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Circling the Economy: The Real Target

Circling the Economy: The Real Target, Asia packaging, Japan packaging, China packaging, Circular economy
Earlier this month, we explored the EU theoretical proposals for a Circular Economy. Now, Stuart Hoggard looks at the realities of the Circular Economy as implemented in both China and Japan.

So how does the Circular Economy (CE) work?

At the heart is a Law that sets a framework for supplementary legislation which does the grunt work in the economic system.

Fairly new to the system, having introduced their CE law in 2008, the Chinese have the Cleaner Production Law which sets manufacturing standards and material restrictions. The Green Fence - a Customs Department reclassification of acceptable recycled plastic imports - was driven by the Cleaner Production Law, as is the world’s only Excessive Packaging Law that restricts the number of layers a package is permitted to have to three. As yet the Chinese have no successful collection and recycling programmes, though they have several under trial.

In Japan, they’ve been refining the CE since the mid 1990’s and, though still a work in progress, for Europe, it is the shape of things to come.

So the CE is a Packaging Law?

No! It is important to note that unlike the EU proposals (as they are currently being presented), packaging plays just a minor role in a concert of laws that, when they all play together, harmonise the national financial and economic imperative to reduce the cost of raw materials with environmental concerns.

The Sound Material Cycle Law (2002) is the heart of Japan’s Circular Economy and is the framework legislation that lays the foundation for a rack of supplementary laws that deal with Front of Pipe (production) and End of Pipe (disposal) of a range of products and materials and, crucially, who pays for disposal.

Waste Management Law (2000) is an ‘End of Pipe’ law that deals with disposal of household materials in Japan. It requires local government to collect waste separated by material content and gives them autonomy as to how to do it. Most cities and prefectures require citizens to have up to 12 household disposal bins for Paper, Metal (aluminium and steel/tin), Glass (clear and coloured), Mixed Plastic, Compostables, Burnables (clothing etc) and batteries. PET, Beer and milk bottles must be washed, labels removed and the container returned to a retail outlet.

Local authorities are not required to collect waste from businesses or industry.

These local ordinances were not introduced in one fell swoop, but were brought in gradually, starting with three waste streams for paper, plastic and mixed and building up from there over 10-15 years.

As a result, most packaging is designed with end-of-life disposal in mind; since consumers have to remove labels, separate plastic from paper, ingenious methods have been designed to allow easy separation.

Municipalities collect household garbage free of charge – though this is factored into local taxes.

End of Life PC Recycling Law (2002) is an ‘End of Pipe’ regulation requires all computer vendors in Japan to include a small recycling fee (less than US$10) in the retail price and attaché a sticker to the bottom. At the end of life, consumers simply take their dead PC to any Japan Post office and hand it over for onward delivery to one of three consortia owned by the main PC manufacturers, where they are stripped down, metals, plastic, glass and other materials recovered, separated and sent for recycling. Non-Japanese PC manufacturers must contract with one of the recycling companies and provide schematics to assist the disassembly process.

Home Appliance Recycling Law (2002) also ‘End of Pipe’, requires consumers to buy a recycling sticker from Japan Post (less than US$10) that obliges retailers to collect and dispose of end of life appliances (fridges, washing machines etc) when a replacement is purchased from them. Again, these are sent to one of several consortia, where they undergo the same dis-assembly process as PCs.

End of Life Vehicle Recycling Law (2002) is another ‘End of Pipe’ legislation in Japan. Car dealers are required to take back, for a fee, any old vehicles when selling a new one. Again, an auto industry-owned recycling consortium strips down the vehicle, recovers usable spare parts for reconditioning and eventual sale on the second hand market. The rest - glass, cables, aluminium, steel, plastic, rubber etc - are separated and sent for recycling.

When working together these laws eliminate the need for WEE legislation, since all component parts are recovered and smelted back to the original materials. A byproduct of these laws has been the rationalisation, and componentisation of production methods. No longer do PC or appliance repair shops replace a single component, but the entire motherboard is whipped out and a new one slotted in, extending the lifespan of the machine.

Circling the Economy: The Real Target, Asia packaging, Japan packaging, China packaging, Circular economyConstruction Material Recycling Law (2002) is a ‘End of Pipe’ regulation governing the demolition of buildings. This requires materials (bricks, glass, metals, wood etc) to be separated and sent for recycling. Concrete is sent to be re-used as backfill for roads, or building foundations.

Food Recycling Law (2002). This ‘End of Pipe’ legislation is not as disgusting as it sounds; it requires food and organic waste from food and beverage outlets to be separated from other trash. This is then collected by contract by the local authority and delivered to an industrial composting company. Most cities have them.

Containers & Packaging Recycling Law (2005) is a ‘Front of Pipe’ regulation that simply lets Extended Producer Responsibility take care of business. A fee structure is imposed according to the weight of each packaging material shipped and varies annually according to the volume of each substrate collected and recycled. Paper, glass (coloured and clear), PET and other types of mixed plastic are subject to these fees – metals, which have a 100% recovery and recycling rate - have no fee obligation. The fee is paid to industry-owned Recycling Associations that monitor and promote recycling.

But is this not an increased cost to industry?

Asked directly, the answer is Yes. But Japanese industry soon discovered that while it was an additional financial burden, it contained a hidden benefit. Both brand owners and converters were obligated under the system, and they were quick to understand that to reduce their fee obligations there were five options:

  1. Weight Reduction: The prospect of increased packaging costs fuelled considerable research and development (R&D) programmes into reducing the package weight – for example, trimming a few grams to bring a 30gm detergent HDPE container down to 28gm shaved a few Yen off the fees across an entire shipment.
  2. Product migration: This involved a major re-think of the way products are packaged. For example does the detergent really need to be in an HDPE container, or would an 11gm flexible re-fill pouch not work just as well? It would save almost 50% of the fees payable – after all as a ‘mixed plastic’ the per-gram fee is the same for a flexible pouch as HDPE. Consumers would buy the HDPE container just once and use refills thereafter.
    Of course, this led to the elimination of the HDPE container from some products entirely, as R&D solved the problem of portion control where the consumer’s hand exerted too much pressure on the container forcing the liquid to spurt out of the opening. Ingenious methods – swan necks, inserted straws and laser cut openings - led to non drip pouches.
  3. Material replacement: Completely substituting a material with lower fee structure; could paper carton can replace a PET bottle? Could a metal can, with zero fee substitute for the paper carton?
  4. Clear PET: Around 2005 the Beverage Manufacturer’s Association realised that the recycling fee for PET would be punitive unless the volumes of recycled PET weren’t increased dramatically. After studying the problem it was discovered that the use of coloured PET was the main barrier to recycling.
    Collection was not the issue; that was easy - by law consumers returned their bottles to retailers. But in the recycling process, coloured PET contaminates the entire batch rendering it useless for any purpose other than to be spun into industrial carpets.
    The solution was bold. The Beverage industry, en-mass, banned the use of coloured masterbatches in PET!
  5. Use Recycled materials that have zero fee: The use of virgin material for most non-food products, such as clam-shells or detergent bottles, is a complete waste of resources. With relatively pure streams of recovered materials coming back to industry as a result of the selective separation regulations imposed on households by the Waste Management Law, industry had a limitless supply of recovered materials. Today, virgin materials in non-food applications are rare. 

So do each of these laws require their own recycling process?

No, that’s the beauty of the Circular Economic system. At the core it is about the separation of materials, all materials. Once the industry owned consortia for PC’s, Motor Vehicles, Domestic Appliances, or Packaging have stripped the product back to the base material, it can all be shipped together for mass recycling: aluminium from cans are mixed with aluminium from motor vehicles, refrigerators and washing machines and whatever else, and smelted down together.

Glass bottles are recovered, and go around, up to 12 times before they get sent for smelting back into glass bottles, or even windows.

Plastics from wires and cables get mixed with HDPE and flexible packs and incinerated together to generate electricity – possibly powering the glass bottle smelter - while gas from the petroleum products going up the flue is captured, sequestered and re-used in another chemical process.

Remember the first principal of the Circular Economy is “The waste from one process becomes the feedstock of another”.

So what about landfill?

What landfill? If there is a process in place; a system of separation and collection, an incentive to reduce the volume of materials used, and a real financial value placed on end of life materials, then there is no need for landfill. It is wasteful to bury valuable materials in the ground, having first dug it out of the ground.

Remember the second principal of the Circular Economy: Waste is something that cannot be sold to someone else!

Where to from here?

Next month we’ll take a more detailed look at the packaging innovations that have emerged in Japan as a direct result of the practical implementation of the Circular Economy.



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