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Consultation Paper on Producer Responsibility for Non-Packaging Waste Agricultural Plastics
FUTURE OPTIONS
20. This Section discusses three main options. The costs and benefits of the options are assessed in the accompanying Initial Regulatory Impact Assessment.
Option 1
Continue as at present and trust that the existing pattern of unrelated voluntary and market-based schemes, covering only local or regional areas of Great Britain, will subsist or develop. These would operate with no intervention from the Executive.
Option 2
Introduce a formal, but voluntary, producer responsibility scheme, either for Scotland only or across Great Britain, possibly along the lines of the FFPG but with the addition of specific initiatives to inform farmers of the importance of supporting plastics suppliers who are members of the scheme. Government intervention would be minimal, and concerned mainly with bringing the parties together for the purposes of agreeing the scheme's constitution and mode of operation. The amendment of the Environmental Protection Act 1990 discussed for Option 1 will also take place.
Option 3
Introduce a statutory producer responsibility scheme, either for Scotland only or across Great Britain. This would mean making Regulations requiring the manufacturers and importers of non-packaging agricultural plastics to ensure the collection and recovery or recycling of certain proportions of waste farm plastics. The Regulations would specify the recycling and recovery targets producers would have to meet and prescribe penalties for freeloading, failure to achieve the targets and other non-observance of the scheme's requirements.
Producer Responsibility Regulations
21. Past experience suggests that Option 1 is unlikely to be a sustainable option. Subject to highly convincing arguments to the contrary in response to this consultation, therefore, we consider that Producer Responsibility is a more effective and comprehensive means of dealing with non-packaging waste agricultural plastics than either voluntary arrangements or dependence on the market as this will ensure a coherent and consistent approach to their collection, recovery, recycling and disposal.
22. Both voluntary and statutory schemes will lead to increased collection and recovery/recycling of waste farm plastics. It might be possible to develop a voluntary producer responsibility scheme, although from the outset it would have to be clear that both domestic producers and importers would be expected to sign such an agreement; and it would be self-evident that if the scheme failed, e.g. if there was "free riding", or the volume of waste being sent for reprocessing was being affected by adverse economic factors, then there would be no alternative to introducing a statutory scheme. The inherent weakness of a voluntary scheme such as that described at Option 2, however, is that it is unlikely to be sustainable unless Government participation also extends to ensuring comprehensive producer participation - and ongoing participation - in the scheme. That implies the use of sanctions against non-participants which in turn implies the need for legislation to make those sanctions available. That suggests aiming for a statutory scheme in the first place.
23. A statutory scheme, although potentially more burdensome to industry than a voluntary approach, would be more immune to being undermined by free-riders. It would also be more immune to market conditions and therefore more likely to guarantee consistent volumes of recyclable material to the two existing recycling plants in Great Britain able to deal with this waste. In the medium to longer term it will potentially also create the demand for further capacity. Producer Responsibility Regulations could be made under the powers provided in sections 93-95 of the Environment Act 1995 ("the 1995 Act"). An outline of how such a scheme might operate is set out below.
What should the Obligations be?
24. Scottish Ministers are empowered to make Producer Responsibility Regulations under sections 93-95 of the 1995 Act "for the purpose of promoting or securing an increase in the reuse, recovery or recycling of products or materials". Regulations could therefore be designed to impose obligations on producers for the collection and recycling of non-packaging farm plastics waste to specified target levels. It is expected that the obligations would be monitored and enforced by the Scottish Environment Protection Agency (SEPA) and, if applied throughout Great Britain, the Environment Agency in England & Wales.
Who should be Obligated?
25. Farmers would not be "producers" in terms of producer responsibility legislation and would not be obligated. However, as with any producer responsibility scheme it is likely that some or all of obligated companies' compliance costs will be passed on to the customer. The obligation on producers to recover waste may also mean changes to their terms of business. Farmers may therefore be expected to manage waste plastics in such a way as to make it easier for the producer (or waste contractor acting on his behalf) to collect the waste, or account for different forms of plastics waste collected. Doing so is therefore likely to mean a rise in their costs, whether in price or as additional effort. Individual farmers will undoubtedly find their own balance of costs and effort between, at one end of the scale, doing nothing and, at the other, segregating or cleaning the waste prior to uplift.
26. There are a number of business sectors that could be obligated to collect and recycle non-packaging farm plastics waste. Polymer suppliers, manufacturers, retailers/distributors and importers are all involved in supplying the material. The main disadvantage of a shared producer responsibility approach - i.e. where a 100% obligation is shared between a number of parties - would be the concomitant complexity of calculating an agreed share-out of the burden between the sectors and of calculating the obligation for each business within each sector. This would result in a complex set of Regulations which hardly seems justified for this particular waste stream. Consequently, a shared approach is not being proposed.
27. A single point of obligation would be more straightforward to legislate for, enforce and comply with and be more transparent to customers and other stakeholders. It would place the burden on only one sector in the supply chain, for example, the manufacturers and importers of non-packaging farm plastics waste. Importers must be obligated equally with manufacturers in order to avoid the "free-riding" problems that led to the demise of the FFPG system and to ensure a level playing field for all stakeholders. This is the narrowest point in the supply chain; it is these producers who supply the material into the market in the first place.
28. There is also the question of whether a small business threshold should be introduced, as is the case in the Packaging Regulations. Given the size of this particular market and the type of product, even a small supplier of farm plastics in terms of tonnage can supply a relatively large number of customers. We are inclined to think that the inclusion of a threshold would allow such suppliers to compete unfairly with larger rivals. On the other hand, if no de minimis threshold were set, the producer responsibility obligation might be held to be a disproportionate burden for the smaller producers who will have fewer resources to meet the financial and administrative demands of Regulations. However, we understand that there are unlikely to be many small suppliers to this particular market. Although at this stage the Executive is not considering introducing an exemption for small businesses, we would welcome comments on this point.
How would a Producer Responsibility Scheme work?
29. The simplest and most effective approach would be to place an obligation on every business which imports or manufactures farm plastics products. These businesses would be the "producers". The typical producer responsibility scenario involves producers being required to ensure the collection and recycling of specified amounts of waste product. They are given the option of discharging their obligation direct or collectively, through a compliance scheme, ie, a body which carries out the collection and recovery/recycling obligations on behalf of its members.
30. In order to meet their collection and recovery obligations producers of non-packaging farm plastics will have to ensure that an adequate waste collection infrastructure is in place. They will also need to know whether all waste plastics should be recycled or whether there should be an element of other forms of recovery (see the section below on Recovery and Recycling for an understanding of what these terms mean). Specifically, should there be incineration for energy recovery. The Executive would welcome the views of consultees on this point. It will also be worth taking account of the discussion of the costs and environmental disbenefits of incineration compared with recycling as discussed in the accompanying Regulatory Impact Assessment.
31. It is envisaged that, following the extension of producer responsibility to non-packaging farm plastics, the co-collection of packaging and non-packaging plastics waste would take place. There is a potential difficulty with this in that it will be essential for data auditing purposes for producers to be able to differentiate between packaging and non-packaging plastics. For them to be able to do so cheaply will require farmers to cooperate by keeping their packaging and non-packaging plastics separate rather than mixed in a single pile. Farmers may not have, or may not be inclined to use, the extra land required to do so. The Executive would appreciate farmers' views on this point.
"Recovery" and "Recycling"
32. It is proposed to adopt the definition of "recycling" as contained in the Packaging Regulations, ie:
"recycling means the reprocessing in a production process of the waste materials for the original purpose or for other purposes including organic recycling but excluding energy recovery".
33. This means that the waste agricultural plastics would go through the process of collection, sorting and treatment (as necessary) before they are recycled in a production process, eg, in a melt process which puts the waste materials back into productive use. It is only at this final stage that the materials are considered to be recycled.
34. If there were also provision for recovery through other operations (since recycling is a sub-set of recovery) this would mean incineration with energy recovery. However, in considering this, consultees need to be aware that there are recent European Court of Justice ("ECJ") judgments which would have an effect on the nature of the recovery operation that would qualify.
35. In June 2003, following the ECJ judgments referred to, the European Commission issued a communication on the circumstances under which incineration of waste constitutes an energy recovery or a waste disposal operation. Under the terms of this communication, municipal waste incinerators and clinical waste incinerators, for example, are considered to be primarily undertaking waste disposal operations and can no longer be recognised as reprocessing (i.e. recovery) operations. However, certain operations will continue to be recognised as energy recovery operations. These are likely to include sites burning refuse derived fuel and sites burning selected non-packaging (and packaging) wastes (on their own, with other fuels, or co-incinerated with other wastes) with recovery of energy for heating and/or power. At this stage legal advice is still being sought but consultees should be aware that there are possible changes ahead as to which operations constitute recovery.
Compliance Schemes
36. Compliance schemes established to discharge producers' obligations would be open to membership by any importer or manufacturer of farm plastics (and other obligated businesses should they be deemed to be "producers" in terms of the scheme as finally adopted). We expect that compliance schemes for farm plastics would be similar in form to those operating under the Packaging Regulations. That is, they would undergo similar approval and registration procedures before being permitted to operate. Once operational, the recovery obligations of their members would transfer to the compliance scheme and the scheme would be responsible to SEPA (or the Environment Agency in England and Wales, as appropriate) for the satisfactory discharge of those obligations. We envisage that packaging compliance schemes will be interested in participating in a farm plastics scheme, given that waste packaging plastic is already a recoverable material. Indeed, the Executive hopes that the introduction of producer responsibility for farm plastics will make it viable to collect waste packaging plastics from farms where this does not already happen. We would welcome views from consultees on the best way of encouraging a cooperative cost-effective approach to the collection of packaging and non-packaging farm plastic waste.
Targets
37. An essential element of the Executive's environmental strategy is to increase the amounts of waste which are recycled. It would therefore be appropriate to set targets for the collection and recovery or recycling of waste farm plastics. Targets may be expressed in one of several ways. For example, the target could specify the "recycling" of a specified volume or proportion of waste to supplied product per annum; or it could require a specified level of "recovery" within which a minimum amount of recycling would have to be achieved (NB recycling is a form of recovery); or it might involve a target for "collection and recycling" of a certain amount. The relatively small amount of waste involved does not seem to justify a complex target. We also wish to keep the scheme flexible so as to secure progressively rising levels of recovery of farm plastic waste.
38. In determining what the target should be, it will be important to consider the existing and potential reprocessing capacity available. It is also important to consider where the main difficulty is likely to lie, and where development of capacity is most needed. In the case of waste farm plastics, the main issue is collection and recovery and the main requirement is to develop collection systems which will achieve the desired recycling level. It is likely, therefore, to be much more effective to set a target which is expressed in terms of both collection and recycling. Thus, a target might be expressed as follows:-
Option 1
Collection and recycling of x% by end 2007
Collection and recycling of y% by end 2009
Collection and recycling of z% by end 2011
Such targets would secure the maximum environmental value but would be burdensome in terms of the cost and effort required to treat particularly contaminated waste.
39. A second option might therefore be to specify an overall recovery target, the majority of which would be required to be discharged through recycling. Thus a second option for targets might be as follows:-
Option 2
Collection and recovery of x% by end 2005
Collection and recovery of y% by end 2007
Collection and recovery of z% by end 2009
And, in each of the above years, for a minimum [say, 80%] of the recovery to be carried out through recycling.
This would allow waste which is particularly costly to prepare for recycling, e.g. heavily soiled and thus difficult to treat plastics, to be sent for energy recovery instead.
40. Comments are invited on these two options..
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