EU recycling chief: product policy should embrace circular economy

With the European Commission due to present its Sustainable Products Action Plan on 30 March, Emmanuel Katrakis takes stock of the EU’s push for a more circular economy in an interview with EURACTIV France.

Emmanuel Katrakis is the Secretary-General of the European Recycling Industry Confederation (EuRIC).

The FPEU wants to create momentum for the circular economy in Europe. What can we expect to be achieved during the French Presidency?

The French presidency is very active on environment-related issues, particularly three of them.

Firstly, the Batteries Regulation, for which the priority is to finalise the Council’s positions. Secondly, the Carbon Border Adjustment Mechanism is a regulatory instrument proposed by the European Commission and strongly supported by France. The mechanism should make it possible to have prices that internalise the carbon emission costs of products imported into Europe.

Lastly, the Sustainable Product Action Framework. By the end of March, the Commission should publish a first paper awaited by all industries and NGOs active in the circular economy. It is hoped that this initiative will go far enough to ensure that product policy in Europe embraces the objectives of circular economy and boosts the incorporation of recycled materials in mass consumer goods.

In addition to this initiative, many other European legislative proposals are expected in the coming months…

The first issue that we are currently concerned about is revising the regulation on transboundary shipments of waste.

The European Commission wants to go beyond a technical review to update procedures for cross-border waste movements, both within and outside Europe.

The need to restrict cross-border waste flows such as unsorted plastic waste, end-of-life vehicles, or electronic waste is well understood.

But European legislation makes a minimal distinction between waste and raw material derived from recycled products. There is either waste or a product in European law, and there is nothing in between.

Consequently, the Commission’s proposal does not only restrict cross-border flows to problematic waste but also to raw materials derived from recycling, which are unfortunately still classified as waste. The criteria for switching from waste to product are defined at the European level only for a limited number of flows. This leaves the industry in a state of legal uncertainty that is detrimental to circular value chains.

However, access to international markets for these recycled products is fundamental for two main reasons: the European market is dynamic but insufficient, and there is more recycling than demand in Europe for a certain number of raw materials derived from recycling, such as metals or paper.

We are trying to find a solution to ensure that, on the one hand, there are stricter rules to combat illegal trafficking of waste and that for other products, which have been recycled, there are no export restrictions. When it comes to standardised materials that meet quality or industrial standards, there is an absolute need for free access to the international market to be competitive.

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We will return to the topic of markets to develop the circular economy, but beforehand, to conclude on the Commission’s proposals, what is your opinion on those that directly concern recycling?

In the context of revising the Packaging and Packaging Waste Directive, we have four priorities. We support the inclusion of binding targets for recycled content. For the time being and until the adoption of the “Batteries” regulation, we only have this type of target for plastic bottles through the Single-Use Plastics Directive. The result is extremely favourable insofar as industrial capacities are developing rapidly and, for the first time, the price of recycled plastic can be decoupled from the price of oil.

Therefore, we want to extend the recycled content targets to other product and material categories to support demand and internalise the environmental benefits in the prices better, be it energy savings, CO2 savings, and of course raw material savings from extraction.

Another objective is to ensure that the sustainable products strategy sets a relatively high bar for integrating recyclability and recycled content factors, as is already the case for energy efficiency issues in energy-using products.

Finally, we really want to make progress on harmonising the criteria for the removal of “waste” status at the European level. We hope that the Commission will develop a reasonably ambitious list; it wanted to prioritise three products with these criteria, but we are hoping for more! This will speed up recycled materials while harmonising the rules applicable to their transfer and use in circular value chains.

Therefore, we are looking forward to hearing more about the Commission’s choices in this area this week.

This is a two-speed circular economy, with some products more advanced than others. Is there a possibility of a more homogenous sector?

There are sectors in the recycling industry that have been highly circular for decades, and for which it is important to maintain the ecosystem and access to markets that we already have. This is particularly the case for metals with a relatively high intrinsic value.

And other sectors start from much further away. I’ll take two examples.

Recycling electronic waste is not an easy task because most products were not designed to be recycled at all. So, even if there is already legislation in place, a real effort will have to be made on the design phase so that products are easier to repair and recycle. This means measures to influence their design and the recycled content to ensure that we have a virtuous circle.

Second example: textiles. This is a sector where there is already a circular economy that has existed for decades. But there has been a deterioration in the quality of the fibres because of fast fashion. We know how to collect and sort for reuse, but there are very few techniques for recycling degraded textile fibres. We need to make an effort to develop these technologies and, above all, the business model. By 2025, we have targets for the separate mandatory collection of textiles. Still, we have not yet worked out how to support an economically viable ecosystem, whether for reuse or recycling. Hence the importance of the forthcoming Textile Strategy, which will be published at the end of March, together with the Sustainable Product Action Framework.

The real challenge, whatever the sector, will be to change the paradigm. While for the last 40 years, European legislation has really focused on collection and recycling targets, it is now time to put in place instruments to increase the demand for recycled materials in downstream markets and thus enable circular value chains to be more competitive. This is where efforts are needed.

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To truly establish the circular economy, France is calling for a rethink of our consumption models. How can we encourage this new model? 

When steel is recycled, for example, and iron ore is replaced by scrap metal from recycling, at least 59% of CO2 is saved. For copper or aluminium, CO2 savings are even higher. So, first of all, it is fundamental to better internalise the environmental benefits of a circular economy in the price factor.

To this end, we can work on market mechanisms, ensuring that the use of raw materials from recycling for economic sectors brings in credits proportionate to the CO2 savings they will make.

So far, the European Commission has been relatively reluctant to listen to this type of proposal.

We are also in favour of implementing a carbon adjustment mechanism at the borders to allow a better representation of the carbon balance of the products we import, knowing that when we use raw materials from recycling, we gain in terms of CO2 and energy savings. It is hoped that implementing this adjustment mechanism will result in a higher demand for recycled raw materials.

Are you calling for more direct economic incentives to support circularity at the company level? 

Fiscal issues are a taboo that will have to be addressed at some point.

Not much progress has been made on differentiated VAT rates for the most circular products. The Member States can do this, but it is quite complex.

However, there is a lot of talk about purchasing power and reduced taxation, for example, for products using recycled materials to guide consumers towards more sustainable and affordable products. There should also be labelling that helps them find their way.

I think that the Commission has understood all of this, even if it is complicated to put in place.

There is work to be done so that, thanks to sustainability criteria, recyclability, absence of harmful chemical substances, etc., a non-sustainable product, even if it is very cheap, to begin with, becomes more expensive than a very sustainable product.

The war between Ukraine and Russia has led to a sharp rise in the price of certain raw materials. Can this context change the Commission’s strategies and proposals for circular economy and sustainable products? 

In the short term, soaring oil prices are having a significant impact on the recycling sector, for which transport, whether it be collection or transportation of raw materials from recycling, is a high cost. Support measures will therefore be needed.

At the European level, there is also a significant increase in the price of some raw materials, which is normal in times of war. This only validates the importance of accelerating the transition to a circular economy. This will allow us to be more resilient and to have better control over the recovery of materials.

The situation does not call into question the Commission’s strategy. But there may be decisions in the short term to work on the security of supply for industries.

In particular, they may encounter difficulties because Ukraine is an important factor in the supply of certain ores.

[Edited by Daniel Eck/ Alice Taylor]

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