Select Committee on European Scrutiny Fourteenth Report


PACKAGING AND PACKAGING WASTE


(23060)

15194/01

COM(01) 729


Draft Directive amending Directive 94/62/EC on packaging and packaging waste.

Legal base:Article 95 EC; co-decision; qualified majority voting
Document originated:7 December 2001
Forwarded to the Council:10 December 2001
Deposited in Parliament:11 January 2002
Department:Trade and Industry
Basis of consideration:EM of 14 January 2002
Previous Committee Report:None
To be discussed in Council:24-25 June 2002
Committee's assessment:Politically important
Committee's decision:Not cleared; further information requested


Background

  5.1  In order to reduce the impact of packaging and packaging waste on the environment, and to ensure the functioning of the Internal Market, Council Directive 94/62/EC[24] lays down provisions to prevent such waste, and to regulate both the re-use of packaging, and the recovery and recycling of waste. In particular, Member States (with the exception, for the time being, of Greece, Ireland and Portugal) were required to achieve by 30 June 2001 the recovery of a minimum 50% and a maximum of 65% by weight of packaging waste. Within this general target, between 25% and 45% by weight of packaging waste would have to be recycled, with a minimum of 15% by weight for each category of packaging material. They were, however, permitted to set higher targets, subject to confirmation by the Commission, so long as they provided appropriate capacity and it did not lead to distortions of the Internal Market.

  5.2  The Directive also requires the Council, not less than six months before 30 June 2001, to fix targets for the next five years. The current document describes the work which has been done to establish the relative costs and benefits of the various approaches, and proposes the levels to be achieved by 30 June 2006.

The current document

  5.3  In introducing its proposal, the Commission points out that packaging is relatively short-lived, and that the level of waste thus corresponds roughly to the amount of packaging put on the market. It says that such waste accounts for about 17% of municipal solid waste by weight and 3% of the total waste stream — though, for some materials, it represents a much higher share, amounting to 70% for glass, 60% for plastics, and 40% for paper and cardboard. The Commission adds that the sources of packaging waste vary according to the material, with households generating most glass, and roughly one-third of paper and cardboard, whereas plastics are more or less evenly spread between this and non-household sources.

  5.4  The Commission also provides figures showing the position in different Member States. As regards the quantities of packaging put on the market, the UK accounted for about 10.2 million tonnes of the 60 million tonnes generated in 1998 by the 12 Member States subject to the Directive, and, in per capita terms, about 176 kilograms as compared with an (unweighted) Member State average of 155 kilograms. The Commission's figures also suggest that about 40% of UK packaging was paper and cardboard, about 22% glass, 17% plastics, and 13% wood, with metals (steel and aluminium) accounting for the remaining 8%.

  5.5  The Commission sets out the basis on which it has sought to revise the targets in the Directive, in the light of studies carried out by consultants. It says that, in determining the financial costs and benefits, three types of cost need to be distinguished — the gross costs, the financing need (equal to the gross cost, less revenue), and the net costs for society (equal to the financing need, minus the saved disposal costs): in the study, the financing need for recycling has been directly compared with the costs of alternative waste treatment. However, the Commission says that evaluating the environmental costs and benefits is much more difficult, and implies valuing how much an environmental good is worth to society, and how much society is willing to pay for environmental protection, as opposed to other options.

  5.6  It adds that the most relevant measure is the determination of optimal recycling rates on the basis of marginal cost-benefit ratios, and that packaging for which this ratio is favourable should be recycled. The Commission also says that, although more work needs to be done, an optimal recycling rate of between 50% and 68% overall has so far been identified, with rates of between 53% and 87% for glass, between 60 and 74% for paper and board, between 60 and 75% for steel, between 25 and 31% for aluminium, and between 28 and 38% for plastics.

  5.7  Against this background, it has proposed that, by 30 June 2006, the minimum overall recovery target should be 60% and that the corresponding maximum should be 75%. It points out that this includes both recycling and energy recovery, and that, if conducted in installations with adequate incineration facilities, the latter can improve the environmental balance of packaging waste management. However, although the Commission sees this as a good reason to encourage Member States to promote this form of recovery, it feels that it cannot in effect force them to construct incineration capacity.

  5.8  As a result, the new recycling targets — involving a minimum of 55%, and a maximum of 70% — have been set at levels close to those for overall recovery. Within this overall range, the targets for specific materials have been differentiated to reflect the clear differences in the costs and benefits of recycling them, and the different ways in which the market for them is organised.

  5.9  It is therefore proposed that 60% should be the target for glass (where the main limitation is said to be public participation in collection schemes), 55% for paper and board (where alternative methods such as composting and incineration can yield comparable environmental benefits), 50% for metals, and 20% for plastics (where the scope is limited by costs and technical constraints). The sum of these targets is thus about 12% lower than the overall recycling target, with the difference being made up through the recycling of other materials, the feedstock recycling[25] of plastics, and/or by exceeding the recycling targets set for specific materials.

  5.10  These targets, together with those for 2001 and the UK's progress in meeting them to date can be summarised as follows:


Targets for 2001

Achieved by UK in 2000

Proposed for 2006

Overall recovery

50-65%

42%

60-75%

Overall recycling

25-45%

36%

55-70%

Recycling

 - paper

 - glass

 - metal

 - plastic



15%

15%

15%

15%


49%

33%

30%

12%


55%

60%

50%

20%

  5.11  The Commission has also attempted to provide some cost estimates, though these are far from clear. On the basis of data obtained from France, Germany, the Netherlands and UK, it suggests that the total financing need for current packaging recycling is 5-8 billion euros a year, equivalent to 0.1% of GDP, 5% of total environmental expenditure, and 15% of total waste management expenditure. It also says that this figure is of the same order of magnitude as the saved waste disposal costs which would otherwise arise. It describes the determination of the exact costs and benefits of this proposal as a "theoretical and difficult exercise", but says that, on the basis of the additional amounts of packaging to be recycled, there would be an additional financing need of around 700 million euros, as against alternative disposal costs of around 800 million euros. It also says that around 350 million euros can be saved in terms of avoided environmental impacts, but that this figure should be taken with "much caution as it is based on many assumptions".

  5.12  The Commission also points out that the proposal is limited to the establishment of new recovery and recycling targets, and to a clarification of some of the definitions in the Directive. Other aspects, such as prevention, re-use, and producer responsibility, will be dealt with separately "in the near future" in the context of the Thematic Strategies on Resource Management and Recycling which form part of the Community's Sixth Environmental Action Programme.

The Government's view

  5.13  In his Explanatory Memorandum of 14 January 2002, the Minister of State for Industry and Energy at the Department of Trade and Industry (Mr Brian Wilson) says that the UK supports the publication of this proposal, but that, as this has taken place a year later than required by the original Directive, it is — along with other Member States — seeking an extension to the proposed 2006 deadline. It is also considering the proposal for differentiated material-specific targets, since it is concerned that this could result in unfair competition between materials, and to an additional, and unnecessary, level of complexity, which might lead to increased costs with little environmental benefit. In particular, the Minister points out that the majority of Member States have queried the methodologies used in the report on which the Commission has based its proposals. He adds that, to date, the UK has preferred to establish a market-based solution which allows the costs of recycling each material to fluctuate according to market conditions, and that, although it would still be able to use this approach, there would be less flexibility.

  5.14  The Minister says that a Regulatory Impact Assessment will follow as soon as possible, but that the financial implications will fall on businesses which would have to meet the higher recycling targets (costs which he suggests they, in turn, will pass on to the consumer, wholly or partly). He points out that, in order to meet the new targets, more packaging material will have to be extracted from the household waste-stream, and that, since the collection of such waste is more expensive than commercial or industrial waste, this will lead to an overall cost increase. In addition, he considers that there may also be higher administrative costs arising from differentiated material specific targets.

  5.15  The Minister also provides a possible timetable for the adoption of this proposal, in which he suggests that the Environment Council will aim to adopt a Common Position on 24-25 June.

Conclusion

  5.16  Although this proposal seeks to develop further the targets set in an existing Community Directive, it seems clear from what the Minister has said that there will be additional costs, though it is less clear at this stage what the magnitude of those costs might be, and on whom they might fall. We also note the reservations which the Commission itself has expressed over the methodology used to determine some of the recovery rates for individual materials, and the somewhat tentative nature of its own cost estimates.

  5.17  All this leads us to the view that a debate on this proposal would be appropriate, but, before making a formal recommendation to that effect, we would find it helpful to have the Regulatory Impact Assessment which the Minister has promised to supply. In particular, we would like to receive this well in advance of the date on which the Minister has indicated that the Council may reach a Common Position.


24   OJ No. L.365, 31.12.94, p.10. Back

25  Methods based on reprocessing by changing the chemical structure of the processed material and recycling the chemical constituents into materials other than the original material of the waste. Back


 
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