Proposal for solutions for clean plastic streams

A large challenge for achieving a circular economy for plastic are the long and complicated supply-chains. Additionally, the risk of goal con-flicts, e.g. between recycling goals and a non-toxic environment, is present. In theory, there are some efficient systems, but it has shown to be difficult. The difficulties with a recirculation of plastic in prac-tice is reflected in the inefficiency that exists within each stage of the recycling. If the percentage of plastic waste from collection and sorting are added together, the collective efficiency is 30 percent. Further-more, this presumes that the reprocessing is 100 percent, which is not the case (Avfall Sverige, 2018b).

There are however several good examples where companies have created streams of plastic that can recirculate in an optimal way. Even more positive initiatives are in the works for an increased collabo-ration between companies. The problem is that this is about examples – not extensive built-up structural systems that would be necessary to make a circular economy of plastic available on a societal level.

Quality security: Traceability and considering additives Standards

The European plastic recycling industry lacks harmonised certifi-cation systems and standards. A variation of different standards results in varying qualities and risks of making it difficult for the customer to rely on a constant supply of homogenous and high-quality products.

See chapter 3.2.2 for the Swedish Standards Institute’s efforts to counteract this.

Short supply-chains and collaboration gives improved traceability Several actors that the inquiry has been in contact with highlight that an improved traceability along the supply-chain is necessary to obtain an increased use of recycled plastic. Supply-chains for plastic and plastic recycling are often complex, with many global actors. Thus, it may be difficult to obtain information within all stages which in the end results in unreliable products. Essential for increasing the trace-ability is the promotion of collaboration along the supply-chain.

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The inquiry establishes that it is foremost the companies’ own re-sponsibility to collaborate to a greater extent to improve the situation.

One example of a company’s efforts is Återvinningsindustrierna’s initiative Circular Sweden. However, we see that there might be a need for the government to step in and support the collaboration between different affected actors. The government’s dedication to the com-panies’ efforts sends a signal that this effort is important to prioritise.

It is however important that this effort is conducted based on the com-panies’ terms since it is the companies who know their respective operations best and what is required.

An important account is that it may be more resource effective to try and find small isolated streams instead of trying to grasp the total plastic stream with the same methods. We propose that the government first and foremost highlights that an increased focus is placed on affected parties finding the clean streams that are already available. We further propose that the government encourages manu-facturers of reused materials and products to create smaller and more controlled streams instead of trying to collect all plastic and then sort it. This may be accomplished by the manufacturers collaborating with their suppliers to close the circle, where the manufacturers be returned their own products that they have control over.

One example of such a project is between the companies Axel Johnson International and the clothing brand Filippa K, in which they examine recycling of the straps that are used for stabilising the trans-portation pallets. Since the straps are 100 percent polyester, Filippa K saw a possibility of recycling them for new products. Together with a Dutch company that manufactures pellets of the strap waste and a button manufacturer, the idea is to manufacture buttons for Filippa K and other companies. Filippa K is also investigating the possibility of creating fabric from the recycled polyester. For it to work in practice however, there is a need for ensuring that the company’s high-quality requirements can be met and finding a sustainable business model for everyone involved, which seems possible (Larsson, 2018).

Regarding production waste within the construction sector, the inquiry wants to see an increased exploitation of this. To take advantage of production waste should, in the cases where it is not directly unsuitable, be mandatory and it can be questioned if it should be counted as recycling. It is rather a matter of optimising the

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pany’s processes. An increased collaboration between recyclers and plastic producers would then be necessary.

Yet another point that may ease traceability and control is a marking containing codes with the purpose of enabling identification of dif-ferent plastic types and plastic content. One example is “digital water-marks”, an optical technique that can create invisible barcodes on all packages and basically identify every object separately. This has the potential of resulting in a significant improvement in sorting, and an increased data transparency on what kind of material and packaging that moves within the system.

Another example is RFID (Radio Frequency Identification).

Halmstad University identified electronic junk with the help of RFID with the purpose of streamlining the sorting process at Stena Metall.

The study showed that RFID could eventually be a more sustainable solution. This is based on that all electronic manufacturers integrates RFID tags in their products (Alhamarna & Kjellgren, 2017). In ad-dition, Akzo Nobel is in the process of developing a method for marking plastic with the help of a microstructure on the surface of the plastic, which is almost invisible for the naked eye but can be used to separate the plastic with a digital camera.

Presence of hazardous substances

An important aspect of improving the quality of recycled plastic is that a phase out of undesired substances occurs. Therefore, it is important that Sweden is active in meeting the EU’s chemical regulation, Reach, and other production regulation concerning content. The starting point ought to be that recycled material should have the same require-ments as new raw material. At the same time, an all too narrow view concerning the occurrence of hazardous substances does not benefit recycling. The inquiry would like to see a higher level of nuanced risk thinking within the discussion of non-toxicity in relation to resource recycling. One example is the discussion in the EU con-cerning the implementation of a strict concertation limit of less than 10 ppm of the SVHC substance decabromodiphenyl ether (dekaBDE) for recycling of plastic from electronics which, according to the recy-cling companies, would mean that no plastic from electronic products could be recycled. This is largely a temporary problem, under the

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prerequisite that new products on the market is covered by a satis-factory chemical regulation.

Creating demand for recycled raw materials

The demand for recycled raw materials is currently low due to ques-tions concerning quality, low volumes and low price for virgin raw material (EU Commission, 2018f). This hinders to some extent the development of sorting techniques and other aspects of the recycling process. We see a clear demand for additional and more effective instruments for increasing the demand of recycled raw materials. In this chapter, we present and analyse some instruments that we have deemed as specifically interesting and those that we believe need to be investigated further to individually, or in combination with other instruments, result in a possibility of an accelerated transition. We are aware that the prerequisites look different for the possibility of implementing them.

Grants or tax deduction for the transition to recycled raw material A transition grant would remove costly investment obstacles, e.g. for installations of new processes, techniques and logistics. One alter-native to a grant could also be a tax deduction. In both cases, a grant or tax deduction, must be configurated in accordance with EU’s state aid rules.

Tax or fee on plastic products that are not recycled or recyclable One possible economic instrument is to introduce a tax that strikes further up in the supply-chain on non-recycled plastic materials and therefore increases the demand for recycled material. The tax could take the shape of tax per kilogram of fossil-based plastic material from new raw material used. One alternative is to adapt the tax after the total recycling level that is actually achieved for the plastic.

In SOU 2017:22, it is stated that new or higher environmental taxes risk disfavouring Swedish companies. Through reduced Swedish production and simultaneous increased corresponding production

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somewhere else, where the environmental requirements are lower, the overall global environmental impact would not be reduced. Even if it could have a positive local effect on the Swedish environment.

Tax on products is also emphasised in a mapping from IVL Swedish Environmental Research Institute (Stenmarck et al, 2014). The report establishes that to avoid that a tax on plastic raw material does not result in movement of usage abroad, the tax can be expanded and even include imported plastic products that is manufactured from virgin plastic material. A tax on virgin material, including imported material, combined with instruments on both the supply side and demand side is recommended by Hasselström et al (2018). However, such a tax must be built on the basis that it should be possible to prove that a product contains recycled material. For this to occur, analyses and measuring methods are required, which do not currently exist, that can verify the content of a certain amount of recycled material within a specific product. It must be possible to prove on a legally correct manner and through the authorities’ tax control that the correct tax has been reported and paid. In the case of imported goods, few alternatives exist apart from random spot-checks on goods to verify the specific good’s content of recycled material. Using re-ceipts on purchases, material balances in manufacturing facilities etc, would bring a heavy tax control/administration and is in the case of imported goods probably not even possible.

Certificates of recycling

Certificates of recycling for plastic is highlighted as one of several suggestions in a study within the research program Hållbar avfalls-hantering (Sustainable waste management) (Bisaillon et al, 2009).

The quota obligation, i.e. the amounts of certificates that the producer of the plastic product needs to annually report, governs the certifica-tion system and is decided by the state. Certificates of recycling would result in higher quality demands being placed on the recycled plastic than is currently being done, since all producers of plastic products would be included in the system. It may therefore be appropriate to start with a certain quota level, which is subsequently raised.

It is difficult to say in advanced what the certification price will be, as the price is set by the market. In accordance with the estimates

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of recycling costs that are conducted in the BRAS-inquiry (SOU 2005:203), the certification price is set at 2 000 Swedish Kronor per certificate as an average price for different types of plastics. If, for example, each certificate then corresponds to 1 ton recycled plastic, it would generate a quota obligation of 20 percent.

One advantage of a certificate system is that the market itself can decided where it would be most effective to change processes and thus enable more recycled material in products. For a certificate system to work, it is vital for an appointed authority to set require-ments and conduct supervision. Otherwise, there is risk of green washing and that the market becomes too weak.

An important distinction between a hypothetical certificate system for plastic products and the already existing certificate system for electricity is that production of renewable electricity occurs on a national level or in neighbouring countries, which makes it possible to verify on the spot or by other relatively uncomplicated means if the electricity is indeed renewable. In a certificate system for plastic products, it is possible to verify the certificates for manufacturing sites in Sweden and intermediate areas. In the case of imported plastic products from non-EU countries, it becomes apparent that the possibilities of controlling the manufacturers’ procurement and use of recycled materials is very limited or even non-existent. Require-ments on a certain proportion of recycled raw material must therefore be set on imported goods for these plastic products to be equated, both economically and from a recycling standpoint, with goods that are manufactured within a certificate system in Sweden. One way of approaching this would be to introduce a tax or fee on all imported plastic products that are not made of recycled plastic. However, then the same challenge would arise that is discussed in the previous section on taxes and fees.

Increased supply of recycled raw material

One way of promoting the market for recycled material is to establish Ecodesign criteria for certain products and product groups. Since the use of recycled plastic is currently not possible to measure or verify with a standardised method, the inquiry cannot perceive how legally binding requirements, which states that recycled materials should be

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used in certain components and products, could be introduced. How-ever, it is possible to have requirements in the Ecodesign directive, which exist and are being discussed, on e.g. demounting to increase the recyclability. Typically, it is a case of increasing the knowledge level among designers concerning how recycling occurs in practice and how the subsequent market functions. The handbook on plastic packaging from FTI¹, the Swedish nationwide system for recycling, can be used to facilitate the problem of lack of knowledge. Addi-tionally, Svensk Plastindustriförening (SPIF), a Swedish association for smaller and medium size companies within the plastic industry, have developed a handbook for what companies ought to consider con-cerning the design of a plastic packaging that is recyclable (Nilsson, 2018).

The inquiry sees great potential in using the Ecodesign directive to introduce design criteria that will aid in promoting recycling of plastic. To achieve an impact on EU-level however, commitment is needed from an early stage. The Swedish Energy Agency is the proper authority for the directive. A work group also exists that comprise of, apart from the Swedish Energy Agency, the Environmental Pro-tection Agency, the National Board of Housing, Building and Plan-ning, the Swedish Chemical Agency, the National Electrical Safety Board and the National Agency for Public Procurement. Even though design criteria for packaging exist, it is important to consider that it does not necessarily mean that it is the same for other types of pro-ducts (that must meet other legal requirements, industry standards, etc). Therefore, recycled material must be considered in regard to what it will be used for.

Collection

The inquiry has determined that there is a demand for increased recycling for all plastic, not only packaging. However, we do perceive this to be difficult to achieve through legal requirements, unless a type of expanded producer responsibility is introduced. According to a Swedish study, a separate collection of hard plastic would signifi-cantly increase the collection of plastic at municipal recycling stations (Fråne, 2017). The reason for this is that the plastic from municipal

1 www.ftiab.se/1860.html. (Visited 2018-11-20).

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recycling stations primarily consist of pure hard plastic products that are requested on the market. Soft plastics should also be collected separately, as a fraction with a higher economic value can then be manufactured (e.g. plastic bags). Yet, it is difficult to recycle com-posite products, which therefore ought to be removed from the pure hard plastic fraction. A separate handling of PVC would most likely increase its economic value, but it is currently deemed uncertain if this would be profitable from a cost standpoint (Fråne, 2017).

Sorting techniques and capacity

One option of improving the quality and the access of recycled raw material is to improve the sorting techniques. It concerns creating an increased capacity, but also to refine the sorting itself and the sub-sequent washing and granulation. Regarding packaging, the Swedish Food Retailers Federation and Plastbranschens Informationsråd are investing in a new sorting facility for plastic packaging in Motala.

The investment of 260 million Swedish Kronor will entail, according to the industry, that Sweden will obtain Europe’s most modern sorting facility. The facility is expected to cover all of Sweden’s needs and therefore, no packaging will be needed to be sent abroad for sorting.

The industry believe that the new facility can aid in an increased recy-cling rate and improved quality of the recycled material. According to the timetable, the facility will be up and running during the first quarter of 2019 with approximately 50 employees. A continued investment in a wash and granulation plant would cost 250 million Swedish Kronor.

One possibility is that the government steps in and funds this invest-ment. For that to happen however, a closer impact assessment that includes competition aspects and other possible technological invest-ments in plastic recycling is needed.

Stena Metall is an example of another company that is also investing in the sorting of plastic, but in industry packaging and plastic tronics. The company is planning manufacturing of pellets for elec-tronics where, in terms of volume, it is primarily ABS and PS that will be handled, followed by PP and PE. There also exist facilities for sorting of mixed waste. One example is Fortum’s Circular Economy Village in Finland. The inquiry establishes that in the future, because of different company investments, there exist good prerequisites for

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an improvement of and increased capacity for sorting plastic waste in Sweden.

Requirements in public procurement

Hasselström et al (2018) have evaluated procurement requirements from several criteria. Regarding goal completion, Hasselström et al believes that raised requirements on recycled plastic in public pro-curements can, for potentially large plastic streams, stimulate supply on reusable plastic and increase the demand of recycled plastic. An important advantage with procurement requirements compared to other instruments is that it has the possibility of also covering im-ported plastic products.

Procurement requirement as an instrument is however limited to the public sector and is deemed as being a second-best alternative if other instruments are not politically viable. Ideally, it could be used as a complement to other instruments, e.g. a tax on virgin material.

By focusing on the design of plastic products and plastic materials for recycling, public procurement can also increase the possibilities for recycled plastic in Sweden. One example of setting requirements for the use of reused or recycled material is the project Constructivate². The project concerns the construction sector and uses an obligation scheme. The requirements would drive the development forward con-cerning collection, sorting, cleaning, product development, process technology, etc and create the prerequisite for a market for recycled material. Plastic is included as well as all other materials used during the

By focusing on the design of plastic products and plastic materials for recycling, public procurement can also increase the possibilities for recycled plastic in Sweden. One example of setting requirements for the use of reused or recycled material is the project Constructivate². The project concerns the construction sector and uses an obligation scheme. The requirements would drive the development forward con-cerning collection, sorting, cleaning, product development, process technology, etc and create the prerequisite for a market for recycled material. Plastic is included as well as all other materials used during the