European recyclers are therefore in favour of an ambitious revision of the WSR that effectively combats illegal shipments while levelling the playing field with extracted raw materials. In that respect, it is instrumental to simplify procedures for intra-EU waste shipments while ensuring free, fair, and sustainable access to international markets for raw materials for recycling (RMR) that are used directly in production processes. This is of particular importance for base metals, paper, or some plastics that have undergone a material recovery process and for which there is no sufficient demand in the EU.
In view of the upcoming vote at the ENVI Committee on the WSR report of Rapporteur Pernille Weiss, EuRIC and FEAD urge policymakers to consider the following elements that are essential for the transition to a more circular economy in Europe within the WSR:
Need for a better functioning EU internal market for recycling:
While the Commission’s proposal introduces certain improvements to the current legislative framework on intra-EU shipments of waste by establishing electronic procedures and easing fast-track shipments for materials recovery, achieving a strong circular economy requires some additional changes. The role of pre-consented facilities still needs to be strengthened by establishing objective and harmonized requirements, including for refusals and revocations. In addition, and among other aspects, Annex VII procedures should maintain the current requirements, which cannot be complicated by introducing an electronic data interchange system. Also, financial guarantees need to be updated, introducing a risk-based approach.
Insufficient demand for RMR in Europe
Substituting extracted raw materials with raw materials from recycling saves resources, CO2, and energy, regardless of the material substituted. While the vast majority of waste recycled in the EU stays in the EU, exports of raw materials from recycling to OECD and non-OECD countries directly contribute to the balance of supply and demand. This is particularly the case for steel scrap and other base metals, such as steel, copper, or aluminium, or recovered paper, where supply exceeds demand in the EU and where value chains are intrinsically global.
Restricting access to international markets goes against recycling
Contrary to some false claims, export restrictions will directly damage the availability of raw materials from recycling for European energy-intensive industries, as has been witnessed in non-European countries. As is well known, trade and market openness go hand in hand with better economic performance. This also applies to the recycling industry, for which unhindered access to international markets is essential for balancing cyclical demand and remaining competitive. A strong European recycling and waste management industry needs economies of scale that allow for more investments in innovation and increased capacities. The absence of competitive end-markets for RMR will negatively affect waste collection, recycling, and investments to scale up recycling capacities. As such, the proposed export restrictions will put at risk the ability to achieve EU recycling targets.
Increasing the competitive disadvantage for recycled materials
A loss in competitiveness due to undiscriminated export restrictions will prioritize extracted raw materials over RMR. This negative impact is not accounted for in market prices. Moreover, extracted raw materials are not subject to any trade restrictions under EU law and therefore render energy-intensive industries even more resource- and carbon-intensive.
Company closures, job losses, and no investments to scale up capacities
Recycling activity is funded by the sales of raw materials from recycling. A revision that hampers instead of boosts recycling in Europe will result in substantial job losses in an industry whose competitiveness largely depends on its ability to market raw materials from recycling to cover the costs of proper waste management. For instance, more than 50% of the turnover of some recyclers relies on exports outside the EU, simply because there is no sufficient demand in Europe. As a result, a number of recycling companies spread across the EU may have to close, resulting in direct and indirect job losses as well as diverting waste from recycling to incineration, landfilling, or illegal dump sites.
The above-mentioned points will particularly affect smaller Member States, and especially islands, where economies of scale do not exist and heavily rely on exports to the EU27, but also to third countries such as the UK, Turkey, the US, or Asia. In Ireland, for example, there are no paper mills and no large metal smelters, as the global nature of business led to their closure. Ireland’s markets for recovered paper and metals are mainly outside the EU (around 80 percent of the exports in 2021), especially in India in the case of paper (almost 30 percent of the exports in 2021). Even though EU markets will continue to be accessible following trade restrictions outside the EU, capacities will be covered with national paper/metals or paper/metals coming from neighbouring countries first. Considering the above-mentioned damaging effects of trade restrictions on the European recycling industry, including the loss in competitiveness, the industry will not be able to scale up capacities to import the waste from those (smaller) EU countries that need it.
For the revision of the WSR, European recyclers and waste managers recall the importance of differentiated export rules according to waste streams under Article 37 of the proposal. Export restrictions for non-hazardous waste, if any, shall solely target exports of problematic waste streams, such as mixed plastic waste and non-processed electronic waste (WEEE), end-of-life vehicles (ELVs), tires, or batteries. European recyclers also underline the importance of maintaining a distinct regulatory framework between OECD and non-OECD countries, as proposed by the European Commission. The definition of environmental sound management of waste with OECD countries shall be primarily done through OECD multilateral agreements, rather than unilaterally by the EU. At a time when the world is undergoing major geopolitical changes, it is essential to maintain a robust economic and environmentally sound trade relationship with historical EU partners. Any amendments that would result in aligning the legal framework for waste shipments applicable to OECD countries with non-OECD countries will be disproportionate and breach legal commitments that the EU and its Member States have taken with OECD countries.
