Using financial instruments to reduce waste


The European Union has set itself various targets for recovering and recycling waste, ranging from packaging to cars and electrical goods. Some countries are more efficient at reaching these than others. A new Commission report * underlines the need for economic instruments if the goals are to be achieved.

Across the European Union, common targets are in place for handling waste. But the progress towards them is distinctly uneven. Six Member States – Belgium, Denmark, Germany, Austria, Sweden and The Netherlands – landfill less than 3% of their municipal waste, but the percentage for the nine worst performing countries is more than 75%.

Europe’s goals – reiterated in last year’s Resource Efficiency Roadmap – include zero landfilling, maximum recycling and reuse and limiting energy recovery to non-recyclable waste. Drawing on experience from across the EU, the report concludes that a combination of economic instruments will need to be applied more widely to implement existing legislation and meet those goals.

It identifies three main avenues. A ban or tax on landfill and incineration has proved highly effective in decreasing such practices by pushing up costs. Pay-as-you-throw (PAYT) schemes prevent the creation of waste and encourage citizens to reduce waste and participate in separate waste collections. Extended producer responsibility (EPR) schemes, a way to collect and redistribute funds to develop separate collection and recycling programmes, already exist for packaging waste in 24 Member States.

The Commission is pressing for full implementation of existing EU waste legislation. In 2008, the waste management and recycling industries had a turnover of EUR 145 billion and accounted for some two million jobs. Full compliance, it is estimated, could add an extra EUR 42 billion to that total each year and 400 000 more jobs.

Next steps

The Commission is investigating how to best promote these economic instruments in a review of EU waste targets for 2014. It would also like to see ex ante conditions apply to the use of future European Structural Funds, which would be devoted to waste prevention, reuse and recycling as priorities.

In cooperation with the European Environment Agency and stakeholders, an early warning system assessing whether the EU’s legally binding waste targets will be met is being developed. This model will help evaluate and plan national waste prevention and management strategies. The first projections are due by mid-2013.

A specific study on EPR schemes, examining best practices and cost efficiency, will be launched during 2012.