Decree establishes reform of recovery scheme

PYR CEO, Juha-Heikki Tanskanen, finds it positive that after years of preparation and expectation operators in the field know what will be required of producers in the collection of consumer packaging. Great changes are coming both for PYR’s operations and those of the producer organisations.

“Producers have so far not had an obligation to set up take-back of consumer packaging. The situation is now changing and it is within our remit to set up a take-back network to cover the entire country.

PYR and the producer organisations will conduct take-back in close cooperation. PYR is planning, asking for tenders and making take-back contracts. All operational activities will be bought from transport firms. In addition, PYR will arrange transfer loading stations and recycling for glass.

A steering committee jointly run by the producer organisations and PYR started its task in early summer. The committee will make the most important decisions on the take-back of consumer packaging. After that PYR will sign contracts, take care of implementation and report to both the producer organisations and the authorities.

While PYR has up to now kept in touch with firms that have producer responsibility obligations and has taken care of data collation, advice, information and invoicing, we will now also start with organising the take-back of packaging. A move into operational activities will constitute a great change,” Tanskanen says.

 Will the environment be gratified?

A couple of details came as a surprise to the packaging sector in the final stretch of the ministry’s drafting process.

“The number of take-back points amounted to 2,000 in the drafts, but came to 1,850 in the final decree. The greatest surprise was that there should be as many take-back points as retail outlets in population areas of under 500 inhabitants and sparsely populated areas. This means setting up 420 points,” he explains.

Tanskanen complains that arranging take-back in remote areas is inefficient as the amounts received will be small and involve long haulage distances. He adds, “The reasoning behind this is that an adequate level of service can in this way be guaranteed throughout the country. This has immense practical significance, because 420 points represent about a quarter of the entire total. It is clear that cost-effectiveness and benefits to the environment would have been greater if these points could have been located in more densely populated areas.”

Tanskanen believes that a good starting point would be to increase recycling possibilities and offer inhabitants opportunities for sorting and take-back. This is also the idea behind the Waste Act. “Nevertheless the question arises as to whether the primary task of the Waste Act is to promote protection of the environment or to further basic municipal services. Recycling targets for packaging have so far clearly been attained and exceeded,” he points out. He considers that one reason for extending producer responsibility is that in several EU countries producers have for a long time now organised take-back of consumer packaging. Producer responsibility is the practice in virtually all EU countries even though the directive does not require this of member states.

The division of costs will change

Up to now collection of packaging has mainly been under the remit of municipalities with the costs covered by waste management fees. Municipalities may, if they wish, continue to supplement collection of packaging. Households will also be allowed to purchase these services directly from waste management firms if producers or municipalities do not arrange on-site collection from properties. Tanskanen maintains that municipalities have lately increased on-site collection and he believes that the quantities of collection will continue to grow.

“The recycling requirements of the new decree will raise costs and cash flows will be change. While producer responsibility costs nowadays amount to about EUR 8 million per year, they are estimated to increase fivefold. Consumers will pay for this in the prices of products whereas previously the waste management of packaging has been paid for largely through municipal waste management fees,”  he explains  Tanskanen considers it regrettable that further obligations have been imposed on trade and industry just when the economy is already facing difficult times.

“This revision puts an upward pressure on prices and consequently weakens consumer purchasing power,” he reckons.

 The beginning of a new era

The steering committee run by producers and PYR is highly motivated, according to Tanskanen: now there is a unique opportunity to get started on the planning of a comprehensive, nation-wide take-back scheme. It is a tight schedule as the obligation for take-back will be transferred to producers at the beginning of 2016.

“Take-back points will be located in places where as many people as possible circulate, for example, close to shopping centres and good transport connections. A large part of reception points are already in good locations and it is futile to start relocating them. More will be established where there is a shortage,” Tanskanen elaborates.

Nowadays there are many points that only accept glass and metal. Glass, metal and fibre packaging can be taken to the producers’ take-back points. In addition, there is a separate waste container for plastic packaging at 500 points. The aim is also to include take-back of paper and clothing in the same complex where possible.

“A major factor is that there will be uniform sorting instructions throughout the country. Up to now there has been great variation between different municipalities. Everything is focused on making it easy for people to sort packaging waste. Industry will thus obtain large amounts of pure raw material. This is an excellent aim,” Tanskanen concludes.

Four producer organisations and the Ministry of the Environment discuss the decree

Maija Peltola, Managing Director of Suomen Keräyslasiyhdistys ry (Glass)

The producer organisation for glass packaging, SKY, has never before had its own collection activities for packaging glass, but the association has just promoted recovery of the material by paying for recovery support of the material collected by municipalities and other operators. The producer organisation must attend to the take-back of consumer packaging and delivery of the packaging material received for recycling on account of the new packaging decree. EPR will lead to a considerable rise in recovery fees for non-deposit packaging glass. SKY has decided on a model for the organisation of its new activities in compliance with the decree whereby the practical implementation of setting up a take-back network with consumer information through to the recycling of the material will be transferred to PYR. In practice, the decree will affect SKY’s operations through closer cooperation with PYR and the other producer organisations in the field of packaging. SKY attends to the producer responsibility for non-deposit packaging glass on behalf of the firms that have transferred this task to SKY. This means that SKY is responsible for fulfilling legal requirements and running the operations cost-effectively.

Previously there has not been a recycling requirement imposed on non-deposit packaging glass; there has only been a joint recycling target for deposit and non-deposit material. The recycling requirement in the new decree for non-deposit glass will be 27 per cent from 2016 and 40 per cent from the beginning of 2020. In the present operating model a substantial portion of non-deposit glass has been directed to construction applications, which is not recognised as recycling. The recycling requirement in the new decree requires a considerable increase in the volume of recycled non-deposit glass by 2020.

Peter Rasmussen, Managing Director of Suomen Uusiomuovi Oy (Plastics)

It is important to Suomen Uusiomuovi that the take-back scheme stipulated by the Waste Act for consumer packaging is set up in a rational manner based on experience. A required network of 500 take-back points is more extensive than we had ourselves proposed, but we are satisfied that the challenges facing plastic packaging have been partly heeded at least. We had proposed that the recycling rate requirements should not be raised until we have some experience of the quantity of waste delivered to the scheme as well as an assurance that there is a fully functioning sorting and recycling facility for consumer packaging in Finland. Such a facility does not exist at present and this lack would in the future mean extensive export of waste, which is expensive and would not create jobs in Finland.

The result for the recycling of plastic packaging will in the future be calculated without the inclusion of deposit packaging. The 16 per cent recycling rate for 2016 stipulated in the decree means an increase of some 4,000 tonnes and the recycling rate of 22 per cent for 2020 will require an increase of over 10,000 tonnes. The requirement for 2020 is really challenging as it will require additional quantities of consumer packaging in particular.

The aim is to further increase the recycling of packaging used by companies as this still comprises good-quality packaging waste that nowadays goes to recovery as energy.

Any estimation of the overall impact of the decree is difficult. Many things are changing at the same time: a ban on landfill will come into effect in 2016, new waste to energy incineration plants will start up, the EU is revising the packaging and packaging waste directive and it is difficult to estimate how the various operators and consumers will behave in a new situation. It is therefore important that the impacts of the Waste Act and the packaging decree will be regularly assessed and changes made if problems arise.

As take-back points for plastic consumer packaging are something new in Finland, the costs incurred by them do not only come from their transfer from municipalities to producers, but they form a completely new cost item for society and the world of business. The requirements of the new act and decrees will raise recovery fees for plastic packaging many times over during the coming years. During the transition period one should remember that the main role of packaging is to protect the packed product and thereby reduce the amount of food wastage, for instance.

Tarja-Riitta Blauberg, Negotiations Officer at the Ministry of the Environment

The starting point for stipulations of the number of consumer packaging take-back sites has been the requirement to set up the convenient take-back of packaging. Convenient accessibility to take-back sites is also a pre-requirement that will enable consumers to sort and deliver waste for collection.

Convenience is deemed to be satisfied if the distance to a take-back site for packaging waste corresponds to the usual journey to the grocery retail outlet from which the consumer has bought the packed product. This distance will inevitably be unequal in length in sparsely populated areas than in large towns. Based on the assessment of environmental impacts carried out by the Finnish Environment Institute, the take-back of packaging waste in compliance with the requirements of the decree is also environmentally feasible in sparsely populated areas.

The minimum requirement in the decree for take-back points corresponds to the number of shopping areas in which there are one or several grocery retail outlets that are located 500 metres from one another. The decree stipulates that there should be as many take-back sites for packaging in sparsely populated or remote areas as there are shopping areas. In this way we want to guarantee a minimum level of service for the take-back of packaging waste in sparsely populated areas as well. On-site collection of packaging from residential property is common practice in areas with a larger population with a large number of retail outlets. It is not therefore considered essential to tie the number of take-back sites precisely to the number of shopping areas in these places.

Take-back sites should be located in the vicinity of grocery retail outlets or other regularly visited public service centres or by the side of public thoroughfares.  If take-back sites in future only amount to the minimum number stipulated by the decree, their number would be reduced by 2,600 for glass and 2,500 for metal as compared to the number at present. The network for fibre packaging would pretty much remain at the present level and for plastic packaging the number would increase by several hundred take-back sites.

Presumably, take-back sites will be decommissioned mostly in remote areas or areas with a low population.

Tapani Sievänen, Managing Director of Mepal-Kierrätys Oy (Metals)

The proliferation of take-back services for metal consumer packaging from its present location in the Helsinki metropolitan area with 1.2 million inhabitants to cover the entire country will increase Mepak’s operational expenditure many times over. Unfortunately, this extension of operations will only slightly increase the total quantity of metal recycling as the major part of metal packaging is collected from trade and industry.

The new decree will raise the recycling requirement from the present rate of 50 per cent to 75 per cent as early as 2016. At the same time, recycling of deposit aluminium cans will form a separate item from non-deposit metal packaging in the calculation of the recycling rate, which will push up the recycling target by a further 10 per cent or so. In 2020 the recycling requirement will rise to 80 per cent, which was the required rate for many types of deposit beverage packaging material only a short time ago.

The take-back network and high recycling requirement for consumer packaging will considerably increase Mepak’s workload and costs, which must be fully covered only by the recovery fees levied on producers. In the final stages in drafting of the decree some 400 extra take-back points were added to be set up the vicinity of shopping areas. This change in location principles significantly limits the efficient organisation of locating the take-back points and any later optimisation of organising locations without effectively reducing either the environmental impacts caused by take-back activities or the costs incurred.

The most positive aspect of the decree is its clear definition of the number of take-back points and terminals, which provides a clear model for the planning and implementation of Mepak’s operations.

Recycling of consumer packaging will be clarified and simplified because the take-back points will be located near to where consumers carry out their daily tasks and they can also bring a greater variety of fractions to the take-back points than they can today. Country-wide uniform sorting instructions will teach consumers to sort and return packaging better than they do at present.

The considerable additional costs incurred by trade and industry in consumer packaging take-back will, of course, be passed on to prices, on top of which there will be an increase in the tax effect. The financial effect of these changes on consumers will be more clearly seen in the prices of groceries.

Eija Jokela, Managing Director of Suomen Aaltopahviyhdistys ry (Corrugated Board)

Greater cooperation with both PYR and fellow producer organisations will be emphasised in the operations of Suomen Kuitukierrätys Oy, the producer organisation for fibres in general. This will boost the take-back of consumer packaging among other things as well as the associated information activities.

The greatest surprise in the decree was that despite all background studies that were commissioned there is a desire to extend the take-back network to places where collection from our experience  is small and haulage distances and therefore harmful impacts on the environment great. The spirit of the Waste Act will not be realised in this respect.

Take-back of fibre packaging is already well established. The location of take-back points must be rationalised so that consumers will be able to take care of many other matters while attending to their daily tasks, for example going shopping and returning packaging to be collected for export.

The cost effect on fibre packaging in particular on packers and importers of packed products, in other words producers, is estimated to double. Consumer behaviour in relation to fibre packaging ought to change considerably so that greater quantities of recyclable packaging can be obtained for recycling than is the case at present. The recycling rate of 80 per cent for fibre packaging is highly ambitious.

Strategy defines PYR’s role

At the beginning of summer PYR’s board of directors approved a new strategy for the company. This corresponds to PYR’s new tasks and its new role. The organisation of the take-back of consumer packaging and the recycling of glass were added to the company’s present tasks.

“The strategy emphasises that we want to serve our member firms as cost-effectively as possible and produce added value for the firms. The aim is that consumers will be satisfied and diligently make use of the enhanced possibilities provided by trade and industry to deliver recyclable packaging to the take-back points,” Juha-Heikki Tanskanen states.

Tight schedule

* EPR for packaging will take effect for producers on 1.5.2015.

* Take-back network for consumer packaging starts operations on 1.1.2016.