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. GFA Consulting Group GmbH / Umweltbundesamt / Mott Mac Donald.

Economic Instruments for Recycling – March 2016 i 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

Abbreviations

AfD Agence Française de Développement ALI Association of Lebanese Industrialists BBH Bekaa, Baalbeck and Hermel BML Beirut and Mount Lebanon CAPEX capital expenditure CAS Central Administration for Statistics CDR Council for Development and Reconstruction CFL compact fluorescent light bulbs EEA Environmental European Agency EPR extended producer responsibility EU European Union GDP Gross Domestic Product GIZ Gesellschaft für Internationale Zusammenarbeit GNI Gross National Income HDPE high density polyethylene ILO International Labour Organization, United Nations IMFU Independent Municipal Fund LDPE low density polyethylene LEPAP Lebanon Environmental Pollution Abatement Project MC Municipal Council Mn million MOE Ministry of Environment MOI Ministry of Industry MOIM Ministry of Interior and Municipalities MOSA Ministry of Social Affairs MOT Ministry of Tourism MSW Municipal Solid Waste NA not available NGO non-governmental organization NL North Lebanon OMEX operations and maintenance expenditure

Economic Instruments for Recycling – March 2016 ii 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

OMSAR Office of the Minister of State for Administrative Reform PET polyethylene terephthalate PP polypropylene PS polystyrene PVC polyvinyl chloride RDF refuse-derived fuel SL South Lebanon SME small to medium size enterprises StREG Support to Reforms – Environmental Governance, Lebanon Regional Solid Waste Exchange of Information and Expertise SWEEP-Net Network UNCHR United Nations High Commissioner for Refugees UNDP United Nations Development Programme UN-ESCWA United Nations Economic and Social Commission for Western Asia UNICEF United Nations International Children's Emergency Fund UNIDO United Nations Industrial Development Organization USAID United States Agency for International Development United Nations Relief and Works Agency for Palestine Refugees in UNRWA the Near East USAID United States Agency for International Development VAT value added tax WDI World Development Indicators (World Bank) WTE waste to energy ZWA Zero Waste Act

Economic Instruments for Recycling – March 2016 iii 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

WEIGHTS AND MEASURES

$US United States Dollar 1 = Lebanese Lira 1,500 = € 0.94365

# number

% percent

Kg kilogram

L liter m2 square meter

Economic Instruments for Recycling – March 2016 iv 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

1 EXECUTIVE SUMMARY

This study has been carried out by the StREG project with several objectives:  Collecting data with which to trace the flow of recyclable material and amount that is being or could be recycled;  Assessing whether incentives could be a useful tool to increase recycling, whether the savings in trash management costs resulting from recycling might be sufficient to defray these incentives overtime, whether a system of extended producer responsibility (EPR) could be a viable recycling policy, and whether it may be feasible to shift the costs of trash management to the users;  Where fiscal incentives are recommended, identifying the optimal legal and institutional structure for implementing them;  Reviewing the options for shifting the costs of solid waste management to the consumers.

Waste Generation and Treatment Estimating the total waste generated in Lebanon is challenging. Waste generation for legal residents of Lebanon is estimated at 1.75 million tons in 2015; however the waste generated by the actual population whose needs must be met is more than 2.35 million (Table 1). Non- organic waste stands at about 50% of the total, and recyclables around 35% of the total. The gap between recyclables and material cycles recycled is difficult to gauge; this study estimates it at 35% of the total recyclable waste. It is difficult to disaggregate waste generation among households, street sweeping, institutions and industries, which complicates the design of policies targeting each group. Moreover, when different categories of waste are mixed at the source and only sorted after being transported to the plant, the quality of all materials is reduced due to cross- contamination. This reduces the value of recyclable material and the quantity which can be sold. The waste treatment and under construction treatment capacity amounts to 5,128 tons per day for sorting (80% of the actual capacity needed), 2,413 tons for composting (75%) and 26 tons per day for RDF by the end 2015. Still, recycled waste through service providers remains low ranging from 1.8% in Tripoli to 20% in Saida, as most providers lack incentives to recycle rather than land filling which leads to the burial of valuable recyclables. Recyclable materials are collected at the source by NGOs, companies, industries, unregulated scavengers, licensed scavengers and service providers. Picking up recyclable material before the trash is collected ensures non-contamination of the material, which can then be sold at a premium. Assessing the weight of recyclables collected by scavengers, NGOs, companies and industries collecting recyclable remains challenging and proxies were used to get an estimate of recycled waste.

Economic Instruments for Recycling – March 2016 v 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 1: Lebanon Population, Waste Generation, and Treatment Capacity, 2015

ANNUAL WASTE GENERATION DAILY WASTE GENERATION TREATMENT CAPACITY POPULATION 2015 Non- Non- Compost/ INPUT Total Organic Total Organic Sorting RDF Organic Organic Digester

# Million tons Ton/day Ton/day

Beirut 358,331 0.14 0.07 0.07 2,220 1,110 1,110 Mount Lebanon 1,756,076 0.67 0.34 0.34

North Lebanon/Akkar 1,025,566 0.39 0.20 0.20 1,077 538 538

South Lebanon/Nabatiyeh 796,384 0.31 0.15 0.15 836 418 418

Baalbeck/Beqaa/Hermel 616,852 0.24 0.12 0.12 648 324 324

Subtotal, Lebanese citizens 4,553,209 1.75 0.87 0.87 4,781 2,390 2,390

Operational

Palestinian Refugees, 2014 455,000 0.12

Other Refugees, 2014-15 1,189,052 0.31

Syrian Workers >450,000 0.11

Other Foreign Workers 2014 198,452 0.05

Non-resid. Lebanese Tourists NA NA

Foreign Tourists in 2013 1,274,362 0.01

Non-Lebanese Resident 0.60 1,646 823 823

Total 2.35 6,426 3,213 3,213

Waste Generation and treatment capacity by mohafazah, assuming non-citizens are distributed across the country in proportion to citizens

Beirut 538,748 0.18 0.09 0.09 506 253 253 2,298 539 NA Mount Lebanon 2,640,245 0.90 0.45 0.45 2,479 1,239 1,239

North Lebanon/Akkar 1,541,931 0.53 0.26 0.26 1,447 724 724 1,110 810

South Lebanon/Nabatiyeh 1,197,357 0.41 0.21 0.21 1,124 562 562 1,020 724 26

Baalbeck/Beqaa/Hermel 927,431 0.32 0.16 0.16 871 435 435 700 320 NA

Total 6,845,713 2.35 1.17 1.17 6,426 3,213 3,213 5,128 2,413 26

Operational treatment capacity: 3,660 1,228 26

Economic Instruments for Recycling – March 2016 vi 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

A survey of NGOs, private companies and trade associations involved with recycling enabled us to estimate that recyclables collected in 2015 amounted to 268,076, of which 55,100 tons were estimated to have been collected by informal sector scavengers. When considering exports of recycled materials, total recycled material amounts to 538,125 tons, including metal from building construction and demolition and automobile scrap. There are, however, some overlaps between the two above figures, as the data do not allow us to determine which collected material may have been exported rather than used domestically, nor can we determine how much recyclable material may be imported either for reuse or for re-export. Moreover, industries seem to be very efficient at selling or disposing of their recyclables to service providers or other recycling business actors, and this is not always captured in the analysis (Table 2). The potential recycling business turnover, which was calculated with and without the substantial metal exports, are between $US 65 million and $US 272 million per year, based on local market prices.

Table 2: Data on Current Recycling, 2015

CATEGORY RECYCLED MATERIAL

2 NGOs Survey Service Interview Grand Provider & 2 Of which Informal Informal Informal Total Media Total Cies Informal % Lower Upper Middle

Lower Upper Tons Tons Tons Tons Tons Tons Tons Tons Bound Bound

Plastic 53,792 604 5,046 25% 72% 1,261 3,633 2,447 59,441

Cardboard 75,215 1,833 90,000 12,952 - - 12,952 12,952 12,952 90,000

Glass 14,455 20 17,820 25% 25% 4,455 4,455 4,455 32,295

Metal 23,076 121 50,455 25% 100% 12,614 50,455 31,535 73,652

Tires 1,965 5,385 25% 100% 1,346 5,385 3,366 7,350

Batteries 2,831 334 25% 100% 83 334 208 3,164

Textiles NA 219 25% 100% 55 219 137 219

Wood 1,955 NA NA NA 0 1,955

Total 173,287 2,578 90,000 92,211 32,767 77,433 55,100 268,076

Percentage 65% 1% 34% 34% 12% 29% 21% 100%

Economic Instruments for Recycling – March 2016 vii 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

Policy Choices: Incentives for Recycling Fiscal instruments for encouraging more recycling do not appear warranted under the current conditions. Such instruments would make sense if the subsidies involved would be sufficient to encourage a shift from land filling to recycling, without costing more than the current marginal cost of land filling, which is $US 108/ton. The economic analysis in this study has shown that recycling of paper products and clear glass is already profitable without any subsidies, so such instruments are not justifiable. For those materials, a more appropriate approach would be to address the institutional and operational constraints which currently reduce the quantities being recycled rather than offering subsidies. On the other hand, recycling plastic and metals would not be economically viable in Lebanon even with subsidy, as the amount required to make those activities profitable far exceed the cost of land filling. Direct subsidies for recycling are therefore not fiscally or economically justifiable.

Funding for Solid Waste Management At present, solid waste management is funded through a number of sources, all of which could be strengthened to increase available resources:  The national budget, through the tax system,  Municipal revenues from the Independent Municipalities Fund and the local waste fee, the "arsifa wa majarir" charge,  International donor projects,  Gate fees charged at landfills and other solid waste management facilities,  Sale of recyclable material,  Sale of electricity or heat from waste-to-energy plants.

Several of the existing mechanisms, and several new ones, are of particular interest as strategies for encouraging more recycling and/or increasing funds available for solid waste management:  Modest dedicated increases in existing taxes - the VAT and the arsifa wa majerir fee - could provide additional revenue for redistribution to municipalities through the municipal fund;  Mainstreaming a high landfill tipping fee will create an incentive to recycle in order to reduce the amount paid. Such fees could be graduated, with higher rates for recyclable material; however differential fees would be considerably more complicated to implement than a single fee, as they would require sorting waste so as to measure the quantity in each category before tipping;  Allowing trash collectors and landfill operators to retain revenues from the sale of recyclables will create financial incentives to recycle rather than land filling material which can be reused (it could also lead to a side activity in "mining" landfills for recyclable material.);

Economic Instruments for Recycling – March 2016 viii 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

 Both pay as you throw waste management charges and charges linked to another bill (probably telephone) are definitely worth further investigation. The former are theoretically preferable but considerably more difficult to implement; they could be initiated for commercial enterprises to see how they may work. The latter will not create an incentive to reduce waste or increase recycling, but would be an efficient way to generate revenue. Opportunities to implement such a tax through landlines, mobile phones, or other bills should be investigated;  Packaging taxes (on plastic bags) and deposit / refund system (on bottles) are both relatively simple and effective ways to reduce material use, reduce trash in the environment, and encourage recycling. They may not actually raise revenues for government, however, as they are often set no higher than the cost of their implementation;  Extended producer responsibility systems, while somewhat more complex, may also be useful to ensure recycling of specific packaging material. Feasibility studies should be carried out on the implementation of EPR systems for large cardboard packaging (e.g. the boxes in which major home appliances are shipped), mattresses, and tires, as these items are large and managing them would be relatively simple. If an EPR approach proves workable for these products, additional analysis could go into expansion of the system in the future.

Next Steps Building on these results, three critical issues emerge: increasing the collection of recyclables, improving their quality, and increasing the funding available for solid waste management. Two strategies are recommended to work towards these goals:  First, the complex data collection and calculations which were necessary to arrive at these figures highlight the clear challenges involved in understanding the current state of recycling in Lebanon. Any new policies will be easier to design if better and more transparent data are available on the generation and composition of solid waste. Developing such data calls for a concerted national and municipal government effort to better track and publicly report on the activities of all engaged in collecting and processing waste, including formal sector companies, NGOs, and informal sector scavengers. Such an effort, which might readily receive the support of international donors themselves interested in the information, would ensure that future policies could be based on more reliable data than those available for this study.  Second, Lebanon should investigate in more detail the feasibility (particularly in political and institutional terms) of introducing the measures identified above for increasing recycling and/or raising revenues for solid waste management. None of these would be simple to implement, and prior study (relying on the data already mentioned in the previous recommendation) would be essential to determine exactly how they could be set up and the impacts of different charge levels. These measures seem to be the most promising ones to achieve the desired ends however. Moving ahead on them is therefore recommended.

Economic Instruments for Recycling – March 2016 ix 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

2 INTRODUCTION

2.1 Objective of this Study

One of the objectives of the European Union Support to Reforms – Environmental Governance (StREG) project is to improve the environmental performance of the country through economic and fiscal instruments relying on market tools rather than command-and- control regulation. The Ministry of Environment’s Decree 8003 of 2012 on Integrated Solid Waste Management aimed at: (i) reducing the quantity of wastes to be disposed of; (ii) assisting in the management of solid waste and the promotion of recycling and treatment facilities; (iii) promoting waste minimization, source separation, recycling, energy recovery, effective waste treatment facilities; (iv) setting up general policy for cost recovery; and (v) specifying the institutional framework for solid waste management. It is with the aim of expanding the breadth of diverting the waste stream away from landfills that StREG initiated this study on the Lebanese recycling industry, with the following objectives:  Collecting data with which to trace the flow of recyclable material and amount which is being or could be recycled;  Assessing whether incentives could be a useful tool to increase recycling, whether the savings in trash management costs resulting from recycling might be sufficient to defray these incentives overtime, whether a system of extended producer responsibility (EPR) could be a viable recycling policy, and whether it may be feasible to shift the costs of trash management to the users;  Where fiscal incentives are recommended, identifying the optimal legal and institutional structure for implementing them;  Reviewing the options for shifting the costs of solid waste management to the consumers. The preparation of this report coincided with the disruption of waste management services in Beirut and Mount Lebanon (BML) in July 2105. Since then, the 3 Rs (reduce, reuse and recycle) have been brought to the fore. After being trapped for 16 years in the government’s 1997 Emergency Plan for Solid Waste Management within Greater Beirut, most BML municipalities are now trying to adopt decentralized alternatives for managing their waste after the government agreed to release the Independent Municipal Fund Balance owed to them, funds that used to be retained at the source to cover the service providers’ costs.

Economic Instruments for Recycling – March 2016 1 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

2.2 Scope of Work

The scope of work for this study focused on the following recyclables: paper and cardboard, plastic, metal, glass, and to a lesser extent e-waste, tires, wood, textiles and batteries. Demolition and construction waste, medical and hazardous waste and agricultural waste are not covered in this report, although these wastes are often mixed with municipal waste and disposed of in dumps and landfills due to the lack of enforcement. The report covers the following issues:  Chapter 3 assesses actual and potential recycling in Lebanon;  Chapter 4 provides decision-makers with policy choices to increase the collection of quality recyclables in Lebanon;  Chapter 5 explores alternative of shifting the cost of Lebanon’s public sector solid waste management to the households and businesses and other institutions that rely on it;  Chapter 6 develops the possibility of introducing extended producer responsibility in Lebanon;  Chapter 7 makes recommendations.

Economic Instruments for Recycling – March 2016 2 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

3 POTENTIAL FOR RECYCLING

3.1 Objective and Process

The main objective of this chapter is to provide a general overview on the waste sector in Lebanon and a better understanding of waste generation in Lebanon, segregated by actor and category, in order to derive an order of magnitude of both potential recyclables and actually recycled materials. The process included desk review, a survey targeting recycling companies, a review of the Lebanese Customs Authority's virgin and off prime material imports for manufacturing and export of recyclables, and meetings with various stakeholders.

3.2 Waste Generation in Lebanon

Waste generation figures are not totally reliable, as they are usually extrapolated from average waste generation per capita. For instance, the 2014 GIZ SWEEP-Net report (p.8) on Lebanon provides a projected total waste figure of 2.04 million tons in 2013, based on a weighted average of 1.05 kg per capita per day. However, the population used, which they say does not include refugees, foreign workers and tourists, seems a bit inflated at 5.6 million in 2013 (GIZ SWEEP-Net, 2014, p.8), whereas the 2015 World Development Indicators (World Bank WDI, 2015 accessed online) sets the population at 4.47 million in 2013. The difference between the two 2013 population figures would lead to 433,073 tons more trash; it seems likely that in fact the SWEEP-Net population figure does include refugees. A presentation made by the Ministry of Environment (MOE) sets the population at 5.2 million in 2014 with the same weighted average of 1.05 kg per capita per day (Sabbagh, 2015, pp.2-3). These aggregate figures could be subject to fine-tuning, as there is no systematic monitoring of the waste sector in Lebanon. Moreover, it is not clear whether the waste generation figures are in fact based on Lebanese resident population without accounting for refugees, foreign workers, tourists, and Lebanese emigrants who spend vacations in Lebanon. For the purpose of this study, we assumed Lebanon to have 4.55 million legal residents in 2015 based, on WDI, 2015 (see Table 3 Notes), and their municipal waste generation to be 1.75 million tons annually and 4,781 tons per day in 2015, using the weighted average of 1.05 kg per capita per day (from GIZ SWEEP-Net, 2014, p.8). Refugees, foreign workers and tourists add 0.60 million tons to the annual waste generation bringing it to 2.35 million tons or 6,426 tons per day. This is based on 2014 data for Palestinian refugees, 2015 figures for other refugees, 2014 figures for foreign workers, and 2013 figures for tourists (see Table 3 Notes). Lebanese tourists spending their vacations in Lebanon could well bring the total waste generation beyond the 2.35 million tons mark in 2015 (Table 3). This report considers the waste management needs of everyone living in the country, without further distinction based on their immigration status.

Economic Instruments for Recycling – March 2016 3 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 3: Lebanese Population and Waste Generation, 2015

POPULATION ANNUAL WASTE GENERATION DAILY WASTE GENERATION INPUT 2015 Total Organic Non-Organic Total Organic Non-Organic

# Million tons Ton/day

LEBANESE CITIZENS: Beirut 358,331 0.14 0.07 0.07 2,220 1,110 1,110 Mount Lebanon 1,756,076 0.67 0.34 0.34 North Lebanon/Akkar 1,025,566 0.39 0.20 0.20 1,077 538 538 South Lebanon/Nabatiyeh 796,384 0.31 0.15 0.15 836 418 418 Baalbeck/Beqaa/Hermel 616,852 0.24 0.12 0.12 648 324 324

Subtotal, Lebanese citizens1 4,553,209 1.75 0.87 0.87 4,781 2,390 2,390 OTHERS LIVING IN LEBANON:

Palestinian Refugees, 20142 455,000 0.12 0.06 0.06 319 159 159

Other Refugees, 2014-15 3 1,189,052 0.31 0.15 0.15 849 425 425

Syrian Workers 4 est. 450,000 0.11 0.06 0.06 315 158 158

Other Foreign Workers 20145 198,452 0.05 0.03 0.03 139 69 69 Non-resid. Lebanese Tourists NA NA NA NA NA NA NA

Foreign Tourists in 2013 6 1,274,362 0.01 0.00 0.00 24 12 12 Subtotal, others in Lebanon 2,292,504 0.60 0.30 0.30 1,646 823 823 Total 6,845,713 2.35 1.17 1.17 6,426 3,213 3,213

Specific data calculation methods: 1 Total resident Lebanese population of 2013 from WDI, 2015. Population annual growth of 0.96% in 2014 and 2015 from WDI. 2015. Population breakdown by mohafaya is from Central Administration for Statistics, Ministry of Social Affairs. Waste generation by type is based on Sabbagh, 2015 p.5 average waste generation of 1.05 kg per capita and MOE Memo 8/1 of November, 2015 for waste composition p.3. 2 Population for Palestinian refugees from UNRWA. Waste generated by all non-citizens estimated at 0.7 kg per capita per day. 3 Population for other refugees from UNCHR. MOE-EU-UNDP, 2014, p.46. 4 Population of Syrian workers from Al-Akhbar of February 10, 2015; this includes 350,000 according to estimates by the Lebanese Contractors Syndicate and 100,000 more hired by UN agencies, and may be an underestimate. It could easily exceed 450,000 in 2015 cited in: waste generated was estimated to be 0.7 kg per capita per day; 5 Population of other foreign workers based on CAS data on foreign workers’ permits in 2014. 6 Data on number of visitor and length of stay from Ministry of Tourism. CAS for average night by nationality: waste generated was estimated to be twice the national mean generation and is based on professional judgment. Source: World Development Indicators website accessed online on Excel Sheet: ; UNRWA website: Main page; UNCHR website: Main page; MOE-EU-UNDP, 2014, p.20; Al-Akhbar website: ; CAS-MOSA-UNDP-ILO, 2010; and Ministry of Tourism website: , 2013 Tourist Statistics accessed online.

Economic Instruments for Recycling – March 2016 4 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

POPULATION ANNUAL WASTE GENERATION DAILY WASTE GENERATION INPUT 2015 Total Organic Non-Organic Total Organic Non-Organic

# Million tons Ton/day

WASTE GENERATION BY REGION, ASSUMING NON-CITIZENS ARE DISTRIBUTED ACROSS THE COUNTRY IN PROPORTION TO CITIZENS Beirut 538,748 0.18 0.09 0.09 506 253 253 Mount Lebanon 2,640,245 0.90 0.45 0.45 2,479 1,239 1,239 North Lebanon/Akkar 1,541,931 0.53 0.26 0.26 1,447 724 724 South Lebanon/Nabatiyeh 1,197,357 0.41 0.21 0.21 1,124 562 562 Baalbeck/Beqaa/Hermel 927,431 0.32 0.16 0.16 871 435 435 Total 6,845,713 2.35 1.17 1.17 6,426 3,213 3,213

3.3 Composition of Recyclable Material

The composition of recyclable material is also difficult to pin down in Lebanon. Table 4 provides potential recyclables and actual quantities recycled, based on data from formal sector service providers. Most surveys on waste composition are conducted after NGOs have targeted recyclable materials (except for the 2015 Arcenciel pilot recycling project—see below) and scavengers have removed recyclables from street bins. This skews our understanding of how much recyclable material exists in Lebanon. If we only consider paper, plastic, metal, and glass, the theoretical recyclables amounted to 36.5% of total trash generated in 2013 according to GIZ SWEEP-Net, 2014, p.8, or to 34.7% in 2014 according to Sabbagh, 2015, p.2. More recently, the MOE (Memo 1/8 of November 16, 2015, p.3) considers a 50/50 breakdown between organic and non-organic waste, where recyclables account for 35% of total waste. Items which are difficult to recycle, such as baby diapers and items made out of different compounds account for the remaining 15%. In other words, 35% is the official recyclable threshold as of November 2015. The most realistic figures for actual recycling in the 4 main recyclable categories are so far found in Baalbeck-Hermel, where 23.2% is expected to be extracted from the total waste stream for recycling, when the plant begins operation, and in Saida, where 20% of the total waste stream is actually recycled. In addition, IBC, the operator of the Saida plant, is using 13% of its waste residue to test refuse-derived fuel (RDF) production. Elsewhere in the country, in 2013-2014 some 10% of waste was recycled in Zahleh, 6.6% in Beirut / Mount Lebanon (BML), (where total volume recovered by the service providers including “others” is 8% of which 0.82% ended up in the landfill even though the service provider had a contractual obligation to recycle 9.41%), and only 1.8% in Tripoli.

Economic Instruments for Recycling – March 2016 5 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 4: Waste Generation and Recycling by Formal Sector Service Providers in Major Cities and Regions of Lebanon

WASTE COMPOSITION BREAKDOWN

TOTAL WASTE AREA YEAR SOURCE Total Metal Other Glass Plastic Paper & Cardboard

Tons Mn % % % % % %

POTENTIAL RECYCLABLES

Lebanon 2013 2.04 11.5 16.0 5.5 3.5 11.0 47.5 SWEEP-Net GIZ, 2014, p.8

Lebanon 2014 2.60 14.0 16.0 2.0 3.0 12.0 47.0 Sabbagh, 2015 p.5

ACTUAL RECYCLED BY SERVICE PROVIDERS NET OF NGO, PRIVATE COMPANY AND INDUSTRY PICK UP, AND INFORMAL SCAVENGING

Dar al Handassah, 2015 Greater Tripoli 2014 0.13 NA NA NA NA NA 1.8 (Annex 3)

Greater Tyre 2015 0.01 2.5 1.2 0.6 0.3 NA 4.7 OMSAR, 2015 (Annex 3)

BML except for 2013-14 1.10 1.7 4.1 0.7 0.1 0.6 7.2 CDR-Laceco, 2014 pp. 61-62 Jbeil

Greater Zahleh 2014 0.05 NA NA NA NA NA 10.0 MOE, 2015 (Annex 3)

Greater Saida 2015 0.07 12.0 8.0 NA 20.0 MOE, 2015 (Annex 3)

MOE/UNDP/It. Coop, 2014 Baal.-Hermel 2014 0.16 5.6 6.1 5.7 5.8 3.9 27.1 p.17

Annually adjusted quarterly TOTAL ANNUAL 1.63 amounts

Note: Lebanon 2014 waste composition is estimated based on actual 2012 Ramboll / Laceco survey. BML contract runs from June 1st to May 31. Total figure for Baalbeck-Hermel are projections from 2014 and waste composition is based on actual 2012. Tyre generation is for one quarter and was extrapolated for a year. Source: See meeting with institutions in Annex 3.

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A 2015 pilot project carried out by the NGO Arcenciel in the Bekaa towns of Zahleh, Taanayel, and Bar Elias may provide the most accurate breakdown yet in terms of waste composition, as bins were collected at the household level before any scavenging. It found that 7.4% out of 118.4 tons collected and sorted could be recycled. This includes: 3.3% is plastic, 2.9% paper, 0.7% metal and 0.4% glass. The non-recyclable 92.6% of the waste is made up of 56% organic and 34.6% of other materials. However, its sample size is small, with 201 households and 16 institutions surveyed (Arcenciel, forthcoming in 2016. Pilot study funded by the Agence Française de Développement --AfD).

3.4 Current Extent of Waste Sorting

There are four main groups of waste generators in Lebanon, although it is not possible to determine exactly how much each contributes to the total waste stream: (i) households, (ii) street sweeping; (iii) institutions such as businesses, SME, banks, schools, hotels, etc.; and (iv) major industries. Their waste is not systematically sorted anywhere in the country. Some sorting at the source is being conducted on a voluntary basis, with recyclables placed in confined street bins and collected by the service providers (in BML) or collected from premises by NGOs and companies (throughout the country). For instance, a successful 1995 community / gender-based initiative Sorting of Solid Waste in Arabsalim project in Southern Lebanon proved successful (World Bank Lebanon CEA, 2011, p. 54) but it was not replicable because it was never institutionalized within the municipalities involved. The Nabatiyeh / Jezzine service provider has recently institutionalized the Arabsalim initiative in its operations (see meeting notes in Annex 3). Some municipalities also began source sorting during Lebanon's waste crisis of summer 2015, but it is too early to assess their results. Also, Arcenciel, through its pilot project, tried to set up a system of sorting into three categories at the source, with waste and recyclables directly collected from households and institutions over 6 months in 2015. However, sorting error was high despite a targeted and sustained awareness campaign: 57% error among households and 78% error among institutions (Arcenciel, forthcoming in 2016. Pilot study funded by AfD).

3.5 Waste Collection Stream

Lebanon's waste collection coverage is 100% in urban areas and 99% in rural areas (2014 GIZ-SWEEP-Net, p. 8). Collection from street bins is usually handled by private waste management service providers in both urban and rural areas, where the municipality reimburses the firm for the services provided. The uncontrolled market for recyclables allows scavengers, whose numbers have grown since the influx of Syrian refugees, to collect recyclable material from bins all over Lebanon. They range from individuals to specialized gangs using small cars or trucks; the brokers to whom they sell are usually Lebanese. This waste stream is not captured in the estimates of waste generation by category of material, as most waste composition surveys are done after the collection of recyclables at the source and scavenging. (However, it may be identified indirectly down the waste chain in the open market for recyclables to be used domestically or exported - see Section 3.8). Also, when mixed or sorted, waste is collected from street bins. Most formal sector service providers use truck compacters, which are efficient, but reduce the quality (due to contamination) and quantity (due to comingling) of both recyclable and compostable material.

Economic Instruments for Recycling – March 2016 7 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

Figure 1: Lebanese Waste Recycling Stream 2 3a 3b 1 Collection to Waste Processing Integration Recycled Material Formally Exported Collected Processing and Sorted of Recycled Waste Buying & Manufacturing Informally Recyclables Collected Imported Waste and Sorted Recycled Recy‐ Materials Input used in clables Recycled Materials Manufactured Goods Non‐ from Imported Durable Households Prime Materials and Street Net Durable Sweeping Collection and Sorting Recyclable Buying, Waste Processing & Manufacturing Integration Residual Good Institutions Waste Industries Imported Market Formally Recycled as well Collected Materials as that Processing and Sorted Recycled Input used in are: of Exports Materials Manufactured Informally Recyclables Goods Collected Imported and Sorted Prime Materials

Imported Manufactured Goods

Landfill/Dump

Source: Authors.

The flow of potential recyclables in Lebanon follows a 3-phased loop (phases 3a and phase 3b are alternate routes), as shown in Figure 1: 1. The sale of non-durable and durable goods, which are supplied by local manufacturing and imports, leads to generation of waste from households, street sweeping, institutions and industries. This waste is either dumped / land filled or captured by the recycling business. 2. Crude recyclables are collected and sorted formally (service providers, NGOs, companies, formalized small and medium enterprises or SMEs, and industries) or informally through specialized scavengers, who may be hired by a third party or conducting their own business. 3. a) Crude recyclables could be semi-processed (collection, sorting, waste processing, shredding, compacting, etc.) to add value before being sold domestically or exported. The integrated processing of recyclables ranges from sorting and compacting to processing to producing semi-finished materials which are used as manufacturing inputs. 3. b) Crude recyclables could be directly sold or transferred to waste processing and industrial process integration industries which would process them before reuse. Finished goods are either sold in the market or exported, completing the loop.

Economic Instruments for Recycling – March 2016 8 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

3.6 Waste Treatment Capacity

The waste treatment facilities in operation or under construction at the end of 2015 had a capacity of 5,128 tons per day for sorting, 2,413 tons for composting, and just over 26 tons per day for RDF. Sorting capacity in place and under construction at the end of 2015 will meet 80% of the estimated total national need, while composting capacity will meet 75% of the national need. Not all of the existing capacity is operational or operating at full capacity. Current operational sorting capacity is 69% of what exists or is under construction, while operational composting capacity is 47% of what exists or is under construction (Table 2-3).

Table 5: Waste Treatment Actual, Under Construction, and Operational Capacity CONSTRUCTION CONSTRUCTION COST & OPERATIONS MAINTENANCE CAPACITY COMPOSTING RDF / DIGESTER

AREA AREA TOWN / SITE TYPE OF TREATMENT STATUS CONSTRUCTION STATUS ($US Mn) ($US/ton) (ton/day) SOURCE

B Karantina S Con Y 35 1,100 Laceco

B Karantina C Con Y 20 300 Laceco

B Amrousieh S Con Y 35 600 Laceco

ML Kahlounieh S&C UC N 1 35 25 12 MOE

ML Nahr El Mot S&C&R UC N 3.5 50 200 50 NA Leb. Op. ML Metn/Kesrw S&C UC N 5 59 100 50 Leb. Op.

ML Harissa S&C UC N 0.05 10 5 Leb. Op.

ML Soueijani S&C UC N 1.5 19 26 20 OMSAR

ML Upper Metn S&C UC N 22 15 OMSAR

ML Barouk S&C UC N 0.2 NA 50 25 Leb. Op.

ML Shouf al A'la S&C UC N 0.25 70 15 7 Leb. Op.

ML Jbeil S&C Con Y 35 80 40 OMSAR

ML Jbeil S&C UC N Extension 70 35 OMSAR

NL Mechmech S&C Con Y 35 10 5 OMSAR

NL Minieh S&C Con N 25 60 30 OMSAR

NL Minieh S&C UC N Extension 25 115 60 OMSAR

NL Bcharreh S&C UC N 1.5 35 50 25 Leb. Op.

NL Tripoli S Con Y 15 300 OMSAR

NL Tripoli C&R UC N Extension 410 NA OMSAR

NL Srar S&C UC N 200 100 OMSAR

NL Koura S&C UC N 80 40 OMSAR

NL Denniyeh S&C UC N 175 80 OMSAR

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CONSTRUCTION CONSTRUCTION COST & OPERATIONS MAINTENANCE CAPACITY COMPOSTING RDF / DIGESTER

AREA AREA TOWN / SITE TYPE OF TREATMENT STATUS CONSTRUCTION STATUS ($US Mn) ($US/ton) (ton/day) SOURCE

NL Zgharta S&C UC N 120 60 OMSAR

SL Jabal Amel S&C UC N 10 40 20 10 Leb. Op.

SL Bint Jbeil S&C Con Y 2 35 50 25 OMSAR

SL Bint Jbeil S&C UC N Extension 100 50 OMSAR

SL Tyre S&C Con Y 35 150 75 OMSAR

SL Tyre S&C UC N Extension 100 50 OMSAR

SL Nabatiyeh S&C Con Y 4 35 200 120 OMSAR

S&C&D& SL Saida Con Y 95 300 350 26 MOE R SL Ansar S&C Con Y NA 10 5 OMSAR

SL Kabrikha S&C Con Y NA 15 OMSAR

SL Kfar Fila S&C UC N NA 20 10 MOE

SL Khyam S&C Con Y NA 15 8 OMSAR

SL Aytaroun S&C Con Y NA 15 8 MOE

SL Kherbet Selm S&C Con Y NA 15 8 OMSAR

SL Ain Ebel S&C Con Y NA 10 5 MOE

BBH Baalbeck S&C&D Con Y 4 35+25 250 75 NA OMSAR BBH Zahleh S Con Y 2.4 15 200 MOE

BBH Zahleh C UC N 2 35 90 OMSAR

BBH Bar Elias S&C Con N 2 35 150 75 MOE

BBH Jeb Jenine S&C UC N 2 35 100 80 OMSAR

Total Constructed / Under Construction of which 41 5,128 2,413 26

-Constructed 3,530 1,129 26

-Operational 3,320 1,024 26

Constructed capacity as share of total need 80% 75% Operational capacity as share of constructed capacity 69% 47% Estimated daily waste generation of total population in 2015 in tons 6,426 3,213

Notes: Type of treatment: S = Sorting; C = Composting; D = Digester; and R = RDF. Construction: Con = constructed; UC = Under Construction; Status: Y = operational and N = non-operational. Tripoli will start operation by end 2015. B = Beirut; ML = Mount Lebanon; NL = North Lebanon; SL = South Lebanon; and BBH = Baalbeck, Beqaa and Hermel. Sources: CDR-Laceco, 2014, p.14; MOE Excel list; OMSAR most recent data from OMSAR website and European Union Fact Sheet on Solid Waste Management I and II p.3; Annex 3; Lebanon Opportunities Issue 221, November, 2015, pp. 29-39; and Table 3.

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Four constructed treatment plants were not operational due to contractual issues: Tripoli, Nabatiyeh, Soueijani and Minieh, although the current state of the latter remains unknown (Office of the Minister of State for Administrative Reform – OMSAR – meeting notes, Annex 3). These four plants would have lifted a heavy burden in a number of regions. Fortunately, the sorting contract for Greater Tripoli and Nabatiyeh were finally approved early 2016 (Table 5), which is fortunate, as Tripoli coastal landfill is at full capacity and at risk of collapsing into the sea (Dar al Handassah meeting notes, Annex 3). Table 5 does not include a number of small community-based composting plants installed by NGOs with United States Agency for International Development (USAID) funding mainly in South Lebanon (2013 Ramboll / Laceco report, p. 92). It also does not include other small NGO-run sorting facilities, such as those of Arcenciel, Terre Liban, Cedar Environmental and Contra- Zero Waste Act.

Table 6: Recyclables Generation and Main Service Providers’ Collection, 2015

SOURCE AGGLOMERATION OR METHOD WASTE GENERATED POTENTIAL RECYCLABLES ACTUAL PLASTIC ACTUAL PAPER ACTUAL GLASS ACTUAL METAL ACTUAL RECYCLED

Tons Tons Tons Tons Tons Tons Tons

Avg. Tyre & Greater Tripoli 130,000 45,500 2,730 3,445 260 845 7,280 Beirut

Same as Greater Tyre 120,000 42,000 3,000 1,440 360 720 5,520 Table 4

Same as BML but Jbeil 1,100,000 385,000 18,700 45,100 1,100 7,700 72,600 Table 4

Avg. Tyre & Greater Zahleh 50,000 17,500 1,875 2,366 179 580 5,000 Beirut

Greater Saida 73,000 25,550 8,760 3,337 834 1,669 14,600 Tyre ratios

Same as Baal.-Hermel 160,000 56,000 8,960 9,760 9,280 9,120 37,120 Table 4

Jbeil 57,488 20,121 2,300 2,300 575 575 5,749

Minieh 38,325 13,414 1,533 1,533 383 383 3,833 Break-down adopted of Bint Jbeil 57,488 20,121 2,300 2,300 575 575 5,749 4-4-1-1% respectively Ansar 3,833 1,341 153 153 38 38 383 based on Kabrikha 5,749 2,012 230 230 57 57 575 Zahleh (rounded Kheyam 9,581 3,353 383 383 96 96 958 figures)

Aytaroun 9,581 3,353 383 383 96 96 958

Economic Instruments for Recycling – March 2016 11 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

SOURCE AGGLOMERATION OR METHOD WASTE GENERATED POTENTIAL RECYCLABLES ACTUAL PLASTIC ACTUAL PAPER ACTUAL GLASS ACTUAL METAL ACTUAL RECYCLED

Tons Tons Tons Tons Tons Tons Tons

Kherbet Selm 9,581 3,353 383 383 96 96 958

Ain Ebel 7,665 2,683 307 307 77 77 767

Mechmech 6,515 2,280 261 261 65 65 652

Service Providers 1,877,173 657,010 53,792 75,215 14,455 23,076 166,537

Waste Potential Potential Potential Potential Potential Lebanon Total Generated Recyclables Plastic Paper Glass Metal Unit used 1.05kg/day 35% 13% 16% 4% 2% % Recyclable MOE Memo 1/8 2015, Total Population 2,345,637 820,973 304,933 375,302 93,825 46,913 p.3

Actual recycling as share of potential: 18% 20% 15% 49%

Notes: Estimates for quantity actually collected for recycling are based on data for the entire year. Where the service provider did not disaggregate composition, this was done based on data from providers who did disaggregate recycling. Extrapolation was done for all other operational treatment waste plants listed under Source and Method. Tripoli and Nabatiyeh sorting plants are not considered as operational as operations started in early 2016 although Tripoli formal recycling done by scavengers in considered (see Table 2-3). Waste composition and sorted recyclable ratios by service provider in 2015 are assumed similar to the previous year. Source: Calculated from data in Tables 3, 4 and 5.

3.7 Quantity and Price of Recycled Material

3.7.1 Recyclables Collected by Main Service Providers

Based on the available data, recyclable material collected by the main and small service providers is estimated at more than 166,537 tons in 2015 compared to a total generation of recyclable material of 820,973 tons (Table 6 above) for the entire population. Hence, major service providers sort and bring to the recyclable market about 20% of the potential recyclables. This is an underestimate of total recycling, since it does not include material removed from the waste stream by scavengers or other small recycling companies. However, it does include the recyclables directly collected from clients by the main service providers. For instance, Sukleen directly serves 2,300 clients in BML (Executive Magazine of November 10, 2015, p.58). Service providers are collecting and reselling 18%, 20%, 15% and 49% of the plastic, paper, glass and metal respectively. However, the figure for metal includes construction and demolition as well car scrap metal.

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Recyclables are sold by service providers according to 2 procedures: through direct agreements at fixed prices (Sukleen, IBC, etc.), or through bidding (Municipality of Zahleh). Prices vary tremendously (Table 7), but are lower than cleaner recyclable material collected from the bins by scavengers or at the source by NGOs or companies.

Table 7: Market Prices of Recyclables for Selected Waste Service Providers, 2014

BML EXCEPT FOR JBEIL ZAHLEH SAIDA (total waste: 1.1 million tons/year) (total waste: 54,071 tons/year) (total waste: 72,000 tons/year)

CATEGORY Recyclables 6/2013-5/2014 6/2013-5/2014 Recyclables % of Recyclables % By agreement % of Total By agreement Bidding Total Waste of Total Waste $US/Ton Waste $US/Ton $US/Ton

Target 9.41 12.0 NA

Actual 7.2 10.0 20.0

Plastic 1.7 NA NA 200 NA

-LDPE 14

-HDPE 1.5 -PET 250 250-308

-PS

-PP

Paper 4.1 50 NA 39 2.5 NA

Glass 0.1 50 NA 30 0.5 NA

Metal 0.7 NA NA 250 1.5 NA

-Tin 0.7

-Iron

-Aluminum 0.0 1,007

-Copper 1,852

-Stain. Steel 383

Other NA NA NA

-Textile

-Wood 0.3

-Tires 0.3

Sources: CDR-Laceco, 2014 pp. 61-62 MOE, 2015 (Annex 3) MOE, 2015 (Annex 3)

Economic Instruments for Recycling – March 2016 13 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

3.7.2 Recyclables Collected by Scavengers

The number of scavengers varies tremendously across Lebanon. Since the beginning of the Syrian war, the number of scavengers increased significantly as noticed by citizens, yet it is very difficult to estimate the size of this group since the last survey was conducted in 2000 (CEDARE, UNEP and Plan Bleu, 2000 p.78). The survey estimated the number of scavengers in Greater Beirut at 1,000 in 1999-2000, and recyclables collected from the trash bins at 55,725 tons. They found most of the scavenging was done by Syrians, who worked seasonally when it was not the harvesting season in Syria (Table 8). The total recyclables collected from trash bins all over Lebanon was estimated at 65,280 tons in 1999-2000 (CEDARE, UNEP and Plan Bleu, 2000, p.84). Both a 2009 presentation by Laceco (the company supervising Sukleen and Sukomi, the service providers in Beirut and Mount Lebanon except for Jbeil) and the 2012 Ramboll / Laceco baseline study (p.70) estimated the number of scavengers prior to 2000 to have been between 2,000 and 4,000. They provide no reference for these figures, which are different from those of the 2000 CEDARE report. According to Laceco’s presentation, scavengers collected between 102,200-205,860 tons (14% to 28% of quantity of waste handled by formal sector service providers in 1999-00), while the formal sector service providers recycled 3.8% during the same year, bringing the total recyclables to 17.8%-32.6% in 1999-00 in BML. A recent article in Al-Akbar (August 1, 2015) estimated the number of scavengers at 3,000 and the total waste scavenged at 500 tons per day (182,500 tons/year), of which 300 tons/day (109,500 tons/year) were in Greater Beirut alone. However the article did not reference or validate that figure.

Table 8: Trash Collection by Scavengers in Lebanon, 1999-2000, in tons

SOUTHERN MATERIAL GREATER BEIRUT NORTHERN LEBANON BEKAA TOTAL LEBANON

Plastic 3,875 1,350 1,350 1,200 7,775

Paper 15,000 900 900 900 17,700

Glass 7,500 75 NA 300 7,875

Metal 26,800 510 455 275 28,040

Other 2,550 540 450 350 3,890

Total 55,725 3,375 3,155 3,025 65,280

Note: “Greater Beirut” includes for Beirut and Mount Lebanon, and “Bekaa” includes Bekaa, Baalbeck and Hermel. Source: CEDARE, UNEP and Plan Bleu, 2000, p. 84.

In Greater Tripoli, in addition to informal bin scavenging, the municipality has formalized landfill scavenging by granting yearly permits to 55 scavengers, who in 2014 collected 2,307 tons of recyclables at the landfill, or 1.8% of the total waste dumped. The breakdown of that waste by material is not available. These recyclables are accounted for under Recyclables Collected by Main Service Providers above.

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3.7.3 Recyclable Material Collected at the Source

A number of NGOs and companies collect recyclables at the source or have drop-off stations at their premises. Table 9 presents data on some of the most active organizations involved in recycling. Although some of these organizations remain cautious about revealing the quantity they collect or the prices at which they buy or sell (see Chapter 4), they have no problem disclosing the market prices. Their share of total recycling is very low, with about 1,845 tons per year for Arcenciel, about 651 for Terre Liban, and about 84 for Contra-Zero Waste Act in recent years.

Table 9: Selected Data on Source Collection and Market Price in Lebanon

NGOs COMPANIES

Arcenciel Terre Liban Cedar-Environmental Contra-Zero Waste Act CATEGORY Waste Waste Waste $US/ $US/ Waste $US/ composition, composition, $US/ Ton composition, Ton composition, 2015 2015 20124 Ton 2015 Ton

Plastic 32.1 150-500 NA 12.5 106 14 100-600

-HDPE 3.3 500 300-600

-PET 17.7 200 100-150

-PS 3.7 450

-PP 7.4 250 200-250

Paper 60.4 60 7.5 40 80 55-75 <100% 60-80 Cardboard 0.0 60 55-75

Glass 1.1 40 NA 5.0 30

Metal 6.3 90-750 5.5 266 6 100

-Tin 90 70 4.9 -Iron 90

-Aluminum 1.4 750 400-600

Other NA NA 10

-Textile 10

-Wood 10

Total in % 100% 100% NA 100%

Total in tons ±1,845 tons ±651 tons NA ±84 tons

Source: Interviews carried out SWM team members (see meeting with NGOs and companies under Annex 3).

Economic Instruments for Recycling – March 2016 15 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

The prices of recyclables and amounts collected do not allow NGOs to break even or companies to make a profit; their activities are supported from other sources. Arcenciel receives funding from the European Union (EU) and the Agence Française de Développement (AfD). Terre Liban receives grants from UNICEF and bilateral donors. Cedar-Environmental offers diversified waste-related activities, including waste management services and value chain products such as eco-board and blown glass. Contra-Zero Waste Act is being cross subsidized by its overseas operations in Abu Dhabi, as its operations in Lebanon are not profitable (see meeting notes in Annex 3). Moreover, most NGOs and companies are trying to move up the recyclable waste value chain and to secure a larger share of the market: Arcenciel, for example, has just started using Uber for free pick up of recyclables in Greater Beirut. Contra-Zero Waste Act, which targeted the young through activities in schools, as the adults resisted waste sorting at the source, started charging the client a fee for the pick up ($US 10 for one pickup per month, $US 15 for two, and $US 20 for three), while putting in place an incentive scheme based on points to attract more clients. Points can be redeemed for energy-efficient products such as LEDs, solar A/C, and solar water heaters (see meeting with 2 NGOs and 2 companies under Annex 3). Still, these activities are not profitable because collection and storage are not carried out at the mohafaza or caza level as transportation networks are centralized and collection routes are not optimized in terms of scheduling and volume collected. Transportation cost is the highest item in the cost structure, making the activity difficult to justify on financial grounds.

3.7.4 Industrial Waste Recyclables Directly Collected by Third Parties

Some recyclables are disposed of by industries as residues and used as inputs in other industries’ processes. A set of 18 industrial audits carried out under the World Bank-funded Lebanon Environmental Pollution Abatement Project (LEPAP) shed some light on industrial wastes and the quantities recycled (Table 10). The audits are not a representative sample, so they could not be extrapolated to the total industrial population (which includes about 4,000 formal and 3,700 informal companies). The audits also revealed that the companies rely on formal and informal entities, including service providers (as mentioned above), NGOs, companies, other industries, and scavengers, to collect their recyclable wastes. Additionally, some companies selling tires, lubricants and forklifts provide an improved service similar to a trade-in scheme for their lubricants and batteries, which could be considered as a crude extended producer responsibility (EPR) system which could be built upon to link sellers with recyclers.

Economic Instruments for Recycling – March 2016 16 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 10: Recycling Data from LEPAP Industrial Audits, in tons/year

PAPER / PLASTIC METAL GLASS TIRES OTHER TOTAL CARDBOARD INDUSTRIAL LINE OF PRODUCTION

Tons/year

Printing NA 500.0 3.6 503.6

Paper Industry NA NA NA 1.9 0.2 2.1

Private Manufacturing & Trading NA NA 12.0 26.0 38.0

Cosmetics and Paints NA 20.0 5.0 0.5 25.5

Construction Materials NA NA NA 0.2 0.2

Cable Systems Production 582.0 28.0 1,143.0 758.0 2,511.0

Multi-purpose Industry 3.6 0.1 NA 2.0 5.7

Food and Beverages NA 1.2 NA NA NA 1.2

Food and Beverages 5.3 5.0 NA 1.0 2,622.0 2,633.3

Food Industry 0.0 0.2 0.8 1.3 2.2

Chemical Industry NA NA NA 375.2 375.2

Chemical Industry 6.0 0.5 NA 0.0 6.5

Chemical Industry 0.1 NA NA 0.4 0.5

Primary Metals Industry 1.0 1.0 410.8 16.7 429.5

Textile Products 49.0 1.0 3.7 60.5 114.2

TOTAL 647.0 557.0 1,578.9 1.0 1.9 3,863.1 6,648.8

Source: Industrial audits carried out for LEPAP, consulted at MOE. Audits that included no relevant data are not included in this table.

3.7.5 Imports of Virgin and Off-Prime Material

A proxy was used to gauge the stock of potential virgin and off prime (recycled) material imported between 2011 and 2014 for use in local industrial processes (Table 11). These materials enter the waste stream when they are transformed into non-durable goods in the short run (e.g., cardboard packaging, newspapers) and durable goods in the long run at the end of the products’ useful life (e.g., plastic chairs, books). The latter could enter the waste stream with a time lag ranging from the present (e.g. if the plastic chair broke) to more than 10 years or even generations, resulting in large uncertainties if imports of raw materials need to be factored into the waste stream.

Economic Instruments for Recycling – March 2016 17 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

Average imports from 2011 to 2014 could bring as much as 2.3 million tons of material into the market to produce durable and non-durable goods, of which an indeterminate annual portion will enter the waste stream. Metal is the largest item on the list (by weight), at 1.37 million tons, and represents more than 61% of the material covered by Table 11. This includes, in particular, the metal used in the Lebanese construction industry. With respect to iron and steel, imports are rising as import prices are dropping, due to lower demand and prices on international commodity markets; this benefits Lebanese real estate developers but reduces the incentive to recycle. Because most imported steel and aluminum is used in construction, it does not end up in the municipal waste stream at the end of its useful life. This skews the accuracy with which we can use data on materials imports to estimate how much recyclable material may end up being handled by service providers working for municipal government when trying to quantify the full flows of trash and recycled material in Lebanon.

Table 11: Materials Imported for Manufacturing or Resale, 2011-2014

2011 2012 2013 2014 2011-14 Average

CATEGORY 000’ Million 000’ Million 000’ Million 000’ Million 000’ Million Tons $US Tons $US Tons $US Tons $US Tons $US

Plastic 260.9 568.9 290.6 604.5 341.1 683.7 325.5 695.0 304.5 638.0

Wood pulp; Recovered paper or 52.1 27.4 41.0 22.6 30.1 19.3 33.0 20.9 39.1 22.6 paperboard

Paper and paper- board; articles of 566.6 312.8 363.8 279.3 259.4 291.0 269.8 297.1 364.9 295.1 paper pulp

Glass 148.1 111.8 149.4 110.0 172.5 118.6 174.7 124.9 161.2 116.3

Aluminum 42.3 158.0 44.7 164.0 55.7 202.6 54.6 205.3 49.3 182.5

Iron/Steel 1,223.3 894.2 1,303.4 885.9 1,377.9 861.4 1,390.2 813.7 1,323.7 863.8

Copper 12.8 121.2 15.6 130.6 17.5 139.3 14.5 108.8 15.1 125.0

Rubber (tires) 30.7 135.4 34.9 157.2 34.4 149.4 32.5 133.9 33.1 144.0

Wood 0.8 0.7 0.4 0.5 1.6 1.4 1.4 1.6 1.1 1.1

TOTAL 2,337 2,330 2,243 2,354 2,290 2,466 2,296 2,401 2,292 2,388

Note: Paper and paper-board as well as articles of paper pulp are not included in the reconciliation Table 14. Source: Annex 8 compiled from Lebanese Customs Data: .

Economic Instruments for Recycling – March 2016 18 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

3.7.6 Exported Recyclable Materials

Export statistics were used to gauge the stock of exported recyclables between 2011 and 2014 to be used in foreign industrial processes (Table 12). These exported recyclables are therefore being removed from Lebanon's waste stream. The average annual exports over 2011-2014 amount to 604,600 tons. Metal is the largest export item at 465,866 tons, representing 77% of the exports listed in Table 12. As mentioned above, this includes construction and demolition waste and scrap cars. Metal scrap is also being informally imported from Syria for re-export out of Lebanon; neither of these flows would be captured in the official statistics. As mentioned above, the iron and steel from construction are not managed by firms handling municipal waste, which must be taken into account in quantifying waste and recyclable material flows. Scrap metal from cars falls into a category by itself in the customs statistics (Annex 5). Similarly, the Lebanese Customs “paper and paper-board; articles of paper pulp” category is difficult to pin down, as it is difficult to distinguish between raw materials and semi-finished products. This is a limitation of the Lebanese Customs’ use of four-digit rather than six-digit codes, which amalgamate some products that could usefully be disaggregated. In addition, there may be misclassification of products across codes by customs officials, which would skew the export data.

Table 12: Exports of Recyclable Material, 2011-2014

2011 2012 2013 2014 2011-14 Average

CATEGORY 000’ Million 000’ Million 000’ Million 000’ Million 000’ Million Tons $US Tons $US Tons $US Tons $US Tons $US

Plastic 52.3 132.5 59.0 148.2 60.0 147.6 54.4 140.9 56.4 142.3

Wood pulp; Recovered 0.0 0.0 2.8 0.3 6.4 0.7 18.4 1.1 6.9 0.5 paper or paperboard

Paper and paper- board; articles of paper 90.3 151.6 65.6 93.1 54.9 89.1 55.1 85.3 66.5 104.8 pulp

Glass 6.9 10.5 5.9 10.9 5.7 10.4 4.8 8.3 5.8 10.0

Aluminum 21.8 65.0 23.6 60.7 29.2 70.5 30.1 72.8 26.2 67.3

Iron/Steel 588.6 252.2 370.8 149.7 433.5 162.9 274.8 103.8 416.9 167.2

Copper 14.9 106.0 25.4 164.0 32.1 192.6 18.6 101.1 22.8 140.9

Rubber (tires) 3.4 19.1 3.0 15.9 2.5 15.2 1.9 10.5 2.7 15.2

Wood (scrap) 0.3 0.1 0.4 0.1 0.4 0.1 0.6 0.1 0.4 0.1

TOTAL 778.5 737 556.5 642.9 624.7 689.1 458.7 523.9 604.6 648.3

Source: Annex 8 compiled from Lebanese Customs Data: .

Economic Instruments for Recycling – March 2016 19 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

3.8 Recycled Material Surveyed The study team preparing this report conducted a survey to determine the volume of recycling by collectors, industries, and traders (exporters) for the following products: plastic, paper, metal, glass, tires, batteries, textiles and wood. Out of the 40 targeted entities, only 17 responded (42% rate of response); 2 of the 40 businesses had closed. A list of the surveyed entities and a summary of the data and comments they provided, are available in Annex 5. Given the low response, due in part to the fact that the survey occurred during the July 2015 waste crisis in Lebanon, the aggregated results were complemented with data gathered through interviews (Annex 3) and media sources (Annex 4). The survey data, interviews and media sources give a lower bound for estimates of recycled materials in Lebanon, which amounted to about 268,076 tons in 2015 (Table 13). Using estimates of upper and lower bounds on the share from scavengers for each material, we estimated that about 32,767 to 77,433 tons of recyclable materials are collected through scavenging and informal collection. Hence, the midpoint, or 55,100 tons may be assumed to be collected through informal actors, or 21% of the total recycled waste which was identified through data collected and extrapolated from service providers, the survey, interviews and media sources.

Table 13: Quantities Recycled in tons, by Material SOURCES OF INFORMATION Data from surveys of companies that use recycled material Service Grand Providers NGOs / informal sector informal sector quantity, MATERIAL Media Total Total (municipal specialized share in tons sources trash companies upper lower upper lower collectors) Tons mid-point Tons bound bound bound bound

Plastic 53,792 604 5,046 25% 72% 1,261 3,633 2,447 59,441

Cardboard 75,215 1,833 90,000 12,952 - - 12,952 12,952 12,952 90,000 Glass 14,455 20 17,820 25% 25% 4,455 4,455 4,455 32,295

Metal 23,076 121 50,455 25% 100% 12,614 50,455 31,535 73,652

Tires 1,965 5,385 25% 100% 1,346 5,385 3,366 7,350

Batteries 2,831 334 25% 100% 83 334 208 3,164

Textiles NA 219 25% 100% 55 219 137 219

Wood 1,955 NA NA NA 0 1,955

Total 173,287 2,578 90,000 92,211 32,767 77,433 55,100 268,076

Share 65% 1% 34% 34% 12% 29% 21% 100%

Notes: Recycled cardboard total used to reach 160,000 tons per year prior to 2015 (Survey) but seems to have reached 90,000 tons in 2015 (ALI meeting in Annex 3) due to the waste crisis. This is the amount brought by the syndicate of pulp and paper industrialists from service providers as well as all other sources. Hence, the informal sector seems to recover the difference between the paper and cardboard collected by service providers as well as 2 NGOs and 2 companies. Tire weights are based on an average of 7.57 kg for vehicle tires and 56.11 kg for machinery tires: . A hypothetical lower bound collection by the informal sector was set at 25% and an upper bound at 100% except for the upper bound for plastic and glass that is based on the Survey. Survey provided 1 to 4 year data series (2011-14) where yearly averages were used in the Table. Tires, batteries and wood are those of BML (CDR-Laceco, 2014, pp, 61-62). Textile figures are from ConfortMat in Annex 4. All other figures under Recycled Material Total are from the Survey (Annex 5). Source: Tables 6 and 9; CDR-Laceco, 2014; Industry survey and interviews carried out under StREG by SWM team members; and Appendices 2, 3 and 4.

Economic Instruments for Recycling – March 2016 20 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

3.9 Reconciling the Recycled Stock

Table 14 presents an attempt to reconcile the recycling data discussed in this chapter. The grand total from Table 13 was considered as a lower bound and reached 268,076 tons; this is the "recyclables collected" column in Table 14. None of the recycling stemming from third parties (e.g. industries soliciting service providers, NGOs, companies, and scavengers to collect their waste) is included, as its inclusion would increase the likelihood of double counting. This lower bound includes only the metal assumed to be part of household waste; it excludes the additional metal exports, which presumably encompass construction and demolition waste and scrap cars, and it excludes all other exported recyclable material. The upper bound shown in Table 14 (the total column) includes all exports of metal and other materials (assuming those of 2015 follow the average of the four previous years), for a total of 732,549 tons. The challenge in this reconciliation is that we do not know how much of the exported material was actually collected in Lebanon and how much was brought in from Syria for re- export, particularly in the case of metals. Thus, it is difficult to estimate how much Lebanese recyclable material actually ends up in the recycling stream and how much is land filled. If the full 732,549 tons were Lebanese material, the country would be recycling almost 90% of its potentially recyclable material, but this is certainly not the case. If the lower bound of 268,076 tons is accurate, then the country is recycling about 33% of potential recyclables, a more realistic guess.

Table 14: Recycling Data Reconciliation, in tons, 2015

ESTIMATED RECYCLABLES TOTAL COLLECTED + EXPORTS OF MATERIAL RECYCLABLE MATERIAL COLLECTED (LOWER EXPORTED RECYCLED MATERIAL BASED ON POPULATION BOUND) (UPPER BOUND)

Plastic 304,933 59,441 56,425 115,866 Paper & Cardboard 375,302 90,000 6,900 96,900

Glass 93,825 32,295 5,825 38,120

Metal 46,913 73,652 465,850 465,8507

Tires NA 7,350 2,700 10,050 Batteries NA 3,164 NA 3,164

Textile NA 219 NA 219 Wood NA 1,955 425 2,380

TOTAL 820,973 268,076 538,125 732,5498

Note: For exports, the 2011-2014 average was used for 2015. Source: Tables 3, 4, 12 & 13.

7 No metal is actually reprocessed in Lebanon. Therefore it is assumed that all metal reported as collected in the country should be included in the quantity exported, and the total is the same as the amount exported. 8 This is not equal to the total of the collected and exports columns, because all metal collected is assumed to be exported, as explained in footnote 7

Economic Instruments for Recycling – March 2016 21 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 15 provides estimates of the total value of recyclable materials for the lower and upper figures in Table 14. As the table shows, we have two estimates of price per ton for each material; we have used the midpoint in these calculations. This gives us a wide range from the possible value of recycled material, from $US 65 million to $US 272 million in 2015. Depending on how much of the exported material actually originates in Lebanon, the lower figure may give us a plausible estimate of the value of Lebanese material which is recycled; while the higher one could estimate the total size of the market, including both domestically generated recyclables and those imported for re-export. It is interesting to note that the average prices of recycled material - $242/ton for domestic collection and $380/ton for domestic collection plus exports - are far much higher than the cost of managing solid waste charged by the BML service provider, which is $162.5/ton. This suggests that, where the market is functioning well, the service provider should have a strong incentive to recycle far more in order to reap those economic gains rather than land filling recyclable materials.

Table 15: Recycling Turnover at Market Price, 2015

LOCAL MARKET AVERAGE UNIT POSSIBLE TURNOVER PRICE

RECYCLABLE $US / Ton $US Million

Recyclables collected + Lower Upper Middle Recyclables collected exported

Plastic 142 500 321 $19.08 $37.19

Paper & Cardboard 50 65 57.5 $5.18 $5.57

Glass 40 50 45 $1.45 $1.72

Metal 228 727 477.5 $35.17 $222.44

Tires 200 200 200 $1.47 $2.01

Batteries 850 850 850 $2.69 $2.69

Textile 10 10 10 $0.00 $0.00

Wood 10 10 10 $0.02 $0.02

TOTAL $65.06 $271.65

Source: Calculated from Tables 14 and 17.

Economic Instruments for Recycling – March 2016 22 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

3.10 Conclusions

Chapter 2 provides the following critical points:  Total waste generated remains challenging to assess, in light of the very limited data available. Based on an average 1.05 kg per capita per day generated in Lebanon, waste generation has been estimated at 2.35 million tons in 2015. It is difficult to disaggregate this figure among sources - households, street sweeping, institutions, and industry - complicating the design of policies targeting each group.  Non-organic waste stands at about 50% of total waste. Recyclable material is about 35% of the total, or about 821,000 tons per year. It is difficult to determine how much of this figure is actually recycled.  Mixing all categories of waste at the source using truck compactors for collection by service providers increases transportation efficiency, but reduces the quality of recyclable material due to contamination, and thus reduces the total quantity which can be recycled.  Municipal trash management service providers are responsible for relatively little recycling, with shares ranging from 1.8% in Tripoli to 20% in Saida, as they have no financial incentive to recycle.  In principle, the waste treatment capacity nationwide should be sufficient to meet 75% of national needs for sorting and composting at the end of 2015; however, a significant share of this capacity is not operational due to contractual issues or because it is still under construction.  Recycled materials are collected at the source by NGOs, companies, industries, informal sector scavengers, licensed scavengers, and service providers. Picking up recyclables before the licensed municipal trash management service collects the trash ensures non- contamination of the material, which can then be sold at a premium. Assessing the weight of recyclables collected at the source is challenging, so proxies were used to get an estimate of their activity.  The survey of companies and trade associations involved with recycling enabled us to estimate that about 732,549 tons of recycled material may be handled by Lebanese companies each year. However, a significant share of this material is imported or exported, or both. As such, we cannot interpret this to mean that Lebanon is actually recycling 90% of its total recyclable waste; the 33% of potentially recyclable materials which is estimated to be collected in the country may be a more realistic estimate of the actual recycling rate. Of this amount, we estimate that about 55,100 tons were collected by the informal sector.  The recycling industry turnover, which was calculated by using the midpoint prices of recycled materials on the Lebanese market, amounts to between $US 65 and $US 306 million. On average, municipal recyclable waste generates $242 per ton in the local market when exports are not considered and goes all the way to $380 per ton when they are, both of which are much higher than the BML service provider cost of $US 162.5 per ton.

Economic Instruments for Recycling – March 2016 23 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

4 FISCAL MECHANISMS AND POLICY TO ENCOURAGE RECYCLING

4.1 Objective and Process

The main objective of this chapter is to analyze the economic and financial viability of economic incentive decision-makers with policy choices to increase the collection of quality recyclables in Lebanon. It builds on the results of Chapter 3 and is based on desk review stocktaking as well as meetings with various stakeholders.

4.2 Overview of the Recyclable Market Players

Two major players seek to capture recyclable material in the Lebanese market: industrialists who purchase "raw" or semi-processed material as inputs into their own manufacturing, and traders who purchase "raw" or semi-processed material for export. In addition, we can mention small-scale entrepreneurs, craftsmen and transformers. Small entrepreneurs and craftsmen use recycled material as an input to other production, and are likely to continue as small players in this market. Transformers, on the other hand, are processing material for resale to other users, and will seek to move up the recycling value chain in purchasing material. Each player is trying to position himself / herself so as to increase his / her share of the recyclable supply; upstream, by seeking recyclables directly at the source; downstream by purchasing directly from service providers and industries generating waste; or indirectly by buying unprocessed material from third parties such as informal scavengers. Therefore, these two major players and, to a lesser extent, the small players are in competition so as to secure as much cheap recyclable material as they can, in a distorted market characterized by asymmetric information. Most players are not only trying to capture a larger share of the market, but are also seeking good quality material so that they can replace expensive imported raw materials with less expensive domestic recycled material. Their aim is to defray some of the very high energy production cost incurred by Lebanese industries, which is eroding their local and regional competitiveness, especially in light of high energy subsidies in other Arab countries (ESCWA, 2015, p.13) which can amount to as much as 8% of the gross domestic product (GDP). Similarly, traders are seeking cheap but quality recyclables to process (shred, compact, package, etc.) just enough to seek the right export price, while transformers and small entrepreneurs and craftsmen also look for bargains to add value to recycled materials by producing semi-finished recycled materials, goods, and crafts.

Economic Instruments for Recycling – March 2016 24 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

4.3 Prices of Recyclables and of Imported and Exported Raw Materials

Imported raw materials (either recycled or virgin) cost at least five times as much as domestic recycled materials for most categories; for certain items, such as iron / steel, the difference is even higher. When comparing import to export prices, export prices are about one third less expensive, except for few items such as tin (Table 16). However, it is difficult to gauge the difference between the selling and buying price of recyclables when major and small players are trying to move up the recyclable value chain. The average market price of recyclable material illustrated in Table 16 could be considered as the selling price and all players could theoretically pay a price for recyclables which could rise as high as the marginal export price or border price. It is only those with the highest profit margins - presumably large-scale industry - which could theoretically pay this top price, and then only if domestic recyclable materials match the quality of imported raw or recyclables. Table 16 presents the relationships between the different prices in the recyclables markets. The average local market price is for unprocessed material. Not all materials are actually usable; the technological recovery rate indicates the share of materials which can be used in processing. The effective real market price is the average local price divided by the technological recovery rate. It measures what is effectively being paid per ton of usable raw material. Raw material import prices for plastic range from 1.9 to 9.6 times the effective real price, while import prices are up to 14.9 times the effective local price for glass, 16.7 for paper, and as high as 242.9 times the local price for tin. These higher prices reflect to a certain extent that imported materials are of higher quality than recycled domestic material. However, most domestic recyclable prices fluctuate with the price of international commodities, oil and minerals. In particular, low world oil prices lower the price ratio between imported plastics or inputs to plastic manufacture, on the one hand, and plastic made from local recycled material, on the other. This decreases demand for plastic recyclables, unless there is excess of local demand for a specific plastic product. Moreover, the depreciation of the euro vis-à- vis the US dollar in 2015 is making some European virgin and off-prime raw materials more competitive to import to Lebanon, as it decreases the relative price premium paid for the higher-quality European materials. This is not shown in Table 16, as import and export prices are those of 2014 and therefore prior to the depreciation of the euro in 2015. Similarly, exports of recyclable plastic sell for 1.4 to 20.4 the effective local price, while exported glass sells for 12.4 the effective local price, exported paper goes for 7.4 times the local price, and so on.

Economic Instruments for Recycling – March 2016 25 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 16: Import, Export. and Recycling Prices in $US/ton, 2015

MATERIAL AND SUBCATEGORY Raw Price Tech. Rate % tech. rr) Effective Recovery / effective (avg price / Recyclables Import Price Export Price Market price Market Price Export Price / EImport pPice Average Local Effective Price

HDPE 1,642 1,223 500 58 862 1.9 1.4

PET 1,331 1,000 211 58 364 3.7 2.7

PVC 1,168 2,667 NA 58

Fiberglass NA NA PLASTIC PS 1,763 2,248 252 58 434 4.1 5.2

PP 1,666 1,454 242 58 417 4.0 3.5

Nylon 2,362 5,000 142 58 245 9.6 20.4

Other 58 -

PAPER Pulp 1,221 539 55 75 73 16.7 7.4

Clear 702 583 50 85 59 11.9 9.9 GLASS Colored 702 583 40 85 47 14.9 12.4

Aluminum 2,283 1,686 727 85 855 2.7 2.0

Iron/Steel 4,108 2,219 228 85 268 15.3 8.3 METAL Tin 22,857 80 85 94 242.9 -

Copper 15,100 1,852 85 2,179 6.9 -

TIRES New/Used 3,980 5,650 200 80 250 15.9 22.6

WOOD Cases/Box 1,147 235 10 80 13 91.8 18.8

Note: Recyclables are adjusted by a technological recovery factor to bring prices to a common denominator when compared to raw imports. Tire import and exports show unexplainable reversed differences associated with Customs’ reporting. Source: Derived from Tables 7, 9 and 26; and New Zealand Ministry of Environment for technological recovery standards: .

The survey of firms involved with recycling (discussed in Chapter 3; full data available in Annex 5) did not enable us to derive the costs associated with moving up the recyclable value chain in Lebanon. Hence, the international cost structure for various subcategories was adopted instead in the next section.

Economic Instruments for Recycling – March 2016 26 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

4.4 Making the Case for Recyclables as Raw Material in Industrial Processes

4.4.1 Major Player Absorptive Capacity

The paper and glass industries, whose recycling process is integrated with their production process as they transform recycled materials into raw materials before using them (see Figure 1), could easily absorb additional recyclables in their production. The metal industry, on the other hand, remains on the back burner pending clear business opportunities and the rehabilitation of the electricity sector in Lebanon, as the cost of the electricity required to process metal, makes domestic recycling too expensive to compete with international products. While the paper and glass industries form oligopolies in Lebanon, there are many sub-sector plastic industries for which recycling capacity is difficult to gauge, as these transformations occur in both the formal and the informal sectors. It is, moreover, quite difficult to gauge the installed capacity for plastic recycling in Lebanon, as the most recent survey was conducted in 2007, and looked only at economic indicators in monetary indicators but did not ask about capacity or volume (MOI et al., 2010). The capacity of the metal recycling industry is shrinking (see notes from meeting with metal industry association in Annex 3) due to stiff competition from China and from Arab countries where energy prices are highly subsidized. As a result, metal can be sold for export at far above the domestic sale price (Table 16), and most metal from municipal waste, construction and demolition waste, and scrap cars is being exported. As such, the analysis of the potential to increase domestic use of recyclables will cover paper, glass, and plastic, but will not include metal. Although information is limited, we can try to estimate how much more recyclable material the different industry sectors could absorb if it were available. Table 17 helps shed some light on this question. It provides various information about each material, which may be useful, although there are still many unknowns, particularly whether the exports are from domestic collection by the main municipal SWM service providers, from imported material, from other domestic sources (for metal), or some combination.

Economic Instruments for Recycling – March 2016 27 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 17: Estimates of Potential Annual Use of Recycled Material, in tons

Industrial Process Residue Quantity now Material Current Potential recyclables MATERIAL Capacity (data provided collected by main Imports Exports based on population (partial) through survey) service providers

Plastic 325,500 NA 154 59,441 56,425 304,933

Paper 302,800 160,000 30,000 90,000 6,900 375,302

Clear Glass 70,330 40,000 780 32,295 NA 34,459

Colored Glass 91,175 0 73,652 5,825 59,367

Metal 1,459,30 0 NA 7,350 465,850 46,913

Total 2,248,75 200,000 30,934 262,739 535,000 820,973

Notes: Potential and Recycled clear and colored bottles are split 0.37/0.63 as the former is the recyclable materials used by Soliver and United Glass Products and in producing glass whereas the capacity of other transparent glass producer was not available. Source: Calculated based Tables 3, 4, 5, 9 and Annex 3 for industrial capacity, recyclable losses during industrial losses and imported bottles.

As Table 17 shows, there are wide ranges in the estimated potential recycling, depending on the approach:  Plastic: we do not know the current recycling capacity of industry, nor do we know the total used in the industry. It is therefore possible that they might be able to use any amount from none at all (if domestic plastic cannot compete on price with imported material) to the current level of imported material (if domestic plastic were competitive and could replace imports). Adding to the complexity for this sector is the number of informal sector actors and the substantial specialization of product, which make it even more difficult to guess where an actual value might fall between these two estimates.  Paper: industry representatives indicated in the survey that they would like to purchase more recyclable paper domestically if it were available. Their processing capacity exceeds the amount now collected domestically, so the difference between the two - 70,000 - may be a lower bound on the additional recyclable material they could use. We do not know the details about the 6,900 tons now exported: there may be product specialization, or particular features of the market which explain why this is not used within the country. At the upper end, if more domestic product were available, paper manufacturers could be interested in investing in increased processing capacity, so they could replace the 302,800 tons now imported with domestic recyclables. It seems however less likely that they could absorb the full 375,301 tons, which, according to our estimates, are now generated in the country.  Clear Glass: here, as well, processing capacity exceeds the amount collected locally. As such, industry might be easily able to absorb another 7,005 tons from local collectors if they were available. We do not know how much is exported, however. If some of current collection is exported, then this figure could be higher. As with paper, it is possible that, at the upper end, glass manufacturers would invest in additional processing capacity if the recyclable inputs were available locally, in this case absorbing most of the amount estimated to be generated in the country.

Economic Instruments for Recycling – March 2016 28 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

 Colored Glass: the industrial capacity is presently zero, so all colored glass is currently exported, in the amount of 5,825 tons per year. There is no colored glass manufacture in Lebanon since the destruction of the Maliban plant in the 2006 war; therefore, this situation is not likely to change.  Metal: the industrial capacity is close to nil, which is not likely to change given energy costs and the high export prices for the material. While the potential scenarios for expanded use of paper and clear glass recyclables are plausible, there are less clear opportunities for expansion in the plastic and metal sectors. In all cases, any excess recyclables generated in the future will either be absorbed by sectors willing to expand, exported or land filled.

4.4.2 Production Cost Structure of Recycled Materials and 3 Incentive Scenarios

Table 18 compares the costs per ton of imported and recycled raw material in industrial processes, in order to assess the impact of possible subsidies.9 For each material, the table shows partial operations and maintenance expenditures (OMEX, limited to electricity and water), the effective real market price of recycled material, and transportation cost. The recycling technologies for paper, plastic, metal, glass and tires on which these costs are based are detailed in Annex 9, Table 26. The partial OMEX, imported raw material prices, effective real prices for recyclable material, and transport costs are based on local markets. The partial OMEX does not include rent, administration, salaries, social security, and other costs, although, if need be, additional labor cost should be included in the future. Average prices of recyclables were derived from all the data gathered on recyclable market prices, adjusted by a technical recovery factor for comparison purposes with the cost of imported raw materials (from Table 16).

9 Incidentally, this cost structure is midway along the recyclable value chain; the end of the value chain would go a step further, either producing durable or non-durable products or exporting the semi-finished products.

Economic Instruments for Recycling – March 2016 29 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 18: Subsidies under 3 Scenarios, in $US/ton

POSSIBLE SUBSIDY NEEDED

Scenario Scenario Scenario 3 MATERIAL AND 1 2 OMEX+

SUBCATEGORY Cost transport transport+ Price transport

Transport Transport cost / cost / Eff mkt Partial OMEX effective partial price less mkt price import price Raw Material Import Price of Recyclables OMEX Effective Real Market

HDPE 1,787 1,642 862 30.6 4% 2% -1,037.25

PET 2,634 1,331 364 30.6 8% 1% -1,697.20

PVC 1,375 1,168 NA 30.6 2% -237.58

PLASTIC Fiberglass 0 0 NA 30.6 -30.58

PS 1,650 1,763 434 30.6 7% 2% -352.07

PP 1,467 1,666 417 30.6 7% 2% -248.49

Nylon 762 2,362 245 30.6 12% 4% 2.78

42% - White 564 1,221 73 30.6 subsidy of 5% 2.04 $21.4

42% PAPER Newspaper 564 1,221 73 30.6 subsidy of 5% 2.04 $21.4

42% Cardboard 564 1,221 73 30.6 subsidy of 5% 2.04 $21.4

52% 18% GLASS Clear 167 702 47 30.6 subsidy of subsidy of 3.85 $23.2 $22.3

Aluminum 693 2,283 855 30.6 4% 4% 2.06

METAL 32% Steel 94 4,108 285 30.6 11% subsidy of 40.69 $25.9

204% TIRES Tires 15 3,980 250 30.6 12% equiv. 248.67 $29.8

Note: Partial OMEX covers electricity and water costs. Average transportation collection costs, which are based on the prices listed in the MOE Memo 1/8 of November 16, 2015, are the weighted by the share of total Lebanese population in each Mohafaza and converted to 2015 prices using the GDP deflator from the 2015 World Development Indicators. The prices are for compacted waste but will be considered for transportation cost in this case and cover transportation from collection point to the industry gate. PVC is not recycled in Lebanon. Possible subsidies are color-coded: red means that a subsidy is needed, orange means that a subsidy should be considered and green means that no subsidy is required. Source: Derived from Table 26; New Zealand Ministry of Environment for technological recovery standards: ; and World Development Indicators website: .

Economic Instruments for Recycling – March 2016 30 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

Three possible incentive scenarios are considered, bearing in mind that the cost structure of the whole value chain is not available. The subsidy level below which such incentives may be justified is the marginal cost of land filling per ton of waste, which amounts to $US 108: $US 31 for collection cost; $US 11 for bailing; $US 18 for wrapping; $US 7 for transportation cost from waste segregation to landfill; and $US 42 for land filling (MOE Memo 1/8 of November 16, 2015, p.2 in 2015 prices; note that this is considerably less than the amount that some major service providers are billing the government, of $162/ton, as mentioned in Chapter 3). That is the amount saved for each ton diverted from landfills to recycling; as long as the subsidy is below $108, the country will save money by recycling instead of land filling the material, and should consider providing the subsidy. Capital expenditures (CAPEX) are not included in this analysis, because it is assumed that capital investments were already carried out and no savings are possible there if the amount land filled declines.  Scenario 1: offers a transportation subsidy when the ratio of transportation cost per ton to effective real market price of recycled material is greater than 12%. The subsidy is set so as to bring transportation cost borne by the enterprise down to 12% of the effective real market price of the material. Transportation is the highest cost item in the budgets of the two NGOs and companies collecting at the source. A gradual reduction of the subsidy should be considered if transportation can be optimized over the mohafazat and cazas and costs reduced after one or two years.  Scenario 2: offers a transportation subsidy when the ratio of transportation cost per ton to OMEX per ton is greater than 5%. The subsidy is set so as to bring transportation cost borne by the enterprise down to 5% of OMEX. Also, a gradual reduction of the subsidy should be considered when transportation will be optimized over the mohafazat and cazas after one or two years.  Scenario 3: offers a subsidy designed to make the price of recycled material competitive with imported raw materials. To determine the amount involved, the partial OMEX (electricity and water), transportation, and effective price of recyclable material is compared to the import price of raw materials; where use of recycles is higher than imported by an amount greater than $US 0 but less than $US 108, the subsidy may be justified.

Economic Instruments for Recycling – March 2016 31 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 18 shows the calculation of possible incentives for the three scenarios; items in bold are where subsidy would be needed according to the criteria of the scenario. It suggests the following observations:  Scenario 1 - Transport cost is less than 12% of effective real market price for all plastics, metal and tires, but ranges from 42% for paper to 52% for clear glass. The subsidy required to bring transport cost down to 12% of effective real market price would therefore be $US 21.40 for paper, $US 22.3 for clear glass and $US29.8 for tires. If a choice were to be made between subsidizing glass, paper and tires, the available subsidies would go first to glass, since it needs more support to be financially interesting.  Scenario 2 - Transport cost is less than 5% of OMEX for all materials except glass (18%), steel (32%) and tires (204%). The subsidy required to bring transport costs down to 5% of OMEX would be $22.23 for glass and $29.83 for tires.  Scenario 3 - Most plastics except for nylon would require a subsidy of the difference between recycling costs and raw material import price to make use of domestically recycled material financially viable. As discussed above, the differential cost is net of rent, management and salary. For all materials except fiberglass, the subsidy required is however greater than the $108/ton cost of land filling, so it would not be justified on economic grounds. We have no additional data about fiberglass. As such, we cannot analyze for this product whether a subsidy might actually make a difference to the amount recycled. For all other materials, no subsidy is needed for the recycled material to be more financially interesting than import. Therefore, there is no justification for further analysis of the transportation-based subsidies even if they were justified according to the criteria defining them. This analysis suggests, therefore, that subsidies do not make sense as a strategy for increasing recycling activity in Lebanon. Where recycling is currently not possible because of the costs involved, the subsidy required would exceed the cost of land filling by orders of magnitude, and could therefore not be justified. In all other cases, recycling is already profitable, so a subsidy is not justified as a way to encourage it; instead, it would be necessary to determine what other market failures create a situation in which a financially- viable activity is not being pursued.

Economic Instruments for Recycling – March 2016 32 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

4.5 Conclusions

Chapter 4 provides the following critical points:  When analyzing recycling, imports, and exports of different materials, we find a range of results. Plastic recycling is not profitable except for nylon. Paper and clear glass are worth recycling domestically rather than importing raw material. There are no longer facilities for production of colored glass in the country. Metal is collected and mostly exported for remanufacturing, as metal production is energy-intensive and therefore not competitive in Lebanon where energy costs are high.  The paper / cardboard and clear glass industries could absorb most of the high-quality recyclable material which is currently unused in Lebanon, if collection systems were in place to provide a supply of clean product.  Some service providers are using waste residues which cannot be recycled to manufacture RDF as an alternative fuel for kilns. This may be a reasonable use for plastic, which is too expensive for recycling to be financially viable in Lebanon.  If recyclable material is to be exported, it will have much higher value to the local economy if it is processed in Lebanon prior to export, rather than exporting raw material.  The recycling business does not need financial incentives or subsidies, as there are no products for which a subsidy costing less than the landfill cost would flip recycling from being uneconomical to being financially interesting. Recycling paper products and clear glass is already financially viable without subsidy, if the product is available. Recycling metal and plastics would require subsidies far higher than the savings on landfills, and are therefore not fiscally justifiable. Thus, the possible subsidies for encouraging more recycling which were primary focuses of this study are not warranted under the current conditions.

Economic Instruments for Recycling – March 2016 33 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

5.1 Objective and Process

The main objective of this chapter is to provide decision-makers options to shift the cost of public sector solid waste management to the households and businesses and other institutions that rely on it.

5.2 Existing Sources for Financing of Solid Waste Management

Below is a summary of the existing sources of financing for solid waste management. Source 1: the national budget funds infrastructure including MSW. The capital cost of this infrastructure (collection equipment, sorting plants / compost plant, incinerators, new landfills, etc.) is usually covered by the Council for Development and Reconstruction (CDR) and paid through the GoL National Budget, which in turn receives its revenues from a wide range of taxes and other sources. One option for funding solid waste management could be a dedicated increase in the Value Added Tax (VAT), to be distributed to the municipalities through the Independent Municipal Fund (IMFu), with the share to be distributed to each community based on population. Unfortunately, the use of an indirect tax such as the VAT is inequitable and inefficient, as it places the burden on all consumers across the board, rather than targeting the waste generators per se. Source 2: Individual municipalities and so-called "unions of municipalities" (municipalities which join forces to benefit from economies of scale and additional central government funding to implement joint projects) pay for street sweeping, distribution of the household sorting bins, trash management awareness campaigns, collection of sorted waste, and transportation of the waste to treatment or disposal sites. The funds to cover this come from:  Revenues from the IMFu, which are managed by the Ministry of Interior and Municipalities. These in turn come from taxes collected by GoL; thus these costs are borne by the taxpayers. The formula for allocating funds to municipalities lacks clarity; current allocations cannot always be explained using the existing formula. According to Law 280 dated 30/4/2014, municipalities hosting MSW facilities will receive additional funds from IMFu.  Local municipal budget. Municipalities collect a small fee (arsifa wa majarir) for solid waste collection, street sweeping, and sewer network services, which covers a fraction of the cost of these services. An increase in this tax to cover household waste collection and disposal would have to be approved by the Parliament. The amount of the increase could vary among municipalities facing different costs for these services; for example, in Zahleh they come to $US 22 per ton (see Zahleh meeting notes, Annex 3), whereas in BML they cost $US 35/ton (Sweep-Net, 2014, p.29).

Economic Instruments for Recycling – March 2016 34 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

Source 3: Development partners have provided soft loans and grants for MSW financing, to build basic infrastructure or to reduce the pollution associated with waste management. Those funds can be of two types:  International loans (World Bank, Arab Funds, etc.), which in turn are paid back by the taxpayers who ultimately bear the cost. These also include soft (very low interest) loans, which are repaid by the private beneficiaries under some circumstances (e.g. the World Bank-funded LEPAP project).  International grants (EU, USAID, UN Agencies, etc.); being grants, these costs are borne by the donors. Source 4: The operating costs of MSW facilities can be financed by a gate fee charged on the waste sent by neighboring municipalities. This is the case in Zahleh, where the surrounding villages using its sorting facilities and landfill pay $US 13 per ton (see Zahleh meeting, Annex 3). Source 5: Municipal solid waste management can be funded through the sale of recyclable material. Contractors operating sorting and composting plants have minimum performance standards in terms of the amount of sorted recyclables and compost which must be collected and produced. The revenues from the sales of this material are either shared between the municipality and the operators or kept by one party. Zahleh allows the operator to keep and resell an increasing amount of recyclables based on performance criteria set in the contract management (see meeting under Annex 3). In contrast, payments under the Sukleen- Sukomi contract in BML are based on quantity of waste processed, without any built-in output-based incentives to increase recycling. Moreover, Zahleh sells its recyclables to the highest bidder, recyclables whereas Sukleen-Sukomi sells them at a fixed price to buyers whose selection criteria remain unknown. If landfill operators were allowed to collect and sell recyclable material, this could also create a new industry “mining” existing landfills to extract material for sale. However, avoiding the dumping in the first place would be a much more cost-effective way to obtain material for recycling. Source 6: Revenues from the sale of energy (in the form of electricity or heat) from waste- to-energy plants can also be used to fund solid waste management. In Lebanon, these revenues are being distributed as compensation to the inhabitants living in the vicinity of the Naameh landfill. While this does not directly fund solid waste management, the cost of running the landfills could be higher if these funds were not available to compensate local residents. In the future, electricity from waste to energy plants may be sold to Electricité du Liban, and this could become a source of revenue for solid waste management. Source 7: The sale of carbon credits generated by improved waste management has been proposed at times as a way to generate revenue. However, the current price of carbon credits is too low to make this a useful strategy.

Economic Instruments for Recycling – March 2016 35 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

5.3 Alternative Instruments Supporting Solid Waste Management

Other instruments for funding solid waste management may complement the sources discussed above. Some of these instruments could also be designed so as to enhance recycling. Several of such instruments were reviewed based on the literature (EEA waste directive, 2009; Hecht, 2014) and compared, to identify those which are most attractive in the Lebanese context based on four criteria: ease of implementation, ease of enforcement, equity, and efficiency. A score of 1 to 5 was used for each evaluation criterion, with the higher score indicating higher suitability in the Lebanese context. The scores totaled to give a general impression of which tools might be most useful. A definition of each instrument is provided below, based on Hecht (2014), and the comparison is provided in Table 19. For efficient cost recovery, more than one of these instruments should be used.

5.3.1 Landfill Taxes

Usually used in densely populated countries due to the high opportunity cost of land, these taxes constitute a surcharge on the tipping fees used to cover the operating costs of the landfill. Different landfill tax rates are applied to different types of waste in order to encourage recycling; the highest taxes are imposed on recyclable or compostable materials. Most countries introduce these taxes at a quite low rate and gradually increase them, giving companies and municipalities time to adapt to the new economic environment. This tax should not be expected to replace other revenue sources over the long term, as total revenues are expected to decline as landfills become less important.

5.3.2 Municipal Waste Charges

These are fees for service paid by households and others whose trash is collected by the municipality, to cover the costs of trash management. They can take five different forms: (1) equal shares per capita; (2) equal shares per household or business, with the same charge paid irrespective of the quantity of waste produced (called a fixed fee); (3) charges which are proportional to some other metered charge such as water, electricity or phone service, with the billing for SWM included with the other invoice and payment for SWM required in order to retain the other service; (4) in proportion to the rental value of owner-occupied real property; and (5) based on how much the household or business actually throws out, with the charge assessed by measuring waste weight or volume. Municipal solid waste charges are often an add-on to a fixed charge paid by all households or businesses, such as the arsifa wa majarir fee. The additional charge will create an incentive to reduce waste generation only if the amount of the charge is related to the amount discarded. For example, where consumers are asked to sort their waste, the charge could be based on quantity of waste not recycled, or could be higher for the portion not recycled. However, in poor countries where the charges are a significant share of income, such systems may lead to an increase in illegal dumping rather than an actual reduction in waste.

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5.3.3 Incineration Taxes

These are added to gate fees at trash incinerators. To encourage reuse or recycling rather than incineration, incinerator taxes may be set to ensure that burning waste will cost more than other options higher on the waste hierarchy (see Figure 2). However, the design of the incinerator may require it to consistently receive a certain waste stream in order to operate efficiently or cost-effectively. In this case, authorities may keep the combined charges for incineration lower than those for recycling, to ensure that there is always enough fuel to keep the incinerator operating properly. As such, while it will generate revenue, it will not create an incentive to recycle rather than burning trash.

Figure 2: The Expanded Hierarchy of Waste Management

Source: World Bank, 2011, p.37.

5.3.4 Tradable Permits for Waste Disposal

Issued through a solid waste cap and trade system, these schemes allocate landfill allowances to each municipality which specify the biodegradable and inert waste quantity to be land-filled. Municipalities may either use their allowances (i.e. bring waste to the landfill) or reduce the quantity of waste needing land-filling and sell their allowances to others. The advantage of trading schemes is that they give municipalities a financial incentive to generate less waste (since they can then sell their landfill allowances), while allowing municipalities for which waste reduction is costly to buy land filling rights from other municipalities which have already reduced their waste generation below the cap. They are, however, extremely difficult to implement and have rarely been used anywhere in the world.

Economic Instruments for Recycling – March 2016 37 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

5.3.5 Recycling Credits

This is a mechanism through which monetary credits are paid by the authority responsible for disposing of the trash to the organization or institution which collects it (local authorities, NGOs, individuals): the former saves money if the recyclable materials are kept out of the landfill. Recycling credits are most useful in small communities or rural areas, where local government does not have enough staff to diversify into recycling, or in areas which have not yet introduced recycling as a major part of the trash management system. The limitation to the application of this scheme is when recycling costs are greater than the disposal cost plus the revenue from sale of the recyclable material, which makes the method useful in the short run only. More efficient methods are needed in the longer run.

5.3.6 Deposit / Refunds

This is a surcharge imposed on specific items at the time of purchase, which is returned when either the packaging or the item itself is returned at the end of its useful life. Such systems are often applied to beverage containers, but have also been charged for car batteries, tires, electronic items, and motor oil. Reintroducing the deposit / refund scheme on sodas and beer cans and bottles should be considered as a priority; introducing such charges on other products may also be useful.

5.3.7 Extended Producer Responsibility (EPR)

EPR systems require the producers or importers of goods sold with packaging to take back the packing materials and ensure that they are recycled, or to join a group take-back scheme which handles these responsibilities for them. Group take-back schemes will be less effective than individual enterprise responsibility in actually reducing the use of packing materials in the first place, since their members are not confronted with the much more onerous task of managing the material themselves. (EPR systems are discussed in greater detail in Chapter 6 of this report.)

5.3.8 Packaging Taxes

These are imposed on the producers or importers of goods sold with packaging, and are assessed based on weight or volume, as well as based on the nature of the packing material (paper, plastic, wood, etc.). One of the most common instances of such taxes at the retail level is a charge on plastic bags provided by stores, combined with a requirement that big stores take them back for recycling. Retailers collect the tax from customers by applying a small charge on bags (e.g., $US 0.05 per bag), which encourages people to bring their own bags.

5.3.9 Green Public Procurement

Green procurements systems are designed to use the purchasing power of government to increase demand for green products sufficiently to reduce their market prices. However, previous worldwide experience has shown that this tool was not effective. (Rudenauer et al, 2007)

Economic Instruments for Recycling – March 2016 38 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 19: Comparison of Instruments for Solid Waste Management Cost Recovery

INSTITUTIONAL AND BEST INTRODUCTION INSTRUMENT STRENGTHS WEAKNESSES ADMINISTRATIVE METHOD REQUIREMENTS Implementable Enforceable Equitable Efficient Overall score

 Creates an incentive to reduce all land filling  Require the existence of  Help shift cost of solid waste licensed landfills; however management from taxpayers since it should reduce Uniform to beneficiaries demand for landfill space, this 4 5 5 5 19  Introduction at low rate Landfill Tax  Revenues from taxes rise then decline as should become easier in the and gradual increase  Charges are paid by the policy starts achieving its objective of giving companies and businesses rather than future than it would be reducing the land filling of waste otherwise municipalities time to individuals or households; adapt this can make them  Could lead to littering to avoid paying the tax administratively (though if waste disposal is not properly enforced;  Could be applied on the perhaps not politically) however this is less likely from a municipal scale with no simpler mechanisms targeting businesses than one necessary need for targeting households  If differential rates apply to introduction at national Landfill Tax  Should reduce demand for recyclables, waste will have scale with much landfill space to be sorted and measured higher rate for 2 3 5 4 14  Specifically creates an prior to or on arrival at the recyclable incentive to reduce land landfill, which will be difficult material filling of recyclable material and costly

Economic Instruments for Recycling – March 2016 39 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

INSTITUTIONAL AND BEST INTRODUCTION INSTRUMENT STRENGTHS WEAKNESSES ADMINISTRATIVE METHOD REQUIREMENTS Implementable Enforceable Equitable Efficient Overall score

 There is no waste incineration in Lebanon; on balance the existence of incineration would work against recycling rather than for it  Encourages recycling if high  Require the existence of  Not relevant, as there is Incineration taxes are placed on  A minimum waste flow is needed to sustain licensed incinerators with 1 4 4 1 10 no incineration in Taxes recyclable materials going to the incinerator gate fees Lebanon the incinerator  If cost of energy sold to public grid falls, incinerator may need to increase the gate fee or receive subsidy from government  Public opposition to incineration in Lebanon

 Require distinct waste disposal and waste  Efficient only in the short run; other tools are collection/sorting authorities more efficient in the longer run  Require the existence of local  Encourage recycling before  Constrained by local recycling capacity accredited waste recycling broader recycling systems  The origin of the recyclable materials is companies taking a variety of  Issue to be decided are in place difficult to track e.g., a waste recycling recyclable materials nationally and Recycling  Encourage waste recycling company could be claiming credits from a introduced at once in  Require a system for 1 4 5 3 13 Credits companies to collect municipality for recyclable materials rural areas where there recording the quantity of themselves if the credit is collected from outside its jurisdiction are no municipal sorting recovered recyclables and high enough to cover their systems  Not clear that the returns will justify the getting a receipt to be collection costs costs, particularly the administrative costs, submitted for credit collection in a country where municipal governments  Requires municipalities to have low management capacity have cash up front to give recycling companies

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INSTITUTIONAL AND BEST INTRODUCTION INSTRUMENT STRENGTHS WEAKNESSES ADMINISTRATIVE METHOD REQUIREMENTS Implementable Enforceable Equitable Efficient Overall score

 Increases the demand for products manufactured with recycled inputs, and therefore for recyclable material  Limited impact because of the currently low  Increased demand is public expenditure  Need to put in place a system expected to lead to in the public procurement  Available evidence from other countries  Issue to be decided Green Public increased production and administration ensuring that suggests that this mechanism does not work 5 3 5 3 16 nationally and Procurement economies of scale, thus the goods are made from a well (Rudenauer et al, 2007) introduced at once reducing the price of certain percent of recyclable products manufactured with  In the short run (at least), raises public materials recyclable material; that price expenditures drop is expected to further increase demand, growing the overall market for recycled paper and other products

Economic Instruments for Recycling – March 2016 41 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

INSTITUTIONAL AND BEST INTRODUCTION INSTRUMENT STRENGTHS WEAKNESSES ADMINISTRATIVE METHOD REQUIREMENTS Implementable Enforceable Equitable Efficient Overall score

 Theoretically allows waste to be handled in the least expensive way possible: institutions for whom it is  Extremely complex in any administrative costly to avoid waste buy context; it will be even more difficult in  Need to put in place a Solid Waste  Issue to be decided extra allowances and Lebanon mechanism for the trade Cap and Trade 1 3 5 2 11 nationally and discharge into the  Does not always encourage recycling system including third party System introduced at once environment, while those for  If waste treatment cost is uniform across the verification whom it is inexpensive to country, the system is no longer efficient avoid waste sell their allowances and manage their wastes in other ways

 Type of packaging and EPR  Constitutes an incentive to system should be reported to reduce packaging waste, and concerned ministries during  Introduced differently for Extended to design packaging that is  If EPR is implemented through joining a the permitting / permitting different materials or for Producer easy to handle and recycle group take-back scheme, it doesn’t provide renewal process 3 4 5 3 15 different sizes of Responsibility a strong incentive to reduce packaging  Shifts the cost for recycling  Given the small market in companies packing materials to the firms Lebanon, a federation of EPR who sell packaged goods across packaged goods should be considered

Economic Instruments for Recycling – March 2016 42 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

INSTITUTIONAL AND BEST INTRODUCTION INSTRUMENT STRENGTHS WEAKNESSES ADMINISTRATIVE METHOD REQUIREMENTS Implementable Enforceable Equitable Efficient Overall score

 High administrative costs relative to  Encourage recycling Packaging revenues  Should be mandated by  Could be introduced at  Typically used for plastic 5 4 5 4 19 Taxes  Retail enterprises may not be willing to municipalities the municipal level bags, to minimize their use collect the tax if it annoys consumers

 Begin with commercial enterprises and Waste  Does not create an incentive to reduce apartment buildings Charges, waste disposal above a certain size Equal Charge  Easy to use  Not equitable 3 3 2 5 13 and extend over time to small enterprises / per Enterprise  Politically would be very difficult to introduce buildings or Household and implement  Rate could be decided on a municipal scale

Waste  Is affected by potential problems in the  Begin with commercial Charges  Places more burden on enterprises above a pricing system of other bills  Easier to implement and proportional to those who are likely to be certain size and extend  Does not create an incentive to reduce enforce be-cause it relies on another bill making more use of the 5 5 3 5 18 over time to households waste disposal the billing and collection and collected service or are better able to and small enterprises system of another institution through that pay for it  Somewhat arbitrary in terms of amount paid  Rate could be decided billing system per enterprise or household on a municipal scale

Economic Instruments for Recycling – March 2016 43 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

INSTITUTIONAL AND BEST INTRODUCTION INSTRUMENT STRENGTHS WEAKNESSES ADMINISTRATIVE METHOD REQUIREMENTS Implementable Enforceable Equitable Efficient Overall score

 Does not create an incentive to reduce waste disposal  To the extent that the  Requires reliable data on the imputed rental imputed rental value of value of owner-occupied housing or owner-occupied housing or business-owned commercial property. For residential property, this is difficult to  Begin with residential Waste commercial property is assess, requires detailed knowledge of both  Government must be able to properties because Charges related to trash generation, it housing and housing markets, and very reliably estimate imputed imputing rental values is proportional to places more burden on those much subject to corruption. For commercial rental value of owner- more conceivable than rental value of who make more use of the 1 2 4 3 10 property, imputed rental values would be occupied properties, which is for commercial property residential or service almost impossible to estimate because the almost inconceivable in  Tax rate could be commercial  To the extent that imputed markets are too thin for comparable Lebanon decided on a municipal property rental value is an acceptable properties to exist scale proxy for ability to pay, it places the burden on those  If revenues are retained by municipalities who can best shoulder it rather than collected nationally for redistribution, rich municipalities will have more funds available than poor ones since their property values are higher

Economic Instruments for Recycling – March 2016 44 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

INSTITUTIONAL AND BEST INTRODUCTION INSTRUMENT STRENGTHS WEAKNESSES ADMINISTRATIVE METHOD REQUIREMENTS Implementable Enforceable Equitable Efficient Overall score

 Begin with commercial  Very equitable  May lead to increased illegal dumping by enterprises above a PAYT (waste  Creates an incentive to poor households  Requires a system for certain size and extend charge based reduce waste disposal  Complex to implement with high determining how much trash over time to households 3 5 5 4 17 and small enterprises on weight or  Enhances recycling if low (or transactions costs each household or enterprise later volume) no) charge is imposed on  Complex to administer because it requires a produces source sorted recyclables way to measure trash discarded  Rate could be decided on a municipal scale

Waste Charges,  More equitable than the fixed  Does not create an incentive to reduce  Need to know how many uniform  Rate could be decided charge per household waste disposal residents per household; this 1 1 3 5 10 charge per on a municipal scale system is probably impossible capita (house-  Not equitable holds only)

 Easy to use and efficient if targeted products contribute  Administrative burden on  Issue to be decided Deposit / stores who receive however a nationally and significantly to the waste 4 5 5 5 19 Refunds stream share of the deposit to cover introduced at once at their handling costs the municipal scale  Increase recycling rates

Economic Instruments for Recycling – March 2016 45 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

5.4 Conclusions

Chapter 5 makes several useful points. First, several existing sources of financing could be fine-tuned, including:  Increasing the VAT by a very small percentage in order to fund MSW management, and distributing the revenues through the IMFu;  Increasing the arsifa wa majerir fee and using the revenues to fund MSW management;  Mainstreaming landfill tipping fees based on the Zahleh experience;  Providing incentives to trash collectors or landfill operators to increase recycling, by allowing them to keep some or all of the revenues from sale of recycled material;  Generating revenues from selling energy from waste to energy plants and combustion of landfill methane emissions; however the possibility of earning this revenue or the need to guarantee a fuel source for the waste-to-energy plant must not lead to burning material that could be recycled.

The comparison of instruments to shift MSW management costs onto users highlights several points:  The mechanisms which will be easiest to implement and raise the fewest problems - packaging charges for plastic bags, deposit / refund systems for bottles - raise only modest revenues (if any; often they are set at a rate which simply covers the costs of implementation) and have relatively modest environmental benefits. Extended producer responsibility systems may also be useful, although more analysis of specific systems would be useful;  High landfill taxes could generate revenue, reduce demand for landfill space, and increase recycling; all of these goals would be very useful in Lebanon;  Both pay as you throw waste management charges and charges linked to another bill (probably telephone) are definitely worth further investigation. The former is theoretically preferable but considerably more difficult to implement; it could be initiated for commercial enterprises to see how it may work. The latter will not create an incentive to reduce waste or increase recycling, but may be a useful way to generate revenue. Opportunities to implement such a tax through phone or other bills should be investigated.

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6 EXTENDED PRODUCER RESPONSIBILITY

6.1 Objective and Process

The main objective of this chapter is to analyze the suitability of extended producer responsibility (EPR) schemes to shift the cost of public sector solid waste management to the producers and importers. A literature review was carried out and a rapid survey was performed.

6.2 Overview

EPR is a strategy for solid waste management which requires manufacturers and/or distributors to take financial or physical responsibility for their packaging and for their products after the end of their useful life. Responsibility may take one of two forms; the producers and distributors are required either to collect and recycle their goods, or to participate in collective schemes which are structured to do that for them. EPR in effect shifts some or the entire burden for managing and/or funding the disposal of the products and the packing material away from government and the taxpayers, and onto the manufacturers and sellers of these goods themselves. EPR programs for industries such as packaging and paper exist in over thirty countries around the world, including most European countries and many Canadian provinces. Many companies involved in EPR programs realize that they can help them to save and even to make money. For instance, Alcoa, a leading aluminum processor, claims that 95% less energy is required to make a can out of recycled aluminum than out of virgin raw material (The Guardian, EPR, May 1, 2012). EPR is implemented through either mandatory or voluntary product take-back schemes. Mandatory schemes require that manufacturers, importers, distributors and/or retailers take products back at the end of their useful life, usually in combination with a recovery or recycling target, as in Germany, Austria and Taiwan (Nahman and Godfrey, 2009). Alternatively, EPR schemes can be implemented voluntarily by industry groups, often to meet targets agreed with their government, as it is the case in the Netherlands and the UK. Voluntary approaches are often created by agreements arising out of a memorandum of understanding between industry and governments, in some cases motivated by a desire from industry to avoid the imposition of potentially harmful regulations (Nahman and Godfrey, 2009). On average, both mandatory and voluntary take-back programs have been found to increase recycling. However, some studies, such as one conducted in South Africa a few years ago, have found that voluntary industry initiatives (e.g. in South African can, glass and PET industries) are more effective than government-imposed regulations as in their plastic bag industry (Nahman and Godfrey, 2009). According to the report, this may be explained by market failures affecting recycling markets; namely information failure, technical constraints, search costs, etc. which act as barriers to the development of a viable recycling industry. In such cases, the industry overcomes such failures, e.g. through voluntary implementation of EPR.

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Experience with EPR in Europe, particularly Austria, suggests several lessons for design of effective systems (Stiglitz, 2012):  Legislation has to be realistic, feasible, flexible and must be enforced by the government;  The targeted industry has to play its role and take responsibility;  Non-compliance must be minimized;  Government has to implement an integrated approach with additional tools like landfill taxes, PAYT systems, green procurement rules, and infrastructure to treat non- recyclable waste;  Existing recovery systems should be integrated with each other, e.g. the formal and informal sector SWM systems. Developing countries have been far slower than developed countries in implementing EPR (Nnorom and Osibanjo, 2008). Some of the difficulties associated with implementing EPR in developing countries are as follows (Widmer et al., 2005; Nahman and Godfrey, 2009; Nnorom and Osibanjo, 2008):  Consumers tend to re-use or dump products rather than recycle;  Recycling is undertaken largely by the informal sector, making organized collection difficult to implement and posing risks to the environment and human health;  Consumers are unwilling to return goods for recycling or pay for disposal of their waste;  Neither consumers nor trash collectors are aware of the environmental and health impacts associated with inappropriate waste handling and disposal, nor of the benefits of recycling, including potential financial rewards;  Funding to finance recycling and adequate waste management is inadequate;  Infrastructure for safe and efficient recycling and waste management is insufficient;  Legislation, regulations, and enforcement of waste management policies are all lacking;  Capacity, skills and technology are inadequate;  Reliable data for designing efficient waste management / recycling strategies and for making rational investment decisions do not exist. Commonly cited EPR benefits include (recycling.about.com/od/Resources/a/Extended- Producer-Responsibility.htm):  Long-term cost savings to state and local governments and general taxpayers as end-of- life management costs are shifted to the producers and others in the product chain;  Long-term cost savings as market forces create incentives for producers to remove toxic substances from products and implement practices which reduce end-of-life costs;  The provision of a consistent, easy-to-predict system for producers, rather than piece- meal legislation;  The reduction of greenhouse gas emissions through increased use of recycled materials;  Because the burden of post-use management of the product is born by producers, the latter are more motivated to reduce this cost through packaging innovations such as increased recyclability, weight reduction, or reuse.

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6.3 The Debate about EPR

In spite of the success of initiatives such as PRO Europe, substantial opposition worldwide to EPR systems remains. The Grocery Manufacturers Association in the United States has sponsored a study which, among other things, compared recycling rates between cities where EPR policies have been instituted, including in Europe and Canada, with the United States where there are no EPR programs for packaging or paper (recycling.about.com/od/ Resources/a/Extended-Producer-Responsibility.htm). This organization has a vested interest in finding that EPR is ineffective, since its members would bear the initial costs involved; nevertheless, its findings are worth looking at:  EPR does not necessarily result in improved overall recycling rates. From a more comprehensive perspective which examines overall municipal solid waste recycling rates, the recycling rate of solid waste in the United States (24%) where there is no packaging EPR was just as well or better that the rate in the EU (23%) and Canada (18%), where EPR is widely employed. These jurisdictions with EPR may achieve high recycling rates for the narrow portion of total discards covered by EPR.  EPR does not necessarily prompt changes in packaging design and selection. Packaging use in the United States declined at a faster rate than in the EU where EPR is common.  Waste and recycling systems do not always become more efficient because of EPR. One non-EPR United States County has a lower net cost per ton ($US 156) than EPR programs in the Canadian provinces of Manitoba ($US 166) and Ontario ($US 202). In fact, EPR programs increase government and administrative costs.

6.4 Examples of EPR Schemes

EPR systems have been effectively introduced in many countries. Their experiences can shed some light on what might be useful in Lebanon.

6.4.1 The Waste Electrical and Electronic Equipment Directive (WEEE Directive)

The WEEE Directive, the European Community directive 2012/19/EU on waste electrical and electronic equipment, was enacted in February 2003. To comply with WEEE regulations, producers must join a Producer Compliance Scheme, which provides a link between producers and environment agencies as well as a number of services, which enables WEEE to be effectively and economically recycled or reused. (ec.europa.eu/environment/waste/weee/ index_en.htm)

6.4.2 Eco-Lef (Tunisia)

Tunisia has implemented Eco-Lef, a voluntary public system designed to improve the collection, treatment and recovery of some specific packaging wastes after the enactment of the Solid Waste Management Act No.96-41 (http://tunisia-way.com/index.php/The-main- projects/The-main-projects/Public-System-for-recovery-and-reuse-waste-Eco-Lef.html).

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The Agence Nationale de Protection de l’Environnement (ANPE) is responsible for implementing the program, which focuses on the reuse of plastic bags, plastics, and aluminum packaging. Eco-Lef began in 1998 in partnership with a small (but constantly growing) number of industrial firms. Most producers and bottlers of mineral water, fizzy drinks, juices or milk products had joined Eco-lef (Figure 3). The Eco-Lef system has been successful in improving collection / recycling of plastic packaging. It consists of 318 Eco-Lef collection centers, which collected 15,700 tons of plastic packaging wastes in 2009 (www.uneca.org/sites/default/files/uploaded- documents/SROs/NA/AHEGM-ISDGE/egm_ ge-_tunisa_eng.pdf). 70-90% of the collected plastic waste is recycled thanks to agreements signed with 100 private sector recyclers. The program is partially financed through the levy of 5% on net added value of local manufacturers and customs value for importers.

Figure 3: Eco-Lef Modus Operandi

Source: Abdeljaoued, Ilyès. May 13-15, 2014. The Extended Producer Responsibility: the Tunisian experience. SWEEP-NET’s Fourth Regional Forum, Amman.

6.4.3 Eco-Emballages (France)

Eco-Emballages is a private sector French company created by the state in 1992, following the issuance of a packaging directive by the French legislature in the same year. It is funded mainly by industry, and provides an interface between business and other stakeholders for the promotion of recyclable packaging and the reduction of packaging waste (ec.europa.eu/environment/ waste/prevention/pdf/Eco_Emballages_Factsheet.pdf).

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There are three main pillars to the organization’s current work:  To fund and monitor selective collection of recyclable material, in close partnership with local authorities; this provides the authorities with technical, financial and practical assistance;  To work with companies on making packaging more sustainable, at both ends of the packaging chain. At the upstream end, the organization works with producers to help them design packaging which is lighter and easier to recycle. At the downstream end of the chain, Eco-Emballages collaborates with the recycling industry to guarantee a sustainable outlet for the materials collected;  Informing consumers themselves and encouraging them to sort their waste, notably through awareness campaigns. Today, 84% of French people say they sort their waste on a regular basis. 99% of the population has access to a selective collection system, and over 36,000 towns have signed an agreement with Eco-Emballages. In 2011, 3.12 million tons of domestic packaging was recycled, which is equivalent of forgoing 2.03 million tons of CO2 emissions (downtoearth.danone.com/ 2012/11/22/eco-emballages-20-years-making-packaging-more- environmentally-friendly ). Eco-Emballages’ budget includes donations and compulsory contributions (as per articles L.541-10 and R.543-53 to R.543-65 of the French environment code) which are made by more than 50,000 companies which market locally produced or imported packaged goods for distribution to and consumption by domestic households. Eco-Emballages allows these contributing companies to comply with their EPR obligations through the management and the recycling of these household packages. The packaging companies are required to pay Eco-Emballages a contribution for each package sold. In return they obtain the right to affix a "green dot" on their product to certify that they have been exempt from the take-back obligations. These contributions are used by Eco-Emballages to financially support selective collection and sorting schemes managed by the municipalities (hal.cirad.fr/halshs- 00624087/document).

6.4.4 PRO Europe s.p.r.l.

Probably the best known example of EPR operates across Europe. Founded in 1995, PRO Europe (Packaging Recovery Organisation Europe) is the organization behind the well- known “Green Dot,” the umbrella organization for European packaging and packaging waste recovery and recycling schemes. “Green Dot” systems contribute to the implementation of producer responsibility by the companies involved. A “Green Dot” on packaging means that for such packaging, a financial contribution has been paid to a qualified national recovery organization, set up in accordance with EU Directive 94/62 on packaging and the respective national laws rather than having producers taking responsibility for the physical recovery of their own packaging (www.pro-e.org/About.html).

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6.4.5 Repak (Ireland)

The details of the schemes vary somewhat from country to country, but the Irish one, called Repak, offers a useful example (Repak website). Repak is a not-for-profit company which has been licensed by the government since 1997 to operate as a compliance scheme for packaging recovery. It was set up by Irish businesses and is owned by its members. Repak charges its members fees according to the amount and type of packaging they place on the Irish market. The fees are in effect subsidies, which are used for the collection and the recovery of waste packaging through registered recovery operators across Ireland – so that the individual member companies are exempt from the actual collection and recovery of their own products.

What is being done in the United States? In the United States, California has introduced an industry-run statewide mattress recycling program to promote proper end-of-use management and increase recovery of valuable resources. The passage of the California Used Mattress Recovery and Recycling Act (Chapter 388, Statutes of 2013, and Hancock, Senate Bill 254) aims to reduce illegal dumping, increase recycling, and substantially reduce public agency costs for the end-of-use management of used mattresses. The legislation established an industry-run, statewide program to increase the recovery and recycling of mattresses at their end-of-use. Cleanup legislation signed by the governor in September 2014 (Chapter 371, Statutes of 2014, and Hancock, Senate Bill 1274) provides additional clarity regarding definitions, report submittals, and record keeping requirements. (www1.calrecycle.ca.gov/Mattresses/default. htm)

6.5 Products that Could Benefit from EPR in Lebanon

EPR may offer a useful approach for Lebanon to improve management of several products: Cardboard: The Lebanese paper and cardboard recycling industry is possibly one of the more efficient in the country, yet from the data shown in Chapter 3, less than half of the material discarded is being actually recycled. In comparison, in the United States about 78% -- more than 25 million tons of all the corrugated cardboard produced in 2007 -- was collected and recycled. In addition, while nearly 70% of United States households have access to paper recycling facilities, far fewer Lebanese households have such access (www. environmentalleader.com/2014/01/14/does-packaging-and-paper-need-extended-producer- responsibility-laws/#ixzz3wJ8QJnEk). Mattresses: Currently, mattress manufacturers such as FAP industries in Beirut and REVA industries in Zouk are not required to physically take back the used mattresses they produce or pay to have them removed and recycled. Such a recovery and recycling system exists in California (see above), and may be of interest in Lebanon. The bulky nature of mattresses and the absence of recycling of used mattresses results in illegal littering or discarding in open dumpsites or landfills even though used mattresses are highly recyclable (between 80-90% of each mattress), and certain components such as steel and polyurethane have high market value.

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Tires: Bakarji, a Beirut-based tire importer and multi-brand tire distributor puts Lebanon’s annual new tire import volumes at 1 million (Personal communication, October 2015). Ahmad Hikmat Shamseddine runs the tire recycling firm OLA 3R, in the village of Toul in Nabatiyeh, Shamseddine’s plant is capable of recycling up to 700,000 tires a year and out of every two tires he recycles, he produces 1m² of rubber tiles to cover playground floors. Every 1,000 tires produce a ton of rubber granules; the big granules are used to make playground floors, while the small ones are put in molds to make boards (dailystar.com.lb/News/Lebanon-News/2015/Mar-03/289376-recycling-lebanons-tires- instead-of-burning-them.ashx). Shamseddine’s main challenges are not unlike those of other Lebanese producers; the high cost of production relative to other regional players, the lack of government support either in the form of sector regulation, import duties, or tax subsidies on investments in new machinery and energy. Construction materials: It is estimated that around 774,000 tons of construction demolition waste was dumped at temporary landfills, in valleys, and offshore in 2010. (Chehab and Srour, 2013). In comparison, in the EU, around 30% of construction materials used by the European construction industry come from recycled sources and this figure can rise to 90% while at the same time helping to support sustainable construction (Waste-Management- World website). Hunting Bullet Shell Cases: Although banned since 2004 by the Ministry of Environment, hunting is still practiced in Lebanon and generates an excessive amount of shell cases (plastic and brass) left by hunters along mountainous trails. An EPR system could be envisaged, although the matter needs additional research and “implementation effectiveness.”

6.6 Suggested Areas to be Further Studied

Based on better information disaggregating waste sources, feasibility studies should be carried out on the implementation of EPR systems for large cardboard packaging (e.g. the boxes in which major home appliances are shipped), mattresses, and tires, as these items are large and managing them would be relatively simple. If an EPR approach proves workable for these products, additional analysis could go into expansion of the system in the future.

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6.7 Conclusions

Chapter 6 provides the following critical points:  For packaged products which are being imported to Lebanon and which require after-life attention and disposal, the government should obtain some form of compensation, especially where recycling fees have already been paid by the manufacturers to foreign entities -- such as Eco-Emballages – which are entrusted with reduction of waste in the country of origin.  The success experienced over the last few years by some regional countries (like Tunisia’s Eco-Lef for instance) deserve due attention by the authorities.  For cardboard, when one analyzes the 50% gap between the potential recyclable vs. the actual recyclables, as well as the comparative advantage to using domestically recyclables over imports and re-inject valuable resources into the local economy, there is clearly a case for EPR.  Due consideration must be given to whether shifting responsibility for recycling to producers and retailers may yield better results. Indeed, they are usually better prepared for the job than the government, as long as proper regulations and strict enforcement are put in place to ensure proper execution.

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7 RECOMMENDATIONS

The recycling business is unregulated and very dynamic in Lebanon, although the market is capturing less than half the potential recyclables through the formal and informal sectors. Sorting and composting plants now in place or under construction will have enough capacity to cover 75-80% of total demand within a couple of years; the challenge is to ensure that recyclable material is actually extracted, preferably at the source rather than after collection. On the demand side, paper and clear glass manufacturers are clearly better off using local recyclable materials than raw material imports. However, these industries are facing two major issues. First, the quality of recycled material is below standard, as waste materials get contaminated during processing. Second, manufacturers are competing with traders who make a substantial profit exporting recyclable material. Industries using plastic, paper and clear glass have or are willing to increase their capacity to process the annual stock of recyclables in Lebanon, if they can get the material. Colored glass and metal industries have stopped production due to the destruction of the plant in 2006 by the Israelis, and the stiff international and regional competition, respectively. Colored glass has a small recycled market in Lebanon (blown glass craft), while metals, mainly from construction and demolition and scrapped cars, are being exported. On the supply side, the profitability of the recycling business is mixed:  Recycling of plastic is by far the least profitable, due to the multiplicity of plastics in the waste stream which requires additional handling and sorting time and expertise, not to mention the pollution footprint during processing (local and global emissions), and the very high CAPEX and OMEX for recycling plastics which are easily offset by the import of plastic raw materials. Moreover, low oil prices reduce the cost of imported raw material, reducing the demand for local plastic recyclables except where there is a local excess demand for a specific product. With current prices and exchange rates, it is far more profitable to use plastic for RDF, as long as environmental safeguards are in place to manage the possible air pollution;  Recycling of paper, clear glass and tires is profitable;  Recycling metal and colored glass is not profitable in Lebanon, and is on the back burner at present. Building on these results, three critical issues emerge: increasing the quantity of recyclables collected rather than land-filled, improving their quality, and increasing the revenues available for solid waste management. The analysis carried out through this study offers several key insights into how - and perhaps how not - to work towards these goals. First the complex data collection and calculations discussed in chapter 3 of this study highlight the clear challenges involved in understanding the current state of recycling in Lebanon. Any new policies will be easier to design if better and more transparent data were available on the generation and composition of solid waste. Developing such data calls for a concerted national and municipal government effort to better track and publicly report on the activities of all engaged in collecting and processing waste, including formal sector companies and informal sector scavengers. Such an effort, which might readily receive the support of international donors themselves interested in the information, would ensure that future policies could be based on more reliable data than were available for this study.

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Second, fiscal instruments for encouraging more recycling, which were the primary focus of this study, are not warranted under the current conditions. Such instruments would make sense if the subsidies involved would be sufficient to encourage a shift from land filling to recycling, without costing more than the current cost of land filling, which is $US 108/ton. The economic analysis in this study has shown that recycling of paper products and clear glass is already profitable, without any subsidies, so such instruments are not justifiable. For those materials, a more appropriate approach would be to address the institutional and operational constraints which currently reduce the quantities being recycled rather than offering subsidies. On the other hand, recycling plastic and metals is not economically viable in Lebanon, and the subsidies required to make those activities profitable far exceed the cost of land filling. They are therefore not fiscally or economically justifiable. Third, the review of current and possible future mechanisms for funding solid waste management leads to several recommendations to build the revenue streams:  Modest dedicated increases in existing taxes - the VAT and the arsifa wa majerir fee - will provide additional revenue for redistribution to municipalities through the municipal fund.  Mainstreaming a high landfill tipping fees will create an incentive to recycle in order to reduce the amount paid. Such fees could be graduated, with higher rates for recyclable material; however this would be considerably more complicated to implement as it would require sorting waste so as to measure the quantity in each category before tipping.  Allowing trash collectors and landfill operators to retain revenues from the sale of recyclables will create financial incentives to recycle rather than land filling material which can be reused. (It could also lead to a side activity in "mining" landfills for recyclable material.)  Pay as you throw charging for solid waste collection and payments based on and collected through another bill (perhaps telephone) should be both investigated. The former is theoretically preferable because it creates an incentive to reduce waste disposal, but the latter would be much easier to implement.  Packaging taxes (on plastic bags) and deposit / refund system (on bottles) are both relatively simple and effective ways to reduce material use, reduce trash in the environment, and encourage recycling. They may not actually raise revenues for government, however, as they are often set no higher than the cost of their implementation. Extended producer responsibility systems, while somewhat more complex, may also be useful to ensure recycling of specific packaging material.  Both pay as you throw waste management charges and charges linked to another bill (probably telephone) are definitely worth further investigation. The former is theoretically preferable but considerably more difficult to implement; it could be initiated for commercial enterprises to see how it may work. The latter will not create an incentive to reduce waste or increase recycling, but would be an efficient way to generate revenue. Opportunities to implement such a tax through phone or other bills should be investigated. Fourth, feasibility studies should be carried out on the implementation of EPR systems for large cardboard packaging (e.g. the boxes in which major home appliances are shipped), mattresses, and tires, as these items are large and managing them would be relatively simple. If an EPR approach proves workable for these products, additional analysis could go into expansion of the system in the future.

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Lebanon should investigate in more detail the feasibility, particularly in political and institutional terms, of introducing each of these suggested mechanisms. None of these would be simple to implement, and prior study, relying on the data mentioned in the first recommendation, would be essential to determine exactly how they could be set up and the impacts of different charge levels. These measures seem to be the most promising ones to achieve the desired ends, however; thus moving ahead on them is recommended.

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Annexes

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

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ANNEX 1: Bibliography

Abdeljaoued, Ilyès. May 13-15, 2014. The Extended Producer Responsibility: the Tunisian experience. SWEEP-NET’s Fourth Regional Forum, Amman. Arcenciel. 2016. Pilot study on waste sorting in the Beqaa funded by Agence française de Développement –AfD. Forthcoming. Chehab, Ghassan R. and Issam M. Srour. March 26-27, 2013. Recycling and Reuse of Construction Materials, Fourth Build It Green Conference, Beirut, Lebanon. www.eecosolutions.com/conferences/build-it-green-lebanon-4/presentations/Ghassan-Chehab-and-Issam- Srour-a-greener-concrete-is-it-technically-feasable-in-Lebanon.pdf CAS-MOSA-UNDP-ILO (Central Administration for Statistics, Ministry of Social Affairs, UNDP and ILO). 2010. The National Survey of Households Living Conditions 2007. Beirut. www.cas.gov.lb/index.php/all-publications-en#households-living-conditions-survey-2007. CDR (Council for Reconstruction and Development)-Laceco. 2014. Supervision of Greater Beirut Solid Waste Treatment Plants, Contract No 6854: 16th Annual Report June 1, 2013-May 31, 2014. Beirut. CEDARE, UNEP and Plan Bleu. 2000. Institutional Assessment of Solid Waste Management. Sophia Antipolis. Coparm, waste treatment plant and machines: www.coparm.biz/fr/recyclage_des_metaux.htm. Environmental European Agency (EEA). 2009. Diverting waste from landfill. Effectiveness of waste-management policies in the European Union. Brussels. EPA. 1992. “Markets for Recovered Glass” www3.epa.gov/epawaste/nonhaz/municipal/pubs/cok.pdf ESCWA. 2015. A Strategic Investment Framework for Green Economy in Arab Countries. Beirut. European Union Fact Sheet on Solid Waste Management (SWAM) I and II. Franklin Associates, 2007. Life cycle inventory of 100% post consumer HDPE and PET recycled resin from post consumer containers and packaging, by Franklin Associates, a division of ERG, Prairie Village, Kansas www.napcor.com/pdf/FinalReport_LCI_Postconsumer_PETandHDPE.pdf Franklin Associates. 2009. “Life Cycle Inventory of Three Single-Serving Soft Drink Containers”. www.container- recycling.org/assets/pdfs/LCA-SodaContainers2009.pdf Gentel earth recycling. 2013. “Recycling Paper”. www.gentleearthrecycling.com/recycling-paper/ Government of Canada, 1996. A publication of William Murray Science and Technology Division, Canada publications.gc.ca/Collection- R/LoPBdP/BP/bp431-f.htm Hecht, Joy. 2014. Environmental Fiscal Instruments for Solid Waste Management: Global Experience and Options for Lebanon. European Union Support to Reforms – Environmental Governance. GFA Consulting Group GmbH / Umweltbundesamt / Mott Mac Donald. Beirut. www.joyhecht.net/ LebanonStREG.html Jackson, Sue and Tamás Bertényi. 2006. ImpEE Project, University of Cambridge. Job, Stella. 2013. “Recycling glass fibre reinforced composites – history and progress (Part 1).” Reinforced Plastics Magazine www.materialstoday.com/carbon-fiber/features/recycling-glass-fibre-reinforced-composites/ Job, Stella. 2013. “Recycling glass fibre reinforced composites – history and progress (Part 2).” Reinforced Plastics Magazine www.materialstoday.com/carbon-fiber/features/recycling-glass-fibre-reinforced-composites-33970/ Lave, Lester, Noellette Conway-Schempf, James Harvey, Deanna Hart, Timothy Bee, and Christopher MacCracken. 1994. A Case Study of the Economics and Engineering Issues Associated with Recycling Postconsumer Goods, Recycling Postconsumer Nylon Carpet www.greener-industry.org.uk/pages/nylon/8nylonPM3.htm. Lave, Lester, et al. 1998. "Recycling Postconsumer Nylon Carpet." Journal of Industrial Ecology 2(1): 117-126. Ministère de l’Energie et de l’Eau. 2004. Les Libanais et l’Eau Potable. En collaboration avec le financement du Service de Coopération et d’Action Culturelle de l’Ambassade de France au Liban. ICEA, Corail Association et IPSOS. Beyrouth. MOE (Ministry of Environment) Memo 8/1 of November 2015. Beirut. MOE-EU-UNDP. 2014. Lebanon Environmental Assessment of the Syrian Conflict & Priority Interventions. Beirut.

EconomicName ofInstruments Report for Recycling – March 2016 59 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

MOE-UNDP-Italian Cooperation. 2014. Integrated Solid Waste Management of Baalbeck Casa. Final Report. Prepared for the Baalbeck Municipality by PROGES-Planning and Development Consulting. MOI, UNIDO and ALI. 2010. The Lebanese Industrial Sector: Facts and Findings - 2007. Beirut. Nahman A., Godfrey L. 2009. Economic instruments for solid waste management in South Africa: opportunities and constraints to implementation. CSIR/NRE/RBSD/IR/2008/0046/C. Pretoria: Council for Scientific and Industrial Research. researchspace.csir.co.za/dspace/bitstream/10204/4055/1/ Nahman1_2009.pdf National Electrical Manufacturers Association. 2008. Recycling households CFL, October 2008 www.nema.org/Policy/Environmental- Stewardship/Lamps/Documents/Recycling_Household_CFLs.pdf. Nnorom, I. C., and O. Osibanjo. 2008. “Overview of electronic waste (e-waste) management practices and legislations, and their poor applications in the developing countries.” Resources, conservation and recycling 52.6 (2008): 843-858. Onondaga Resource Recovery Agency, 1998. Waste reduction is a Smart Business Decision, Repaper project www.id2.ca/downloads/eco-design-paper-facts.pdf Pehlken, Alexandra and Elhachmi Essadiqi. 2005. “Scrap Tire Recycling in Canada.” CANMET-MTL Report. www.nrcan.gc.ca/sites/www.nrcan.gc.ca/files/mineralsmetals/pdf/mms-smm/busi-indu/rad-rad/pdf/scr-tir-rec-peh-eng.pdf Ramboll/LACECO. 2012. SWM in Lebanon, Sub-Report 1: Baseline Study. Contracted by CDR. Beirut. Rüdenauer, Ina, et al, 2007. “Costs and Benefits of Green Public Procurement in Europe: General Recommendations" Produced for EU / DG Environment by the Institute for Applied Ecology, Freiburg, Germany. ec.europa.eu/environment/gpp/pdf/ eu_recommendations.pdf Sabbagh, Bassam. 2015. Solid Waste Management in Lebanon: Options for Treatment and Lesson Learned. Presentation made by the Ministry of Environment Head of Urban Environment Service at the Movenpick Hotel, April 27, 2015. Beirut. Scrap MSC. 2008. Recycling Household CFLs www.scrapmsc.com/our-pricing/ SafeSHRED. 2012. “Waste Paper Recycling”. www.safeshred.com/shredding-services/waste-paper-recycling-and-electronic-waste- disposal-los-angeles/ Serena, NG, 2015. High Costs Put Cracks in Glass-Recycling Programs, the Wall Street Journal issue of April 2015 www.wsj.com/articles/high-costs-put-cracks-in-glass-recycling-programs-1429695003 Stiglitz, Christian. 2012. Packaging waste management following the extended producer responsibility (EPR) principle 1995-2012 in Europe and the Austrian experience. Susan Kinsella, 2012. Paper network comparing recycled paper to virgin paper, Repaper project, environmental network project. SWEEP-Net GIZ (Regional Solid Waste Exchange of Information and Expertise network Gesellschaft für Internationale Zusammenarbeit). 2014. Country Report on Solid Waste Management in Lebanon. Funded by German Cooperation in collaboration with ANGed. Tunis. University of Cambridge, 2005. The IMPEE project wwwg.eng.cam.ac.uk/impee/topics/RecyclePlastics/files/Recycling%20Plastic %20v3%20PDF.pdf USEPA. 2014. Municipal Solid Waste Generation, Recycling, and Disposal in the United States, Energy and Environmental Profile of the U.S. Glass Industry. Washington, DC: U.S. Department of Energy, Office of Industrial Technologies. April 2014 www3.epa.gov/epawaste/conserve/tools/warm/pdfs/Glass.pdf World Bank. 2011. Republic of Lebanon Country Environmental Analysis. Report Number 62266-LB. Washington, D.C. World Bank WDI (World Development Indicators). 2015. Online database published by and accessed on the World Bank website: data.worldbank.org/products/wdi Widmer, R., Oswald-Krapf, H., Sinha-Khetriwal, A., Scnellmann, M., Bon, H., 2005. Global perspectives on the e-waste. Environmental Impact Assessment Review 25, 436 - 458. WRAP. 2009. Financial modelling and assessment of mixed plastic separation and reprocessing, WRAP project MDP021, Report prepared by Axion consulting www.wrapcymru.org.uk/sites/files/wrap/WRAP%20A%20financial%20assessment%20of %20recycling%20mixed%20plastics%20in%20the%20UK.pdf

EconomicName ofInstruments Report for Recycling – March 2016 60 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

Websites Accessed:  About Recycling website:  Al-Akhbar Website:  Association of Lebanese Industrialists:  Arcenciel website:< www.arcenciel-en.org>  Auto info website:  Canada Used Tires Regulations website:  CAS (Central Administration for Statistics) website:  Cedar Environmental:  Commerce du Levant website:  Contra-Zero Waste Act website:  Daily Star website:  Downtoearth Danone website:  EC website:  Executive Magazine website:  Lebanese Customs Data:  Metro Metal Recycling website:  Ministry of Environment website:  Ministry of Energy and Water website:  Ministry of Finance website:  Ministry of Industry website:  Ministry of Interior and Municipalities website:  Ministry of Tourism website:  New Zealand Ministry of Environment website:  OMSAR website:  Pro-e website:  Profitable recycling website:  RCREEE website:  Space Research website:  Scrap MSC website:  Scrap Tire Disposal and Recycling Rates website:  Liban: < www.terreliban.org>  Sweep-Net:  The Guardian website:  Tunisia Way website:  Uber Beirut website: www.uber.com/cities/beirut>  UNCHR website:  UNICEF website:  UNDP website:  UN-ESCWA website:  UNIDO website:  UN ILO website:  UNRWA website:  Waste Management World website:  World Bank:

EconomicName ofInstruments Report for Recycling – March 2016 61 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

ANNEX 2: List of People Met

Meetings were conducted with several stakeholders of the recycling sector with the objectives to discuss the existing solid waste management practices, to assess the potential revenues from the waste sector, and to hear from them regarding how they think recycling could be enhanced in Lebanon. A list of the conducted meetings is provided in Table 20 whereas major discussed points and discussions over the phone are outlined in Annex 3.

Table 20: List of Meetings with Stakeholders

STAKEHOLDER LIST OF PERSONS MET LOCATION / DATE STREG ATTENDANTS

Ministry of Environment Mr. Youssef Doughan, Advisor to the Minister of Beirut on June 3, Dr. Naji Chamieh (meeting # 1) Environment 2015 Mr. Fadi Doumani

Dr. Lamia Mansour, StREG Policy Consultant Mr. Nicolopoulos Constantinos, StREG Consultant Ministry of Environment Beirut on June 3, Dr. Naji Chamieh SEA Solid Waste (meeting # 2) 2015 Mr. Fadi Doumani Dr. Mazen Makki, StREG Consultant SEA Solid Waste

Mr. Marwan Rizkallah, LEPAP project manager Mr. Sebastian Frisch, External Consultant in Hazardous Waste Management under the World Ministry of Environment Bank Institutional Development Fund that was set up Beirut on June 3, Dr. Naji Chamieh (meeting # 3) to build capacity and produce Audit for enterprises 2015 Mr. Fadi Doumani that would seek LEPAP funding in the future. Dr. Weam Abou Hamdan, Consultant under the World Bank IDF grant

Dr. Naji Chamieh Mr. Dany Gedeon, Director General MoI on July 16, Mrs. Karine Abdelnoor- Ministry of Industry Dr. Rabih Badran, Head of Statistics & Industrial 2015 Tohme Information Department Mr. Fadi Doumani

Mr. Khalil Harfouche, Mayor of Jezzine and Head of Union of Jezzine municipalities Office of the Mayor Dr. Naji Chamieh Municipality of Jezzine Mr. Ali and Ayman Ayash, Main Solid Waste in Sin el Fil on July Mr. Fadi Doumani Contractor for the Federation of Nabatiyeh and 3, 2015 surrounding municipalities in the South

Dr. Naji Chamieh Starco on July 30, Mrs. Karine Abdelnoor- OMSAR Mr. Mohamed Barakeh 2015 Tohme Mr. Fadi Doumani

Dr. Joy Hecht Dr. Naji Chamieh Badaro on July 28, Municipality of Zahleh Mr. Assad Zgheib, Former mayor of Zahleh 2015 Mrs. Karine Abdelnoor- Tohme Mr. Fadi Doumani

EconomicName ofInstruments Report for Recycling – March 2016 62 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

STAKEHOLDER LIST OF PERSONS MET LOCATION / DATE STREG ATTENDANTS

Dr. Joy Hecht Dr. Dominique Salemeh, Head of the Chemical Sin el Fil on July 29, Arcenciel Dr. Naji Chamieh Dept., ESIB and Arcenciel Advisor 2015 Mr. Fadi Doumani

Dr. Joy Hecht Sursock Museum, Dr. Naji Chamieh Council of the Beirut Mr. Rachid Achkar, Member of Council of the Beirut Sursock Street on Municipality Municipality Mrs. Karine Abdelnoor- August, 3 2015 Tohme Mr. Fadi Doumani

Dr. Joy Hecht Dr. Jamil Taleb, Eng. Rabih Osseiran, and Eng. Olfat Verdun on July 29, Dar El Handassah Dr. Naji Chamieh Awad 2015 Mr. Fadi Doumani

Contra International Ms. Yvonne El Hajj, Project Manager of Zero Waste Dr. Naji Chamieh Contra-Zero Waste Act Offices on July 14, Act 2015 Mr. Fadi Doumani

Cedar Environmental Results of Research Study on Recycling Expired AUB on July 7, Dr. Naji Chamieh (presentation) Pharmaceutical Pills by Mr. Ziad Abichaker 2015 Mr. Fadi Doumani

Cedar Cedar Environmental Mr. Ziad Abichaker, Owner Environmental (CE) Mr. Fadi Doumani (meeting) HQ on July 9, 2015

Terre Liban in July Dr. Naji Chamieh Terre Liban Mr. Paul Abi Rached and Mr. Antoine Abou-Moussa 30, 2015 Mr. Fadi Doumani

Gefinor on July 28, Dr. Naji Chamieh UNICEF Ms. Joumana Nasser 2015 Mr. Fadi Doumani

Mr. Saad Oueni, General Manager ALI Headquarter, Mr. Ibrahim Mallah, Environmental Advisor Dr. Naji Chamieh ALI Sanayeh, July 8, Mrs. Rana Tabcharani Saliba Head & Project 2015 Mr. Fadi Doumani Manager, Environment & Energy Department

ALI Headquarter, Dr. Naji Chamieh ALI Dr. Fadi Gemayel, President Sanayeh, October 21 and 28, 2015 Mr. Fadi Doumani

Phone call Lefico Mr. Ahmad Halbawi, Owner’s Son Dr. Naji Chamieh November 4, 2015

Phone call Soliver Mr. Sami Haidamous Dr. Naji Chamieh November 4, 2015

Phone call Kfoury Metals Mr. Kfoury Dr. Naji Chamieh November 4, 2015

EconomicName ofInstruments Report for Recycling – March 2016 63 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

ANNEX 3: Major Points Discussed during Meetings with several Stakeholders

Table 21: Major Points Discussed with Stakeholders

MAJOR POINTS DISCUSSED WITH STAKEHOLDERS

Ministry of Environment (meeting # 1)

Observations about Sukleen:  The contract stated a target of 10 to 12% sorting but could only achieve 7 to 8% because of scavengers.  Sukleen hires subcontractor to do some additional transformation of the sorted material (such as shredding of plastics). Concerning tires, they have a machine that extracts the steel from them.  Sukleen has initiated a sorting at the source program on a voluntary basis, where Blue Bins are for Paper/Cardboard and Red for metals, plastics, and glass.  Two companies Sikomo and Solicar are buying directly from Sukleen.

Ministry of Environment (MEETING # 2)

 Draft SEA of solid waste strategy of Lebanon would be completed by end of July 2015. A copy of the draft final SEA can be given to the project team for review.  A database of all existing and planned sorting/composting/landfill facilities along with their existing operational status has been prepared.  The SEA study will give a list of recommendations at the macro scale legal and financial levels (cost recovery and tariffs).  The team met also Mr. Ahmed Osman (StREG consultant), who mentioned that a sustainable strategy is currently being prepared for the Prime Minister Council, which would cover many sectors including solid waste.

Ministry of Environment (meeting # 3)

 Mr. Frisch’s mandate is to develop for MoE fact sheets for the industrial sector to properly manage its industrial waste. Eventually to develop TOR for the establishment of a hazardous collection center, an incinerator, and a hazardous landfill.  Estimated hazardous waste is between 50,000 to 100,000 tons/day, the sectors that will be looked at are: chemical processing, metal, tanneries, food, oil, cosmetics, textile, and ceramics.  Study is expected to be completed by end of Dec 2015.  LEPAP loan provided by BDL is being amended to increase the loan ceiling above the limit of 10 million $US, with any incremental loan above $US 10 million will be charged a 1% interest for a period of 10 years. It could potentially finance the upgrading of existing sorting plants.  Mr. Rizkallah, who was a consultant for the Municipality of Zahleh, said that the sorting tender document for the contractor included a clause on sorting of at least 10% of the waste collected. The revenues from the sales of the sorted material where split 80/20, with the Municipality taking the larger portion. It was in a way a bonus for the contractor to do better sorting. Municipalities in the region of Zahleh were allowed to dispose of their waste in their sanitary landfill at a tipping fee of $US 13 per ton. It was estimated that the cost of operation of the landfill was about $US 18 per ton, and that $US 3 to 4 per ton where collected from the recycling revenues. Zahleh auction out the recycles.  In general, the small scavengers are selling directly to recyclable collection centers which sell to industries. It was suggested to only formalize those centers and leave the existing small scavengers.

EconomicName ofInstruments Report for Recycling – March 2016 64 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

Ministry of Industry

 There are about 4,000 formal and 7,700 formal and informal industrial facilities in Lebanon.  A survey of about 170 industrial facilities was conducted to evaluate their air pollution emissions as part of a climate change project with the Ministry of Environment.  The Ministry developed a very basic database on the industrial facilities in Lebanon, a copy of which was sent to us.  A copy of a form that must be filled by every facility was also given to us. This form is usually required when an industrial facility needs a certificate from the Ministry to export its products.

Municipality of Jezzine

 The company of Mr. Ayash collects about 250 to 325 tons/day from a population of 220,000 and from around 110,000 Syrian refugees.  Collection and disposal fee is around $US 25 per ton. The scavengers at the dump of Nabatiyeh are from the municipality itself.  The brand new Nabatiyeh sorting/composting plant that was financed by the EU is still un-operational due to a tender dispute. The Mayor of Nabatiyeh is Dr. Ahmad Tuhail.  The contractor said that the transportation cost is $US 5 per/ton/km, split 1/3 fuel, 1/3 labor, and 1/3 maintenance. The density of the transported waste varies from 400-500 kg/m3.  The Mayor of Jezzine is about to launch in 40 municipalities/villages of the Caza of Jezzine, a sorting at the source campaign where 6000 red 50 liter household bins and 400 red 240 liter street bins will be distributed. This project is financed by the EU. Currently the federation of Jezzine is collecting and selling cardboards at a price of $US 40 per ton to an agency in Hay el Sellom (next to the airport). With the launching of the EU project, Mr. Ayash will be responsible of collection and recycling. The collected recyclables will be sent to Arab Salim village where Mr. Ayash will segregate, compact, and then sell the recycled materials. Mr. Ayash bought the Arab Salim successful operation run by women. Some of the women will be responsible for quality control of the recycled output.

OMSAR

 Waste Management is scattered: OMSAR is responsible for setting up EU program on sorting and composting plants. Also, OMSAR is responsible for granting service contract that are paid from its own budget.  11 sorting and composting plants (except Tripoli that only has a sorting plant; and Baalbeck that produced biogas) were funded by EU to the tune of Euro 14.2 million:  Jbeil: operational  Abrikha: operational  Tyre: operational  Khirbit Selm: operational  Khiam: operational  Minieh: operational  Mishmish: operational  Baalbeck: contract just signed with contractor: $US 26 per ton.  Tripoli: contract about to be signed in September 2015.  Nabatiyeh: some issues remain to be resolved after problems with the procurement process.  Soueijani: some issues remain to be resolved.

EconomicName ofInstruments Report for Recycling – March 2016 65 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

Assad Zgheib (Former mayor of Zahleh)

Governance:  About 50,000 people live in Zahleh and the locally registered residents constitute the minority. Main local real estate tax represents 6% of the estate/apt. rental value.  Main local business tax represents 10% of the business rental value.  There is a tax discrepancy between locally registered residents and not-locally registered residents as the latter contribute to the larger share of the tax. According to Zgheib, the re-evaluation of the rental value could occur when the property is bought / sold or a new lease is signed. This issue is debatable because some municipalities are re-evaluating the rental value of properties to increase their revenues (need to be validated). Financial in 2010:  Collection and sweeping was $US 22 per ton; treatment and land filling were $US 35 per ton; gate fee for other municipalities to use the landfill: $US 13 per ton. This amount is less than the amount allowed by the 2002 decree.  Zgheib suggested that the government should encourage sorting at the source and to introduce a $US 4-6/household/month fee to cover the land filling cost and to be paid through the cell phone.  Arsifah wa Majarir (pavement and sewerage) fee covered 25% of the collection and sweeping cost.  Municipality has recourse if a household is not paying the real estate tax: warning, notification and auctioning the house but these measures are never enforced. See additional financial matters under the MOE meeting # 2. Independent Municipal Fund (IMFU) transferred amount is function of the real estate tax collected.

Arcenciel, Dominique Salemeh

 Need to devise sustainable solid waste management methods. In the new bids, the waste strategy is unclear as all options are on the table: recycling, RDF and Incineration/Waste-to-Energy (WTE). All these options are not complementary! Hence the market signals for investors are not clear: to burn or not to burn? Sweden went through this path where it invested in both recycling and incineration: Sweden has an over capacity for waste treatment and is offering to import waste for incineration.  If the recycling path is clearly adopted:  There is a need for awareness and capacity building  There is a need to promote SME dealing with recycling by providing incentives. France / EU Experience:  Eco-emballage is paid by manufacturing agencies and this tax is collected by a private entity that distributes the proceedings to introduce “points verts” and improve recycling; 2 issues arise:  Agencies exporting are not exempt of the eco-emballage, which means that the funds should technically be reinvested in the countries of export: Arcenciel wants to cash in on this loophole to get the funds that will be available to a federation of NGOs in Lebanon that will invest in secondary sorting plants.  A private agency is collecting all the eco-emballage fees. Why is it a private agency? Check and balances could be an issue! p.s. The Bouchon Roulant recycling initiative was introduced to prove that recycling could be rolled out in Lebanon.

Municipality of Beirut Rachid Achkar

 Usually, the president of the municipality (Mayor) exercises the executive power in the municipality, the municipality of Beirut being the exception. The Mohafez of Beirut holds the executive power, carries out the decisions of the City Council but also administers the Municipality.  Hence, responsibilities remain unclear: the Mayor and Municipal Council could plan and formulate strategies but it is up to the Mohafez to execute them. Hence, the municipality prospective planning is decentralized and the municipality execution is centralized.  A number of initiatives concerning solid waste management were devised by the municipality but never endorsed and executed by the Mohafez, e.g., need to give incentives for recycling and increase tax to cover collection costs (decision needs Parliamentary approval).  Check and Balance: the Mayor and Municipal Council have no control whatsoever on Sukleen.  Physical constraints: Beirut receives a great deal of commuters every day which substantially increases waste generation. However, Beirut does not have any space for incineration/land filling and needs to depend on other mohafaza/caza/municipalities for the end of chain waste handling. Nevertheless, social awareness, especially in schools, sorting at the source, recycling and composting are needed in Beirut to reduce the volume of generated waste.

EconomicName ofInstruments Report for Recycling – March 2016 66 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

Dar El Handassah Nazih Taleb (NT)

 The coastal sanitary dump in Tripoli could crash at any time as it exceeded its capacity. Dar al Handassah supervises the work of the contractor, Batco, at the dump and is hired by CDR. Important data on the Tripoli landfill and scavengers was handed over.

Contra-Zero Waste Act

 Zero waste act (ZWA) was established 4 years ago to provide schools and businesses, free of charge, with the tools which are necessary for them to segregate at the source (bins, awareness). ZWA sends their own trucks to collect the paper, plastic, and cans. Glass is not being collected. In return, and based on the weight of recyclables collected, schools & businesses receive points. Those points are redeemed by renewable energy products such as LED, Solar A/C, and solar Water Heaters.  Currently around 90 schools and 300 private companies have been participating in the Zero Waste Act program. Some of the baled paper and cardboard are sold to Solicar at $US 50 to 65 per ton. Aluminum is usually shred and exported. ZWA uses 3 vans and one pick up in its collection operation.  How Zero Waste ACT implements its project in the private sector:  Provides awareness sessions to students, staff and employees  Installs a certain number of cardboard bins free of charge and the rest will be paid for  Collects recyclables from members’ premises. The collection service, that is not free of charge anymore, depends on the customer need  Provides the concerned member, at each collection, with a log sheet that details the kind and weight of waste collected  Gives its members exposure on its social media pages, where they collect points versus their recyclables in order to pay them back their efforts  Invites members to environmental activities on a yearly basis such as Eco Challenge and Art Waste contest to push them to recycle and also to reuse their waste in an artistic way  Collaborates with many recycling industries (they do not recycle themselves); they collect recyclables, implement an advanced segregation and bale each kind aside then sell to Lebanese recycling industries.  Around 45 to 60 Tons of recyclables are sold per month (paper, cardboard, plastic, aluminum, tin, ferrous)  Municipalities should have to pay as you throw policies that encourage people to segregate  Contra and ZWA can supply bailers, conveyors, compactors, forklifts, trucks with and without compactors, shredders, and converters to turn waste into RDF.

Cedar Environmental (presentation)

 The presentation illustrated the results of a R&D project on an alternative process to recycle expired pills. Two major kinds of pills were first leakage-proofed in aluminum foils to avoid leakage and then embedded in plastic eco-boards already produced by Cedar Environmental using recycled plastics. To avoid future leakages, pills were embedded in designated areas of eco-boards to avoid being perforated in the future. Leakage tests were carried out by AUB and proved negative.  It was very difficult to get a sense of the recycling costs from Cedar Environmental! One figure was mentioned though: $US 50 per eco- board although the size was not mentioned.  The cost of transferring expired pills to Europe for safe incineration was mentioned by a pharmaceutical representative complying with the EPR system: $US 1,000-1,500 per ton as they are assuming responsibility for their expired products. But all other pills are disposed unsafely in Lebanon. A cost of $US 8,000 per ton was mentioned by AUB (Faruk Merheby) to transfer and safely incinerate toxic wastes  The problem remains that pills are only a fraction of expired medical drugs as for instance, expired creams, which are much more voluminous, are not considered in this alternative process.

EconomicName ofInstruments Report for Recycling – March 2016 67 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

Cedar Environmental (meeting)

 According to CE and based on municipalities across the regions where CE conducted tests or managed waste, the breakdown of waste stream is as follows: organic waste: 70-80%; Glass: 4-6%; Plastics: 10-15%; Aluminum: 1-3%; Paper and board: 5-10%; and metals: 2- 5%.  CE is pushing for the zero-waste option for the 7 categories of waste: household and yard waste; slaughterhouse waste; industrial waste; medical and pharmaceutical waste; electronics and construction and debris.  CE is suggesting a modular Municipal Recycling Facility with a capacity of 100 ton/day to achieve zero-waste.  With donor funding, CE implemented and managed about 11 composting plants with dynamic composting technology using drums: the process reduces the organic waste volume by 75% and its weight by 50% in 3 days according to CE! Only 3 small ones are still operational although 10 are still “standing”. The main one that was installed in Hbalin (Jbeil) was dismantled in 2013. The new elected Mayor was not keen on maintaining CE as an operator.  CE is also managing Qarantina’s slaughterhouse waste/residues. These operations are on hold due to the rehabilitation of the slaughterhouse: it is unclear what the disposal alternatives are during the rehabilitation of the slaughterhouse! In addition to compost (see next paragraph), CE is producing fertilizers (bones and horns) certified by LibanCert.  CE is producing various grades of compost including ones that are certified for agriculture ($US 150/ton against $US 400 per ton for imported certified compost). Still, an independent testing of slaughterhouse compost carried out by GIZ under the Environmental Fund of Lebanon was not compliant with EU standards (GIZ/ELF, 2009). Conversely, heavy metal tests are below EU standards according to CE!  CE has revived the blown glass in Sarafand and this segment has been very successful as it is adding value to the green glass that is stockpiled at CE warehouse. Decanters, pitchers, various forms of glasses in different colors, lamps, etc. are being supplied and sold in several stores in Beirut.  CE is producing eco-boards or eco-prefab by using plastic bags, etc. (PET). These boards are serving as a base to produce a number of finished products: small houses, booths, toilets, furniture, garden composting units, green walls and cubes, etc. (see Figure below): The Colonel brewery used eco-boards for its external walls in Batroun. A pilot funded by the Goethe Institute was implemented in 8 schools where kids were collecting recyclable materials that were transformed into eco-boards. Also, CE is piloting sorting at the source (a campaign is about to be launched in a northern suburb of Beirut where 2 bags will be distributed to the neighborhood: one for organic and paper, and one of other recyclables). Also, eco-board-based recycling bins will be installed in these neighborhoods and a permit was granted by the Beirut municipality to go ahead with the pilot. CE will provide the bins free of charge and will use their surface to sell adds. The bins will be closed and a special truck with a winch is needed to replace the bins. The monthly add fee was set at $US 49 per bin. One caveats being how to reduce the volume of plastic to avoid a quick filling up of the bin. A mechanical double-drum that will be installed on the top of the bin is being considered to flatten the plastic before putting it in the bin. Although the idea is good, it is doubtful that households will adopt the drum on a regular basis.  CE is producing eco-logs by mixing pulp residues of tissue production with municipal yard waste. This operation cannot be pursued as the manufacturing agency and CE are not on good terms! Also, CE is producing eco-pallets that could be transformed into eco-slabs that are used for décor, sound proofing and heat insulation. Finally, eco-bricks are also produced by CE based on construction debris. Comments:  It is very difficult to get a sense of the recycling costs from Cedar Environmental! Yet, CE has calculated the monthly household fee or tipping fee needed to implement and achieve municipal zero-waste based on a 100 ton/day unit (to be increased as needed) net of transportation: $US 4 per household per month equivalent to $US 59 per ton. When considered in terms of the Gross National Income per capita of $US 9,870 in 2013 (WDI, 2015) and assuming a constant 4.23 members per household (CAS, 2007) on average in Lebanon in 2013, the total fee per household in 2013 is equivalent to 0.11% of the Gross National Income (GNI) household. The waste fee suggested by the World Bank and based on a professional judgment (Cointreau, 2006) sets the waste fee for collection and transfer at 1% to 1.5% of the household GNI per year which includes transportation.  The municipal zero-waste costs include CAPEX (cost: $US 5.5 million) and OMEX but the net of the profits is made from the sale of recycled and composted materials. The area needed per unit is 6,000 m2 and 45 employees are required to run the scheme. Yet, it was impossible to verify the calculations behind these figures. Also, the dynamic composting sought under this scheme did not prove effective so far (see above).

EconomicName ofInstruments Report for Recycling – March 2016 68 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

Terre Liban

 Sorting paper at the source in schools was introduced in 1995 in 500 schools. Pulp and paper industries were supposed to collect the recycled paper!  Terre Liban was sub-contracted by UNICEF to perform an awareness campaign in 1,239 public schools in 2008.  Terre Liban has currently a program with 500 schools and is using a van funded by UNICEF to collect the paper.  Institutions were included in the collection since 2008: bankers, World Bank, private sector, MOE, etc.  Père Chami is processing e-waste.  Terre Liban is currently providing collection services to 600 entities. Three colored bins have been adopted.

UNICEF

Governance:  For Beirut and Mount Lebanon, the tonnage is assumed by CDR and Sukleen. Sukleen has the exclusive use of the landfill; therefore, municipalities did not have the opportunity to refuse Sukleen collection services because they did not have an alternative for land filling.  Sukleen has a problem collecting the recyclables.  Incentives for sorting at the source need to be considered by municipalities. The rural Arab Salim experience was not institutionalized at the municipal level and few villages adopted it!  UNICEF has already worked on solid waste (sorting at the source to granting trucks for collection of commingled waste) in the following villages. UNICEF 1: North Lebanon: El Mehamra, Bebnine, Berkayel, Sir, Halba, Machta Hammoud, Ouadi Khaled, Akroum, Al Minieh, Deir Ammar and Beddawi Bekaa: Hermel, Baalbek, Arsal, Bar Elias, Saadnayel, Qabelias, Taalbaya, Jeb Jennine, Ghazzeh, Majdel Anjar and Brital UNICEF 2: South Lebanon: Borge el Chémali, Ghazyat, Miemié, Saida Ville, Sarafend, Sour (Tyr), North Lebanon: Chekka, Zghorta, Al-Kalamoune, Al-Khraibém, Akkar El-Atika, Bakhoune, Deir-Daloum/Zouk el Mokashrin, Fneidek, Machha, Mejdlaya, Ouadi el-jamous, Ras Maska, Tripoli Al-Zehrieh, Zouk Bhanine Bekaa and Hermel: Al-Aine, Al-Fakiat, Al-Labouat, Al-Marje, Al-Nabi Chite, Al-Sawiré, Al-Qa el benjakie, Bednayel, Douress, El-Karaoun, Kfar Zabed, Zahlé (Maallaka-Terres, Maalaka-Kerek, Midan) Beirut and Mount Lebanon: Baouchariat, Borge el Baragenat, Borge Hammoud, Haret Horaik, Mazraa. Barja, Chehime, Chiah, Chouaifat (Amrouzzyat & Qobbat).

ALI (First Meeting)

ALI has around 770 industrial (formal) members which represent around 80% of the Lebanon total production value. According to SWEEP-Net (2014), industrial solid waste amounts to about 188,000 tons per year which represents ±10% of municipal waste. Nevertheless, this industrial solid waste chain remains poorly studied although high-value recyclables, such as metal, are being recycled and even exported. ALI’s main role is in lobbying for better customs fees, assisting the government in trade negotiations, advising members to enhance visibility in various trade shows. ALI has no control or influence on the industrial zones in Lebanon. ALI is against waste incineration but favors sorting and recycling with the rejects being used as RDF. A position paper on this issue has been provided and is attached. ALI has been lobbying for many years to impose taxes on the export of recyclable materials such as steel. ALI would be willing to help better understand the industrial solid waste chain within their very limited means. Ms. Tabcharani recommended having a waste exchange system between the ALI members so they would benefit and use the waste of one industry as raw material for another. Based on Ms. Tabcharani statement, a suggestion was made to build on the work done by StREG at the Ministry of Industry (MOI) to try to carry out an inventory of industrial raw material input (based on the customs codes compiled by Mohamad), output and residual solid waste composition generated by industries: categories of waste, possible weights and disposal type could be included in the questionnaire. ALI is interested in the progress and final deliverable of the report.

EconomicName ofInstruments Report for Recycling – March 2016 69 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

ALI (Second Meeting)

Sukleen used to provide 4,500 tons/month of cardboard/paper or around 54,000 tons/year (20-30% reject due to contamination during handling) or 60% of actual recyclables. Also they collect from IBC plant in Saida, Zahleh Municipality and other sources. Currently the cardboard/paper industry is recycling 90,000 tons/year As an industry they have a capacity to process 150,000 tons/year and could increase their capacity in case the supply of recyclables increases. Across country competitiveness of the pulp and paper industry was discussed and low recycling material cost compensate for the high energy bill in Lebanon (30%-35% of Pulp & Paper Industry production cost). His plant collects from the following sources:  municipal collection 30%  total industrial 23%  Independent suppliers ( supermarkets, private business, scavengers) 47% Policies: His strategy would be to have a 3 bag/bin system where paper and cardboards are collected separately. He raised the issue of the waste ownership which is not clear in the law. Typical rates: His company will pick up recycled paper/cardboards with a price range of $US 30-60 per ton, if bailed they can add $US 12 per ton. Newspaper alone, $US 50 per ton The not-costed ALI Strategy was provided and encourages use of the non-recyclable material for RDF. (See Annex 7)

Batco

The company never provided the promised data.

Kfoury Metal

A smelting iron plant exists (invested $US 232 Million). The factory has a capacity of accepting all scrap metal from Lebanon. He can process 500 tons/day. The factory was shut down because of competition from China. Import duties on steel rods (rebar) seven years ago where at the beginning 15%, then there were dropped to 5%, then he said it is now 0% (we need to check that). He stopped all operation 2.5 months ago. It is suggested to allow countries like Syria, Egypt, and Jordan to export scrap. Now all the scrap is sent to Turkey. The factory used to employ 450 employees. The factory uses 33 MW for his plant Switching to Natural Gas could increase competitiveness but the factory is put out for sale.

EconomicName ofInstruments Report for Recycling – March 2016 70 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

Soliver

Their production rely on a mixture of 70% Virgin which take a higher temperature to melt (1500 degree Celsius) and 30% clear glass recycled which takes a temperature of 1200 Degree Celsius to melt. In Europe they use a ratio of 30 virgin/70 recycled. They produce only clear glass. They buy from the market 6000 to 7000 tons/year of clear glass recycled. The gate price ranges from $US 45 to 55 per ton. They do not collect. If the recycled glass is not clean they pay a lower price ($US 45), as they have to clean it. They prefer to have the glass unbroken, as collectors tend to cheat and add color bottles, which should not be mixed. Before the waste crisis, Sukleen used to supply about 100 tons/month, now it is 50 tons/month. Most of the recycled glass comes from bottling companies’ rejects or returned water bottles such as Coca Cola, Pepsi, Kassatly and Sohat. Maccaw and Libbys are collected and delivered through another party. Also municipalities are starting to send them. The IBC plant in Saida does not send them any, as all the glass is being crushed in their process. Currently they are using 7000 tons/year of recycled glass from the outside and another 7000 from their internal reject production. They can take up to 25,000 tons/year of recycled glass from the market. The Local Clear Glass production is 40,000 tons/year and 30,000 tons/year is being imported. Concerning the colored glass market, he estimated around 20,000 to 25,000 tons/year is being imported. A big investment would be needed to establish another color glass smelting furnace. Soliver supports very much the sorting at the source campaign. I recommended to him that perhaps if he increases the buying price of recycled glass he would increase the supply. He said he will look at it as it makes sense from an energy saving perspective.

Lefico

Lefico takes around 25 tons/day of PET. About 10-12 tons/day from Sukkleen. Average Price $US 250 per ton bailed. They would collect it. Lefico mainly collects from NGOs, Municipalities (Zahleh, Saida, Tripoli), as they need to trust the quality of the recyclables. Not much from the informal sector. Lefico was a bit impacted by the crisis but they immediately adjusted. They do not import recycled PET. Lefico is capable of taking any new increased collection as they would double the shift. The waste that Lefico gets from its production is minimal. Some water, dirt, etc. The supply of PET is directly linked with the price of oil. If the price of oil drops, they can use virgin material.

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ANNEX 5: Survey Results

Table 22: Survey Form Used in Data Collection

Company Profile

Company Name

Address

City/Town

Type Of Industry (Metals, Cardboard, Plastics, etc.)

Website

Email

Phone

Economic Instruments for Recycling – March 2016 72 Support to Reforms – Environmental Governance, Beirut, Lebanon (Contract No: ENPI/2011/022-757) This project is funded A project implemented by a by the European Union GFA Consulting Group led consortium

(separate pages requesting data for 2010, 2011, 2012, 2013, and 2014)

Waste Generated (where does it go? If in house Virgin (not recycled) Recycled Material recycled, please include in the recycled column)

Type of Recycled Raw (In Informal / Material Imported / Quantity Cost Supplier Imported / Quantity Cost Source Quantity house? Value ($US) (If waste was Formal Local (Tons) ($US) (Country) Local (Tons) ($US) Name (Tons) Sold to a sold) Source third party?)

Recycled Plastico Example Imported 50 25000 Local 10 2000 Informal 2 (third 500 (India) party)

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Table 23: Survey Results Adjusted by Media of the Companies Buying Recyclables, 2014

INPUTS OF RECYCLABLE INPUTS OF VIRGIN MATERIAL WASTE MATERIAL MATERIAL TYPE COMPANY Purchase Purchase Quantity tons Quantity tons Quantity Price $US / Price Fate (source) (source) tons ton $US / ton

Hussein Al Salman NA 60 2 (F) NA 2 Recycled in house Plastic - PP Vacuum Bags 250 (imported) NA NA NA NA NA Ahmad Khalifeh NA NA 400 (I /F) 300 NA NA Plastic - Polyamide Vacuum Bags 50 (imported) NA NA NA NA NA

Plastic – PP&HDPE Lebanese Recycling Works NA NA 400-1500 (I) 200 NA NA Plastic - Polystyrene Lebanese Recycling Works NA NA Low (I) 200 NA NA

Plastic – Polycarbonate Lebanese Recycling Works NA NA 27 (I) 200 NA NA Hussein Al Salman 20 (NA) NA 2 (F) NA 2 Sent to paid third party for pelleting

Some are recycled in house and the rest Plastic - HDPE Alphaplast 50 (NA) NA NA NA 1 thrown Ahmad Khalifeh NA NA 100 (I) 300 NA NA

Ahmad Khalifeh NA NA 150 (I) 250 NA NA Lebanese Recycling Works NA NA 200-600 (I) 200 NA NA

Plastic - PET Lefico NA NA 7000 (I/ F) NA 140 (2%) Discarded being made of sand and paper Petco 529 (imported) 1285 0 0 NA NA

Vacuum Bags 150 (imported) NA NA NA NA NA

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INPUTS OF RECYCLABLE INPUTS OF VIRGIN MATERIAL WASTE MATERIAL MATERIAL TYPE COMPANY Purchase Purchase Quantity tons Quantity tons Quantity Price $US / Price Fate (source) (source) tons ton $US / ton

Hussein Al Salman 20 (NA) NA 9 (F) NA 9 Sent to paid third party for pelleting

Lebanese Recycling Works NA NA 200 (I) 200 NA NA Plastic - LDPE Cityplast NA NA NA NA NA Recycled in house

Mimosa 2400 (imported) NA NA NA NA NA Vacuum Bags 50 (imported) NA NA NA NA NA Plastic - PVC Lebanese Recycling Works NA NA 50 (I) 200 NA NA Sicomo NA NA 33,000 (NA) NA 5,775 In-house incineration

Unipak 1,100 (NA) NA 400 (F) 100 NA NA 160,000 (I /F) Syndicate of owners of paper and NA NA 0-300 30,000 Pulp waste and humidity loss packaging industries ALI meeting: 90,000 Paper / Cardboard mentioned

Sipco NA NA 12,000 (F) NA NA Residue of paper lamination, not recycled Mimosa 10,000 (imported) NA 3,000 (NA) 66 NA NA

Hussein Daher 8,400 (I/F) 40 Uniglass NA NA NA (collectors) NA NA NA

Glass Koubaytari Golden Glass 86 (imported) NA 4,320 (F) 0 NA NA Soliver NA (local) NA 5,720 (I /F) 50 780 Recycled in house

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INPUTS OF RECYCLABLE INPUTS OF VIRGIN MATERIAL WASTE MATERIAL MATERIAL TYPE COMPANY Purchase Purchase Quantity tons Quantity tons Quantity Price $US / Price Fate (source) (source) tons ton $US / ton

Vacuum Bags 20 (imported) Ahmad Khalifeh 400 (I) 1,300 Aluminum Ets. Carlo pour le Com. et 1.2 Market Price l’Industrie Ahmad Khalifeh 60,000 (I) 200 (F/I) Steel/Iron Yahya El Hariri NA 138 Ets. Carlo pour le Com. et 12 (NA) Market Price Copper l’Industrie Ahmad Khalifeh 100 (I) 5,000 Granules: 300- 237,000 car tires 350 and 64,000 heavy Rubber tires Ola 3R NA NA Powder: 450 0 Not applicable machinery tires (Municipalities) Scrap: ~200 Tiles: >1,500

Batteries Ahmad Khalifeh 400 (I) 850

Note: * NA: Not available; I: Informal; F: Formal. Tire weights are based on an average of 7.57 kg for vehicle tires and 56.11 kg for machinery tires: . Source: Industry interviews carried out under StREG by SWM team members.

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(Contract No: ENPI/2011/022-757)) A project implemented by a This project is funded GFA Consulting Group led by the European Union consortium

ANNEX 5: Data Available Online through Media

A – Paper and Cardboard A-1 List of Companies Using Recyclables

NAME (IN BOLD BIGGEST) LOCATION CONTACT PERSON NOTES

Lebanese Recycling Roumieh Elie Debs (GM) Works The recycling sector produces 500 direct jobs (Commerce du Levant, 2015). SOLICAR Wadi Shaarour Fadi Gemayel (CEO) They buy used cardboard/paper at $US 50 per ton from the local market (LBC News, 2015).

Their export of recycled products dropped at one time SIPCO Kfarchima Sarah Hammoud (Sales) to 50% (Commerce du Levant, 2015).

They used to export 20% of recycled cardboard to Syria (Commerce du Levant, 2015). 1/3 of total production (30,000 tons/year recycled) - 25,000 tons from Averda for a delivered price of $US 50 per ton, from the informal sector price is $US 100 Michel Ayoub (General per ton as they are of better quality. Transportation SICOMO Qab Elias Manager) cost to export is around 50-100$/ton. Sales price is $US 500 per ton (Commerce du Levant, 2015) They ship from outside pulp $US 80 to 200 per ton for cardboard and $US 120 and above for Paper (Green Party of Lebanon )

NINEX Zouk Mosbeh

UNIPAK Halat

Produces 3000 t/year of recycled paper, most of it for the local market. Local price for recycled paper is $US 75 to 200 per ton Tannouri and Saliba vs. $US 650 to 700 per ton virgin imported. Also they MIMOSA Qaa Al Rim (Mounir) Owners recycle 2500 tons/year (less than 5% of total market). They buy, $US 50 to 100 per ton brown sorted cardboard and sell it for $US 1000 per ton as a final product (Commerce du Levant, 2015).

They use 60 to 70% European recycled cardboard (price is 10 to 20% higher than the Lebanese recycled cardboard), they only use 5 to 10% Lebanese recycled SIDEMA Jean SMAT (CEO) cardboard). Energy cost is usually 35% of production cost compared to 10 to 20% (Commerce du Levant, 2015).

EconomicName of InstrumentsReport for Recycling – March 2016 77 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

NAME (IN BOLD BIGGEST) LOCATION CONTACT PERSON NOTES

Moussa and sons They produce recycled egg cartons (Commerce du Chekka (Recokap) Levant, 2015).

Other remarks  Cardboard is more expensive than paper  Prices paid for used paper and cardboard from LL 40,000 to LL 142,000 (depends on quality) (Green Party of Lebanon).  Annual production of recycled cardboard is estimated at 120,000 tons (Commerce du Levant, 2015). 160,000 according to ALI  1/3 of the waste used in the recycling industry comes from Averda and is given to SOLICAR and SICOMO (Commerce du Levant, 2015).  Import of recycling cardboard from Europe has increased due to better quality and better exchange rate (Euro/$US) (Commerce du Levant, 2015).  Local production of corrugated cartons according to ALI is 60,000 tons/year (Lebanon Opportunity, 2015).  Price of Recycling Equipment is extremely high. Recycling Industry is recommending Tax Exemptions, Import Restriction or Customs Tax (Commerce du Levant, 2015)

A-2 Findings from Industry Survey and Interviews Carried out under StREG by SWM Team Members A-2-1 Collectors / Traders

COLLECTORS / TRADERS QUANTITY (2014) PRICE $US / TON SOURCE

Hussein Daher 8,400 40 F, I

Note: * NA: Not available; I: Informal; F: Formal

A-2-2 List of Companies Using Recyclables

INPUT RECYCLABLE INPUT VIRGIN MATERIAL WASTE MATERIAL COMPANY Quantity tons Price Quantity tons Price $US Quantity Fate (source) $US / ton (source) / ton tons

Sicomo NA NA 33,000 (NA) NA 5,775 In-house incineration

Unipak 1,100 (NA) NA 400 (F) 100 NA NA

Syndicate of owners of Pulp waste and humidity paper and packaging NA NA 160,000 (I /F) 0-300 30,000 loss industries Residue of paper Sipco NA NA 12,000 (F) NA NA lamination, not recycled 10,000 Mimosa NA 3,000 (NA) 66 NA NA (imported)

Note: * NA: Not available; I: Informal; F: Formal

Economic Instruments for Recycling – March 2016 78 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

A-3 Discussion Average price $US 40-50 bulk from sorting facilities and $US 100 from informal sector (due to better quality). Lebanon can technically produce around 16% of Cardboard/Paper out of the annual 1.57 Million tons of Municipal Solid Waste, or 250,000 tons. It is estimated that about 36.5% of the total non-organic waste stream can be recycled (i.e. 16% Paper/cardboard, 11.5% Plastics, 5.5% Metals, and 3.5% Glass); Typically Sorting Facilities have succeeded to sort around 10% of the total waste stream. Therefore if we look at Greater Beirut and Mount Lebanon, which generate 51% of the total waste stream, technically this region can produce 127,500 tons. Since the plant can sort 10% of the recyclables, then it expected that AVERDA produces around 35,000 tons/year which is very close to the reported values. It is also reported that Lebanon produces 120,000 tons/year (this would come for the remaining sorting plants and informal sector).

B – Glass B-1 List of Recycling Companies

NAME (IN BOLD BIGGEST) Location Contact Person Notes

LL 37,500 LL to 45,000 per ton for white or green glass. Green Party of Lebanon; Buy 6,000 to 7,000 SOLIVER Shoueifat Sami Hydmas (GM) tons/year (presume clear), their need is 70,000 tons/year, buy at a price of $US 45-55 per ton (LBC News, 2015)

LL 75,000 LL to 90,000 per ton for single color Closed after 2006 Israel MALIBAN Chtaura glass, (Green Party of Lebanon). Used to recycle deliberate bombing 80% of brown and green bottles.

Recycles about 1.5 tons/day of clear glass. 50 to Mohammad Khalil United Glass Products Tripoli $US 70 per ton for clear glass. Transform the glass Hammoud into gallons.

Green Glass Recycling Recycles colored glass into various artisanal Sarafand Initiative objects such as blown glass.

Other remarks  Almaza buys its bottles from Egypt or Saudi Arabia (Commerce du Levant, 2015)  Averda sells $US 50 per ton the sorted glass (Commerce du Levant, 2015)

B-2 Findings from Industry Survey and Interviews Carried out under StREG by SWM Team Members B-2-1 Collectors and Traders None surveyed.

Economic Instruments for Recycling – March 2016 79 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

B-2-2 List of Companies Using Recyclables

INPUT RECYCLABLE INPUT VIRGIN MATERIAL WASTE MATERIAL COMPANY Quantity tons Price Quantity tons Price $US Quantity Fate (source) $US / ton (source) / ton tons

Uniglass NA NA NA (collectors) NA NA NA

Koubaytari Golden 86 (imported) NA 4320 (F) 0 NA NA Glass

Soliver NA (local) NA 5720 (I /F) 50 780 Recycled in house

Note: * NA: Not available; I: Informal; F: Formal

B-3 Discussion Average Price $US 25-50 bulk from sorting facilities. Lebanon can technically collect around 3.5% of Glass or out of the annual 1.57 Million tons of Municipal Solid Waste or around 55,000 tons. Soliver buys 7,000 tons/year, but their need is 70,000 tons/year.

C – Plastic C-1 List of Recycling Companies

NAME (IN BOLD LOCATION CONTACT PERSON NOTES BIGGEST)

Recycles PET, 4000 tons/year mainly from Sukleen, to produce at their other company FOMACO mattresses (Commerce du Levant, 2015). Buying 4,000 tons/year of PET from Sukleen ($US 250 per LEFICO Bekaa Ousama Halbawi (GM) tons), Exporting it as fibers for $US 1250 per tons (Al Nahar, 2015). He has 70 employee afraid that we will have to shut down operation with the current situation (Lebanon Opportunity, 2015)

$US 100 to 120 per ton for unshredded plastics and $US 150 to 170 per ton for shredded plastics (Green Party of Lebanon), Produces Qab Elias- Hasan Taha & Ghassan MAZAR PLAST Plastic Fruit Baskets, Produce daily 2,000 to 3,000 plastic baskets (0.3 Bekaa Alouly to 1 kg each), Shredded and clean plastics is about $US 700 per ton, They use around 60 tons/month (Commerce du Levant, 2015)

Import 1500 tons/year plastic wastes (40 to 80% more expensive than local market)-Cost of transformation of plastic wastes $US 150-270 Rocky Plast Jbeil Robert El Khoury per ton), 50% sold to Africa. Doing the same thing at IBC Saida (300 tons/month) (Commerce du Levant, 2015)

Economic Instruments for Recycling – March 2016 80 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

NAME (IN BOLD LOCATION CONTACT PERSON NOTES BIGGEST)

Main Usage for the HDPE: Irrigation Piping and Fruit Carts. Low density polyethylene (LDPE) used for plastic and trash bags. In 2014, Recycled PET was sold between $US 850-1000 per ton, and Virgin PET $US 1650-1850 per ton. Now Virgin Plastic is $US 800 per ton (Commerce du Levant, 2015)

Josephine Voskeridjian Rolls and Bags Produce Plastic and Nylon Bags (Commerce du Levant, 2015) (Marketing)

Plastic Chem Khalil Cherry (GM)

Techniplast Mounir Moubarak Produce Irrigation Pipes (Commerce du Levant, 2015)

They buy 80% of the recycled plastics from the golf (Commerce du Alphaplast Levant, 2015)

Closed his PET Factory in 2015 when price of Oil dropped (Commerce Wood Plus Elie Yammine du Levant, 2015)

Lebanese Shred 150 tons/month of PET Bottles then ship them to China, Roumieh Elie Debs (GM) Recycling Works (L’Orient Le Jour, 2015)

Other remarks  PET is used to produce polyester fiber, tissues, carpets (Commerce du Levant, 2015)  Polyester Fiber is imported from Turkey which compete with the local fiber (Commerce du Levant, 2015)  Most PET is exported to China.  Due to the current oil prices, PET recycling is not as competitive as before.  70% of plastic baskets on the market are made from recycled plastic and are 35% cheaper than regular plastics (Commerce du Levant, 2015)

C-2 Findings from Industry Survey and Interviews Carried out under StREG by SWM Team Members C-2-1 Collectors and Traders

COLLECTORS AND PRICE $US / MATERIAL TYPE QUANTITY (2014) SOURCE TRADERS TON

PP AND HDPE Yahya El Hariri 150 650 F, I

Note: * NA: Not available; I: Informal; F: Formal

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C-2-2 List of Companies Using Recyclables

INPUT VIRGIN INPUT RECYCLABLE WASTE MATERIAL MATERIAL MATERIAL TYPE COMPANY Price Quantity Price Quantity tons $US / tons $US / Quantity tons Fate (source) ton (source) ton

Hussein Al Salman NA 60 2 (F) NA 2 Recycled in house

250 Plastic - PP Vacuum Bags NA NA NA NA NA (imported) Ahmad Khalifeh NA NA 400 (I /F) 300 NA NA

Plastic - Polyamide Vacuum Bags 50 (imported) NA NA NA NA NA Plastic – Lebanese Recycling NA NA 400-1500 (I) 200 NA NA PP&HDPE Works

Plastic - Lebanese Recycling NA NA Low (I) 200 NA NA Polystyrene Works Plastic – Lebanese Recycling NA NA 27 (I) 200 NA NA Polycarbonate Works

Sent to paid third Hussein Al Salman 20 (NA) NA 2 (F) NA 2 party for pelleting Some are recycled Plastic - HDPE Alphaplast 50 (NA) NA NA NA 1 in house and the rest thrown

Ahmad Khalifeh NA NA 100 (I) 300 NA NA Ahmad Khalifeh NA NA 150 (I) 250 NA NA

Lebanese Recycling NA NA 200-600 (I) 200 NA NA Works Discarded being Lefico NA NA 7000 (I/ F) NA 140 (2%) made of sand and Plastic - PET paper

529 Petco 1285 0 0 NA NA (imported) 150 Vacuum Bags NA NA NA NA NA (imported)

Sent to paid third Hussein Al Salman 20 (NA) NA 9 (F) NA 9 party for pelleting Lebanese Recycling NA NA 200 (I) 200 NA NA Plastic - LDPE Works Cityplast NA NA NA NA NA Recycled in house 2400 Mimosa NA NA NA NA NA (imported)

Vacuum Bags 50 (imported) NA NA NA NA NA Plastic - PVC Lebanese Recycling NA NA 50 (I) 200 NA NA Works Note: * NA: Not available; I: Informal; F: Formal

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C-3 Discussion Average Price $US 100-150 bulk from sorting facilities. Lebanon can technically produce around 11.5% of Plastics or out of the annual 1.57 Million tons of Municipal Solid Waste or 173,000 tons per year.

D – Metals D-1 List of Recycling Companies

NAME CONTACT LOCATION NOTES (IN BOLD PERSON BIGGEST)

Sami Recycles all kind of metals including scrap (Green Party of Lebanon). They collect Liban Roumieh Nassar annually 800 tons of iron, 150 tons of aluminium, 80 tons of copper. Their final product is Fonderies Owner 5 to 15% cheaper than imported material (Commerce du Levant, 2015)

Ohanis Kfarshima Recycles all kind of metals including scrap (Green Party of Lebanon) Kasarjian

Kfoury Metals Chekka Recycles metals into rebars but plant was closed

CharMetal Export Scrap Metals

Srour for Scrap Nabil Srour- Export Scrap Metals (sold 20 to 40% higher due to cost of secondary sorting). Aluminum

Metals Owner is $US 1000 per ton sold then to Greece and Korea (Commerce du Levant, 2015)

Remarks  Sales price is dictated by The London Metal Exchange Market (Commerce du Levant, 2015)  Most of the Metals are Exported: Commerce du Levant, 2015  Used batteries are sold at $US 800 per ton, Car scraps $US 150 per ton (Commerce du Levant, 2015)  Turkey is the major importer of scrap metals (Commerce du Levant, 2015)  Market is down due to the lower prices of metals worldwide (Commerce du Levant, 2015)

D-2 Findings from Industry Survey and Interviews Carried out under StREG by SWM Team Members D-2-1 Collectors and Traders

PRICE COLLECTORS AND QUANTITY MATERIAL TYPE $US / SOURCE TRADERS (2014) TON

Ahmad Khalifeh 60,000 200 I Steel / Iron Yahya El Hariri NA 138 F, I

Aluminum Ahmad Khalifeh 400 1,300 I Copper Ahmad Khalifeh 100 5,000 I

Note: * NA: Not available; I: Informal; F: Formal

Economic Instruments for Recycling – March 2016 83 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

D-2-2 List of Recycling Companies

INPUT VIRGIN INPUT RECYCLABLE WASTE MATERIAL MATERIAL

MATERIAL TYPE COMPANY Price Quantity Price Quantity tons $US / tons $US / Quantity tons Fate (source) ton (source) ton

Aluminum Vacuum Bags 20 (imported) NA NA NA NA NA

Note: * NA: Not available

D-3 Discussion Lebanon can technically produce around 5.5% of Metals or out of the annual 1.57 Million tons of Municipal Solid Waste or about 86,000 tons per year.

E – Textile E-1 List of Recycling Companies

NAME LOCATION CONTACT PERSON NOTES (IN BOLD BIGGEST)

Elie Daou Recycles Textile Wastes, 4 years ago- 4 to 5 Comfort Mat tons/day, now 0.6 tons/day. Commerce du Levant, (Co-Owner) 2015

E-2 Findings from Industry Survey and Interviews Carried out under StREG by SWM Team Members None surveyed.

F – Tires F-1 List of Recycling Companies

NAME (IN BOLD BIGGEST) LOCATION CONTACT PERSON NOTES

OLA 3R Toul, Nabatiyeh Shamseddine Can Recycle 800 to 1,000 tires per day

Informal Collection Sector

Revenues $US 300 to 500 per month. Carts (100 to 200 kg/day) Commerce du Levant, 2015 Collect from Supermarkets and Printing Shops. Vans (Pick ups) Commerce du Levant, 2015

Remarks  Estimates that out of 2 million cars, 1 tire/car/year is damaged, hence 2 Million tires can be recycled (Romiter Group, 2008)  1,000 tires produce one ton of rubber granule (Romiter Group, 2008)

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F-2 Findings from Industry Survey and Interviews Carried out under StREG by SWM Team Members F-2-1 Collectors and Traders None surveyed.

F-2-2 List of Companies Using Recyclables

INPUT VIRGIN MATERIAL INPUT RECYCLABLE MATERIAL WASTE

COMPANY Quantity tons Price $US / Quantity tons Quantity Price $US / ton Fate (source) ton (source) tons

Granules: 300- 237,000 car tires 350 and 64,000 heavy OLA 3R NA NA Powder: 450 0 Not applicable machinery tires (Municipalities) Scrap: ~200 Tiles: >1,500

Note: * NA: Not available

Economic Instruments for Recycling – March 2016 85 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

ANNEX 6: Plan Proposed by HE Minister Akram Cheayeb 10, 2015

Service Areas The plan allows municipalities and municipal unions to agree on their own service areas without central government intervention. Once local governments group together into service areas, they would then have to choose how to treat and dispose of the waste in their area. Local governments have the power to decide on how to implement their own visions (i.e. deciding how much private sector involvement to have in trash collection as well as building, operating and maintaining treatment and disposal facilities). The central government would not dictate if or how landfills fit into the mix nor would it have a role in choosing the sites for waste facilities. If some municipalities refuse to be part of a service area and do not want to handle their own waste, they can appeal to the central government to do it for them.

Timeframe The plan sees new waste management solutions built and operational 18 months from the date on which the plan gets implemented. Between day zero and full authority by municipalities over waste management, multiple things should happen. First, Naameh will re- open for seven days to receive all recoverable garbage which has piled up in Beirut and most of Mount Lebanon since July 17, 2015. Next, the government will cancel two contracts with Sukomi – one covering waste sorting (recycling and composting) and the second for waste disposal (transport to Naameh) – while keeping Sukleen’s collection contract valid for 18 months. Also, from day zero, municipalities will be trained on waste management with a goal to have service areas agreed upon in two or three months. Once service areas are agreed, CDR will help municipalities write tender documents for the facilities the municipalities decide to use, with contracts expected to be signed six months from day zero. Facilities should be largely completed one year later. Beirut and most of Mount Lebanon’s garbage for 18 months, 1,500 tons per day are planned to be sent to Srar, a village near Lebanon’s northern border with Syria in the Akkar district in the first six months. At the foot of this dump, the plan calls for building a 10,000 square meter sanitary cell for the new waste, which will take two to three months to build. In the short term, ground will be prepared with a sanitary liner to store new waste until the sanitary cell is operational. The fate of the other 1,500 tons is unclear after ruling out one potential site near Masnaa, on Lebanon’s eastern border with Syria; the location is unsuitable due to a shallow aquifer below. Saida’s Mayor also agreed to take 200 tons per day for treatment but notes the Mayor later added a demand for a sanitary landfill before taking any more waste. Finally, during the first third of the plan’s 18-month temporary phase, the long-closed Bourj Hammoud dump will be rehabilitated similar to how Saida’s waste mountain was razed – build a breakwater in the sea, dump the old trash into it, use the old landfill space as a new, sanitary landfill and, after 12 months, close both and use them as reclaimed green space in the future.

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Cost The plan’s long-term solutions will be funded by municipalities based on the plans they choose, so no cost estimate is available. That said, the 18-month temporary phase of the plan is expected to cost $US 153 million. The money will come from cancelling Sukomi’s treatment contract, meaning that the company was being paid $US 100 million per year for recycling and composting. As noted, Sukleen’s collection contract would remain in place during this phase, and Sukomi would be paid to transport waste to the temporary dumpsites. There is no estimated cost for trucking garbage to diverse points around the country, but it is included in the total $US 153 million price tag for the 18-month phase.

Reference Nash, M. (2015, October). A new trash plan in the pipeline. Executive Magazine. Retrieved from .

Economic Instruments for Recycling – March 2016 87 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

ANNEX 7: Plan Proposed by the Association of Lebanese Industrialists

(Unofficial translation)

Through the relevant ministries and the Council for Development and Reconstruction, the government of Lebanon has launched a public tender for the collection, sorting and treatment of household waste to cover the Lebanese territories. As the terms of the tenders have not been published or discussed with many specialists including the Association of Lebanese Industrialists, the latter is interested in the new tender in terms of securing raw materials from the solid waste to be used in recycling paper, cardboard, plastic, iron, glass and other industries. The fact that the tender remained vague in terms of the best ways to sorting waste prior to incineration, ALI fears that the bidding companies can seek to collect and burn solid waste without the adoption of international recognized scientific methods in terms of:  Prevention  Re-use  Recycling  Energy recovery  Landfill The countries that have adopted in the last century to landfill or incinerate their waste are moving towards a new strategy hence abiding by the principle of zero waste. As it turned out, to be burying or burning waste is a waste of money in addition to the high cost of landfills not to mentioned the cost of burying the remaining ash from the burning process and finding specialized landfills for this type of ash. Recourse to this option must come after the exhaustion of all the solutions, but first and foremost, the recycling and production of alternative fuels from the waste prior should be considered before the incineration or burying alternative. ALI is currently looking into the household solid waste as a source of industrial raw materials and energy at the same time. Every ton of solid waste contains almost 50% of the organic material for composting and almost 40% of materials that can be recycled in the first place while the remaining 10% should be considered as an alternative fuel in factories. As it can extract and sort the materials that contains high heat energy equivalent to 95 kg of fuel oil from each ton of this waste for use as an alternative fuel in local industries and this is what has been adopted in a large number of countries around the world since more than forty years and necessitated to introduce legislations that would help implement the solid waste management strategy. Therefore, Lebanese industries can contribute to the larger solution in the solid waste dilemma in Lebanon by recycling paper, cardboard, plastic and other metals from waste, if sorting at the source is adopted. While promoting the adoption of public and environmental safety standards, sorting materials containing high thermal energy for recycling could be used as an alternative fuel RDF in the cement industry. Thus, the contribution of the industrial sector in recycling and the use of alternative energy could reach about 32% of the total solid waste that is collected today.

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The re-sorting and recycling and manufacturing of RDF as an alternative fuel contributes to the creation of new jobs in Lebanon as it will also contribute to the reduction of the cost of production which helps Lebanese industry to withstand competition. ALI proposes that the concerned ministries develop appropriate solutions and avoid rushing into burning waste without gauging the best ways to treat household solid waste.

Association of Lebanese Industrialists

Three alternatives are proposed by ALI in the above figure where sorting at the source being key. However, the 3 alternatives consider that 70% of the waste is organic and 30% is recyclable (15% paper and cardboard and 15% others) while hazardous waste should be initially separated and land filled. All residual waste with or without recycling under Plan A (30% recycling), Plan B (All recyclable to be RDFed) and Plan C (sorting at the source for 15% of Paper and Cardboard and 15% for the rest) is meant to be RDFed.

Economic Instruments for Recycling – March 2016 89 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

ANNEX 8: Customs Database of Imports and Exports of Raw Materials

Table 24: Customs Database for Imports and Exports Used as Raw Materials

IMPORTS EXPORTS TARIFF NUMBER 2014 2014 DESCRIPTION

Quantity Value Quantity Value HS2 HS4 HS6 (Tons) (000’ $US) (Tons) (000’ $US)

39 01 Polymers of ethylene, in primary forms (PE and the like)

Total (PE) 97,652 160,307 5,765 7,050

Polymers of propylene or of other olefins, in primary forms 39 02 (PP) Total (PP) 25,698 42,809 130 189

39 03 Polymers of styrene, in primary forms (PS)

Total (PS) 16,418 28,948 404 908

Polymers of vinyl chloride or of other halogenated olefins, 39 04 in primary forms (PVC) Total (PVC) 22,883 26,716 12 32

Polymers of vinyl acetate or of other vinyl esters, in 39 05 primary forms; other vinyl polymers in primary forms (PVA) Total (PVA) 5,992 9,488 459 669

39 07 PC, PET and PLA

39 07 40  -Polycarbonates (PC) 491 1,272 0 0

39 07 60  -Poly(ethylene terephthalate) (PET) 15,095 20,093 1 1

39 07 70  - Poly(lactic acid) (PLA) 0 1

39 08 Polyamides in primary forms (PA or also known as Nylon)

Total (PA/Nylon) 389 919 1 5

39 15 Waste, parings and scrap, of plastics.

39 15 10  -Of polymers of ethylene (PE) 1,408 852 64 31

39 15 20  -Of polymers of styrene (PS)

39 15 30  -Of polymers of vinyl chloride (PVC) 284 108

39 15 90  -Of other plastics 460 315 3,928 2,829

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IMPORTS EXPORTS TARIFF NUMBER 2014 2014 DESCRIPTION

Quantity Value Quantity Value HS2 HS4 HS6 (Tons) (000’ $US) (Tons) (000’ $US)

Other plates, sheets, film, foil and strip, of plastics, non- 39 20 cellular and not reinforced, laminated, supported or similarly combined with other materials.

39 20 10  -Of polymers of ethylene (PE) 5,878 12,931 14,502 32,577

39 20 20  -Of polymers of propylene (PP) 7,816 20,802 2,001 7,679

39 20 30  -Of polymers of styrene (PS) 888 2,414 17 76

39 20 61  --Of polycarbonates (PC) 230 991 1 8

39 20 62  --Of poly(ethylene terephthalate) (PET) 4,003 7,039 45 103

39 21 Other plates, sheets, film, foil and strip, of plastics.

39 21 11  --Of polymers of styrene (PS) 311 992 17 105

39 21 12  --Of polymers of vinyl chloride (PVC) 539 822 1 9

Articles for the conveyance or packing of goods, of 39 23 plastics; stoppers, lids, caps and other closures, of plastics.

Total (PE) 3,018 9,809 5,399 15,662

 -Carboys, bottles, flasks and similar articles 39 23 30 11,600 27,981 1,608 3,931 (PET or PC)

 -Stoppers, lids, caps and other closures (PS or 39 23 50 1,892 8,756 183 591 PP)

Tableware, kitchenware, other household articles and 39 24 toilet articles, of plastics. 39 24 10  -Tableware and kitchenware (PS) 4,319 18,836 2,359 10,064

Reclaimed rubber in primary forms or in plates, sheets or 40 03 strip. Waste, parings and scrap of rubber (other than hard 40 04 rubber) and powders and granules obtained there from. 40 11 New pneumatic tires, of rubber.

Total (NEW Tires- rubber) 24,082 95,835 1,299 7,339

Retreaded or used pneumatic tires of rubber; solid or 40 12 cushion tires, tire treads and tire flaps, of rubber. Total (USED Tires- rubber) 66 203 14 83

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IMPORTS EXPORTS TARIFF NUMBER 2014 2014 DESCRIPTION

Quantity Value Quantity Value HS2 HS4 HS6 (Tons) (000’ $US) (Tons) (000’ $US)

40 13 Inner tubes of rubber.

Total (NEW Inner Tubes for Tires- rubber) 412 1,358 14 65

Packing cases, boxes, crates, drums and similar packing, 44 15 of wood; cable-drums of wood; pallets, box pallets and other load boards, of wood; pallet collars of wood.

Total (Wood Pallets) 1,354 1,553 562 132

47 01 00 Mechanical wood pulp.

47 02 00 Chemical wood pulp, dissolving grades.

Chemical wood pulp, soda or sulphate, other than 47 03 dissolving grades. Total (Wood Pulp) 9,779 6,353 0 0

48 01 Newsprint, in rolls or sheets.

Uncoated paper and paperboard, of a kind used for writing, printing or other graphic purposes, and non perforated punch-cards and punch tape paper, in rolls or 48 02 rectangular (including square) sheets, of any size, other than paper of heading 48.01 or 48.03; hand-made paper and paperboard.

Toilet or facial tissue stock, towel or napkin stock and similar paper of a kind used for household or sanitary purposes, cellulose wadding and webs of cellulose fibres, 48 03 whether or not creped, crinkled, embossed, perforated, surface-colored, surface-decorated or printed, in rolls or sheets.

Uncoated kraft paper and paperboard, in rolls or sheets, 48 04 other than that of heading No. 48.02 or 48.03. Other uncoated paper and paperboard, in rolls or sheets, 48 05 not further worked or processed than as specified in Note 3 to this Chapter.

Vegetable parchment, greaseproof papers, tracing papers 48 06 and glassine and other glazed transparent or translucent papers, in rolls or sheets.

Composite paper and paperboard (made by sticking flat layers of paper or paperboard together with an adhesive), 48 07 not surface-coated or impregnated, whether or not internally reinforced, in rolls or sheets.

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IMPORTS EXPORTS TARIFF NUMBER 2014 2014 DESCRIPTION

Quantity Value Quantity Value HS2 HS4 HS6 (Tons) (000’ $US) (Tons) (000’ $US)

Paper and paperboard, corrugated (with or without glued flat surface sheets), creped, crinkled, embossed or 48 08 perforated, in rolls or sheets, other than paper of the kind described in heading No. 48.03.

Carbon paper, self-copy paper and other copying or transfer papers (including coated or impregnated paper for 48 09 duplicator stencils or offset plates), whether or not printed, in rolls or sheets.

Paper and paperboard, coated on one or both sides with kaolin (China clay) or other inorganic substances, with or 48 10 without a binder, and with no other coating, whether or not surface-colored, surface-decorated or printed, in rolls or rectangular (including square) sheets, of any size.

Paper, paperboard, cellulose wadding and webs of cellulose fibres, coated, impregnated, covered, surface- colored, surface-decorated or printed, in rolls or 48 11 rectangular (including square) sheets, of any size, other than goods of the kind described in heading 48.03, 48.09 or 48.10.

48 12 Filter blocks, slabs and plates, of paper pulp.

Cigarette paper, whether or not cut to size or in the form of 48 13 booklets or tubes. Wallpaper and similar wall coverings; window 48 14 transparencies of paper. Carbon paper, self-copy paper and other copying or transfer papers (other than those of heading No. 48.09), 48 16 duplicator stencils and offset plates, of paper, whether or not put up in boxes.

Envelopes, letter cards, plain postcards and correspondence cards, of paper or paperboard; boxes, 48 17 pouches, wallets and writing compendiums, of paper or paperboard, containing an assortment of paper stationery.

Toilet paper and similar paper, cellulose wadding or webs of cellulose fibres, of a kind used for household or sanitary purposes, in rolls of a width not exceeding 36 cm, or cut to size or shape; handkerchiefs, cleansing tissues, towels, 48 18 tablecloths, serviettes, bed sheets and similar household, sanitary or hospital articles, articles of apparel and clothing accessories, of paper pulp, paper, cellulose wadding or webs of cellulose fibres.

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IMPORTS EXPORTS TARIFF NUMBER 2014 2014 DESCRIPTION

Quantity Value Quantity Value HS2 HS4 HS6 (Tons) (000’ $US) (Tons) (000’ $US)

Cartons, boxes, cases, bags and other packing containers, of paper, paperboard, cellulose wadding or 48 19 webs of cellulose fibres; box files, letter trays, and similar articles, of paper or paperboard of a kind used in offices, shops or the like.

Registers, account books, note books, order books, receipt books, letter pads, memorandum pads, diaries and similar articles, exercise books, blotting-pads, binders 48 20 (loose-leaf or other), folders, file covers, manifold business forms, interleaved carbon sets and other articles of stationery, of paper or paperboard; albums for samples or for collections and book covers, of paper or paperboard.

Paper or paperboard labels of all kinds, whether or not 48 21 printed. Bobbins, spools, cops and similar supports of paper pulp, 48 22 paper or paperboard (whether or not perforated or hardened).

Other paper, paperboard, cellulose wadding and webs of cellulose fibres, cut to size or shape; other articles of 48 23 paper pulp, paper, paperboard, cellulose wadding or webs of cellulose fibres.

Total (Paper - includes all types and grammage) 249,460

Cullet and other waste and scrap of glass; glass in the 70 01 mass. Drawn glass and blown glass, in sheets, whether or not 70 04 having an absorbent, reflecting or non-reflecting layer, but not otherwise worked.

Total (colored Glass - non-recyclable) 930 702 167 196

Glass of heading No. 70.03, 70.04 or 70.05, bent, edge- 70 06 worked, engraved, drilled, enamelled or otherwise worked, but not framed or fitted with other materials.

Carboys, bottles, flasks, jars, pots, phials, ampoules and other containers, of glass, of a kind used for the 70 10 conveyance or packing of goods; preserving jars of glass; stoppers, lids and other closures, of glass.

Glass envelopes (including bulbs and tubes), open, and 70 11 glass parts thereof, without fittings, for electric lamps, cathode-ray tubes or the like.

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IMPORTS EXPORTS TARIFF NUMBER 2014 2014 DESCRIPTION

Quantity Value Quantity Value HS2 HS4 HS6 (Tons) (000’ $US) (Tons) (000’ $US)

Glassware of a kind used for table, kitchen, toilet, office, 70 13 indoor decoration or similar purposes (other than that of heading 70.10 or 70.18).

Paving blocks, slabs, bricks, squares, tiles and other articles of pressed or molded glass, whether or not wired, of a kind used for building or construction purposes; glass 70 16 cubes and other glass small wares, whether or not on a backing, for mosaics or similar decorative purposes; leaded lights and the like; multicellular or foam glass in blocks, panels, plates, shells or similar forms.

Laboratory, hygienic or pharmaceutical glassware, 70 17 whether or not graduated or calibrated. Total (Glass household items non-recyclable) 62,208 59,323 1,765 3,299

Tanks, casks, drums, cans, boxes and similar containers, for any material (other than compressed or liquefied gas), 73 10 of iron or steel, of a capacity not exceeding 300 l, whether or not lined or heat-insulated, but not fitted with mechanical or thermal equipment.

Total (Iron or Steel) 4,077 16,748 2,019 4,480

Containers for compressed or liquefied gas, of iron or 73 11 steel. 76 01 Unwrought Aluminium.

76 02 Aluminum waste and scrap.

76 03 Aluminum powders and flakes.

Aluminium plates, sheets and strip, of a thickness 76 06 exceeding 0.2 mm. Aluminium foil (whether or not printed or backed with paper, paperboard, plastics or similar backing materials) of 76 07 a thickness (excluding any backing) not exceeding 0.2 mm.

Aluminium casks, drums, cans, boxes and similar containers (including rigid or collapsible tubular containers), for any material (other than compressed or 76 12 liquefied gas), of a capacity not exceeding 300 l, whether or not lined or heat-insulated, but not fitted with mechanical or thermal equipment.

76 13 Aluminium containers for compressed or liquefied gas.

Total (Aluminum) 33327 116,069 4,699 13,500

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IMPORTS EXPORTS TARIFF NUMBER 2014 2014 DESCRIPTION

Quantity Value Quantity Value HS2 HS4 HS6 (Tons) (000’ $US) (Tons) (000’ $US)

80 01 Unwrought tin.

80 01 10  -Tin, not alloyed 7 160

80 01 20  -Tin alloys 0 0 0 0

80 02 Tin waste and scrap.

Other articles of tin: e.g.: --- Tin plates, sheets and strip, of a thickness exceeding 0.2 mm; --- Tin foil (whether or not printed or backed with paper, paperboard, plastics or 80 07 similar backing materials), of a thickness (excluding any backing) not exceeding 0.2 mm; tin powders and flakes; --- Tubes, pipes and tube or pipe fittings (for example, couplings, elbows, sleeves)

Total (Tin) 7 160 0 0

Electric instantaneous or storage water heaters and immersion heaters; electric space heating apparatus and soil heating apparatus; electro-thermic hair-dressing apparatus (for example, hair dryers, hair curlers, curling 85 16 tong heaters) and hand dryers; electric smoothing irons; other electro-thermic appliances of a kind used for domestic purposes; electric heating resistors, other than those of heading No. 85.45.

Telephone sets, including telephones for cellular networks 85 17 or for other wireless networks: Microphones and stands therefore; loudspeakers, whether 85 18 sound amplifier sets. 85 19 Sound recording or reproducing apparatus.

Video recording or reproducing apparatus, whether or not 85 21 incorporating a video tuner. Discs, tapes, solid-state non-volatile storage devices, "smart cards" and other media for the recording of sound 85 23 or of other phenomena, whether or not recorded, including matrices and masters for the production of discs, but excluding products of Chapter 37.

Transmission apparatus for radio-broadcasting or television, whether or not incorporating reception 85 25 apparatus or sound recording or reproducing apparatus; television cameras, digital cameras and video camera recorders.

Radar apparatus, radio navigational aid apparatus and 85 26 radio remote control apparatus.

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IMPORTS EXPORTS TARIFF NUMBER 2014 2014 DESCRIPTION

Quantity Value Quantity Value HS2 HS4 HS6 (Tons) (000’ $US) (Tons) (000’ $US)

Reception apparatus for radio-broadcasting, whether or 85 27 not combined, in the same housing, with sound recording or reproducing apparatus or a clock.

Monitors and projectors, not incorporating television reception apparatus; reception apparatus for television, 85 28 whether or not incorporating radio-broadcast receivers or sound or video recording or reproducing apparatus.

Parts suitable for use solely or principally with the 85 29 apparatus of headings Nos. 85.25 to 85.28. Electrical signalling, safety or traffic control equipment for railways, tramways, roads, inland waterways, parking 85 30 facilities, port installations or airfields (other than those of heading No. 86.08).

Electrical machines and apparatus, having individual 85 43 functions, not specified or included elsewhere in this Chapter.

Waste and scrap of primary cells, primary batteries and electric accumulators; spent primary cells, spent primary 85 48 batteries and spent electric accumulators; electrical parts of machinery or apparatus, not specified or included elsewhere in this Chapter.

Total (Electrical Appliances) 13,769 392,326 728 38,286

Source: compiled from Lebanese Customs Data: .

Economic Instruments for Recycling – March 2016 97 Support to Reforms – Environmental Governance, Beirut, Lebanon (Contract No: ENPI/2011/022-757)) This project is funded A project implemented by a by the European Union GFA Consulting Group led consortium

ANNEX 9: Customs Database of Imports and Exports of Raw Materials

Table 25: Available Recycling Technologies

COST WATER ENERGY RECYCLABLE TECHNOLOGY SOURCE DEMAND DEMAND 20Y Capital O&M

10774.23L- 21503.01 35-45  Sue Jackson and Tamás Bertényi. 2006. ImpEE Project, University of Cambridge. L/lb MJ/kg 0.84-0.87 Franklin Associates. 2009. “Life Cycle Inventory of Three Single-Serving Soft Drink  -Optical sorting (spectroscopy HDPE, PET, (PET) (HDPE) $/kg (HDPE) Containers”. NIR) / Flotation. Sorting-grinding- LDPE  milling-washing-drying 12138.06 L- 60-64 1.1-1.2 $/kg 24230.66 MJ/kg (PET)  WRAP. 2009. Financial modelling and assessment of mixed plastic separation and L/lb (PET) reprocessing (WRAP project MDP021. Report prepared by Axion Consulting (HDPE).

 Vinyloop process (mechanical): Pre-treatment / dissolution / filtration / decantation / precipitation of the regenerated PVC compound / drying 35-40 0.77-0.99 Plastic:-PVC  Sue Jackson and Tamás Bertényi. 2006. ImpEE Project, University of Cambridge.  Feedstock recycling (chemical): MJ/kg $/kg PVC waste is broken right back down into its chemical molecules, which can be used again to make PVC or other materials

Economic Instruments for Recycling – March 2016 98 Support to Reforms – Environmental Governance, Beirut, Lebanon (Contract No: ENPI/2011/022-757) This project is funded A project implemented by a by the European Union GFA Consulting Group led consortium

COST WATER ENERGY RECYCLABLE TECHNOLOGY SOURCE DEMAND DEMAND 20Y Capital O&M

 Stella Job. 2013. “Recycling glass fibre reinforced composites – history and progress (Part 1).” Reinforced Plastics Magazine  Fiberglass 308.7 $/ton pyrolysis  Stella Job. 2013. “Recycling glass fibre reinforced composites – history and progress (Part 2).” Reinforced Plastics Magazine 

 Sue Jackson and Tamás Bertényi. 2006. ImpEE Project, University of Cambridge. WRAP. 2009. Financial modelling and assessment of mixed plastic separation and 40- 0.75-  PS  Extruding / Melting reprocessing (WRAP project MDP021. Report prepared by Axion Consulting 50MJ/kg 0.86$/kg

 Sue Jackson and Tamás Bertényi, (2006) ImpEE Project, University of Cambridge.  WRAP, 2009, Financial modelling and assessment of mixed plastic separation and  Sorting / cleaning / reprocessing 35- PP 0.99-1.1$/kg reprocessing (WRAP project MDP021. Report prepared by Axion Consulting by melting 45MJ/kg

 Sorting / shredding / washing, Polycarbonate granulating into compound ready for re-use

Economic Instruments for Recycling – March 2016 99 Support to Reforms – Environmental Governance, Beirut, Lebanon (Contract No: ENPI/2011/022-757) This project is funded A project implemented by a by the European Union GFA Consulting Group led consortium

COST WATER ENERGY RECYCLABLE TECHNOLOGY SOURCE DEMAND DEMAND 20Y Capital O&M

 Physical recycling:  PA6:Automatic IR identification / shredding / pulverizing / centrifuge and separation / dypolymerisation to coprolactam / polymerization to PA6  PA6,6: Automatic IR identification / shredding / pulverising / centrifuge and separation / melting / pelleting / polymerisation to 8.32-  Lave, L., et al. 1998. "Recycling Postconsumer Nylon Carpet." Journal of Industrial Nylon PA6 or PA6,6 210.05$/lb Ecology 2(1): 117-126.  PA6,6: Automatic IR identification / shredding / pulverising / incineration / polymerisation to PA6 or PA6,6  Chemical recycling:  Mixed PA6 & PA6,6 / shredding and pulverising / ammonolysis / caprolactam / polymerisation PA6  1,6 diaxominohexane / polymerisation with hexaneolioic acid PA6,6

Economic Instruments for Recycling – March 2016 100 Support to Reforms – Environmental Governance, Beirut, Lebanon (Contract No: ENPI/2011/022-757) This project is funded A project implemented by a by the European Union GFA Consulting Group led consortium

COST WATER ENERGY RECYCLABLE TECHNOLOGY SOURCE DEMAND DEMAND 20Y Capital O&M

White paper: 100$/ton  Gentle Earth Recycling. 2013. “Recycling Paper”.  Upcycling process: Pulping / Paper/ 2500-6500 Newspaper www.gentleearthrecycling.com/recycling-paper/ accessed December 2015. screening / cleaning / washing / cardboard kwh/ton 30 $ /ton. dissolved air flotation  SafeSHRED. 2012. “Waste Paper Recycling”. 30$/ton

 SERENA NG. 2015. “High Costs Put Cracks in Glass-Recycling Programs”. The Wall 4.32 Street Journal. BTU/ton  EPA. 1992. “Markets for Recovered Glass”

Aluminum: 11570 L 4.46 MWh  Metal  Shredding / melting / purification /ton 26.59 Steel: 1070 MWh  L/ton

 Alexandra Pehlken and Elhachmi Essadiqi. 2005. “Scrap Tire Recycling in Canada.” CANMET-MTL Report.  Tires 1.5 $US/tire / shredding/ rubber powder  Used Tires Regulations Canada:  Scrap Tire Disposal and Recycling Rates: 

Economic Instruments for Recycling – March 2016 101 Support to Reforms – Environmental Governance, Beirut, Lebanon (Contract No: ENPI/2011/022-757) This project is funded A project implemented by a by the European Union GFA Consulting Group led consortium

COST WATER ENERGY RECYCLABLE TECHNOLOGY SOURCE DEMAND DEMAND 20Y Capital O&M

Textile  Shredding / carding / spinning

 The different components are separated: Compact  Glass: insulating material Fluorescent 0.50 -2.00 $  Recycling Household CFLs. (2008). https://www.nema.org/Policy/Environmental-  Metal: reused Light (CFL) per unit Stewardship/Lamps/Documents/Recycling_Household_CFLs.pdf Bulbs  Plastic: incinerated  Mercury and phosphorus are distillated and reused

 Different components are separated:  Alkaline/Zinc Carbon/Zinc Air Batteries: Recycled in a specialized “room temperature,” mechanical separation process where Household the battery components are batteries separated into 3 end products. These items are Zinc & Manganese Concentrate, Steel, Paper & Plastic. All of these products are put back into the market place for reuse in new products. These batteries are 100% recycled

Economic Instruments for Recycling – March 2016 102 Support to Reforms – Environmental Governance, Beirut, Lebanon (Contract No: ENPI/2011/022-757) This project is funded A project implemented by a by the European Union GFA Consulting Group led consortium

Table 26: Recyclable Technology CAPEX and Partial OMEX

OMEX UNIT COST

CAPEX CAPEX OMEX Electricity Water Electricity Water MATERIAL Electricity Lower Electricity Higher Water Lower Water Higher Mid Mid Unit Cost Unit Cost

$/Ton $/Ton KWh/ton KWh/ton KWh/ton m3/ton m3/ton m3/ton $US/KW/h $US/m3 $/Ton $/Ton

HDPE 840.0 870.0 9,722.2 12,500.0 11,111.1 23.8 47.4 35.6 0.13 9.0 855 1,787

PET 1,100.0 1,200.0 16,666.7 17,777.8 17,222.2 26.8 53.4 40.1 0.13 9.0 1,150 2,634

PVC 770.0 990.0 9,722.2 11,111.1 10,416.7 0.13 9.0 880 1,375

PLASTIC Fiberglass 308.7 0.13 9.0 309 -

PS 750.0 860.0 11,111.1 13,888.9 12,500.0 0.13 9.0 805 1,650

PP 990.0 1,100.0 9,722.2 12,500.0 11,111.1 0.13 9.0 1,045 1,467

Nylon 0.0 0.1 5,774.0 5,774.0 0.13 9.0 0.0 762

White 100.0 2,500.0 6,500.0 4,500.0 26.0 26.0 0.13 9.0 100 828

PAPER Newspaper 30.0 2,500.0 6,500.0 4,500.0 26.0 26.0 0.13 9.0 30 828

Cardboard 30.0 2,500.0 6,500.0 4,500.0 26.0 26.0 0.13 9.0 30 828

Economic Instruments for Recycling – March 2016 103 Support to Reforms – Environmental Governance, Beirut, Lebanon (Contract No: ENPI/2011/022-757) This project is funded A project implemented by a by the European Union GFA Consulting Group led consortium

OMEX UNIT COST

CAPEX CAPEX OMEX Electricity Water Electricity Water MATERIAL Electricity Lower Electricity Higher Water Lower Water Higher Mid Mid Unit Cost Unit Cost

$/Ton $/Ton KWh/ton KWh/ton KWh/ton m3/ton m3/ton m3/ton $US/KW/h $US/m3 $/Ton $/Ton

GLASS Colored 10.0 40.0 1,266.1 1,266.1 0.13 9.0 25 167

Aluminum F(size) 4,460.0 4,460.0 11.6 11.6 0.13 9.0 F(size) 693 METAL Steel F(size) 642.0 642.0 1.1 1.1 0.13 9.0 F(size) 94

TIRES 198.2 0.13 9.0 198 15

Source: Table 25; RCREEE website for 2013 Industrial Electricity Price; 10 2004 Ministry of Energy and Water for Industrial Water Price;11 and 2015 WDI for GDP Deflator

10 For Lebanon real industrial electricity cost and 2015 prices RCREEE website: ; and GDP Deflator, WDI, 2015. 11 For Lebanon real industrial water cost and 2015 prices, Ministère de l’Energie et de l’Eau. 2004. Les Libanais et l’Eau Potable. En collaboration avec le financement du Service de Coopération et d’Action Culturelle de l’Ambassade de France au Liban. ICEA, Corail Association et IPSOS. Beyrouth. P. 139; and GDP Deflator, WDI, 2015 website: .

Economic Instruments for Recycling – March 2016 104