Producer still insufficiently responsible for circular economy
For a truly circular economy, producers should be further incentivized to use recycled materials and extend their products lifespan. Producers are now only financially responsible for discarded products they have managed to collect. The processing of the remaining waste in incineration plants is still funded through municipal waste taxes, and thus recovered from the taxpayer. Therefore, the Dutch government must set much stricter requirements for the reuse of products, otherwise, it will never achieve its circular economy targets for 2030. This is the core of the advice of the “Circular Economy and Society Hub” of Utrecht University, presented in a white paper to Undersecretary Stientje van Veldhoven.
The use of new raw materials must be reduced by 50% in 9 years, and by 2050 the Netherlands must be 100% circular. This aim is not entirely new. In the past two decades "extended producer responsibility" has been introduced for many products, such as electronics, packaging, batteries, cars and tires, to promote collection and recycling practices. As a result, producers have to organize the collection and recycling themselves and bear the costs involved. Ultimately, the consumer ends up paying this in the price of new products. But with the current rules, the target of 50% less new raw materials will not be achieved, let alone the target of 100% circular.
The very broadly defined objectives within extended producer responsibility policies, such as a percentage of "reuse or recovery" to be achieved, mainly stimulate cheap and simple solutions. In part, this also leads to processing abroad. The government applies a maximum processing price of € 205 per ton. This means that high-quality reuse in new products has little chance. Collection and reuse are therefore too cheap. That may seem paradoxical, but it is not. The recovery of a discarded product (collection and recycling) now costs less than 2% of the original product price. When fully allocating the waste costs, producers are much more stimulated to use raw materials more efficiently. Rewarding front runners among the producers should be done with discounts.
In some cases, almost all discarded products are collected (paper, glass, cars, tires). Usually, much less is collected. Once collected, these products are often reused in a low-quality way, in part by incinerating them and thereby recovering energy. These systems have barely succeeded in using those materials again in a high-quality manner in new products. Raw materials are still becoming depleted. There are just a few exceptions, such as glass bottles and paper.
Currently, the most critical choices are left to the market. The organizations implementing recovery operations consists of producers and traders. Companies and organizations that can extend the lifespan of products through, for example, repair and "refurbishment" and that can enable high-quality recycling, are not involved in the decision-making about the circular solutions that can be applied. The government should also take the lead in this, argue the researchers from Utrecht University. Their report is in line with the recent recommendations of PBL and CPB in their Integrated Circular Economy Report 2021. The authors further show that a more far-reaching approach is needed to realize all high-quality reuse options and the development of a more circular system. The advice goes further than the PBL / CPB advice on two points:
- With a new kind of organizations, together with all actors in the value chain, the strategy must be established, with choices for those value retention options that enable the deployment of 50% renewable raw materials by 2030 in each product group.
- On this basis, the costs that producers must bear according to the "polluter pays" principle must be determined. In addition, the costs of the part of the waste that is not yet paid for through the 'extended producer responsibility' must also be included in the tightening up. The Dutch policy maximum processing price of € 205 per ton must be abandoned.
The advice on adjusting extended producer responsibility was written by Utrecht researchers from the Copernicus Institute for Sustainable Development, Faculty of Geosciences and the Department of Constitutional Law, Administrative Law and Legal Theory, Faculty of Law, Economics, Governance and Organization.
Vermeulen, W.J.V., C.W. Backes, M.C.J. de Munck, K.Campbell-Johnston, I.M. de Waal, J. Rosales Carreon, M.N. Boeve, (2021) Pathways for Extended Producer Responsibility on the road to a Circular Economy, White paper based on a literature review and the results of a Delphi study, on the experiences with EPR in the Netherlands, Utrecht University, Circular Economy and Society Hub, Utrecht ISBN: 978-90-6266-600-3.
Campbell-Johnston, K.A., Munck, M.C.J. de, Vermeulen, W.J.V., Backes, C., 2021. Future perspectives on the role of extended producer responsibility within a circular economy: A Delphi study using the case of the Netherlands. In Business Strategy and the Environment. Download in Open Access