Packaging waste recycling in Europe: Is the industry paying for it?

This paper describes and examines the schemes established in five EU countries for the recycling of packaging waste. The changes in packaging waste management were mainly implemented since the Directive 94/62/EC on packaging and packaging waste entered into force. The analysis of the five systems allowed the authors to identify very different approaches to cope with the same problem: meet the recovery and recycling targets imposed by EU law. Packaging waste is a responsibility of the industry. However, local governments are generally in charge of waste management, particularly in countries with Green Dot schemes or similar extended producer responsibility systems. This leads to the need of establishing a system of financial transfers between the industry and the local governments (particularly regarding the extra costs involved with selective collection and sorting). Using the same methodological approach, the authors also compare the costs and benefits of recycling from the perspective of local public authorities for France, Portugal and Romania. Since the purpose of the current paper is to take note of who is paying for the incremental costs of recycling and whether the industry (i.e. the consumer) is paying for the net financial costs of packaging waste management, environmental impacts are not included in the analysis. The work carried out in this paper highlights some aspects that are prone to be improved and raises several questions that will require further research. In the three countries analyzed more closely in this paper the industry is not paying the net financial cost of packaging waste management. In fact, if the savings attained by diverting packaging waste from other treatment (e.g. landfilling) and the public subsidies to the investment on the “recycling system” are not considered, it seems that the industry should increase the financial support to local authorities (by 125% in France, 50% in Portugal and 170% in Romania). However, in France and Portugal the industry is paying local authorities more than just the incremental costs of recycling (full costs of selective collection and sorting minus the avoided costs). To provide a more definitive judgment on the fairness of the systems it will be necessary to assess the cost efficiency of waste management operators (and judge whether operators are claiming costs or eliciting “prices”).