Developments on exports, waste shipments and carbon credit during 2021 have clarified the way ahead for recyclers in 2022 and beyond.
During 2021, several key regulatory changes took place that affect our industry, some of which will change the plastics recycling sector substantially. The very first change – applicable from 1 January 2021 – was an amendment to the Basel Convention. Plastic scrap trade from Europe to non-OECD countries fell under the notification process from that date until 20 October when the European Commission updated regulation 1418/2007.
This was the toughest period for European plastics waste exporters as they had to undertake a lot of administrative work to carry out their business. Many felt they were busier applying notifications and getting approval to ship their material to customers rather than the core business of buying and selling.
On 10 November (20 days after the development was published in the EU Gazette) an updated 1418/2007 regulation came into force, once again allowing exports to many non-OECD countries without the required notification process.
The first 10 months, therefore, were full of challenges for exporters.
While exporters were unable to move their material out of Europe easily, European recyclers had an opportunity to expand further. Plastic raw material was moving more within Europe because the process was straightforward.
Taking credit for carbon
The most interesting development of 2021 which will change the shape of our plastics recycling industry is an acceptance of the concept of ‘carbon credit’ for every tonne of plastic that is recycled. This was a long-standing and unresolved issue which was also part of discussions in COP25 in Madrid. In Glasgow for COP26, I participated in several meetings to urge recognition of our industry, acknowledge the challenges it faces and its positive impact on environment and society.
The motive and the biggest challenge for us at COP26 was to secure common acceptance of Article Six of the Paris Agreement rulebook which clarifies how international carbon markets involving governments should function. I lobbied delegates to resolve the issue as it had not been finalised even as the event was nearing its conclusion.
Ultimately, if it had not been settled, many experts would have considered the conference a failure. But the eventual resolution of this issue is a very important milestone for the plastics recycling industry.
Under the Glasgow package, carbon credits can be traded from one country to another for fulfilling their obligations under the Paris agreement. After dragging their feet for six years, the negotiators have finally agreed on rules for cross-border trading, rules on old stocks and how to avoid double counting under Article Six.
Carbon credits will change the shape of our recycling industry because currently only plastics valuable enough to cover the cost of collection and segregation are collected for recycling. Industry won’t collect those plastics which can’t cover collection and segregation costs. Carbon credits will play a vital role because such costs will be arbitrated with a carbon credit.
This should increase the collection and recycling of plastics currently considered of low value. Every day we generate almost one million tonnes of plastic waste globally and average recycling rate is only 16% – some say it is even less. Carbon credit should bring a substantial increase in that figure.
Waste shipment policy
Towards the end of the year, the European Commission issued a directive with new regulations for waste shipments. The commission proposes a strong regime for the export of waste outside the European Union and the focus is on shipments to non-OECD countries. The proposal is to consider gradually restrict or end exports unless the importing country explicitly tells the EU it wants to receive the waste and has the required ability to treat waste.
The commission is working to finalise the list of counties where such exporting would be allowed. They will publish this list after correspondence with all non-OECD countries. To ensure waste shipments are ending up at the right recycling facilities, the European Commission also proposes to make exporters responsible for proving their export is sustainable.
Exporters may need to arrange an independent audit of every recycling facility to ensure this. The bigger focus is to keep raw materials within Europe and they are ready to pay good incentives to recycle them recycle within the EU.
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