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Towards a circular EU recovery plan

Citeo, the French company in charge of Extended Producer Responsibility (EPR) for household packaging and graphic papers, believes in the involvement of all the actors of the value chain from public authorities to brand owners in order to build a truly Circular Economy with measures to reinforce competitiveness of recycled material, a common vision on recyclability, on reusable models and on littering issues. This vision requires not only the commitment of all actors, but also coherence and harmonization at the European level for both standards and targets. This is a key factor for future investments in eco-design as well as new technologies of recycling.

Citeo believe the EU recovery plan proposed by the EU Commission is a great opportunity to shift towards a real circular economy within the EU Single Market. Citeo have therefore several recommendations for the implementation of the EU recovery plan in order to improve circularity among packaging and papers.

  • Accompanying the recovery plan with a framework to accelerate investment, competitiveness and circularity of materials.

In order to answer the challenge of competitivity between Primary and Secondary Raw Materials, Citeo believes it is essential to move towards a more circular and ecological fiscal system both within Member States and at the EU level. Citeo believes in a harmonized approach based on a Life Cycle Analysis at the EU level. Indeed, Citeo welcomes new initiatives taken at the EU level and within the EU Member States to reduce the use of single use plastic and promote the incorporation of recycled materials in products through incentive fiscal measures. However, some points need to be stressed out. First, it is important to avoid putting on the EU market alternatives to plastic that have a negative or more harmful environmental impact and to look at all materials (especially when it comes to littering) and not only to focus on single-use, and especially single-use plastics. Regarding the plastic levy of 0,8€/kg announced by the European Commission under the MFF project for 2021-2027, and underlined in its recovery plan published on 27th May 2020, we believe that such measure, if decided at the European level, needs to be translated consistently and efficiently at the national scale. Indeed, the taxation of use of virgin plastics, such as the Italian plastic tax project is a different approach than the English one, with a plastic taxe based on the recycled content of plastics products, and the Spanish one linked on the use of plastics packaging. Such fiscal measures should aim at increasing the use of recycled plastics within packaging and reduce the spread between the price of recycled plastic and the price of virgin plastic in a context of low oil prices in the aftermath of the Covid-19 crisis.
In this perspective, we strongly encourage the Commission to pay attention to the implementation of this new levy within the EU member States so that it does not lead to the fragmentation of the EU single market and may have economic and environmental consequences that are the opposite of the intended objectives.

  • Supporting the extension of separate collection and sorting to all materials (glass, paper, cardboard, aluminium, steel, plastic)

Protecting biodiversity by reducing littering is at the heart of EU’s climate strategy and the SUP Directive. The EU recovery plan should thus support the modernisation and economic development of waste collection. Cities and municipalities have a key role to play as they can help to improve collection and sorting performances and thus meet European collection targets by encouraging the development of collection points especially on on-the-go consumption places, public events (festival, etc) and in public establishments. Moreover, in order reach its targets the EU should make waste management a valuable business in order to incentivize businesses to invest in circular solutions.

  • Supporting manufacturers and marketers to upgrade their production lines to 100% recyclable or reusable

The 40 billion euros dedicated to the Just Transition Fund could act as a tool, within EU member states national recovery plans in order to support EU industries to upgrade their production lines to 100% recyclable and reusable materials. The revised EU industrial strategy should also act as a mean to enhance circularity among European industries. Finally, the concept of industrial symbiosis have should be developed: it has proven to be a mean to reduce the extraction of resources and to enhance the circularity of materials.
Furthermore, to develop reuse model, local and regional authorities must be fully involved in the implementation of the EU Circular Economy Action plan and targeted by EU regional and cohesion funds. Indeed, local policy makers can act as key stakeholders in order to develop and promote reuse schemes (recycle shops, reusable packaging, DRS or RVM systems…). The spread of this kind of economic activities requires the development of specific infrastructures: massification zones (return logistics platform), washing plants or washing tools, etc. Support from local and regional authorities is thus necessary towards reuse schemes’ development.

  • Promoting circular public procurements

Cities and regions can also enhance circularity in public procurements, and it is necessary for regional and local public authorities to introduce binding targets for buyers in terms of circular economies in the coming years. For examples, local and regional authorities can encourage public purchase of reusable goods in order to reduce the consumption of single-use plastics. They can also require in their specifications the procurement of goods with a minimum threshold of incorporated recycled material.

  • Financing R&D for new materials

The EU funds should be specifically directed towards environmental-friendly and innovative industries especially technical centers and SMEs. The latest are indeed the main actors providing circular solutions and new recyclable materials helping to close the loop of circular economy for packaging and paper.

  • Developing molecular recycling and pyrolysis of plastics

Citeo is willing to collaborate with the European stakeholders and the European commission on developing new recycling solutions at the EU level in order to reach the recycling targets. Completing mechanical recycling technologies with chemical recycling technologies, in order to better recycle complex and multilayered materials, should be considered as a solution at the EU level.

  • Restructuring of the graphic paper recycling sector and support for the paper and cardboard industry

The paper and cardboard industries are an essential part of the circularity and competitiveness of materials in the European single market.
In France and like in most member States, cardboard packaging is experiencing an increase in consumption due to three factors: the expansion of e-commerce, demographic factors and the fact that it is an alternative to plastics. Furthermore, graphic papers have seen their apparent consumption decrease over the last 15 years, due to lower newspaper circulation and the growth of digital uses.
There is in France and within most of the member States an extra output of recycled cardboard and papers, which is one of the causes of the current price turbulence.
This sector is indeed experiencing an economic crisis. Reference prices for paper and cardboard for recycling have followed a comparable trend in the price of market pulp (peak in 2018 between 800 and 1,000 euros per tonne, depending on fiber size). This price subsequently declined due to the closure of Asian markets (China, Vietnam, Malaysia), which chose to increase their requirements in terms of the quality of the material to be recycled. The closure of these markets has thus led to a drop in European PCR exports of 25 to 30% in 2018.
Several levers exist to ensure the restructuring of a sustainable recycling industry adapted to the evolution of paper and cardboard consumption in Europe:

  • Supporting R&D in new paper uses to ensure the creation of new market opportunities for recycled raw materials.
  • Investing to support printers in the declining market (no creation of new capacity but a more suitable tool)
  • Incentivising through economic tools to support consumer paper products (notebooks, reams etc.)
  • Supporting the conversion of paper mills: from graphics production to the production of paper for cardboard packaging
  • Involving e-commerce stakeholders in the loop of the circular economy

In this time of Covid-19 crisis, marketplaces have been solicited far more than usual. As e-commerce is growing exponentially, the problem of similarly growing waste packaging grows with it. The main issue raised by online platforms and e-commerce regards the financing of the EPR schemes. Indeed, a phenomenon of “free-riding” in the EU has been observed. Member States have difficulties to ensure that online sellers correctly contribute to waste recycling by paying their eco-contributions in the countries they are operating. In order to correct this lack of information, and to improve the financing of extended producer responsibility channels, and limit the environmental footprint of this sector of activity, Citeo recommends to subject e-commerce to the following obligations: extended producer responsibility with all related obligations (operational or financial management of the end of product life, prevention and reuse objectives according to national regulations, etc.), and environmental labelling and legal warranty.

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