The Circular Economy Package aims to “close the loop” of product lifecycles through greater recycling and re-use.

The Circular Economy Package includes four directives that were adopted by the European Parliament on 18 April 2018 (see Latham’s previous post) and by the EU Council on 22 May 2018. The directives were recently published in the Official Journal (OJ L 150, 14 June 2018), and entered into force on 4 July 2018 and Member States should implement the directives within a two year period.

The legislative package amends:

  • The Waste Framework Directive (2008/98/EC)
  • The Landfilling Directive (1999/31/EC)
  • The Packaging Waste Directive (94/62/EC)
  • The Directives on end-of-life vehicles (2000/53/EC), on batteries and accumulators and waste batteries and accumulators (2006/66/EC), and on waste electrical and electronic equipment (2012/19/EU)

The overall goal of the directives is to improve EU waste management. This will contribute to the protection, preservation, and improvement of the quality of the environment as well as encourage the prudent and rational use of natural resources. More specifically, the directives aim to implement the concept of “waste hierarchy”, which has been defined in Article 4 of the Waste Framework Directive. The waste hierarchy sets a priority order for all waste prevention and management legislation and policy which should make any disposal of waste a solution the last resort:

  1. Prevention
  2. Preparing for re-use
  3. Recycling
  4. Other recovery, e.g., energy recovery
  5. Disposal

The waste hierarchy promotes a shift to a more sustainable “circular economy”. All directives rely on more rigorous Member States’ monitoring and reporting obligations, as well as implementing and review powers conferred on the European Commission.

Amendments to the Landfilling Directive

Directive (EU) 2018/850 requires Member States to significantly reduce waste disposal by landfilling. This will prevent detrimental consequences for human health and the environment, and ensure that economically valuable waste materials are recovered through proper waste management and in line with the waste hierarchy. Member States will be required to ensure that, as of 2030, waste suitable for recycling or other recovery, in particular contained in municipal waste, will not be permitted to be disposed of to landfill. Use of landfills should remain exceptional rather than the norm. Furthermore, the Member States will take the necessary measures to ensure that by 2035, the amount of municipal waste disposed of in landfills is reduced to 10% or less of the total amount of municipal waste generated. Acknowledging that such reductions will require major changes in waste management in many Member States, these measures likely will facilitate further progress and investment in the collection, sorting, and recycling of waste. Member States that used landfills to dispose of more than 60% of their municipal waste in 2013 will be allowed to postpone the respective deadlines by five years.

Amendments to the Waste Framework Directive

Directive (EU) 2018/851 requires Member States to improve their waste management systems into the management of sustainable material, to improve the efficiency of resource use, and to ensure that waste is valued as a resource. Among other areas of focus, the amendments address:

  • Measures to prevent waste generation, inter alia, obliging Member States to facilitate innovative production, business, and consumption models that reduce the presence of hazardous substances in materials and products, encourage the increase of the lifespan of products, and promote re-use.
  • The handling of municipal wastes.
  • Incentives for the application of the waste hierarchy, such as landfill and incineration charges or pay-as-you-throw schemes.
  • Measures to encourage the development, production, marketing and use of products suitable for multiple use that contain recycled materials, and that are, after having become waste, suitable for re-use and recycling.
  • Measures to promote the re-use of products constituting the main sources of critical raw materials to prevent those materials from becoming waste.
  • Minimum operating requirements for extended producer responsibility schemes.
  • The promotion of sustainability in production and consumption in Member States, including communication and educational initiatives as well as measures to promote prevention and reduction of food waste.
  • Member States’ obligation to set up separate collection for paper, metal, plastic, and glass waste.

Member States must implement measures whereby unprocessed municipal waste is better (a) prepared for re-use after its collection and (b) recycled. This must be done to a minimum of 55% by weight by 2025, 60% by 2030, and 65% by 2035. The directive acknowledges that large differences exist among Member States with respect to their waste management performance, and therefore allows low-performing Member States to postpone these targets by up to five years.

Amendments to the Packaging Waste Directive

Directive (EU) 2018/852 aims to increase packaging waste recycling. In particular, Member States will:

  • Implement measures in order to prevent the generation of packaging waste and to minimise the environmental impact of packaging. Economic instruments and other measures should be used to provide incentives for implementing the waste hierarchy.
  • Take measures to encourage an increase in the share of reusable packaging placed on the market and of systems to reuse packaging in an environmentally sound manner. This includes using deposit-return schemes, setting qualitative or quantitative targets, using economic incentives, and setting up a minimum percentage of reusable packaging placed on the market every year for each packaging stream.
  • Meet defined targets and deadlines. By the end of 2025 (and 2030), at least 65% (2030: 70%) by weight of all packaging waste must be recycled, and the following minimum targets for specific materials contained in packaging waste must be met: 50% (55%) of plastic, 25% (30%) of wood, 70% (80%) of ferrous materials, 50% (60%) of aluminium, 70% (75%) of glass, and 75% (85%) of paper and cardboard. Some Member States may postpone these target deadlines by up to five years under certain conditions.
  • Ensure that, by the end of 2024, extended producer responsibility schemes are established for all packaging.

In addition, the directive sets long-term policy objectives as many Member States have not yet completely developed the necessary waste management infrastructure. The directive intends to give economic operators and Member States a clear direction for the investments needed to achieve those objectives. In developing their national waste management plans and planning investments in waste management infrastructure, Member States should investment carefully, including through EU Funds.

Amendments to the directives on end-of-life vehicles, on batteries and accumulators and waste batteries and accumulators, and on waste electrical and electronic equipment

Directive (EU) 2018/849 primarily establishes monitoring and reporting requirements for Member States regarding the reuse and recovery goals for end-of-life vehicles and collection targets for waste batteries, accumulators and electrical and electronic equipment. Member States will take the necessary measures to apply the waste hierarchy to all wastes that the respective directives cover. In the context of the EU commitment to a transition towards a circular economy, a review process will consider the feasibility of setting targets for specific materials contained in the relevant waste streams.

Implementation

The directives entered into force on 4 July 2018. Unlike regulations, they do not have any immediate effect in the national legal systems; the Member States must implement the directives in their legal systems within a two-year period. The Member States have a considerable margin of appreciation on how to fulfil their obligations under the directives. All relevant stakeholders should ensure they engage in the implementation processes at national levels in order to help shape national solutions.

Implementing the Circular Economy Package will provide investment opportunities throughout the EU, including, for example, waste management and waste recovery services, reusable products, and solutions relating to extended producer responsibility schemes. Latham will continue to monitor and provide updates on the progress of the Circular Economy Package.

This post was prepared with the assistance of Olivia Featherstone in the London office of Latham & Watkins.