May/June 1994
Environmental regulations--and misunderstandings--are as pressing a concern to European recyclers as to their American counterparts. But the growing role of the European Union as an international legislative body and its focus on environmental topics translate to some unique challenges. Here’s a look at key issues sweeping the continent.
By Tom Tyler
Tom Tyler is staff attorney for the Institute of Scrap Recycling Industries (Washington, D.C.).
European recyclers are losing more sleep these days over environmental regulations--and no wonder. Not only are they contending with myriad new environmental rules enacted in their own countries, but they also face regulation from an additional authority--and one tougher to influence--than their national governments: the European Union (EU).
The EU, formerly known as the European Community, is an economic and political union of 12 member countries: Belgium, Denmark, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, and the United Kingdom. It may soon include four more--Austria, Finland, Norway, and Sweden--which are seeking membership.
Founded a few years following World War II, the organization that would become the EU was charged with discouraging militarism and promoting economic development by removing trade barriers among its member nations. As such, it was dismissed by some as a detached forum spouting vague policy statements on international cooperation.
Today, however, the EU is a powerful body that issues substantive laws its member countries must then implement through their own legislation and regulations. And one policy area it has increasingly targeted in recent years is environmental protection. While this may seem a stretch from the union’s roots, the EU believes that uneven environmental regulatory burdens inhibit free trade and that the costs of pollution--related to health, lowered agricultural productivity, environmental remediation, and reduced land values--inhibit an EU goal of promoting sustained development. EU environmental initiatives begin as policy statements, called “green papers,” issued to launch debate on a topic. Such proposals may advance as “white papers”--a legislative draft that may eventually be enacted as a “directive.” Each member country is then required to implement its own laws or regulations to comply with the directives.
This doesn’t necessarily ensure a level playing field among the EU’s member nations. The national laws and regulations must be at least as strict as the directive, but they can also be stricter. IN addition, members may interpret the directives in different ways. “The way each environment ministry looks at the directive may differ, for example, from France to Italy or the Netherlands,” says Francis Veys, secretary general of the Bureau International de la Recuperation (BIR) (Brussels, Belgium). There can also be regional and even municipal differences in implementation and enforcement, depending on the country’s regulatory structure. From the point of view of regulated industries, says Veys, “this really can be complete chaos.”
Pressing Issue No. 1: Basel’s Threat to Scrap Exports
When it comes to some environmental initiatives, regulatory differences among EU nations may be the least of recyclers’ concerns. EU legislation implementing the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their Disposal, which was set to take effect May 6, is one good example. In fact, as this article was being written, the BIR was warning recyclers that the then-upcoming regulation would mean serious disruption of--if not outright bans on--international trade in scrap metals, paper, textiles, and glass.
Basel is an international treaty that strictly controls transboundary movements of a wide range of so-called hazardous wastes. The trouble is, the convention’s definition of hazardous waste is so broad that it has been interpreted to cover even the most innocuous recyclables.
Nevertheless, as allowed by the convention, members of the Organization for Economic Cooperation and Development (OECD)--which includes most of the industrialized nations and all EU members--have agreed to continue trade in recyclables among themselves under a regulatory scheme that establishes “green,” “amber,” and “red” lists of wastes. The green list covers nonhazardous materials and includes most common scrap materials, which could continue to be traded among OECD members with only “normal commercial controls.” Some scrap items, including lead-acid batteries and nonferrous drosses, however, are on the amber list, whose trade demands reporting by the shipper and preconsent by the importing state. The red list, which does not cover any common scrap items, would face even stricter controls.
The EU has also formally adopted the OECD green-amber-red list scheme, and its regulation to implement Basel calls for an end to exports in any listed “wastes”--including green and amber list recyclables--from EU countries to non-OECD countries unless the recipient nation formally accepts the OECD regulatory scheme. For trade in green list materials, this means the recipient must "recognize" the list, according to the BIR. Trade in amber materials, meanwhile, requires that the two countries have in place a bilateral waste trade agreement.
Some nations, such as Indonesia and Saudi Arabia, have reportedly told the EU they will not accept any "wastes," including green list items. Others, such as the Czech Republic, Korea, Malaysia, and Taiwan, have threatened to regulate some or all of the green materials using the stricter OECD controls for amber or red list items, the BIR says. In addition, all "waste" shipments to most African countries are expected to be halted.
Such bans not only could cost EU exporters, but also could effectively close down major industries in the importing countries, international recyclers claim. Commenting on Indonesia's announced ban on the import of any "waste," Veys says, "They banned it without realizing the implications, which are significant, considering that Indonesia imported more than I million tons of ferrous scrap from OECD countries last year." John Clubb, executive director of the British Scrap Federation (Brampton, United Kingdom), warns that at least in the short term, the EU's Basel implementation means that international trade in recyclables is likely to be in turmoil. "We've told our members to get in touch with their overseas customers, to tell them to warn their governments about what will happen."
(Further complications may result from a recent vote by the Basel signatories to ban exports of "hazardous wastes" for recycling from OECD nations to non-OECD nations effective Dec. 31, 1997.)
Scrap Is Not Waste In Europe Either
Beyond Basel's immediate threat, which concerns only EU trade with non-OECD countries, European recyclers are concerned about other restrictions on the flow of recyclables across borders. The point that scrap is not waste, which is at the heart of the Basel problem and American recyclers' Superfund dilemma, is also of concern within the EU as countries implement national or EU legislation purportedly targeting "waste." (As an example, see "Recycling in the UK: Another Layer of Definitions," below.) Clubb sums up the situation by saying, "Attorneys are the ones who will make their fortunes on this because it is an absolute mine field of imprecise and sometimes meaningless words."
As a result, European recyclers are aggressively lobbying the EU to define recyclables as distinct from waste and coordinate the interpretation of EU "waste" definitions among member countries. These efforts may be paying off- The EU's Working Party on the Definition of Wastes has accepted that recyclables should be regarded as elements of a "product family" rather than "waste." This interpretation, however, is a long way from formal adoption and its likely benefits are unclear.
Integrated Pollution Prevention Targeted in Draft Legislation
Another EU initiative that might be of concern for scrap recyclers was adopted as draft legislation in September 1993. It aims at reducing the impact of major industrial polluters using an integrated approach to pollution prevention rather than the customary media-specific regulation, such as air- or water-quality rules.
In essence, the proposed rule would require reporting on all the processes used and everything that goes in and out of industrial operations, including "metal production and processing" facilities and ferrous metal foundries. Although industry comment has reportedly eased some of the initial demands, the proposed permit application called for industrial operations to provide details on the following:
- the plant and all materials moving in and out of it,
- all emissions and the likelihood that emissions to one medium would affect another,
- proposed techniques to prevent or minimize and to measure emissions,
- proposed measures to prevent accidents,
- options for alternative methods of operating (such as less-polluting or more-efficient) that have been considered and rejected and why, and
- measures taken to ensure no environmental harm occurs once the plant ceases operation.
Facilities would also be required to submit data to verify compliance with the permit, and permit information would be available to the public.
An EU committee is currently working on the draft, considering what agencies would issue permits, what constitutes best-available technology, emission limits, and other issues.
More Hot Issues
EU legislators have targeted a broad range of other environmental topics, many of which could affect recyclers. Here's a sample:
'Voluntary’ Eco-Audits. Under a "voluntary regulation" enacted by the EU in 1993, companies can undergo periodic safety and environmental audits-with the results made public-to receive a special certification. Much of the reporting required is similar to that proposed by the integrated pollution control initiative. Although the program is voluntary, many in industry feel public pressure to participate could be overwhelming.
Civil Liability for Environmental Damage. The EU is debating development of a standardized system of civil liability for environmental damage, modeled partly on U.S. Superfund law. Support for a directive remains uncertain, but the commission has issued a green paper seeking comment on what should be considered environmental damage, whether liability should be fault-based, proposed liability caps, and other issues. Unlike Superfund, the proposal does not appear likely to include retroactive liability-except for activity that was illegal at the time it occurred.
Packaging and Packaging Waste. This proposed directive-apparently one of the EU's most controversial-calls for member nations to recover and recycle a minimum-and a maximum-percentage of discarded packaging, with the percentage varying depending on the type of packaging material. While some countries have complained that the minimums are too high, others are disturbed by the establishment of maximum rates, which would weaken existing laws in certain nations.
Emission/Energy Use Tax. The EU is considering "environmental taxes" on carbon dioxide emissions and energy use.
Air Quality. The EU has established air quality standards for sulfur dioxide, nitrogen dioxide, and particulates, and requires best-available technology to control pollution on new industrial facilities and regulates auto emissions. A new air quality directive may be legislated during 1994.
Clean Water. The EU has passed more than 25 directives on drinking water and other water quality issues, making this topic the most comprehensively regulated environmental issue by the union.
How Do You Lobby a Union?
European recyclers face different--and perhaps tougher--challenges than their American counterparts in influencing policy. For instance, because some countries lack national recycling associations, representation at the EU level is uneven. In addition, lobbying on the international level is difficult, requiring additional resources to reach above and supplement national efforts. Although the BIR and some national recycling groups do substantial EU lobbying, most others concentrate on communicating with national policy makers.
Adding to this situation, Veys points out, EU decision makers are heavily lobbied by the environmental parties and their supporters. And some environmentalists are pushing for policies that will stop any production of "waste," including recyclables, which are seen as just another postconsumer waste that ought to be done away with, he says. Proponents of such policies apparently want each country to be self-sufficient and deal with its "waste" internally.
In contrast, Veys notes, the EU has traditionally been less impressed by the contributions of industry and of entrepreneurs--including recyclers--in handling environmental problems. Nevertheless, the BIR has recently seen signs that its voice is being heard in the EU, says Veys, noting that the group was recently asked to comment on a draft of proposed legislation. To add to such progress, he says, individual recyclers must recognize the perils the industry faces today and get involved in the public policy debate--even on the international level. "If we are too conservative and traditionalist ... that would be the end of recyclers," Veys warns.
Clubb agrees, noting that international recycling markets have a direct impact on even the smallest domestic recyclers by directing prices and the flow of material. He's confident, however, that common sense will prevail in recycling's favor: "Perhaps it's naive optimism on my part, but surely people will soon realize that the legislators and regulators didn't intend to affect recycling so adversely and will change their ways. The alternative scenario is that bans will be applied until primary industries, such as the steel industry, make enough noise to get the policies changed. So far, the industries are not making the necessary noise."
A Closer Look at the EU
The European Union includes a large number of agencies, boards, and committees. Here’s a glimpse at the key bodies that affect environmental policy.
The Council of Ministers includes high-level representatives from each member state and makes all major EU policy decisions. It also provides a forum for the heads of state to gather. The council votes on initiatives put forth by the European Commission (see below). Environmental issues are addressed at quarterly meetings by a council subgroup of member environmental ministers. The presidency of the council, which rotates among the member states every six months, provides an opportunity to influence policy developments for that period. For example, the German presidency that begins in July is expected to produce somewhat “greener” policy than the current Greek presidency.
The European Commission drafts initiatives that will go before the council. It also acts as the EU executive, enforcing rules and implementing policies.
The European Parliament is a democratic body consisting of 518 popularly elected deputies--between 6 and 81 from each member nation--that serve five-year terms. The size of each country’s delegation is determined by the country’s population. These representatives do not typically align based on nationality, but on party--including Socialists, Christian-Democrats, and Greens. Although it does not pass laws, the parliament advises the European Commission and approves the EU budget, making it an important political force in the EU. For example, it was instrumental in the creation of the Single European Act of 1986, the treaty that set 1992 as the year for implementation of Europe “without frontiers.”
The Court of Justice approves or quashes measures adopted by the European Commission, the Council of Ministers, or national governments based on their compatibility with EU law and policy, reviewing cases at the request of national courts.
The European Environment Agency is the scientific arm of the European Commission that will manage and assess data on the environment. It does not have regulatory power.
Recycling in the UK: Another Layer of Definitions
Ferrous scrap recyclers in the United Kingdom face definition problems beyond the Basel Convention or EU directives. Two national laws, the Control of Pollution Act of 1974 and the Environmental Protection Act of 1990, include waste definitions so broad that regulators have interpreted them to include ferrous scrap, requiring scrap metal merchants to obtain waste disposal licenses.
Under EU waste laws, handlers, processors, and managers of waste must be permitted. Although the EU provides an explicit exemption for recycling, the United Kingdom has ignored the exemption and continues to treat recyclers as disposers or managers of waste, lumping ferrous scrap metal processors in with landfill operators. This interpretation “cause unnecessary expense to legitimate recyclers and unjustified interference with their activities,” according to John Clubb of the British Scrap Federation.
In a hopeful sign for recyclers, however, the U.K. Department of the Environment issued a 27-page interpretation of a three-line EU definition of “waste” that for the first time takes into account the holder’s intention to “discard” the materials. It also considers the material’s value, based on the assumption that those items with no value are more likely to be discarded and cause pollution. But a sticking point remains: Under the interpretation, items can be considered raw materials rather than waste only if they can be used without processing. Although this may provide a break for furnace-ready scrap, material the must be processed would still be considered waste. •
Environmental regulations--and misunderstandings--are as pressing a concern to European recyclers as to their American counterparts. But the growing role of the European Union as an international legislative body and its focus on environmental topics translate to some unique challenges. Here’s a look at key issues sweeping the continent.