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Use of Economic Instruments for Recycling in Lebanon Streg

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Use of Economic Instruments for Recycling in Lebanon Streg European Union – ENPI/2011/022-757 Support to Reforms – Environmental Governance, Beirut, Lebanon Project Identification No. EuropeAid/134306/D/SER/LB/3 Contract No: ENPI/2011/022-757 Economic Instruments to Create Incentives for Recycling in Lebanon March 2016 A project implemented by GFA Consulting Group GmbH / Umweltbundesamt / Mott Mac Donald This programme is funded by the European Union Your contact persons within GFA Consulting Group GmbH are: Constanze Schaaff (Project Director) Hans Lauritzen (Team Leader) Dr. Joy E. Hecht (KE4 – Fiscal Reform (EFI)) Lebanon Support to Reforms – Environmental Governance, Beirut, Lebanon EuropeAid/134306/D/SER/LB/3 Economic Instruments to Create Incentives for Recycling in Lebanon Authors: Dr. Naji Chamieh, Recycling Industry Expert Dr. Mohamad Ghassan Abiad, Data Collection Expert Mr. Fadi Doumani, Solid Waste Financing Expert Mrs. Karine Abdelnour-Tohme, Lawyer / Policy Analyst Prepared for: Dr. Joy E. Hecht, StREG Key Expert on Fiscal Reform March 2016 Disclaimer The content of this publication is the sole responsibility of the author and can in no way be taken to reflect the views of the European Union. Address: GFA Consulting Group GmbH Eulenkrugstraße 82 D-22359 Hamburg Germany Phone: +49 (40) 6 03 06 – 174 Fax: +49 (40) 6 03 06 – 179 E-Mail: [email protected] REPORT COVER PAGE Project Title: Support to Reforms – Environmental Governance, Beirut, Lebanon Project ID: ENPI/2011/022-757 Beneficiary Country: Lebanon Project Number: EuropeAid/134306/D/SER/LB/3 Contract Number: ENPI/2014/337-755 Country: Lebanon Project Beneficiary Contracting Authority Contractor Name: Ministry of Environment PAO GFA Consulting Group (Lead Partner) Address: Lazarieh Center, Grand Serail, Eulenkrugstraße, 82. Beirut, Lebanon Riad El-Solh 22359 Hamburg Beirut, Lebanon Germany Tel. number: +961 1 971 432/428 +49 (0) 40 603 06 174 Fax number: +49 (0) 40 603 06 179 E-mail: [email protected] [email protected] Constanze.schaaff@gfa- group.de Authorised Ghassan Sayah Lamia Chamas Constanze Schaaff person: Project Focal Point Project Manager Project Manager Date of report: March 2016 Author of report: Dr. Naji Chamieh, Dr. Mohamad Ghassan Abiad, Mr. Fadi Doumani, Mrs Karine Abdelnour-Thome Ministry of Environment: _______________ _______________ _______________ Project Administration Office: _______________ _______________ _______________ EU Delegation: _______________ _______________ _______________ [name] [signature] [date] Support to Reforms – Environmental Governance, Beirut, Lebanon This project is funded (Contract No: ENPI/2011/022-757) A project implemented by a by the European Union GFA Consulting Group led consortium TABLE OF CONTENTS Acknowledgements i Abbreviations ii 1 EXECUTIVE SUMMARY V 2 INTRODUCTION 1 2.1 Objective of this Study 1 2.2 Scope of Work 2 3 POTENTIAL FOR RECYCLING 3 3.1 Objective and Process 3 3.2 Waste Generation in Lebanon 3 3.3 Composition of Recyclable Material 5 3.4 Current Extent of Waste Sorting 7 3.5 Waste Collection Stream 7 3.6 Waste Treatment Capacity 9 3.7 Quantity and Price of Recycled Material 12 3.7.1 Recyclables Collected by Main Service Providers 12 3.7.2 Recyclables Collected by Scavengers 14 3.7.3 Recyclable Material Collected at the Source 15 3.7.4 Industrial Waste Recyclables Directly Collected by Third Parties 16 3.7.5 Imports of Virgin and Off-Prime Material 17 3.7.6 Exported Recyclable Materials 19 3.8 Recycled Material Surveyed 20 3.9 Reconciling the Recycled Stock 21 3.10 Conclusions 23 4 FISCAL MECHANISMS AND POLICY TO ENCOURAGE RECYCLING 24 4.1 Objective and Process 24 4.2 Overview of the Recyclable Market Players 24 4.3 Prices of Recyclables and of Imported and Exported Raw Materials 25 4.4 Making the Case for Recyclables as Raw Material in Industrial Processes 27 4.4.1 Major Player Absorptive Capacity 27 4.4.2 Production Cost Structure of Recycled Materials and 3 Incentive Scenarios 29 4.5 Conclusions 33 NameEconomic of Report Instruments for Recycling – March 2016 Support to Reforms – Environmental Governance, Beirut, Lebanon This project is funded (Contract No: ENPI/2011/022-757) A project implemented by a by the European Union GFA Consulting Group led consortium 5 FUNDING SOLID WASTE MANAGEMENT 34 5.1 Objective and Process 34 5.2 Existing Sources for Financing of Solid Waste Management 34 5.3 Alternative Instruments Supporting Solid Waste Management 36 5.3.1 Landfill Taxes 36 5.3.2 Municipal Waste Charges 36 5.3.3 Incineration Taxes 37 5.3.4 Tradable Permits for Waste Disposal 37 5.3.5 Recycling Credits 38 5.3.6 Deposit / Refunds 38 5.3.7 Extended Producer Responsibility (EPR) 38 5.3.8 Packaging Taxes 38 5.3.9 Green Public Procurement 38 5.4 Conclusions 46 6 EXTENDED PRODUCER RESPONSIBILITY 47 6.1 Objective and Process 47 6.2 Overview 47 6.3 The Debate about EPR 49 6.4 Examples of EPR Schemes 49 6.4.1 The Waste Electrical and Electronic Equipment Directive (WEEE Directive) 49 6.4.2 Eco-Lef (Tunisia) 49 6.4.3 Eco-Emballages (France) 50 6.4.4 PRO Europe s.p.r.l. 51 6.4.5 Repak (Ireland) 52 6.5 Products that Could Benefit from EPR in Lebanon 52 6.6 Suggested Areas to be Further Studied 53 6.7 Conclusions 54 7 RECOMMENDATIONS 55 ANNEX 1: Bibliography 59 ANNEX 2: List of People Met 62 ANNEX 3: Major Points Discussed during Meetings with several Stakeholders 64 ANNEX 5: Survey Results 72 ANNEX 5: Data Available Online through Media 77 ANNEX 6: Plan Proposed by HE Minister Akram Cheayeb 10, 2015 86 ANNEX 7: Plan Proposed by the Association of Lebanese Industrialists 88 ANNEX 8: Customs Database of Imports and Exports of Raw Materials 90 ANNEX 9: Customs Database of Imports and Exports of Raw Materials 98 NameEconomic of Report Instruments for Recycling – March 2016 Support to Reforms – Environmental Governance, Beirut, Lebanon This project is funded (Contract No: ENPI/2011/022-757) A project implemented by a by the European Union GFA Consulting Group led consortium List of Tables Table 1: Lebanon Population, Waste Generation, and Treatment Capacity, 2015 vi Table 2: Data on Current Recycling, 2015 vii Table 3: Lebanese Population and Waste Generation, 2015 4 Table 4: Waste Generation and Recycling by Formal Sector Service Providers in Major Cities and Regions of Lebanon 6 Table 5: Waste Treatment Actual, Under Construction, and Operational Capacity 9 Table 6: Recyclables Generation and Main Service Providers’ Collection, 2015 11 Table 7: Market Prices of Recyclables for Selected Waste Service Providers, 2014 13 Table 8: Trash Collection by Scavengers in Lebanon, 1999-2000, in tons 14 Table 9: Selected Data on Source Collection and Market Price in Lebanon 15 Table 10: Recycling Data from LEPAP Industrial Audits, in tons/year 17 Table 11: Materials Imported for Manufacturing or Resale, 2011-2014 18 Table 12: Exports of Recyclable Material, 2011-2014 19 Table 13: Quantities Recycled in tons, by Material 20 Table 14: Recycling Data Reconciliation, in tons, 2015 21 Table 15: Recycling Turnover at Market Price, 2015 22 Table 16: Import, Export. and Recycling Prices in $US/ton, 2015 26 Table 17: Estimates of Potential Annual Use of Recycled Material, in tons 28 Table 18: Subsidies under 3 Scenarios, in $US/ton 30 Table 19: Comparison of Instruments for Solid Waste Management Cost Recovery 39 Table 20: List of Meetings with Stakeholders 62 Table 21: Major Points Discussed with Stakeholders 64 Table 22: Survey Form Used in Data Collection 72 Table 23: Survey Results Adjusted by Media of the Companies Buying Recyclables, 201474 Table 24: Customs Database for Imports and Exports Used as Raw Materials 90 Table 25: Available Recycling Technologies 98 Table 26: Recyclable Technology CAPEX and Partial OMEX 103 NameEconomic of Report Instruments for Recycling – March 2016 Support to Reforms – Environmental Governance, Beirut, Lebanon This project is funded (Contract No: ENPI/2011/022-757) A project implemented by a by the European Union GFA Consulting Group led consortium List of Figures Figure 1: Lebanese Waste Recycling Stream 8 Figure 2: The Expanded Hierarchy of Waste Management 37 Figure 3: Eco-Lef Modus Operandi 50 NameEconomic of Report Instruments for Recycling – March 2016 Support to Reforms – Environmental Governance, Beirut, Lebanon This project is funded (Contract No: ENPI/2011/022-757) A project implemented by a by the European Union GFA Consulting Group led consortium Acknowledgements The report was prepared by Naji Chamieh (Team Leader), Mohamad Ghassan Abiad, Fadi Doumani and Karine Abdelnoor-Tohme. The authors would like to express their deep gratitude to Antoine Abou-Moussa, Rawan Dgheim, Ruba Rizk and Hagop Harfoushian, who assisted in data collection and carrying out the surveys under extremely challenging circumstances. The authors would like to extend their appreciation to Joy Hecht, StREG Key Expert for Fiscal Reform, who guided the work and reviewed the document, Hans Lauritzen, StREG Team Leader, Lamia Mansour, StREG Key Expert for Policies and her team and Constanze Schaaff, GFA Portfolio Manager/Senior Consultant. The authors would also like to wholeheartedly thank the Ministry of Environment Advisors and high-level staff for their sustained collaboration, notably Manal Moussalem, Senior Advisor, Youssef Doughan, Advisor, Bassam Sabbagh, Head of Urban Environment Service and Marwan Rizkallah, World Bank LEPAP Project Manager. The authors would also like to commend all the Lebanese counterparts for their time and insight, and their help to bring this task to fruition. Their names and affiliations are attached in Annex 2. This report should be cited as follows: Chamieh, Naji, Mohamad Ghassan Abiad, Fadi Doumani, and Karine Abdelnour-Thome, March 2016. “Economic Instruments to Create Incentives for Recycling in Lebanon.” Prepared for the Lebanon Ministry of Environment through the European Union Support to Reforms – Environmental Governance (StREG) Project.
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