EU Circular Economy Package Stakeholder Meeting 6 July 2017

Agenda Wrap-up and next steps Welcome, introductions and scene-setting Update on progress: European Council and European Parliament positions on Municipal Waste, EPR, Packaging and Landfill Evidence Team Update Q&A Breakout meetings on: Municipal Waste EPR Packaging Landfill Wrap-up and next steps The circular economy can be considered a framework that draws on many others including the ‘performance economy’ (service-based business models), the ‘productive economy’, the bioeconomy (use of biological feedstocks involving biotechnology processes) and the ‘sharing economy’ (considering collaborative or shared consumption).

Update on Progress since January Progress under the Maltese Presidency (Jan-July) On 19 May 2017, COREPER secured agreement on a mandate to enable trilogue discussions to begin European Parliament Adopted their amendments to the proposals in March 2017, securing a huge majority (over 600 votes) in favour of very ambitious measures Plans under the Estonian Presidency (July-Dec) Circular Economy Package is an area of priority for them, we expect they will want a conclusion to trilogues during their term

Municipal Waste European Council European Parliament Definition: Includes waste from households, waste from other sources that is similar in nature and composition to household. Does not include waste from production, agriculture, forestry, ……., and construction and demolition waste. Definition: Broadly similar definition but lists the ‘other sources’ eg. small businesses, offices, schools, hospitals, and government buildings. Does not include sewage and construction and demolition waste. Targets: 60% recycling of municipal waste by 2030 (55% by 2025) Targets: 70% recycling of municipal waste by 2030 including 5% prepared for reuse(60% by 2025) Calculation method Recycling is the weight of waste: a) Entering the recycling process – after checking and sorting etc. b) Output of a sorting operation (where no further sorting required) as a derogation only c) Includes metals from incinerator bottom ash. Not other minerals a) Entering the final recycling process b) Includes metals from incinerator bottom ash. c) Recovered or collected by a recognised preparation for reuse operator

Extended Producer Responsibility European Council European Parliament Scope - Does not apply to schemes that do not establish mandatory financial or operational responsibilities - Responsibilities for producers of products, waste holders, operators of schemes Financial Responsibility - Covers at least the following: separate collection, sorting and treatment operations, for products placed on the UK market. - These costs are modulated based on how easily the particular product can be recycled - Based on the necessary costs of waste management services - May depart from the division of financial responsibility while ensuring that the producers bear at least half of the necessary costs - Sets up schemes for at least packaging, EEE, batteries and ELVs - Responsibilities for all actors involved - Covers the entire cost of waste management for the products it puts on the Union market - Based on the optimised costs of waste management services

Packaging Directive European Council European Parliament Targets 2030 70% target for reuse and recycling of packaging waste (60% for 2025) Materials’ targets: (i) 30% of wood; (ii) 80% of ferrous metals; (iii) 50% of aluminium; (iv) 75 % of glass; (v) 80% of paper and cardboard 80% target for reuse and recycling of packaging waste (70% for 2025) (i) 80% of wood; (ii) 90% of ferrous metal; (iii) 90% of aluminium; (iv) 90% of glass Legal Base The Commission initial proposal for amending the Directive was based on Article 114 TFEU which is a Single Market legal base. However, in the Council this has now been changed to Article 192 TFEU which is an environmental legal base. No position taken.

Landfill Directive European Council European Parliament Targets 2030 “Member States shall take the necessary measures to ensure that by 2030 the amount of municipal waste landfilled is reduced to 10% or less of the total amount of municipal waste generated.” “Member States shall take the necessary measures to ensure that by 2030 the annual amount of municipal waste landfilled is reduced to 5% of the total amount of municipal waste generated.” “Member States shall endeavour to ensure that as of 2030, all waste suitable for recycling or other recovery, shall not be accepted in a landfill with the exception of waste for which landfilling delivers the best environmental outcome.” “By 31 December 2030, Member States shall accept only residual municipal waste in landfills for non-hazardous waste.” New Calculation method: 4 streams to be considered

Circular Economy Package: evidence update Ladislav Tvaruzek 06/07/2017

GHG emissions savings* Sector-wide modelling: Higher recycling and lower landfilling make both economic and environmental sense Higher collection costs more than offset by reduced disposal costs and recycling revenues. Reduced landfilling and recycling rather than incineration generates substantial environmental benefits. But this does not account for the aspect of feasibility, distributional impacts or supporting policies needed to drive the behavioural change etc. 2021-2030 55% 60% 65% Waste sector savings £0.9bn £1.3bn £2.5bn GHG emissions savings* £1bn (19 MtCO2e) £1.8bn (34 MtCO2e) £2.4bn (44 MtCO2e) Social savings £1.9bn £3.1bn £4.9bn * Include landfill GHG emissions savings up to 2100

Feasible recycling rate for households: for England, current threshold likely to be around 55% Harmonised collection systems HHWRCs efficiency improvements – ca. 2 percentage points? Supporting policy measures: Separate FW requirements Minimum service standards LA specific targets EPA amendments Industry incentives – comms, EPRs Harmonised co-mingled/multi-stream, separate FW, AWC Harmonised co-mingled/multi-stream, separate FW, AWC, free GW 2015 FW – food waste, AWC – alternate week collection of residual waste, GW – garden waste

Feasible recycling rates for municipal business waste: Wrap ongoing analysis of recycling and associated costs Municipal commercial and industrial data: significant gaps and uncertainties Top-down approach: up to 80% (red line) Bottom-up approach: 65-75% (blue bars) Different cost impacts dependent on the type/size of business Policy measures under review Note that these are interim results that are likely to change in the final analysis.

Packaging targets feasibility: Council 2030 proposals above Defra 2020 targets for ferrous metals and glass. * Average of targets under consultation, ** Target set for 2025 only,. Defra analysis based on the total packaging placed on the market dived by the accredited tonnages expected to be recycled.

Feasibility of MSW landfill target Our modelling suggests that a landfill target of 10% by 2030 looks to be realistically achievable: 10% target does not seem to generate unprecedented pressures on new residual waste treatment capacity partly as a result of revised estimates of municipal solid waste (MSW). Any increase in achieved overall recycling rate would further decrease need for new residual waste treatment capacity. Moreover, the current economics of residual waste treatment options looks favourable with respect to landfill diversion.

Conclusions Significant environmental benefits and potential sector-wide savings through higher resource efficiency. Landfill target and most packaging targets seem to be realistically achievable. Overall recycling target likely to be very challenging: 55%: requires new measures on household side, possibly including household recycling centres. 60%: would need deployment of measures on municipal business side. Very high targets would likely require significant changes to households behaviour and businesses operations.

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