Sorting through the trash Part 1: Our recycling dilemma – Why extended producer responsibility can hurt more than it helps

Preface: The views expressed in this article are my own, and do not reflect the opinion of York University or any of the stakeholders affiliated with the Waste Wiki project. I have not received compensation for the studies referenced in this article, nor have I been directed to undertake said studies by any individual or organization.

It’s not too often that I have to start one of my LinkedIn articles with such an explicit disclaimer. However, given the nature of the topic, and how contentious the topic has been among various stakeholders, it seems prudent to be as transparent and explicit about the motivations from the get go. With that being said, it is almost an inevitability that I will be accused of some sort of bias, which is disheartening, but something I have come to expect over the years.  

While I have written extensively about extended producer responsibility (EPR) in the past, as a quick primer for those outside of the industry, EPR schemes task producers (or first importers) of a good with the physical and financial responsibility for managing that material at end of life. While EPR can take multiple forms (mandatory, negotiated, voluntary, partial etc.), and arrangements (50/50%, full, Individual Producer Responsibility) the overarching objective is to focus on the end of life treatment of consumer products, with the aim to increase the amount of product recovery, while simultaneously minimizing the environmental impact of waste.

EPR schemes exist for a range of waste streams in Ontario (Waste electronics, tires, printed paper and packaging etc.), and is largely seen as the preferred policy option for jurisdictions across Canada, and abroad. With respect to EPR legislation, I have often heard it characterized as a matter of when, not if, as the number of waste streams included under the umbrella of producer responsibility is set to expand to things like textiles, and even the IC&I sector. Policy makers, producers and even the public have come to accept that EPR is an inevitability, and to many, it is a welcomed change.

Given the conceptual premise of EPR, ensuring that producers who make a product, ultimately bear the responsibility for managing it at end of life and keeping it out of landfills, it is easy to see why EPR is being championed. In fact, despite both the title of this article, and my subsequent criticism, I am one of those people. Producer responsibility *can* play a critical role in minimizing waste and promoting superior environmental outcomes. However, the impact (economic, environmental and social), is very much contingent on how it is implemented, and how we choose to define the goal of a waste management system. In fact, depending on the waste stream, it may not even be the desired approach.

For the purposes of this discussion, I am going to (generally) confine my analysis to EPR programs that promote recycling based outcomes. This is often the most commonly used approach for printed paper and packaging, and is the model adopted by both Ontario and British Columbia (the latter being championed as a “best practice” model for EPR across North America). In future articles, I will also discuss issues surrounding EPR policies for the IC&I sector, and whether EPR should be a preferred model for end of life textiles.

Before continuing though, let’s pause for a moment to better understand what EPR is intended to do: (copy and pasted from a previous article I wrote)

1)    Encourage design for the environment: By forcing producers to bare the end of life management costs (in the case of printed paper and packaging, recycling costs) and meet recycled content quotas, the expectation is that producers will design their packaging in such a way that is more readily recyclable given existing infrastructure

2)    Contain Costs: By shifting end of life management costs onto producers, they will not only be incentivized to use more readily recyclable material, but do so in a way that minimizes material management costs. If producers are obligated to “foot the bill” of the entire system, then they have a greater incentive to reduce costs relative to a shared responsibility model where municipalities pay half. The steward lead EPR model is what is used in Recycle BC, and what is being considered for implementation in Ontario.

3)    Invest in recycling infrastructure to more efficiently capture and recycle light-weight materials: Under a full producer responsibility model, producers are tasked with the responsibility of operating the entire system, which not only includes a financial obligation, but a physical one as well. Previously, municipalities have traditionally served as the waste management operator, providing collection and sorting services. A 100% EPR Model will incent producers to invest and develop infrastructure that allows them to meet their legislative responsibility, which in turn, will result in investments in collection and sorting infrastructure to better problematic materials.

4)    Develop healthy and robust markets for composite and light weight packaging materials: Given that producers will bear the responsibility of managing all packaging at end of life, this will require significant investments in end markets and end use applications of light weight and composite materials. Despite the increased proliferation of light weight packaging, there remain few viable end markets for these materials. As such, if an EPR model is implemented that obliges producers to recycle their packaging, they will have to develop new and innovative ways to use these materials.

With the above in mind, it is extremely clear why we should implement EPR in Canada (and abroad) – more recyclable packaging, innovations in waste management infrastructure, all at a reduced cost to taxpayers? Where do I sign up?

Unfortunately, if we were to look solely at the data, and carefully examine each of the aforementioned objectives and see whether EPR helps achieve them, EPR in it its current form achieves (and has achieved) the exact opposite.

*An EPR program for packaging waste that is centered around a recycling based outcome is destined to fail*

I want to place a significant emphasis on the word “recycling”. I’m not saying that EPR programs don’t work, but I am saying that EPR programs (for PP&P) premised on a recycling model absolutely doesn’t.

Now, I know the immediate reaction to this is going to be doubt, cynicism, and perhaps even anger. After all, how can recycling be bad for the environment and the economy? For much of the past three decades, waste management in Canada has largely been defined by our recycling programs, with the Blue Box seen as an international symbol of our leading approach to sustainability.

However, in many ways, we have become a victim of our own success - both households and policy makers now conflate recycling with sustainability.  When discussing the “waste” problem, it is often framed as “We aren’t recycling enough, only 9% of plastics are recycled in Canada”. When we talk about goals, we often hear “We want to create more recyclable packaging, encourage households and industry to recycle, strive for higher recycling rates ” etc. The premise of our EPR programs for packaging waste emphasize “recycling” as being the desired outcome for EOL materials. Ultimately, if it can’t be recycled, it is characterized as being “bad” for the environment.

As a brief anecdote, during the summer of 2019, York University conducted a study to ascertain what the public thought about various waste management initiatives. Participants were asked to rank, from best to worse, which end of life scenario resulted in the greatest environmental impact

As you can see from the graph, recycling came out number 1, followed by reuse, and then composting. In last place, was waste reduction.

Why do these findings matter? Because reduce, reuse, recycle isn’t just a catchy phrase – it is the order in which we are supposed to things. Recycling is our third most preferred option.

Our fixation on recycling, as both consumers and policy makers, is what makes our waste management system unsustainable, and why EPR programs premised on recycling based outcomes have not, and will not work.

Recycle BC: A look under the hood

The Recycle BC program is often touted as a “best practice” model of steward lead extended producer responsibility. Because of its perceived success, it is seen as a potential model to be replicated in Ontario and other jurisdictions across the United States. Late last year, York University undertook a detailed study examining the economic and environmental performance of Recycle BC recycling program for printed paper and packaging waste, comparing it to Ontario’s Blue Box model. So with that in mind, it seemed prudent to undertake an examination of economic and environmental performance

Note: This study will be released by the end of this month, but the following is a high level summary of some of our findings.

From the onset, I would like to stress that this study used publicly available from Recycle BC’s annual reports. There was absolutely no data manipulation what so ever – we only organized the data in a way to facilitate year over year comparisons, or calculate correlation coefficients. Our requests for additional data, or clarity surrounding existing data, were not returned by Recycle BC

In this study, we examined the following:

·       A review of historical recycling performance (tonnes collected, recovery rate, recovery rate per capita etc.)

·       Service Coverage and Cost (Including an examination of revenue, fee revenue, investment income and material management costs by activity type)

·       The relationship between recovery rates, and P&E, gross expenditure, service rate etc.

·       An examination of what is being recovered (material mix), and the subsequent environmental impact

Our findings show that program costs have increased by approximately 26%, while program performance (measured as % tonnes diverted) has increased by 1%. The most significant driver of increase in costs can be traced to increase in per tonne material management costs (which increased by 20.5% year over year between 2017 and 2018). Due to the lack of granularity in Recycle BC’s annual reports, the study could not attribute this cost increase to a particular activity (collection, processing etc.).

Perhaps of greatest interest is that the rate of year over year cost increases is greater in British Columbia (26.5%) than it is in Ontario (18.25%), when compared over the same time period. This was a genuinely surprising result, in that the narrative surrounding the efficacy of EPR models is that Ontario is a laggard relative to BC. BC's performance is actually strikingly similar to Ontario. Most jurisdictions have an equilibrium point, which can best be characterized as the recycling rate a given area is likely to achieve independent of major programmatic change or policy intervention. In Ontario, it is roughly 60%, while in BC, it appears to be 75%. Anything above this equilibrium point is likely to require significant investments in both infrastructure and outreach, often coming at an extremely high marginal cost. In the case of BC, for every 1% increase in the recovery rate, program costs are expected to increase by $5.4 million dollars

By all available metrics, 2015 was actually the best performing year of the program - this is atypical, considering program development costs exceeded 8 million dollars (compared to an average of $218,000 since). Essentially, despite the growing pains of a new program - the year of inception has been the most successful (unless you measure it in terms of service coverage)

Lastly, based on the types of material RCBC is recovering, a significant % of year over year increases in diversion can be attributed to increased recovery of glass. It should be noted that due to a lack of available data for diverted tonnes by detailed material type, it is extremely difficult to quantify the carbon footprint of the Recycle BC program with a great degree of accuracy. At present, the Recycle BC annual reports contains information about broad “umbrella” categories, such as newsprint, metals, glass and plastics.

However, our preliminary findings suggest that the carbon impact has potentially decreased year over year, given the types of materials being recovered. A fall in the recovery of metals results in a lower overall carbon impact from recycling, despite the increased recovery of glass cullet. This suggests that that the total amount being recycled, matters less than what is actually recycled.

This last point is of critical importance, and allows for a segue into why a recycling based program does not work. Our system, based on the types of materials being generated, technologies to sort and process those materials and available end markets, is no longer compatible with a “recycling first” approach.

The evolving tonne – Who is to blame for “recyclables” that can’t actually be recycled?

One of the greatest challenges facing the waste management industry is the issue of “The Evolving Tonne”. Increasingly, producers of packaging are switching into light weight, and composite materials, that historically, cannot be readily managed in the existing recycling system.

While elaborating on the technical dimensions of system incompatibility are beyond the scope of this article, light-weight materials are more difficult to collect, difficult to sort and process, and virtually impossible to sell. At present, there very few end markets or applications for composite and light-weight materials. Simply put, the waste management system was not built for these materials.

This latter point is where opinions on recycling diverge. There are those that belong to a school of thought that “If you build it, they will come”. This is one of the outcomes that EPR is intended to achieve – producers, in an attempt to meet legislative requirements obliging them to recycle, will develop the requisite technology and infrastructure to do so. Producers will be able to develop new markets for these materials, leading to both technological and economic innovation. While this all sounds wonderful in theory, it has not been born out in reality.

Why a producer makes the packaging decisions they do is largely a function of economics and safety – some factors include: Does the packaging I use make it safe to transport materials, protect the product, avoid spoilage or contamination, increase shelf life, increase the number of units I can place on the shelf/in the store, allow for easy brand recognition etc.

All things being equal, the recyclability of a package his historically ranked as a relatively low priority for producers. Obviously they must be punished for this willful disregard for mother earth! Actually, no – in a somewhat ironic twist, producers are making products that REDUCE the overall amount of packaging used, which is the foremost goal of a waste management system. Once again, our fixation on recycling has completely lost sight of the fact that our goal *should* be based on environmental based outcomes, not recycling rates.

The increased adoption of light weight packaging can be attributed to the benefits of durability, transport and ease of consumption, while also allowing for a reduction in overall packaging used. Interestingly, when taking a life cycle approach, the environmental impact of light weight and composite packaging can actually result in superior environmental outcomes when compared to conventional packaging. This may seem counter intuitive, given the relatively low recyclability of these materials, but upstream benefits (packaging reduction, logistical efficiencies when transporting materials, avoided food waste/spoilage, discretionary consumption etc.), actually outweigh whatever you lose from not recycling that material.

Who should foot the bill?

Attempting to recycle these materials comes at an enormous cost (to municipalities, producers and even the public). In Ontario alone, the annual costs of the Blue Box program exceed $300 million dollars, with program costs more than doubling in 12 years. Year over year increases in the cost of managing recyclables are in the double digits (in both Ontario and BC), and any attempts to contain costs have been met with abject failure.

Who should foot the bill depends on who you ask. A contention made by municipalities in the past, is that the increases observed in the cost of operating the recycling program were a direct result of producers developing packaging that was incompatible with the existing recycling infrastructure.  Municipalities have felt that they are “subsidizing” the packaging decisions made my manufacturers, and as a result, producers should bare 100% of the cost for their packaging choices. The underlying premise behind the Recycle BC model is that a steward lead EPR program will lead to cost containment, as private companies have a vested financial interest in achieving economic efficiencies and cost savings. In fact, this notion has been the “selling point” of a producer run EPR model in several jurisdictions. Since it’s “working” in BC, then surely it is the best approach?

As noted above, the answer to that is a resounding no. There is no evidence to suggest that a steward run EPR model (focused on recycling) is effective in either economic or environmental terms. Anecdotally in conversations with packaging companies, the notion that a CPG company can run a waste management system more effectively than a municipality is a curious conclusion. Building a really nifty cookie container is fundamentally different than identifying efficiencies in waste collection.

*Note* If you have actual data that contradicts this point, please share. I fully expect to be disagreed with, but in order to have a meaningful dialogue, we must root our conversations in data that people are willing to share. Simply saying “Your wrong” is not constructive.

Now some of you may be saying, well, if producers are choosing to make packaging that isn’t readily recyclable, shouldn’t they pay for it? After all, the goal is to encourage them to design more recyclable products, and invest in the infrastructure and end markets to recycle them.

In my opinion, that answer is no. While I do not say this to absolve producers of their physical and financial responsibility for managing end of life waste, I am saying that making them pay for the costs of recycling is neither fair, nor tenable in the long run.

Unless something radically changes in either our ability to capture light weight material economically, or find a viable and sustained end use application, the costs of recycling are going to continue to increase (and if past history is any indicator of what is to come, that increase is enormous). As an example, if Ontario were to find a way to recycle all light weight plastics, but have producers incur that costs, the *additional* costs associated with material management would increase by more than $400 million. While this assumes a rather unrealistic scenario of everything being recycled, and keeps costs fixed based on existing recycling costs, we have to be willing to ask ourselves, how much money do we want to spend attempting to recycle everything, everywhere? Does it make sense trying to recycle a plastic laminant pouch for more than $2500 a tonne?

One could make a compelling argument that if the environmental benefits of recycling light weight/composite materials was significant, it would rationalize the cost (to a degree). However, the environmental “return” for many of these materials (expressed as dollars spent on recycling activity to abate one tonne of carbon), is enormous. In more layman’s terms, we are spending awful lot of money, trying to achieve a fairly poor environmental result (see figures 2 and 3 below). In a 2016 study I published “Optimizing emissions targets for residential recycling programs” https://www.ncbi.nlm.nih.gov/pubmed/27491372,

I made the observation that you can abate more carbon at a lower overall cost, while recycling less material. To echo a sentiment I made earlier, what is important is what you recycle, not how much you recycle.

Figure 2

Figure 3

The end result to these rapidly escalating costs, is ultimately born by the consumer. At the end of the day, irrespective of whether it is packaging companies or municipalities that pay for the costs of a recycling system, those costs are just passed on to Canadians (in the form of increases in the price of products, or property taxes)

If recycling isn’t the answer, then what is?

By this point, I have hopefully made my case for why an EPR program premised on recycling is neither the most environmentally or economically sustainable model. This necessitates the question “if recycling isn’t the answer, what is?”

In my opinion, it is important to remember that we have more options than just recycling when it comes to managing our waste – waste reduction, reuse and waste to energy are all options at our disposal (pun not intended), and our goal should be focused on achieving optimal environmental outcomes, in an economically tenable and sustainable way. What good is trying to chase higher recycling rates, if it doesn’t yield a more desired outcome?

While this article may seem like I am an opponent of EPR, I’m really not. I whole heartedly agree with the conceptual premise of the approach – producers should be responsible for keeping end of life materials out of landfills. However, why does recycling have to be the only path to achieving that goal? Government should provide producers with the flexibility and latitude to explore whatever option makes the most economic and environmental sense for their products, such that they are diverted, but without prescribing what the end of life outcome should be.

When evaluating the merits of a particular package, including what its optimal end of life destination is, it is imperative that we use life cycle thinking to guide our decisions, as opposed to an arbitrary recycling rate goal.

Jurisdictions across Canada and the world need to rethink both attitudes and approaches towards recycling and EPR. Perhaps the greatest challenge facing the sector is that we no longer have viable end markets or applications for much of the packaging that we attempt to recycle. The unexpected fallout of the Chinese National Sword (which has grown to include other markets in South East Asia), has demonstrated the short sighted nature of attempting to recycle everything, everywhere.

The deterioration of end markets calls into question the approach of fixating on producers making (and paying for) recyclable packaging. EPR legislation should provide producers multiple avenues in their road to circularity, which will require policy makers to think beyond the (Blue) box and remember that reduce, reuse, recycle is not just a catchy phrase, but how we should prioritize a waste management system.