon footprinting and product roadmaps, which take a more holistic approach to the product supply chain.

• A large unknown factor is the influence of government guidance on measuring and reporting carbon emissions, which could become a mandatory requirement in a few years.

• Packaging waste is subject to recycling targets separately from local authority recycling targets. The complexities of funding arrangements that arise from this situation,

and the impact this has for recycling and other infrastructure, needs further discussion.

• The prospects for fiscal incentives on products themselves (such as VAT reductions for best-in-class or taxes on particularly damaging products) are under-explored.

How far is carbon a good proxy for other environmental impacts, and what else is needed? How do we make trade-offs?

There seems to be consensus that carbon is a reasonable proxy for resource efficiency when considering the ways in which materials are processed and recycled, but it is not overall a good proxy because it cannot easily deal with some key environmental parameters of the product lifecycle.

These include water scarcity, materials scarcity and security, and the knock-on impacts of extracting resources on landscape and biodiversity.

The product roadmap approach is the main government-promoted initiative that considers these other parameters, and extends to social parameters such as fair trade and labour conditions. However, how to make trade-offs between different parameters has barely been addressed in policy terms, and the voluntary nature of the product roadmap process means that its coverage is unlikely to be comprehensive.

This issue could be significant to companies who are considering how to assess their products and achieve improvement ahead of any product legislation.

Greener products The questions

How can measurement and communication be best optimised or standardised to avoid consumer and business confusion?

There are a bewildering number of ways companies can measure and report their environmental impacts. Measurement need not imply public reporting: for some companies the value will be in illuminating the impacts of supply chains, and being able to act internally or in concert with suppliers and customers, rather than in making public statements.

The significant mandatory driver is the CRC, as well as the possibility of mandatory carbon emissions reporting. Mandatory energy labelling also exists for some products. Voluntary initiatives include the Greenhouse Gas Protocol, the Global Reporting Initiative, and the Carbon Disclosure Project. For products, there is the carbon footprinting standard PAS 2050, product roadmaps, ecolabelling, and others initiatives for dealing with other environmental issues other than carbon. These all present companies with a considerable task in deciding which formats are going to command widespread currency and credibility in future.

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Furthermore the metrics, and data sets that feed into such metrics, are numerous and often unverified, so that several different results can be obtained for the same product depending on what data set is used. However, all product life cycles have significant variability and aiming for precise measurement in an imprecise system could add further confusion.

There are opportunities to align measurement and reporting methodologies in the next couple of years as a number of key protocols and standards are either reviewed or developed.

This will be a continuing theme for the second year of the Designing Out Waste project.

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Summary of key drivers The production, use and disposal of products are influenced by many factors, including design, demographics, media, fashion and behaviour. These are all relevant when considering the impacts of the policy drivers mentioned below, but we have focussed on assessing the government-driven initiatives bearing on products and their processes of production. ‘Stuff’ has four main drivers bearing on it:

1) Requirements for organisations to reduce carbon in their operations, which may in the longer term work through into products, but so far in unknown ways One of the most important environmental policy drivers on companies and now also on public sector organisations is the introduction of carbon budgets and the instruments designed to meet them, in particularly the mandatory CRC. While the EU Emissions Trading Scheme (EU ETS) is designed for energy-intensive industries, the CRC covers a much larger group of less energy intensive businesses, and for many it will be the first time they have considered or monitored their emissions.

Typically, for these organisations energy bills are less than one per cent of their turnover.

Since the CRC concentrates on aggregate emissions that arise, especially from metered energy use, it is unlikely in the short term to affect product design, except possibly in relation to the procurement of new buildings or new equipment (i.e. manufacturing process design), where these have a significant impact on energy use. The politics of the CRC is likely to be around the administrative burden of the scheme and ensuring that the market for trading carbon works without the problems that have bedevilled the EU ETS.

Greener products Summary of key drivers

2) Voluntary encouragement to measure and report a) carbon and b) carbon and other parameters, in ways which are likely to lead to increased scrutiny of supply chains to reduce impacts Alongside the CRC, policymakers see tools such as carbon footprinting and product roadmaps as acting in a complementary fashion. These initiatives are aimed at voluntary stakeholder engagement with the issues, and are designed to stimulate thinking about all parts of the supply chain, not just those parts over which a company has immediate influence. However, how far the information from such schemes will result in action, particularly action to redesign products, is not clear and the government has no means of ensuring a particular level of progress.

It can be argued that the chronology of introducing carbon accounting (first, energy intensive industries, then corporate greenhouse gas accounting, now with the CRC, mediumlevel users of energy) does nothing to break down barriers between parties in a supply chain to encourage them to cooperate to tackle the biggest carbon source in the chain, rather than tackling just their own emissions. Nor does it necessarily lead to a critical mass or groups of companies working together to send signals to the energy market about what their future expectations might be.

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3) Requirements towards increased recycling and reuse, which may in the medium to long term be combined with measuring progress on a carbon basis rather than a weight basis There are several important drivers bearing on waste, including the EU Landfill Directive, the UK’s landfill tax, mandatory household waste recycling and composting targets, packaging recycling targets, and recycling requirements in EU producer responsibility directives.

The net effect of these is likely to be a significant amount of diversion from landfill and increased recycling, and while these drivers should stimulate thinking about product redesign in pursuit of easier and more efficient recycling, there is nothing to ensure that that is the case. This is particularly important given that company evidence is that consumer drivers are primarily around perceptions of quality and performance, with recycling as an important but secondary consideration for most consumers. The only mandatory drivers presently with an ecodesign component are the various producer responsibility directives but there is a view that the design components are presently underused.

Greener products Summary of key drivers

The Courtauld Commitment, a set of voluntary targets for retailers and brand owners negotiated between companies, WRAP and the Department for Environment, Food and Rural Affairs (Defra) on packaging and food waste, sets an interesting precedent because it sits somewhere between the mandatory and the entirely voluntary, aimed as it is at meeting firm targets on waste reduction and securing engagement from an expanding number of corporate participants.

Redesign of products could be one of the explicit aims of the Courtauld Commitment in future, as well as a new focus on measuring and reducing the carbon associated with products.

4) Ecodesign standards for energy use in products may, in future, also include water and materials use.

The instrument that could have most effect on products is the EU’s Ecodesign of Energy-Using Products. This could be expanded beyond its present scope to set standards for products on their recyclability or water use, for instance.

However, there are no immediate plans to extend it beyond energy-related products, and any revisions would take at least until 2012 to be introduced.

Ecodesign standards may also be linked to procurement standards, which are in development in the EU and already in place in some areas of UK public purchasing.

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In addition:

Fiscal instruments Although there are fiscal instruments such as enhanced capital allowances (ECAs) and capital grants for new technologies, fiscal measures on products (in addition to those already in place on carbon or landfill) are not yet firmly in prospect, but are being considered.

Politics and ambition Politically, although there is much positive positioning on the need to reduce carbon and the opportunities for new forms of wealth and job creation, it seems likely that appetite for new regulation will be diminished by the recession.

This is despite strong messages from business commentators that regulation can stimulate innovation and help prepare UK business for a green recovery. A more positive note comes from the development of a certain amount of political competition between England, Scotland and Wales to have higher aspirations on, for instance, recycling targets. The downside of this could be confusion for companies with a UK reach.

At present the differing aspirations are not being accompanied by radically differing policy proposals, although they have led to new funding streams being made available to industry and local authorities to help achieve these targets.

For the bigger players, however, what happens at EU level is much more important than anything that happens in the UK.

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Figure 1: Summary of main policy drivers bearing on products and production processes

Ecodesign

Carbon reduction commitment

Targets manufacturing, including outside the UK

May apply to any of these operations individually, if in the UK, to improve metered energy use (not transport)

Extraction

Distribution

Retail

Consumers

Commerce

Manufacture

Reprocessing

Landfill

Waste collection

Sorting

Mandatory waste policy drivers

Energy from waste

Act primarily on local authorities (for household waste) and to some extent on commercial waste producers through landfill tax, pre-treatment regulations and producer responsibility.

Processes left of the dotted line may be abroad

Carbon footprinting and product roadmaps can cover all the above stages, including those outside the UK.

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Figure 2: Summary of main waste policy drivers bearing on products and production processes

C&D recycling target

Packaging regulations

The UK target to recycling 50% of C&D waste by 2012 and an EU target of 70% by 2020 are the only targets for recycling non-household waste outside of those in producer responsibility directives

Bear on companies in the packaging supply chain in the UK, requiring recovery and recycling of a percent of packaging materials, as well as some design requirements

Extraction

Courtauld Commitment Has voluntary targets for packaging and food waste reduction for brand owners and retailers

Manufacture

Distribution

Retail

Consumer drivers Reprocessing

Consumers

Sorting

Commerce

Are essentially voluntary: local authority encouragement to recycling; labelling of products and packaging with recycling information

Landfill

Waste collection

Local authority recycling targets, LATS, landfill tax Local authority recycling targets divert household waste from landfill or EFW towards recycling; LATS diverts biodegradable household waste away from landfill and towards recycling or EFW; landfill tax diverts both household and commercial waste from landfill towards recycling or EFW.

Energy from waste

Renewable Obligation Commitment (ROC) Processes left of the dotted line may be abroad

ROCs scheme and associated policies encourage anaerobic digestion; energy policy is concerned with the contribution of energy-from-waste to all kinds of renewables targets

Greener products Summary of key drivers

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Table 1: Which government department oversees what?

Mandatory drivers Carbon reduction commitment Carbon reporting Waste targets Producer responsibility directives Ecodesign Directive

DECC Defra

3

3 3 2

3

3

3

Voluntary drivers Carbon footprinting Product roadmaps Courtauld Commitment Defra framework for pro-environmental behaviours

3 3

3

3 4

3

Fiscal measures Landfill tax Enhanced capital allowances and grant aid Fuel duty Vehicle excise duty

Strategy Carbon budgets Low carbon industrial strategy Waste strategy Product and materials Packaging strategy Resource efficiency Sustainable procurement action plan

3

3 3

3

3

3 3 3

3

BIS

HMT

3 3

3 3 3 3

3

3 3 3

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Table 2: Coverage of the main drivers, by main scope/focus Scope/focus Main drivers

Carbon reduction commitment

Carbon footprinting

Product roadmaps

Ecodesign Directive

Waste targets

Policy coverage

UK-wide

UK-wide

International

EU-wide and thus UK-wide

Separate waste strategies for each country with differing household waste targets. Packaging and producer responsibility targets UK-wide

Impacts outside UK

Cannot cover

Cannot cover

Can cover

Could cover

Cannot cover

Primary focus

Carbon

Carbon

Considerations in pilots include greenhouse gases but also resource consumption, air and water pollution and toxicity, soil degradation, biodiversity and land use, solid and hazardous waste, and social impacts

Presently energyRecycling of waste using or energy related products and therefore carbon; could be widened in future

Key metrics

Tonnes of carbon dioxide

Tonnes of greenhouse gas (carbon dioxide equivalent)

Varied

At present energy Tonnes of waste consumption; others diverted from landfill, possible recovered, recycled

Mandatory driver

Mandatory driver

Mandatory driver

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Table 3: Coverage of the main drivers, by impact on stage of product lifecycle Lifecycle stages Main drivers

Carbon reduction commitment

Carbon footprinting

Product roadmaps

Ecodesign Directive

Waste targets

Design

Not directly, but may influence buying decisions on, and possibly eventually design of, buildings and equipment where these affect metered energy use

Should illuminate the carbon impacts of all stages of the supply chain, so could be used to influence design of products

Should illuminate impacts of all stages of the supply chain, so could be used to influence design of products

Yes

Local authority targets have no influence back up the chain

Raw material production

Yes, if CRC registered company is doing the raw material production.

Can include e.g. heat and light used in agricultural production but not transport or fertiliser

Yes

Yes

Yes if widened to include embodied energy

No

Manufacture

Yes

Yes

Yes

Yes if widened to include embodied energy

Some, e.g. lightweighting of packaging

Packaging

Not directly affected

Could influence packaging if carbon consequences of materials are analysed

Yes

Yes if widened to include embodied energy

Recycling at end of life and some influence on design

Distribution

No, transport fuel excluded

Could influence efficiency here

Yes

Yes if widened to include embodied energy

No

Mandatory driver

Mandatory driver

Mandatory driver

EU producer responsibility directives have design requirements separate to recycling requirements

Greener products Summary of key drivers

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Table 3 continued: Coverage of the main drivers, by impact on stage of product lifecycle Lifecycle stages Main drivers

Carbon reduction commitment

Carbon footprinting

Product roadmaps

Ecodesign Directive

Waste targets

Retail

Yes, should improve energy efficiency of buildings and equipment

Could improve the attention to energy efficiency of stores and equipment

Yes

Yes if widened to include embodied energy

Only for packaging and plastic bags

Home shopping

No

Yes

Yes

No

Yes, post customer recycling

Consumer

No

Can be used to illuminate impacts of products in use and thus advise consumers

Can be used to illuminate impacts of products in use and thus advise consumers

No, unless married up with labelling requirements

Some mandatory separation in force by local authorities

End of life

Only if disposal uses metered energy on site

Can illuminate which destinations (reuse, recycling, energy from waste, landfill) have best carbon benefits

Yes

Yes if widened to include embodied energy and material use e.g. recycled content

Focus on diversion from landfill and improving recovery and recycling

Mandatory driver

Mandatory driver

Mandatory driver

Greener products Summary of key drivers

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Table 4: Drivers by target and breadth of focus Narrow focus

Broad focus

Company level

EU Emissions Trading Scheme Carbon reduction commitment Carbon reporting Producer responsibility directives mandating recycling rates (packaging, WEEE, ELV, batteries) Courtauld Commitment Enhanced capital allowances and capital grants for new technologies Landfill tax

CSR reporting

Product level

Carbon footprinting Ecodesign Directive (at present narrow since just energy-related)

Product roadmaps Ecodesign Directive (in future could be expanded to other parameters) Public procurement

Bold: mandatory Italic: voluntary Bold Italic: has elements of voluntary and mandatory

Table 5: Origin of drivers Now

Possibly in future

UK originated

Carbon reduction commitment Carbon footprinting Recycling targets Landfill tax Product roadmaps Procurement ‘Quick Wins’ Carbon reporting

Implementation mechanisms for carbon budgets Product levies Wider procurement policy Wider reporting

EU originated

EU Emissions Trading Scheme Producer responsibility directives Ecolabelling Landfill Directive Waste Framework Directive Ecodesign Directive

Variable VAT Expanded Ecodesign Directive Wider procurement policy

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The drivers 1. Carbon emissions reduction requirements Policy The UK government has committed itself to a binding target to reduce UK carbon emissions by 80 per cent by 2050 against 1990 levels, with an interim target of a reduction of at least 26 per cent by 2020. This target is in the 2008 Climate Act. In order to expose the government to some degree of scrutiny, a detailed annual report must be submitted to Parliament stating the levels of, and changes in, greenhouse gas emissions.

However, the Act does not provide for any direct sanctions in the event of a failure to meet the 2050 target or to comply with any carbon budget.

The Act establishes a Climate Change Committee of individuals appointed from different sectors to be an independent advisory body to government.

Part of its role is to advise on carbon budgets or plans, broken down into commitments per sector, to limit emissions over successive five-year periods.These are intended to help set out a trajectory to the 2050 target.The government set the first of these in the April 2009 Budget, aiming for a 34 per cent reduction on 1990 levels by 2020. Mechanisms to achieve this reduction were set out in the government’s response to the first report of the Climate Change Committee in July.

At a Green Alliance event in May 2009, Michael

Jacobs, environment adviser to Gordon Brown, described the budgets as the first ever attempt to put ecological constraints around the UK economy.

The EU has an overall target of 20 per cent reduction of carbon dioxide on 1990 levels by 2020, and 20 per cent of energy to come from renewable sources, with national targets varying (the UK’s is 15 per cent). The Council of Ministers also indicated that they would be negotiating for a 30 per cent reduction at the Copenhagen summit later this year.

At present the principle policies in place to achieve the UK’s reduction target are i) participation in the EU Emission Trading Scheme for energy intensive industries; and ii) the UK’s carbon reduction commitment for other non-intensive businesses and the public sector. These sit alongside efforts to achieve better domestic energy efficiency such as the mandatory carbon emissions reduction target (CERT), and the community energy saving programme (CESP) for energy suppliers.

Greener products The drivers

The EU ETS mainly targets power generation and extractive and heavy industry. The CRC, which will be introduced in 2010, is designed for less intensive industries, and will cover any business or public sector organisation with a half-hourly meter using more than 6,000 MWh electricity per year (equivalent to a bill over £500,000).5 Government estimates indicate that around 20,000 public and private sector organisations will be required to participate in CRC in some way.6 The majority of these will ‘simply’ be required to make an information disclosure once every few years that tells the administrator about their electricity usage.

However, around 5,000 of these organisations will be required to participate fully, an estimated 25 per cent of total business sector carbon emissions in the UK. This means they must not only record and monitor their carbon dioxide emissions, but also purchase allowances equivalent to their emissions each year.

During the introductory phase, allowances will be sold at a fixed price of £12 per tonne of carbon dioxide. Following the initial sale period, participant organisations can buy or sell allowances by trading on the secondary market.

This enables organisations that have reduced their energy consumption more than they expected to sell some allowances, while those

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that have higher emissions than anticipated can purchase extra allowances. The idea is the whole sector will have to improve energy efficiency in line with the overall cap. The money will be returned to participants each year, six months after the sale or auction. The return will be based on the previous year’s performance: in the first year, those at the top of the emissions reductions table will forfeit ten per cent of the sum they paid, while those at the top will have the sum paid returned with a ten per cent bonus. The incentive is thus both financial and reputational, since the league tables will be published. This forfeit/bonus will increase from 10 to 50 per cent over the first five years, after which the scheme will be reviewed. The fraction of the pot that firms receive will depend on how hard they’ve tried to be better than average.

The CRC has been designed to not clash with other instruments since it will cover emissions outside of climate change agreements (CCAs) and outside the direct emissions already covered by the EU ETS. Any subsidiary organisation with more than 25 per cent of their energy use emissions covered by a CCA will be completely exempt from the scheme (but only the subsidiary is exempt, not the entire organisation). The CCAs work in conjunction with the climate change levy, although this is felt by some to have had limited effect.

Greener products The drivers

Other policy drivers are designed to act on the energy use of specific products rather than firms’ or organisations’ energy use in aggregate.These include state support for improving the energy efficiency of homes; building regulations standards for energy efficiency in buildings; encouraging the phase-out of incandescent light bulbs; forthcoming ecodesign standards for energy-using and energyrelated products; and transport measures such as engine emissions standards (from the EU) as well as the UK’s policy of graduated vehicle excise duty for efficient cars, and the new car scrappage scheme designed to encourage uptake of newer, more fuel efficient cars (although this is not a formal requirement, which many see as a missed opportunity). Financial support is available for new technologies through enhanced capital allowances or grant aid, which affect the production of whole classes of products rather than individual products.

A future possible addition to the range of trading schemes is personal carbon trading. This was examined as a policy tool by Green Alliance among others. Depending on its scope, it could put pressure on all areas of the supply chain to reduce carbon including energy generation, products, transport, and waste treatment.The RSA’s detailed analysis of this area suggests its complexity means that it may work better on a community, rather than an individual level. Politically, however, its prospects are slim. Defra produced a report last year which concluded that it was not a political option at the current time.

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Politics Carbon has dominated the political agenda for a number of reasons, but an important one is that carbon is relatively easy to measure and thus manage.The target of 80 per cent reduction of emissions by 2050 is one of the most ambitious in the world (President Obama has recently adopted the same target) but critics argue that there is no meaningful road map for meeting that target and opinion is divided about the efficacy of the policies put in place.

The EU ETS has been undermined by the volatility of the price of carbon; a consequence of too many permits being issued and companies selling off permits to raise shortterm funds. The fluctuating price of carbon, which is presently low, provides little certainty to those considering investments in alternatives.

The drop in the price under the ETS, from about €30 (£26.75) a tonne last summer to €8 (£7.13) in February, has recently prompted calls for a floor price. Other criticisms are around the fact that the large sums of money from auctioning permits has been going to government central funds (£54 million so far; an estimated further £1 billion over the next four years) rather than being allocated directly (hypothecated) to developing renewables; and the fact that energy-intensive industries can buy permits from ‘clean’ projects outside the EU (the clean development mechanism) where it

Greener products The drivers

can be difficult to guarantee that these project would not have happened anyway. The CRC is structured in a way that should avoid some of these problems. The government’s low carbon industrial strategy is seeking views on how to address some of these issues, and the CBI has also recently published its own roadmaps against the targets to prompt debate.

At home, the political debate is largely centred on the future sources of energy. Decarbonising implies a shift to greater use of electricity from ‘clean’ sources rather than relying on gas, particularly given the UK’s exposure to imported gas (50 per cent), but also a desired switch to more electric vehicles. So the debates are about the mix of electricity generation: nuclear, coal (and the differences of view about whether there can ever be ‘clean’ coal or ‘safe’ nuclear) and renewables, of which the only ones really considered viable on a large scale are wind and possibly in future tidal power, with biomass playing a role. A recent development has been to characterise some forms of waste treatment as contributing to ‘renewable’ energy. Using organic waste in anaerobic digestion (which can produce gas for electricity production or heat as well as usable compost) is the favoured option under the renewable obligations certificates (ROCs) regime; other forms of energy from waste include incineration with energy recovery and

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the less proven technologies of pyrolysis and gasification of waste. Estimates of the potential contribution of such forms of energy range from the Institute of Mechanical Engineers’ very optimistic 17 per cent of UK electricity by 2020,7 to the National Grid’s estimate of 48 per cent of domestic gas from anaerobic digestion within ten years, to the government’s Food Matters report which estimated that composting 60 per cent of the country’s food waste in anaerobic digesters could generate 2.2 terawatt hours of energy, enough to power all the homes in Edinburgh and Glasgow. In the view of some, the recent government tendency to back particular technologies (anaerobic digestion, wind power) could stifle innovation and the development of a diverse mix. On the other hand, all forms or renewable energy are struggling to establish in the wake of the credit crisis, so explicit support is considered necessary.

The virtual abandonment of the idea of personal carbon trading leaves hanging an important debate about the best ways of encouraging the lifestyle changes or ‘pro-environmental behaviours’ needed to help meet carbon reduction targets, at the same time as generating a positive public view of action taken by the government, the ‘political space’ that politicians see as a prerequisite for taking radical action.

Greener products The drivers

Another key element of the current politics is the split of responsibilities between different departments. The Department for Energy and Climate Change (DECC) has taken from the Department for Business, Innovation and Skills (BIS) and Defra responsibility for energy security, tackling climate change (i.e. mitigation), the competitiveness of energy markets, ensuring that every home is ‘adequately and affordably heated’ and nuclear safety, security and nonproliferation. However, Defra retains large chunks of relevant policy including adaptation to climate change, sustainable consumption and production, environmental regulation and waste. BIS retains a general objective to ‘raise the productivity of UK business’ which could also be interpreted as resource efficiency. It is notable that the recent low carbon industrial strategy was published jointly by BIS as well as DECC, and was launched by Peter Mandelson, Ed Miliband and Gordon Brown, indicating a desire to make low carbon a central plank of economic recovery.

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Practice Both the EU ETS and the CRC will entail audited measurement of carbon emissions by tonnes of carbon dioxide, based on use of fossil fuels or metered electricity use (see details in appendices). It is unclear how much detailed modelling has been done of companies’ likely responses to carbon reduction measures in terms of where they will most seek to make changes, but since both trading schemes are presently limited to operational energy use, first responses are likely to be around energy efficiency and renewable sources of energy. This could indirectly change products by changing the processes by which they are made if energy efficiency gains outweigh any cost of change (and some changes may be available at no or low cost), but no one seems to have assessed the extent to which an affect on products is likely.

Companies could go further and address the embodied carbon in products by cutting waste through the supply chain, and also by changing the materials they use (for instance to move towards more recyclable materials) but this would not be measurable and reportable according to current CRC guidelines. In addition, the potential for the CRC to impact on how products are designed and made reflects is limited by where British ‘stuff’ comes from: if made in a factory abroad, the emissions are out of the scope of CRC.

Greener products The drivers

Many businesses may not be well prepared for the introduction of the CRC. Neil Bentley, director of business environment at the CBI was quoted in the Financial Times in March 2009 as saying that although the CRC had “sound objectives”, it was “going to come as a bit of a shock” to most businesses. He said, “The levels of awareness and preparedness among businesses are very low. It’s going to be an uphill struggle for the government to raise awareness, and to ensure that this is not going to become a bureaucratic nightmare.” However, Joan Ruddock, the DECC minister responsible for the CRC, said that the scheme would help companies to save money by making them more aware of their energy use. She estimated companies could save a total of £1 billion on their energy bills through the scheme by 2020.

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One view is that the chronology of introducing carbon accounting (first, energy intensive industries, then corporate greenhouse gas accounts, now medium-level users of energy) has done nothing to break down barriers between parties in a supply chain to encourage them to cooperate to tackle the biggest carbon source in the chain, rather than tackling their ‘own’ emissions. This is significant i) because policy may not be tackling the biggest sources first and ii) this approach is further institutionalising the opposite culture of what is needed for designing out waste: whole-life thinking and cooperation. One solution would be to introduce tradability of obligations between the parties in the chain, for example a supermarket could discharge its carbon reduction commitment by helping growers to use less energy.

Greener products The drivers

2a. Voluntary reporting of carbon Policy Carbon footprinting aims to illuminate the whole supply chain by looking at the lifecycle carbon emissions of products, including their extraction, manufacturing, distribution, retail, in-use and disposal phases. As a part of this, it illuminates manufacturing impacts in a way that might help make emission cuts under other carbon reduction schemes such as EU ETS and CRC, where they affect metered energy supply.

The footprinting process is seen as addressing impacts through a collaborative project involving different players in the supply chain.

At a point when it looked as if competing methodologies might emerge from a range of companies, Defra together with the Carbon Trust and the British Standards Institute (BSI) led the development of a standardised product carbon footprinting methodology that is now PAS 2050.

It has been described by Defra as good at identifying the hot spots in the supply chain.

It is only a measurement standard, and does not deal with reporting and communication, so BSI has also produced The Code of Good Practice for Product GHG Emissions and Reduction Claims to help with labelling.The use of the standard and

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code is voluntary. Additionally, carbon labelling has been trialled by a few companies with the Carbon Trust on a limited number of products.

There is an additional government initiative on the corporate reporting of carbon emissions.

This is a commitment in the Climate Change Act to the effect that ministers must either make carbon reporting mandatory, or explain to Parliament why they have not done so, by 2012. Draft guidance on the form of reporting has now been issued, with full guidance to be published later in the year.8 The new guidance aims to be consistent with CRC requirements and existing international reporting guidelines such as the Greenhouse Gas Protocol Accounting and Reporting Standard (GHG Protocol Corporate Standard) and the Global Reporting Initiative (GRI). There is also the Carbon Disclosure Project which encourages businesses to measure and report carbon on a voluntary and non-standardised basis.

Reporting initiatives aimed at a broader range of parameters include the Accounting for Sustainability initiative, which has been used by the Treasury as the basis for work on standards for public sector financial reporting.

Greener products The drivers

Politics Supporting the Carbon Trust on footprinting has been a way for government to be seen to help companies with the carbon agenda and to encourage the gathering of data from across the supply chain without directly mandating its collection. Other than the coming carbon reporting requirements listed in the previous section, the government has fought shy of wide-ranging mandatory requirements, the last time being when a Labour commitment to make environmental reporting compulsory as part of an operating and financial review (OFR) was scrapped by Gordon Brown while still chancellor.

Practice There is concern from businesses that multiple means of measuring and reporting carbon, from both mandatory and voluntary schemes, will create confusion among stakeholders. A specific concern is around barriers to investment in renewable energy. In March 2009, over 40 businesses and a number of third sector organisations, coordinated by the Aldersgate Group, wrote to Joan Ruddock identifying conflicts between the incentives towards on-site renewable energy generation provided by ROCs, the rules around reporting on carbon emissions embodied in Defra’s Best Practice Voluntary

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Reporting Guidelines (June 2008) and the CRC. In essence, the reporting rules do not allow on-site renewable generation that has benefited from subsidy under the ROCs scheme to count as zero carbon, which lessens the incentive to invest in order to meet the CRC. The signatories to the letter urge a more clearly defined and regulated market for zero carbon electricity.

Alongside the ‘what is zero carbon?’ debate, there are also government moves to define zero carbon homes and carbon neutral. A DECC consultation on the definition of carbon neutral closed in May, and the new BSI PAS 2060 is aiming to define carbon neutrality. Zero carbon homes were the subject of consultation by Communities and Local Government (CLG).

There is also a possible tension between company carbon reporting and product footprinting. If a company has voluntary ‘intensity’ reduction targets rather than absolute reduction targets, the company can reduce the carbon intensity of a unit of production while the total emissions of the company increase if the business grows. Further, intensity is not a good measure if carbon dioxide per £/profit or per £/sales is used, because this would move the carbon intensity number up or down dependent on selling price or margin. A mandatory reporting scheme should tackle all these aspects.

Greener products The drivers

So far the carbon label, which is an optional extension of using the carbon footprinting standard, has only been used on a limited number of products. Given the labour intensity of the process, this is unlikely to become common practice in the short term. There are around twenty companies that have adopted the label for individual products, including companies like Boots, Tesco and Walkers. It is hard to see to what extent carbon labelling can help consumer choice, but undertaking the foot-printing exercise in itself does yield improvements. For instance, Boots has reduced the footprint of its Botanics range by 20 per cent, mainly through packaging design and distribution methods. This has enabled the company to tell consumers with the benefit of data that the time spent washing hair is a big variable in the footprint of shampoo. In another example, across the two-year period of the reduction label commitment, Walkers reduced its carbon footprint by seven per cent. Through one single change, switching to 100 per cent British potatoes, Walkers saved 374,000 road miles per year - reducing emissions from transporting potatoes to its factories by ten per cent. However, the press stories around the relative footprint of Coca Cola and an Innocent

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fruit smoothie illustrate that the results of footprinting have to be communicated with caution. The key is where and how boundaries are set, and also how comparable the data is with other similar products. Although the point of a carbon footprint is not to capture all the possible environmental issues associated with a product, and certainly not wider issues such as health, there appears to be a certain expectation that it is put in a wider context and not used as the sole criterion of what is ‘good’.

The key issue seems to be deciding what levels of information are needed to make decisions about supply chains, and also to report with confidence, without waiting for fine grain detail. WRAP has recently established a new Carbon Research Forum with support from the Carbon Trust and the Environment Agency to bring together stakeholders and experts with an interest in measuring and reducing the carbon impacts associated with grocery and home improvement products in the first instance. In theory, this forum could also extend its remit to facilitate other government policy objectives in the future.

Greener products The drivers

2b. Voluntary measurement and reporting of carbon and other impacts of products Policy The main driver here is likely to be sustainable consumption and production (SCP) policy.

Excluding support for WRAP and other delivery bodies, the largest areas of spend within SCP are on the ecodesign and labelling directives; then sustainable public procurement and the EU ecolabel and green public procurement. Third to these are product roadmaps.

Product roadmaps look at the environmental and social impacts across the lifecycle of ten pilot products (clothing, domestic lighting, electric motors, fish and shellfish, milk, passenger cars, plasterboard, TVs, windows, WCs) to understand the environmental and social impacts of products, where interventions might best be made to improve their sustainability and then set targets by consultation with industry stakeholders (these are envisaged as voluntary targets at present although product standards have been mentioned as a possible future intervention). They are primarily individual voluntary commitments from companies; the sustainable clothing roadmap for example has relatively few joint or shared commitments by

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the sector. It is also a self-selecting group of industry stakeholders. The clothing roadmap has been successful on publicity terms, but it is not clear how much will really change in design terms, especially given the dominant role of consumer expectations. The government has some means of tracking progress since most textile waste is post-consumer and ends up in the household bin, so recycling and waste reduction statistics should pick up whether there have been significant changes in the consumption of patterns for textiles.

SCP policy also targets key materials, chosen as those presenting large volumes in waste streams.

They may eventually be considered at all points in their lifecycle, but at the moment there is a slight disconnect between the two approaches.

The main evidence base for acting on products is felt to be the Stern Review on the economics of climate change, the Millennium Ecosystem Assessment, the UNEP Environmental Food Crisis report and the EU EIPRO9 study of the products with highest environmental impact.

In 2008 Defra issued a progress report on sustainable products and materials, asking for views on where they should focus.

Greener products The drivers

Defra’s current priority areas of work within what is a very broad theme are: gathering evidence on product impacts so as to be able to set priorities; helping the EU process of setting minimum standards for products, and using green public procurement to incentivise green products such as recycled paper.10 However, Defra has made it clear to us that at present the emphasis is more on evidence than intervention.

Key preoccupations for companies on this agenda include improving and standardising data before targets are set, and also clarifying competition law so that companies need not fear working together and sharing data.

There is also discussion of establishing a water footprinting methodology to understand the embodied water in products.

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Politics There was a brief period when the UK government seemed to want to lead the field on product policy, and talked about establishing an independent sustainable products body to provide advice. This would have been the successor body to ACCPE (the advisory committee on consumer products and the environment), which issued three major reports on how to approach improving products before being dissolved in 2005. Having commissioned a study on the options (undertaken for Defra by Green Alliance and partners), the independent body was rejected in favour of an internal Defra product unit. Sustainable products and materials has taken a back seat politically to carbon and waste policy, but in the wake of the creation of DECC, it now provides Defra with a considerable raison d’être and perhaps more potential to be creative. In addition, there is an opportunity to reshape WRAP to help deliver SCP policy and targets. However, there is little evidence that anyone in politics outside Defra understands the agenda. The agenda has been further confused recently by calls from outside Defra to establish a packaging strategy, published in June this year, in isolation from a wider products strategy.

Greener products The drivers

Practice Companies are probably well ahead of government in some areas in terms of understanding supply chain impacts and how they might be addressed, but do not always have the necessary drivers to change. They also do not necessarily adopt consistent approaches.

Walmart’s efforts to establish a packaging scorecard to inform packaging buyer’s choices (and the nervousness of the packaging industry that it might become an industry standard, thereby making considerable demands on the supply chain for information and potentially change), demonstrate the difficulties but also the opportunities of trying to lead in this field.

Following the delivery landscape review, WRAP is looking at how to reshape itself and its activities to focus more on supporting improvements in material resource efficiency, carbon efficiency and supporting industry in the development of more sustainable products and services.

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Experience from outside the UK might be helpful in developing our policies. There is a major French initiative being spearheaded by ADEME (the equivalent of the Environment Agency) and AFNOR, the French national standards body, that is responding to a French government mandate to provide a full environmental product profile for every product sold in France by 2011. This is a massively ambitious project, but has been well funded by the French government. The first phase involves testing a lifecycle assessment approach on 300 consumer products. The UK could potentially learn a great deal from this process.

Greener products The drivers

3. Requirements for waste reduction, recovery and recycling In this area there are some firm legislative and fiscal drivers, mainly aimed at landfill diversion and increased recycling. None are directly or primarily aimed at redesign of products, with the exception of some provisions within producer responsibility directives. Most are applied to household or post-consumer waste and very little to commercial and industrial waste.

The drivers in rough order of importance are (see figure 2 on page 10 for where these drivers primarily come to bear):

Landfill Directive The Landfill Directive applies UK-wide and sets mandatory targets for the diversion of degradable, municipal waste only. Using 1995 as a baseline, by 2010 degradable waste must be reduced by 25 per cent, by 2013 by 50 per cent and by 2020 by 65 per cent. The principle instrument to achieve this is the landfill allowance trading scheme (LATS), by which local authorities trade their ability to divert degradable waste. If they miss their targets, they face fines.

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Landfill tax The most important indirect driver towards waste reduction and recycling is the landfill tax, which has an escalator of an additional ÂŁ8 per tonne every year. Extended for a further three years in the 2009 budget, it now means that by 2013 the tax will reach ÂŁ72 per tonne on top of the landfill gate fee. This is comparable with levels in continental Europe where such taxes have been used a major element of recycling policy for many years.

Recycling targets Targets for household recycling and composting at a national level differ, with England aiming for 50 per cent by 2020; Scotland 60 per cent by 2020 and 70 per cent by 2025; and Wales at least 40 per cent by 2010 and 75 per cent by 2025, averaged across local authorities. Local targets are set by individual groups of local authorities in local area agreements. In England, there is also a target to reduce residual household waste (i.e. after reuse, recycling and composting) from 450 kg per person in 2000 to 225 kg in 2020, equivalent to a fall of 50 per cent per person over twenty years. The falling residual waste figure is a function of increased recycling and composting (which is thought to explain half of it) but also of greater reuse and waste prevention. Defra is now relatively sure

Greener products The drivers

that waste growth has decoupled from economic growth, so waste growth is slowing and is likely to slow further with the recession (it is currently negative). It is not yet completely clear what is causing the decoupling; in terms of bin composition the reduction is consistent across waste streams.This merits further research.

Local authorities’ responses to the present mix of targets and drivers has been to: i) Concentrate on diversion of biodegradable waste, since this is what will result in fines if targets are not met. This has meant increasing collection of paper, cardboard and green waste, and in some cases kitchen waste. ii) Maximise collection of dry recyclables.

This has led to widespread adoption of alternate weekly collections (to encourage as much waste as possible to go into recycling bins) and co-mingled collections, which evidence suggests increases participation rates but which have been criticised as producing lower quality secondary materials than segregated collections.

Others dispute this, arguing that new technology can get good quality recyclate out of co-mingled, but it is more expensive. There is an emphasis on ensuring that any new materials recovery facilities (MRFs) are effectively configured to separate mixed plastics.

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These measures have been successful in bringing the average local authority household waste recycling rate up to 35.5 per cent in 2007-08, with the best performing local authorities achieving over 50 per cent. The picture on meeting the landfill directive targets is more mixed: the UK is broadly on track for 2010 but the 2013 and 2020 targets are looking much more challenging.

There are also drivers bearing on companies and the supply chain:

Packaging regulations The packaging regulations act on various parts of the packaging supply chain (companies generating or using packaging, if over a certain size) requiring the recovery of set amounts of different materials. Compliance is via a scheme for generating and trading packaging recovery notes (PRNs) or packaging export recovery notes (PERNs). However, there is a conflict of policy objectives in that local authorities have a duty to collect dry recyclables and residual wastes, including packaging, which is counted in the trading scheme, but they don’t get what they see as an appropriate return. The system is thus an uncomfortable hybrid between public sector duties and a full producer responsibility scheme, with many local authorities saying that their collection of packaging materials for

Greener products The drivers

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recycling in effect subsidises the PRN system, so that those companies covered by the regulations are not paying the full producer responsibility costs associated with the packaging they bring to market. It is also considered by some illogical to isolate packaging from other sources of the same materials. However, recycling of packaging (all materials taken together) has increased significantly under the scheme, and in many ways, illuminating the issues for packaging illuminates the issues for those materials more broadly. The packaging regulations do not have targets for reduction of packaging at source, which is tackled by the Courtauld Commitment, see below.

Voluntary agreements The Courtauld Commitment is a voluntary agreement with leading retail and food companies with three aims: • To design out packaging waste growth by 2008 (achieved); • To deliver absolute reductions in packaging waste by 2010 by tonnage, per business; • To help reduce the amount of food the nation’s householders throw away by 155,000 tonnes by 2010, against a 2008 baseline, which amounts to a 2.3 per cent reduction.

Producer responsibility As well as the packaging regulations (a consequence of the EU Packaging Directive) there are producer responsibility directives, the principle ones being the Waste Electronic and Electrical Equipment Directive (WEEE), the End of Life Vehicles Directive (ELV) and a newer directive on batteries. Each of these set targets for recovery and recycling of waste products, with responsibilities put onto various parts of the supply chain to create or join compliance schemes. So far, these directives have been successful in improving rates of recovery and recycling, but have had variable and generally less impact on product design, which is also one of their aspirations.

The Courtauld Commitment is designed to be complementary to the packaging regulations and local authority targets in that it is about reduction rather than recycling. A criticism of the agreement has been that since it works on weight, reducing overall packaging has prompted a switch to lightweight materials, not of all of which can be recycled. Since the targets are also per business, it makes growth of the business problematic. There is also some discussion about the projections for packaging growth, and what effects changing demographics such as an ageing population or increase in one-person households might have on these figures. For the future, it is not clear whether it could drive changes to product

Signatories set their own targets, supported by WRAP (see page 42 for details).

Greener products The drivers

design as well as to the packaging. WRAP is trying to extend the Courtauld Commitment to the widest group of companies possible, and is negotiating a new post-2010 agreement that seeks to reduce the materials and carbon associated with grocery, internet retail and home improvement products.

Along with packaging, carrier bags have received considerable political attention. Last December, seven major supermarkets and other high street retailers reached an agreement with the government to halve the number of single use carrier bags being handed out in stores around the UK by Spring 2009. Asda, the Coop, Marks & Spencer, Sainsbury’s, Somerfield, Waitrose and Tesco stores in England, Wales and Northern Ireland signed up to the voluntary agreement that obliges them to halve the numbers of single use carrier bags compared with 2006 levels and committed to an aspirational target to eventually cut bag use by 70 per cent. The Scottish Executive has agreed a similar deal with retailers in Scotland.

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New developments The packaging strategy draws several strands of policy together, and, amongst other things, suggests that carbon be used as a metric alongside weight. This would have the effect of designing for best carbon footprint as measured through the supply chain. For the vast majority of materials, increasing recycled content reduces carbon, so using carbon as a metric should drive recyclability as well lightweighting. The only exception is paper, where recyclability is gradually compromised by degradation of the fibres, so using paper for energy sometimes shows a better carbon impact. There are considerable methodological issues associated with this route, not least what is actually being measured: the carbon implications of the material, or of the pack (amount and form of a given material), or a trade-off between pack and product, on the basis that spoilage of product can have a higher carbon footprint than the packaging. The strategy also gives considerable, and very welcome, emphasis to improving ecodesign of packaging, to reduce waste and improve reuse and recyclability.

Greener products The drivers

As yet the only formal UK target for reduction, recovery or recycling of commercial and industrial wastes other than packaging is one of 50 per cent recycling by 2012 for construction and demolition waste. The recent Waste Framework Directive (WFD) sets a target for 70 per cent recycling of construction and demolition waste as well as a pan-European household waste recycling target of 50 per cent, both by 2020. These need legislation to be transposed into UK law, but are not expected to be challenging to implement, although interpretation of the new requirement for ‘separate collection’ of recyclables may be an issue. There is also a requirement for member states to prepare waste reduction plans within five years of implementation of the Directive (so by 2014). The government is currently consulting on the implementation of the WFD. There is also the possibility of a biowaste directive from the EU. A green paper was published in 2008 and the Commission will present an impact assessment of different policy options for improving biowaste management by the end of 2009. A new directive could define priorities for the possible destinations of biowaste, not just the need to make sure it does not end up in landfill.

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Politics Action on waste has never been politically attractive, dominated as it is by headlines about inconsistent recycling policies, bin taxes and litter. Packaging and carrier bags have received political attention since they are things most people claim to dislike. UK, or rather English, policy has lagged behind that in play in most of Europe. Recently, however, Scotland and Wales have espoused more ambitious polices than England, with Scotland embracing the zero waste concept and both Scotland and Wales aiming for 70 per cent recycling by 2025. These are long-term aspirations, however, and so far no very different instruments from those in use in England are being proposed as a way to meet those aspirations.

The main feature of waste policy until very recently is that it has been dominated by landfill avoidance, with recycling seen as a desirable alternative, rather than being driven by a desire to develop a more closed loop, resource efficient economy. Resource efficiency as a theme has been politically badly neglected (although it may be revived now, in a time of recession) and resource scarcity has never made it on to the political agenda. Although there is emerging product policy, this has been driven more by carbon than by overall resource concerns. This has transferred into waste and recycling policy to provide a carbon

Greener products The drivers

justification for recycling. The logical progression for this debate is to measure efforts to reduce, recover and recycle materials on their contribution to carbon reduction, rather than crude tonnages. The packaging strategy is one of the first places that this has been proposed.

The danger in this is that carbon comes to act as a complete proxy for resource efficiency, and pushes issues of scarcity as well as other environmental considerations into the background. Some proactive firms are starting to consider the issue of embodied waste in materials, for instance how much waste is sent to landfill in the course of producing a given material. The problem here is whether activity taking place outside the UK can be taken into account. The product roadmap approach, as described above, aims to take a more holistic approach.

One of the practical issues for government is that in the view of some, recycling infrastructure to replace landfill is not being put in place quickly enough.There is a view that the policy signals spelling the end of landfill (or a certain future for recycling) have not been strong enough, combined with the length of time it takes facilities to clear the planning process. In March this year, the Local Government Association urged the government to return ÂŁ1.8 billion of landfill tax revenue to councils so that they can invest in recycling capacity. Recently this has also become an issue about markets, as the outlets for

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secondary materials have wobbled in the global downturn although most are now recovering.

So while it is politically acknowledged that recycling makes sense in energy and resource terms, it is by no means straightforward to secure greater recycling on an economic basis, particularly in the face of a contracting global economy. Recent political debates in Europe have considered whether measures like recycled content obligations or using the Ecodesign Directive or procurement rules to condition products could provide the necessary market pull. Levying virgin materials use would be another route to creating market pull for secondary products.

There is also pressure to tackle non-household waste, which makes up over 90 per cent of UK waste by weight, and which has received little attention compared to household waste.

The only target bearing on such waste is the target to recycle 50 per cent of construction and demolition waste by 2012, mentioned above. The only major driver bearing on nonhousehold waste is the landfill tax, which although steadily increasing, has not yet taken recycling of this waste much beyond 50 per cent despite the waste streams being more homogenous and therefore in theory more easily recycled than domestic waste. Although there are EU-driven rules on pre-treatment of waste before collection, which could be used to drive separation for recycling, in practice this

Greener products The drivers

is not being vigorously enforced. A policy that could tackle construction and demolition waste as well as household would be the banning of particular waste streams to landfill, e.g. for carbon rich materials like aluminium, as used in several European countries, over and above the current bans for streams such as hazardous waste already imposed by the Landfill Directive.

Green Alliance has recently completed a consultancy report for Defra on this subject.

In terms of implementing any measures, it is not clear whether this process would be married up with bringing in legislation to implement the Waste Framework Directive targets (particularly the target for 70 per cent recycling of construction and demolition waste); the Directive’s requirement to product a waste prevention plan, and a possible review of England’s waste strategy around 2010-2011.

The neglected end of the agenda has been the potential to extend producer responsibility. EU directives have forced producer responsibility for WEEE, ELV and batteries. Although early days, and not without teething problems, these are being reasonably successful at securing collection and recycling of these items and removing them from the household waste streams. They also have the in-built aspect addressing design of products, which for cars and to some extent packaging is having effects,

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although some would argue that these features are underused. They do however set important precedents in terms of the potential to negotiate effective take-back schemes with producers.

Producers’ responsibilities might even be considered to extend to influencing the behaviour of their consumers: how people do their washing or use their shampoo has already been tackled to some extent by companies such as Unilever and Boots.

With the political rejection of the idea of charging householders for waste not recycled (pay as you throw) drivers on consumers are at present essentially voluntary, coming mainly from local authority encouragement to recycle and the labelling of products and packaging with recycling information by retailers and brand owners. A few local authorities have imposed what they term mandatory separation of recyclables but the legal basis for enforcement of this is not always clear.

Greener products The drivers

Practice Waste policy affects companies most at the operational end, in dealing with process or retail waste. It is only recently affecting product design through voluntary agreements or standards (the Courtauld Commitment on packaging; WEEE, ELV and batteries from the EU). However, it is widely recognised that those charged with dealing with products’ end of life will always find it hard to implement truly efficient systems without having some influence in the design phase of products. Green Alliance’s work on compostable packaging is a good illustration of the dilemmas: compostable packaging needs to be designed with the present limitations of waste treatment in mind; at the same time, the considerable potential benefits of compostable packaging cannot be realised without waste treatment being upgraded and/ or better organised in order to cope with it.

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Many firms are uncertain about how best to communicate recyclability to consumers, particularly in the face of differing local authority collection schemes, although this is being tackled through the WRAP and British Retail Consortium on-pack logos scheme.

Companies are also adopting inconsistent approaches on communicating recycled content. There have been examples of material substitution, e.g. glass to PET, which are counter-intuitive to some people but that the evidence on carbon impacts supports. Other substitutions, such as recyclable to nonrecyclable lightweight plastics help to meet targets for reduction based on weight (as under the Courtauld Commitment) can confuse consumers.There is a general absence of coherent guidance on what the government wants the outcomes of substitution of materials to be.

Greener products The drivers

4. The EU’s Ecodesign of Energy Using Products Directive and other EU sustainable consumption and production (SCP) measures Policy The EU’s Ecodesign of Energy Using Products Directive was passed in 2005 and provides a framework for setting legal standards for products, initially for their energy consumption, but potentially for a wider range of issues.

The Directive has recently been proposed for extension from energy-using products (white goods, TVs, computers, boilers, air conditioners) to energy-related products (showers, windows, insulation materials).

The EU Commission must review its success and make proposals for its possible further extension by 2012. That could include looking at the embedded carbon and embedded water in products, and possibly parameters such as design for disassembly or recyclability or reuse.

For the UK, as signalled in the sustainable products and materials progress report issued in autumn 2008, the Directive is the way to eliminate the most environmentally damaging products by setting minimum standards.

Other, voluntary, measures are expected to then shift the mass of products towards a higher level of performance.

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The Directive is currently the most significant part of a package of measures on SCP. Other elements are setting rules on public procurement, reviewing the EU ecolabel and a large exercise on data gathering including work on product lifecycle assessment.

By contrast to the voluntary ecolabel, the mandatory energy labels based on a simple rating system reflecting electricity consumption help consumers to choose the most energy efficient products, thereby also influencing the design phase of products. This should be the aspiration for carbon labelling, particularly if there is ever a suggestion that it should be mandatory, but it is much harder to get true comparability across products.

The procurement process is the least clear: the Commission’s criteria could be binding on member states, and could require that 50 per cent of purchases subscribe to the criteria, but it is unclear how member states will actually sign up to this.

Greener products The drivers

Politics Although there is talk of expanding the Ecodesign Directive standards to parameters such as recycled content, it is unclear whether this has any political momentum. The Ecodesign Directive has also become linked to the regrading of energy labels (which started with A-G ratings; since most appliances are now A, the logic is to recalibrate, but this is being resisted by some sections of the industry in favour of an additional numerical scale that many fear would cause widespread confusion).

If something this apparently straightforward can hit problems, it does not bode well for expanding the Directive.

The EU has a timetable for a set of follow-up measures on this theme, below. None will necessarily yield mandatory measures, although there is the possibility that some will.

2009: Implementation of sustainable consumption and production action plan; Waste Framework Directive 2010: Review waste and resources strategies 2011: Report on waste generation and prevention 2012: Review sustainable consumption and production action plan 2014: Proposal for measures on waste prevention

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The most surprising piece of politics is that the idea of reducing VAT for best-in-class products is still in play, something once unthinkable.

However, there has been recent news comment that while the UK and France are very much in favour of this, they face significant opposition from other member states, including Austria, Denmark and Germany, as well as recent reports that the Commission has been influenced by a negative consultant’s report citing crossborder effects.

Greener products The drivers

Practice An important current practical expression of ecodesign requirements in the UK is green procurement policy. Government purchasers have a list of quick wins for green purchasing, which include standards for paper, IT equipment, white goods, construction products and others.11 A consultation on expanding green procurement rules for paper is this year.

Procurement is one of the first places that requirements for e.g. recycled content can be driven without direct additional regulation. The government’s voluntary agreement with the newspaper industry is another ‘requirement’ for recycled content and has been successful in securing up to 85 per cent recycled paper content of newsprint, and helping to maintain the viability of UK reprocessing industries.

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There is a view that the ecolabel, being voluntary and multi-faceted, may never work as standard for the best products, but the committee structure used to help decide on the labels could provide benchmarks for use in the Ecodesign Directive and the procurement criteria. However, environmental consultancy Oakdene Hollins, together with TUV NEL, has been helping Defra manage the operation of the European Commission’s ecolabel in the UK. Working together as UK Ecolabel Delivery, the team is aiming to increase uptake of the label further by working closely with manufacturers and retailers. This could provide useful preparation for any EU ecodesign requirements in future.

Greener products

Conclusion This is a very compressed account of a complex set of policy drivers, which we hope the accompanying diagrams help to illuminate. We have used this mapping to set the agenda for the second year of the Designing Out Waste theme and now welcome comments and contributions from our partner companies and other commentators.

We also want to look forward to the governance theme of the Designing Out Waste theme, for which we have identified the following questions: • What is the articulation of the ‘problem’ by key institutions

and groups?

• What do we think the objectives should be for society?

• How do we organise to deliver these objectives?

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Notes and references 1 Factor Four: Doubling Wealth, Halving Resource Use (Ernst Von Weizsacker, Amory B Lovins, L Hunter Lovins, 1998) notes: “A study for the US National Academy of Engineering found that about 93 per cent of materials we buy and consume never end up in saleable products at all. 80 per cent of products are discarded after a single use”. However, the original source is not referenced.

2 With the Carbon Trust 3 With the Carbon Trust 4 With WRAP 5 The CRC participant will be the organisation’s entire group, not a single company.

6 Defra’s user guide 7 Institute of Mechanical Engineers, December 2008 8 www.defra.gov.uk/corporate/consult/greenhouse-gas/index.htm 9 Environmental Impacts of Products 10 London Remade’s work on the Mayor’s green procurement code provides some useful learning to take this work forward.

11 www.defra.gov.uk/corporate/regulat/impact-assessment/envguide/waste/option.htm

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Appendix Supplementary information Carbon reduction commitment (CRC) All combustion of fuels and consumption of electricity is covered by the CRC. This consumption is turned into carbon dioxide emissions by using emissions factors. Excluding transport and onward supply, these make up ‘relevant emissions’, and after exemptions based on whether the organisation is participating in other schemes such as climate change agreements or EU ETS, constitute the ‘footprint emissions’ on which CRC obligations are based.This terminology is confusing, since it implies looking up and down the supply chain (as with carbon footprinting, see next section) when in fact in this context it is dealing only with an organisation’s direct emissions.

Defra’s CRC page www.defra.gov.uk/environment/climatechange/uk/business/crc/index.htm The government’s CRC user guide www.defra.gov.uk/environment/climatechange/uk/business/crc/pdf/crc-userguide-090312.pdf www.carbonreductioncommitment.info/ (this is not a government site)

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Carbon emissions reduction target (CERT) Under CERT, domestic energy suppliers must, by 2011, deliver measures that will provide overall lifetime carbon dioxide savings of 154 Mt carbon dioxide, equivalent to the emissions from 700,000 homes each year. The government has recently consulted on a 20 per cent increase in this target. There have also been recent consultations on the community energy saving programme (CESP), which would place an obligation on energy suppliers and electricity generators to meet a carbon dioxide reduction target by providing energy efficiency measures to domestic consumers, and on a heat and energy saving strategy on longer-term ambitions for transforming heat and energy efficiency in homes and businesses.

Defra’s CERT page www.defra.gov.uk/environment/climatechange/uk/household/supplier/cert.htm CLG’s CESP page www.communities.gov.uk/publications/planningandbuilding/communityenergysaving

DECC, Defra and BERR responsibilities For full breakdown of responsibilities see www.parliament.uk/deposits/depositedpapers/2009/DEP2009-0396.pdf and www.cabinetoffice.gov.uk/media/cabinetoffice/corp/assets/publications/reports/ government_changes/october2008/written_changes_oct08.doc Accounting for Sustainability Guidance for the Connected Reporting Framework (CRF) suggested five key environmental indicators, which all organisations should consider reporting: greenhouse gas emissions, energy usage, water use, waste and significant use of other finite resources. It also included information on the connection between sustainability and the overall operational strategy of an organisation, other material impacts, industry benchmarks and the upstream and downstream impact of the organisation’s products and services.

The CRF has built on, and is compatible with, the work of other organisations which have developed sustainability reporting guidelines, in particular the Global Reporting Initiative, the United Nations, AccountAbility and Defra/Trucost, and can be used in conjunction with these frameworks. www.accountingforsustainability.org/files/pdf/Consolidated%20Case%20Study%20-%20FINAL.pdf

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Carbon footprinting www.carbontrust.co.uk/solutions/CarbonFootprinting/ www.defra.gov.uk/news/2008/081029b.htm Product roadmaps www.defra.gov.uk/environment/consumerprod/products/index.htm Waste and recycling England’s targets are: www.defra.gov.uk/environment/waste/strategy/strategy07/pdf/waste07-summary.pdf The government’s key objectives are to: • Decouple waste growth (in all sectors) from economic growth and put more emphasis on waste prevention and re-use; • Meet and exceed the Landfill Directive diversion targets for biodegradable municipal waste in 2010, 2013 and 2020; • Increase diversion from landfill of non-municipal waste and secure better integration of treatment for municipal and non-municipal waste; • Secure the investment in infrastructure needed to divert waste from landfill and for the management of hazardous waste; and • Get the most environmental benefit from that investment, through increased recycling of resources and recovery of energy from residual waste using a mix of technologies.

Scotland’s targets are: www.scotland.gov.uk/Topics/Environment/Waste/wastestrategy The Scottish government’s key targets in relation to municipal waste are to: • Stop the growth in municipal waste by 2010 • Achieve 40 per cent recycling/composting of municipal waste by 2010; 50 per cent by 2013; 60 per cent by 2020 and 70 per cent by 2025 • No more than 25 per cent should be treated by energy from waste by 2025 • No more than 5 per cent should be landfilled by 2025 • A commitment to recycle is one of the Scottish government’s ten greener pledges

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Wales’ targets are: wales.gov.uk/desh/publications/enviroprotect/wasterecycle/wisewaste/summarye.pdf?lang=en • By 2003/04 achieve at least 15 per cent recycling/composting of municipal waste with a minimum of five per cent composting (with only compost derived from source segregated materials counting) and five per cent recycling; • By 2006/07 achieve at least 25 per cent recycling/composting of municipal waste with a minimum of ten per cent composting (with only compost derived from source segregated materials counting) and ten per cent recycling; • By 2009/10 and beyond achieve at least 40 per cent recycling/composting with a minimum of 15 per cent composting (with only compost derived from source segregated materials counting) and 15 per cent recycling.

The list of Courtauld Commitment signatories www.wrap.org.uk/downloads/Courtauld_ Commitment_signatories_list_16_March_091.1e8e45a3.6250.pdf The Courtauld Commitment targets www.wrap.org.uk/downloads/CC_Targets_for_Web_Retailers_18_Aug_08.ac1cf86c.5780.pdf www.wrap.org.uk/downloads/CC_Targets_for_Web_Brands_Supply_Chain_18_Aug_08. bd9ab5e2.5779.pdf Ecodesign Directive ec.europa.eu/enterprise/eco_design/index_en.htm Ecolabelling ecolabel.defra.gov.uk/pdfs/Ecolabelled%20Products%20and%20Services%20in%20the%20UK%20 v1.4%20Jan%2009.pdf For additional information contact: Paul Vaughan Senior Technical Consultant Oakdene Hollins (paul.vaughan@oakdenehollins.co.uk).

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