May 31, 2019
The business conversation about circular economies is picking up momentum around the world. This discussion is breathing new life into old debates about stuff and what we do with it – reducing and reusing materials, recycling, and otherwise diverting materials from landfills.
But there’s a seismic shift underway, one that will force businesses to reconsider their relationships and responsibility for the stuff it makes. China’s Blue Sky / National Sword policy, launched in January 2018 and which restricts imports of recyclables into China, is the epicenter.
The Big Shift
China has long been the global trade leader for recyclables. Between 1995 and 2016, the country’s importation of recyclables grew from 4.5 million to 45 million tonnes. China imported more than half of the world’s exports of scrap copper and waste paper, and half of its used plastic in 2016. The EU27 sent 87 percent of its collected recycled plastic to China. Almost a quarter of the biggest US exporters by volume were recyclers of paper, plastic, and metal.[1] Unfortunately, these materials can often be very “dirty” with contaminants. Combined with the increasing reliance on single stream (or “commingled”) collection methods, particularly in the United States, variability across geographies regarding what can be recycled, and a tendency toward “wishful recycling” – that is, recycling materials that are not recyclable but you think should be – contamination rates have increased.[2] Recycling contamination increases the cost of recycling and increases disposal of materials that may be recyclable otherwise.
High contamination rates – and resulting environmental and human health impacts – are one of the factors behind the China Ministry of Environmental Protection’s recent import restrictions on 24 categories of recyclables and solid waste. Called a campaign against “foreign garbage” or yang laji, the Blue Sky / National Sword policy (aka, the Green Sword) launched in 2018 is also sometimes called a second “Operation Green Fence” program, which was an aggressive inspection effort implemented in 2013 to increase the quality of recyclables imported into the country. Signs point to escalating restrictions going forward; CNN Money reported in April 2018 that the Chinese government announced it is extending this policy and adding 32 more types of materials to the list of restricted materials. These restrictions include various types of post-consumer scrap like grocery bags and soda bottles, unsorted scrap paper, used or scrap textile materials, and certain metal slag, and reduces the contamination rate for recycling imports to 0.5%.
The global recycling marketplace is already feeling the effects of this new policy, and reactions vary. For instance, governmental authorities around the world are forming task groups to figure out how to handle the issue; some recycling companies are stockpiling materials awaiting a solution while others have stopped accepting materials for which there is no market.[3] The EU is implementing policies to restrict the use of single-use plastics and microplastics, and to make all plastic packaging in the EU market recyclable or reusable by 2030[4]. In the United States, several states have established short-term waivers allowing recyclers to dump materials that would previously have been recycled. For instance, Oregon’s Department of Environmental Quality approved 14 waivers between September 2017 and February 2018, allowing more than 6 thousand tons of recycling to be dumped in landfills.[5] Since November 2017, the state of Massachusetts Department of Environmental Protection issued 21 disposal waivers for unsorted single stream recycling materials because of lack of processing capacity – a direct result of the ban as material recovery facilities (MRF) slowed down their recycling lines or are running materials through the lines twice to minimize contamination.[6] Even trade associations are devising ways to help their members respond, with some like the American Chemistry Council (ACC) announcing new goals that both reflect and are a reflection of these challenges. For example, n May 9, 2018, the ACC announced three circular economy goals for capturing, recycling, and recovering plastic[7]:
- 100% of plastics packaging is re-used, recycled or recovered by 2040.
- 100% of plastics packaging is recyclable or recoverable by 2030.
- 100% of the U.S. manufacturing sites operated by ACC's Plastics Division members will participate in Operation Clean Sweep-Blue by 2020, with all of their manufacturing sites across North America involved by 2022.
Operation Clean Sweep-Blue is a voluntary membership campaign designed to encourage steps to reduce the loss of plastic into the environment.
Is Business Paying Attention?
But what are product manufacturers and retailers doing?
So far, with the exception of some leading businesses that have taken steps to lightweight or dematerialize packaging, integrate recycled content, reduce chemicals of concern in their products and packaging (which can enhance the end uses and trust in the recyclate produced), reduce their operational waste in their own operations and throughout their supply chain, most manufacturers and retailers seem to be taking a wait and see approach to these trends. It is useful as an example here to use certifications offered by the Global Ecolabelling Network (GEN)[8], an association of the leading ISO 14024 Type I (lifecycle based) ecolabellers around the world, as a rough proxy for the universe of certified products and services, and companies that are engaged in some way in managing materials more sustainably. GEN estimates that just under 300,000 products and services are certified by its members[9]. This represents the work of about 16,000 companies – far fewer than the more than 46,000 publicly listed companies tracked by the World Federation of Exchanges in 2017[10], and the more than 6 million private companies reported to operate in the U.S. alone.
Doing nothing is a mistake. But where should businesses start?
In the second edition of his book, Greener Products: The Making and Marketing of Sustainable Brands, Dr. Al Iannuzzi, Senior Director, Environment, Health, Safety and Sustainability at Johnson & Johnson, cites several greener product design examples that provide useful case studies for businesses to consider as they embark on their journey to create a greener product strategy or program.
For example, the GE Ecomagination Program – a business initiative recognizing products and services for reducing energy use, greenhouse gas (GHG) emissions, water use, and offering financial benefits for customers – was characterized by strong CEO support, significant R&D investment, included a third-party review element, and engaged a review board of advisors when it launched. Timberland’s Green Index is a transparency tool based on life cycle assessments that reports on a product’s climate impact, chemicals used, and resource consumption. The company also has created environmental standards for all of its product categories that are aligned with 2020 goals such as “100% of footwear will include at least one material containing recycled, organic or renewable content” and “100% of footwear and outerwear leather will be sourced from tanneries that have earned a Gold or Silver rating from the Leather Working Group for following environmental best practices”. Iannuzzi’s own J&J program, Earthwards®, was developed out of an evolution of its design for environment (DfE) program. The Earthwards® program is composed of four steps: 1) meeting J&J stewardship requirements; 2) reviewing for life cycle impacts; 3) implementing and validating improvements in consultation with internal sustainability experts; and 4) achievement of Earthwards® recognition upon achieving improvements in at least 3 of 7 impact areas and approval by a board composed of internal and external experts. J&J has also set product stewardship targets, achieving 20% revenue from Earthwards® recognized products and increasing the recyclability of consumer product packaging to 90% or more in key markets.
Great programs such as these share some attributes. First, the companies started with the needs of their customers and demands of other stakeholders today and in the future in mind. Second, they established a framework for product development, informed by lifecycle thinking, implemented through tools like scorecards to help product designers and engineers integrate sustainability concepts into the product development process, and integrating third-parties to provide validity to the program and outcomes. Third, they established goals related to product improvements – revenue-related, sustainability impacts-related. And fourth, they established clear communication schemes to help decision-makers, purchasers, and others understand the value of these efforts.
Taking steps to establish a cohesive greener product approach is important and should be part of every company’s product innovation approach. In the meantime, all businesses can take two very tangible steps toward circularity today: first, by integrating recycled content into their products (directly, if manufacturers, or as requirements of suppliers to retailers); and second, by implementing waste diversion practices at all of their owned sites and then throughout their supply chains. The impetus behind a circular economy is a vision of an economy in which economic growth is decoupled from resource constraints. These two actions alone can have far reaching impacts in helping move toward a more circular economy and can help companies open the conversation to broader product stewardship conversations overall.
UL offers advisory services to help companies develop a roadmap to help it implement a sustainable product plan. UL also offers certifications that provide third party credibility for circularity related efforts such as zero waste to landfill, integration of recycled or bio-based content into product, and compostability or design for recyclability. Contact us for more information.
[1] https://www.economist.com/china/2017/08/03/china-tries-to-keep-foreign-rubbish-out
[2] Recycling contamination is when the wrong materials are put into the recycling system, or the right materials are prepared the wrong way – for instance, food residue in containers, liquid put in paper recycling.
[3] https://theconversation.com/chinas-recycling-ban-throws-australia-into-a-very-messy-waste-crisis-95522
[4] http://europa.eu/rapid/press-release_IP-18-5_en.htm
[5] https://www.bna.com/us-recycling-woes-n57982089254/
[6] https://www.wastedive.com/news/maxed-out-massachusetts-mrfs-prompt-recycling-disposal-waivers/514011/
[7] https://www.prnewswire.com/news-releases/us-plastics-resin-producers-set-circular-economy-goals-to-recycle-or-recover-100-of-plastic-packaging-by-2040-300645520.html
[8] UL’s ECOLOGO program is a GEN member.
[9] https://globalecolabelling.net/green-initiatives-and-news/gen-annual-report-2016/
[10] https://www.world-exchanges.org/home/index.php/statistics/annual-statistics