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03/05/2016

Recycling industry under pressure from falling raw material prices

Sustainable Dev.

Recycling industry under pressure from falling raw material prices

The average EU citizen generates 503 kilos of waste every year.

[Jo Ann Deasy/Flickr]

Businesses are abandoning recycled materials in favour of cheaper virgin materials. The French recycling industry’s profits fell by 2% in 2014. EurActiv France reports

The price of virgin raw materials started falling in 2014, a trend that continued in 2015. As raw materials become rarer, businesses should in theory be forced to recycle more. But in the short term, cost is a more persuasive factor than any environmental benefit of recycling.

The French recycling industry’s revenue fell by 2% in 2014 to €9 billion for a total of 74 million tonnes of recycled materials. These figures vary greatly according to the sector.

2014 was a delicate year for the ferrous metals sector, which is highly sensitive to global market fluctuations, particularly in China. Jean-Pierre Gaudin, the President of the French recycling federation’s metals branch (FEDEREC), believes 2015 will be even harder.

The news was better for recyclers of non-ferrous metals, who recorded revenue growth of 6% in 2014, with the tonnage recycled also up 4.5% on the previous year.

The recycling industry cemented its position as a major employer in France, increasing its workforce by 1.8% from 2013 to 2014. It now boasts 1,300 companies with a total of 26,500 employees.

A boon for the environment

Recycling saves a massive amount of CO2 emissions compared to using virgin raw materials. With COP21 fast approaching, this weighs heavily in its favour.

“Our production and consumption habits, the way we exhaust resources and accumulate waste, have to change. We have to move from a linear to a circular economy,” said Jean-Philippe Carpentier, the President of FEDEREC. According to consultants McKinsey & Company, Europe would save around €336 billion on raw materials every year with an effective circular economy package.

A 2008 study by the Bureau of International Recycling found that the recycling industry reduced global CO2 emissions by almost 2%, preventing the release of 551 million tonnes of CO2. FEDEREC wants to update this study “to demonstrate the intrinsic value of recycled products” and show that every tonne of recycled material cuts the carbon footprint of the raw material in half.

According to Carpentier, one solution for stabilising the industry would be to “have a more dissuasive CO2 tonnage price (which varies from €8 per tonne in France to €150 per tonne in Sweden), and maybe establish a flexible bonus for CO2 emissions avoided, based on the price of raw materials”.

Political progress?

In France, “there is increasing awareness from the economy and ecology ministries. We are working together to find a way to help the recycling industry, notably the plastics sector, to deal with falling oil prices. But there has been no particular progress at EU level,” Jean-Philippe Carpentier said.

The European Commission decided to ditch the Circular Economy package in December last year. A victim of the “Better Regulation” strategy, this proposal aimed to bring in a legally binding recycling target of 80% for packaging like glass, paper, metals and plastic by 2030, and 70% for municipal waste.

>>Read: Circular Economy package to be ditched and re-tabled

“The change of European Commissioner held this project up. We expect a harmonisation of EU legislation and taxation,” FEDEREC’s head said.

The European executive launched a consultation on the new circular economy package in May. The results will be presented later this year. 

Background

European citizens generate an average of 503 kilos of waste every year. The real amount varies from 300 to 700 kilos depending on the member state.

According to a report published in March by Eurostat, the European Union Office of Statistics, in 2011, 37% of this waste ended up in landfill, 25% was recycled and 15% was composted. Around 23% was incinerated, generally to recover the energy.

Germany, Austria, Belgium, Denmark, the Netherlands and Sweden have largely abandoned the system of burying rubbish. Romania, Bulgaria and Malta on the other hand, still resort to landfill for almost all of their waste.

A report by the NGO Friends of the Earth Europe revealed that only 25% of Europe's municipal waste was recycled.