A New Extended Producer Responsibility System for Compostable Packaging – the Italian Model

by NatureWorks

A new Extended Producer Responsibility system for compostable packaging – the Italian model

Mariagiovanna Vetere June 2020

✓EPR – Extended producer responsibility, what is it and how it works ✓Italian system, CONAI and Corepla ✓The Composting system in Italy, how it works ✓Biorepack – how this new EPR scheme can be a game changer for bioplastics ✓Q&A

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EPR – Extended Producer Responsibility

OECD* defines Extended Producer Responsibility (EPR) as an environmental policy approach in which a producer’s responsibility for a product is extended to the post-consumer stage of a product’s life cycle. An EPR policy is characterised by:

1. the shifting of responsibility (physically and/or economically; fully or partially) upstream toward the producer and away from municipalities; and 2. the provision of incentives to producers to take into account environmental considerations when designing their products.

While other policy instruments tend to target a single point in the chain, EPR seeks to integrate signals related to the environmental characteristics of products and production processes throughout the product chain.

European legislation has applied this principle to: hazardous waste (RoHS), electric and electronic waste (WEEE) and vehicles (ELV); Packaging and Packaging Waste Directive is inspired to this principle.

Extended Producer Responsibility: Updated Guidance for Efficient Waste Management | 2016 © NatureWorks 2020 5 EPR in Packaging by NatureWorks Packaging and Packaging waste Directive 94/62, back in 1994, set how the EU members States should design packaging Essential Requirements and recover packaging waste. *PRO

Recycling Composting Energy Recycling targets Recovery Material 2008 2025 2030 Glass 60% 70% 75% EN Standards Paper and board 60% 75% 85% Recovery operation EN Norm Metals 50% 70% 80% Material Recycling EN 13430:2004 Aluminum 50% 50% 60% Energy Recovery EN 13431:2004 Plastics 22.5% 50% 55% Composting EN 13432:2004 Wood 15% 25% 30%

*Packaging Recovery Organization

➢ „Dual model“ (e.g. Austria, Germany, Belgium) Full responsibility for industry for collection, sorting and recycling. Packaging separate collection system besides collection of other waste EU member States streams run by local authorities; local authorities have limited influence implemented the Packaging and packaging waste ➢ „Shared model“ (e.g. Italy, France, Spain, Czech Republic) directive in different Shared responsibility between industry and local authorities, common ways agreements on packaging separate collection implementation.

➢ Tradable Credits Model (UK, Poland) No link between industry and collection at local level

CONAI system and Corepla

The Consortium members consist of packaging producers and users which, by paying the CONAI Environmental Contribution (CAC), cover the costs of collection, recovery and recycling of packaging put on the market.

Legislative Decree 22/1997, transposing the Packaging and Packaging waste Directive envisages that they companies can meet their obligations by organising themselves independently, provided that they ensure achievement of the targets set.

In 2018, there were approx. 844,000 CONAI consortium members, of which only 1% were packaging producers, with the remainder consisting of users (such as importers or traders of goods already packaged, self- producers, traders of empty packaging, etc.).

The Environmental fees (CAC) collected by CONAI are distributed among the material consortia. As of today the fees collected for bioplastics are included in the plastic fees and then sent to COREPLA

Compostable plastic

Sortable and recyclable packaging are packaging from trade and Other sortable and recyclable industry packaging from HH charged with the 150Euro/ton 436 Euro/ton highest fees.

Packaging from household Non sortable/recyclable (HH) with consolidate sorting packaging and recycling value chain 546 Euro/ton 208 Euro/ton

Corepla works with Producers Municipalities Converters 33 MRFs dedicated Importers to plastic. Recyclers don’t include composting plants MRFs

Recyclers

Material flows Financial flows (costs) Financial flows (revenues) Waste to Energy Plants

2018 plastic packaging recycling

performance According to Corepla 12.50% official statements.

44.50%

Composting and AD 43% are not a recycling option managed by the Corepla system Recycling Energy Recovery Disposal

Biorepack

© NatureWorks 2020 15 Biorepack by NatureWorks Bioplastic Industry created a new material consortium, Biorepack*, for bioplastic packaging; the new scheme will include “compostable” only packaging. Biorepack will collect the environmental fees for bioplastic packaging and will use them to help municipalities collecting organic waste, and to support Composting plants that will accept to manage bioplastic waste.

• Municipalities Packaging Plastic • Recyclers • MRFs Producers Converters CONAI fee Importers • Municipalities Bioplastic BIOREPACK • Composters

The cooperation with CIC – the Italian Composting Council – will be crucial to achieve the recycling Communication and targets. citizens awareness campaigns *still waiting to be published on the Official Journal © NatureWorks 2020 16 EU situation pictured by Zero Waste Europe and BIC by NatureWorks

The report shows that biowaste management remains an untapped potential for the European Union to further transition to a Circular Economy. Only 16% of the potential is currently captured and, through proper initiatives, this number could be multiplied by 5 so as to reach 85%. This shows the need for the EU and Members States to maintain and strengthen their effort in biowaste collection and treatment as key steps towards soil regeneration, circularity and climate neutrality

© NatureWorks 2020 17 Bioplastic market in Italy by NatureWorks Rough estimate for 2020 are around 100ktons of bioplastics put on the market. Only part of this amount is compostable packaging. Compostable plastic packaging market showing an increasing trend.

The collection rate for compostable plastic packaging we can expect implementing the full potential of Biorepack is around 60%

274 COMPOSTING PLANTS TREATMENT CAPACITY 5.4 million ton

52 ANAEROBIC DISESTION and COMPOSTING PLANTS COMBINED TREATMENT CAPACITY 3.3 million tons

Thank you

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@natureworks | natureworksllc.com

Annex

OECD (2016), Extended Producer Responsibility: Updated Guidance for Efficient Waste Management, OECD Publishing, Paris.

EUROPEAN PARLIAMENT AND COUNCIL DIRECTIVE 94/62/EC of 20 December 1994 on packaging and packaging waste

CONAI 2018 Green Economy Report

Biodegradable – property of materials of undergoing decomposition ultimately into CO2, Biomass and Water.

Compostable – biodegradable in way that doesn't hinder the collection and recycling process into which is introduced EN 13432:2004

Biodegradation Disintegration Toxicity Safety

• Microorganisms • Non- • Absence of eco- • Finished soil rich convert organic distinguishable toxicity in compost can matter to CO2 to fragments (90% finished sustain plant the level of 90% in 12 weeks) compost growth in less of 6 months