Let's not waste our waste - Fortum

Let’s not waste our waste ESSENTIAL ROLES OF HAZARDOUS WASTE TREATMENT AND ENERGY RECOVERY AS VITAL ELEMENTS OF A CIRCULAR ECONOMY

Fortum Energy Review, November 2017

Fortum Energy Review November 2017

Foreword

Role for policy makers and enterprises in the transition to a circular economy

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eading thinkers across the globe have begun to recognise the potential of resource efficiency and the circular economy in driving economic growth. Consequently, conventional environmental policies to improve resource efficiency and to reduce landfilling and landfill gas emissions are increasingly being complemented with initiatives to evolve industrial and waste management processes to develop the re-use, recycling and recovery of waste.

Global megatrends will place significant consequences on Europe in the coming decades. Current lifestyles in Europe and in other regions that are in the midst of development put excessive pressures on the environment. As the growing middle class increasingly adopts the resource-intensive consumption patterns of advanced economies, the total environmental burden is rapidly moving beyond globally sustainable limits.1 It is estimated that the amount of municipal solid waste (MSW) will double from around 2 billion tonnes today to 4 billion tonnes by 2025.2 This is a

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massive and growing problem that will have to be solved, and the linear economy is no longer a viable option for societies and enterprises. Over the last 30 years, the European Union’s waste policy has evolved through a series of environmental action plans and a framework of legislation and regulation. These have aimed to reduce negative environmental and health impacts and create an energy and resource-efficient economy. The 7th Environment Action Programme of the EU recently set the direction with a vision of the year 2050: “In 2050, we live well within the planet’s ecological limits. Our low carbon growth has long been decoupled from resource use, setting the pace for a safe and sustainable global society”.3

About this review With our acquisition and integration of Ekokem Group in 2016, Fortum has become one of the leading companies not only in the energy industry but also in the circular economy sector. We aim to develop our circular economy concepts in order to capture more value

European Environmental Agency (EEA): Global megatrends assessment. Technical report 11/2015.

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UNEP and ISWA: Global Waste Management Outlook. 2015.

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EU Commission: The 7th Environmental Action Programme to 2020.

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from resources as well as to provide municipal and industrial customers with better solutions. Various case examples will be given in this review. For more information, visit www.fortum.com/wastesolutions. In this review, we share our insights on policy and regulation in the transition to a circular economy. We believe European and national policies and regulations should create frameworks where waste producers and managers have proper and effective incentives to encourage waste prevention and the reuse, recycling and recovery of all wastes in line with the waste hierarchy.

Key messages In a sustainable and safe circular economy, material flows containing unwanted hazardous substances must be separated, decontaminated, and prevented from being reintroduced to the system. This process is called detoxification. Stronger policy and regulatory steering are needed to improve the competitiveness of high-quality,

November 2017 Fortum Energy Review

Contents

decontaminated secondary raw materials and recycled products in the markets and to raise consumers’ awareness of them.

FOREWORD Role for policy makers and enterprises in the transition to a circular economy. . . . . . . . . . . . . 2

Restricting landfilling by effective financial incentives or landfill bans is the first step in prohibiting the negative climate impacts of waste management. Thermal treatment of non-recyclable waste with energy recovery is a vital component in a circular economy. Waste residues that do not fulfil legal, technical, economic, and environmental requirements should be recovered as energy rather than landfilled Furthermore, thermal treatment enables the utilisation of minerals in fly ash and slag and the recycling of metals from bottom ash.

PART 1 Waste is a global challenge. . . . . . . . . . . . . . . . . . . . . 4

This Energy Review focuses on the most relevant enablers for better resource efficiency in the waste and energy markets of the future. We hope that it contributes to an informative and forward-looking discussion about relevant European and national policies and regulations to optimise the use of waste.

PART 2 Towards a sustainable and safe circular economy. . . 7 PART 3 Current EU policies in place . . . . . . . . . . . . . . . . . . . . 10 PART 4 Drivers that facilitate the transition to a circular economy . . . . . . . . . . . . . . . . . . . . . . . . . 13 PART 5 Fortum’s policy messages . . . . . . . . . . . . . . . . . . . . . . 18

Fortum Corporation

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1. Waste is a global challenge

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aste is not just a local concern – it is a global challenge. Due to poor waste management, emissions and waste travel far afield, both intentionally and unintentionally. This makes the sound management of waste one of the most important issues that must be addressed in achieving the Sustainable Development Goals set up by the UN in its Post-2015 Development Agenda. The types and amount of waste reflect the society that generates it, and are directly linked to its production and consumption patterns. Economic growth and population are shifting consumption patterns towards those of developed regions. This brings challenges in waste management which

require both top-down political action and engagement from individuals and enterprises to overcome.

Waste trafficking, and dumpsites – some of the world’s most polluted places In the 1970s, legislative controls and systems for the environmentally sound management of hazardous waste were introduced in developed countries. A side effect of this was that less serious actors sought to avoid the costs of proper treatment by dumping and fly-tipping hazardous waste in the countryside, burning it, or exporting it to countries where controls and legislation were lacking or weak, making the handling cheaper. The most common procedure for the illegal trafficking of waste is

Proposed Primary Goals of Global Waste Management within the Post-2015 Development Agenda By 2020 • Ensure access for all to adequate, safe and affordable solid waste collection services. • Eliminate uncontrolled dumping and open burning.

By 2030 • Ensure the sustainable and environmentally sound management of all wastes, particularly hazardous wastes. • Substantially reduce waste generation through prevention and the 3Rs (reduce, re-use, recycle) and thereby create green jobs. • Halve global per capita food waste at retail and consumer levels and reduce food losses in the supply chain.4 These global waste management goals are linked to the Sustainable Development Goals (SDGs) of the United Nations.

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UNEP and ISWA: Global Waste Management Outlook. United Nations Environment Program 2015.

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GRID Arendal and UNEP report: Waste crime – Waste Risks, Gaps in meeting the global waste challenge. 2015.

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for hazardous waste to be deliberately classified as non-hazardous, or even as products, in order to circumvent legal requirements. A UNEP-financed report from 2015 concludes that illegal trade in hazardous waste is an extensive and international business with a turnover that can be compared to both the drugs or weapons trades. It generates exceedingly high revenues for the criminal actors involved, and a lack of resources for monitoring or control makes it a low-risk venture for organised crime. Moreover, as it can contain precious metals, hazardous waste has developed into a valuable resource. This contributes further to the increase in its illegal trade, as criminals can turn profits from lower treatment costs, as well as from the sale of recovered materials.5 Waste dumpsites are far less prevalent in high-income countries. However, waste dumps in low and middle income countries still receive 40% of the world’s waste. In contrast to controlled landfills, waste dumpsites are heaps of waste with no controls on or records of incoming waste, no leachate management, or landfill gas collection. Open fires cause the uncontrolled emission of both toxic compounds and greenhouse gases. Hundreds of millions of people living in and around them are directly affected, but the emissions also spread over a long distance through waterways and air, causing substantial public health and environmental risks. Furthermore, erosion of coastal dumpsites is a source of marine litter.


Key figures of waste management Global

EU

Population

7.3 billion

510 million

Total waste

7-10 billion tonnes

2.5 billion tonnes

Municipal solid waste

Approx. 2 billion tonnes

Approx. 240 million tonnes

MSW kg per capita

275

480

Source: UNEP/ISWA: Global Waste Management Outlook 2015 (GWMO)

Global municipal solid waste (MSW) expected to double from 2 billion tonnes to 4 billion tonnes by 2025 • Uncontrolled disposal well above 50% in low economy countries • Waste pickers may achieve even 20–30% recycling rates in low economy countries • Hazardous household waste approx. 1% in Europe

To a great extent, transitioning open dumpsites to controlled landfills concerns people and social change. It must involve the so-called informal recyclers or waste pickers – in other words, people who earn their livings from the collection and sale of recyclable waste. In 2016, the International Solid Waste Association (ISWA) launched a call to action to close the 50 largest open dumpsites in the world. This is a top priority for the organisation and the stakeholders who support it for the coming years.

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To reconcile high levels of human development with environmental sustainability, or living with environmental limits, advanced economies in Europe and elsewhere will have to improve their environmental performance four-fold or even tenfold. If Europe is to achieve the EU’s 2050 vision of “living well, within environmental limits”, it must fundamentally transform its core societal systems, in particular those related to food, energy, mobility and the built environment.6

Chemicals remain after products become waste During the second half of the 20th century, the global production of chemicals increased from 7 million tonnes to 400 million tonnes annually. This development is expected to continue with production forecast to double from 2014 to 2030. The number of chemicals and the range of products in which they are being used are increasing, and most chemicals remain after products become waste.

EEA: Sustainability transitions: Now for the long term. 2016.

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Framework for solving the global waste challenge

Waste Prevention Suitable production

Sustainable consumption

Waste management

Life cycle stage

Production

Transport/ Purchase

User/ Consumption

End-of-use

Collection

Key stakeholder

Manufacturer/ Importer

Distributor/ Retailer

Consumer

Consumer/ Community

Local authorities/ Waste companies

Qualitative prevention

Elimination or reduction of hazardous substances content

Product-service systems; Eco-labels

‘Green’ purchasing choices by citizens, businesses and governments

Segregation at source

Education & information programmes; second hand shops

Quantitative prevention

Design for repair, reuse, disassembly & recycling; Reduced packaging; Remanufacture

Product-service systems; Reduced packaging, refilling

Purchasing choices; no food waste; repair & reuse

Reuse; donation; exchange (Freecycle, Swapit); buying second hand also online

Reverse logistics for remanufacture; reuse awareness campaigns; second hand shops and events; swap events

Source: UNEP and ISWA: Global Waste Management Outlook. 2015.

Marine litter – waste that kills Marine litter has rapidly emerged as one of the most urgent global waste problems. It harms the health of ecosystems, injuring or killing animals when they become trapped or swallow debris. According to some estimates, about 80% of the debris found in the marine environment comes from land-based activities.7 Many different kinds of waste enter the oceans, but a growing waste stream associated with problems of marine litter is that of used plastics. As a result of current consumer habits, single-use plastic packaging has increased dramatically. Because it degrades very slowly, taking up to 400 years to break down in water, plastic is the most challenging material associated with problems of marine litter. More than 8 million tonnes of plastic reach our oceans every year. It is estimated that there are over 150 million tonnes of plastics in the ocean today. If this trend continues, the oceans are expected to contain more plastics than fish by 2050.

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One specific problem concerns so-called micro plastics, or plastic particles under a certain size. These result from bigger plastic items breaking down into small pieces, from the wear of automotive tires, the washing of fleece garments, artificial glass grounds, as well as from additives in cosmetics reaching the oceans in storm and effluent water. It has been shown that micro plastics can accumulate harmful chemicals from the sea, and swallowing them can therefore be deadly for some marine organisms. Micro plastics certainly constitute a direct risk for human health as well, as they ultimately end up on peoples’ dinner tables. Marine litter is an increasing global challenge that requires international, regional and national actions to master.

Global response urgently needed Good decision making about how we manage the waste we create is one of the most important contributions

www.eea.europa.eu/signals/signals-2014/close-up/litter-in-our-seas.

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humanity can make to reducing our negative impact on the natural world. Environmentally sound waste management is a crucial element in sustainable development. Key factors to accelerate the needed global developments can be summarised in the graph from United Nations Environmental Program above. The following are essential factors for a more rapid transition to a circular economy: • Effective and forward-looking steering from policy-makers to enhance the required mind-set and support the development of sufficiently strict legislation and regulation. • Push from industries and R&D activities to commercialise new initiatives. • Pull by waste producers, such as households and industries, to acknowledge their shared role and to commit to actions that change their behaviour in treatment of products throughout their life cycles.


2. Towards a sustainable and safe circular economy

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circular economy is restorative and regenerative by design, and aims to keep products, components, and materials at their highest utility and value at all times. The concept distinguishes between technical and biological cycles. It is a continuous positive development cycle that preserves and enhances natural capital, optimises resource yields, and minimises system risks by managing finite stocks and renewable flows. It works effectively at every scale 8. In addition, it has close links to resource efficiency and material circulation, and incorporates new business models, the sharing economy, and disruptive technologies.

Nature works with a circular model In nature, there is no waste. Natural ecosystems function in such a way that residues or emissions from one system

Resource use today • Earth Overshoot Day is the day on which all the natural resources available for the year have been used up. This date has shifted from late September in 2000 to August 8 in 2016.9 • In Europe, 95% of material and energy value is lost, and material recycling and waste-based energy recovery capture only 5% of the original value of raw material.10

are used by another. Moreover, in the agrarian societies of the fairly recent past, waste was not the problem that it is today. Machines and clothing were repaired to extend their life cycles, and excess materials were re-used many times. Waste became a problem with the onset of industrialisation, urbanisation, and the increase of economic welfare. The consumption of new materials and

products grew and the useful lifetimes of products shortened drastically. New, non-biodegradable materials were introduced. Products developed, becoming more and more complex. More chemicals were used in products to generate new properties. Later, many of these chemicals were found to be toxic or harmful. There was no use for all of the new residues in their increasing amounts.

Linear economy

Linear Economy Technical and biological materials unsegregated Energy from finite sources

Waste Natural Resources

Take

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www.ellenmacarthurfoundation.org/circular-economy/overview/concept

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www.earthovershootday.org.

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Make

Dispose

Ellen McArthur Foundation: Growth within: A circular economy vision for a competitive Europe. 2015.

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For hygienic and health reasons, waste collection and treatment had to be managed. The solution was to take the waste to landfills or to be incinerated – often with no energy recovery. This development has led to a linear takemake-dispose process, where waste is a non-valuable commodity and an environment-burdening factor in the economy. Waste generation per capita has increased over the last 50 years, showing a strong correlation with income levels and economic growth. This correlation has proven to be hard to break. In highincome countries, nevertheless, the rate at which municipal solid waste is being generated is now beginning to stabilise,

or even show a slight decrease. This may indicate the beginning of waste growth decoupling from economic growth. This change is also driven by the increase in commodity prices and concerns about security of supply for some critical materials.

story: that change is not only inevitable, but essential. We must go back to a circular economy. In the circular economy the value of products, materials, and resources is retained for as long as possible, and the generation of waste is minimised.11 But the circular economy is not a closed loop, as there are always some materials which must be extracted from the cycle to ensure the safety and quality of materials in circulation.

However, as economies continue to grow rapidly in low- and middleincome countries, one can expect that globally, per capita waste generation will continue to increase. This development is compounded by urbanisation.

Designers, manufacturers, consumers and the end-of-life actors need to participate actively in the circular economy. Policies and legislation must promote and support these activities.

Thus, the development of our planet is far from sustainable. All the indicators describing climate change, resource efficiency, and pollution tell the same

Fortum’s view on the circular economy

Fortum view on Circular Economy

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Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions. Closing the loop - An EU action plan for the Circular Economy COM(2015), 614 final.


According to McKinsey & Company, three major principles govern the circular economy: 1. Preserve and enhance natural capital by controlling finite stocks and balancing the flow of renewable sources. 2. Optimise resource yields by circulating products, components, and

materials in use at the highest possible levels at all times. 3. Make the system more effective and climate-benign by eliminating negative externalities. The circular economy offers Europe an opportunity to increase the productivity of resources, decrease dependence

on them while also decreasing waste, and raise employment and growth. In addition, it would improve competitiveness and unleash innovation. On the other hand, European companies are already capturing many economically attractive opportunities for recycling, remanufacturing, and re-using. Reaching higher levels of circularity may incur substantial economic costs.12

CASE

ECO AND PLASTIC REFINERY IN RIIHIMÄKI In Fortum’s Circular Economy Village in Riihimäki, Finland, materials included in municipal waste are processed further through the Eco Refinery, Finland’s first Plastic Refinery and the Gasum’s Bio Refinery. Completed in 2016, the Circular Economy Village is based on a unique concept, in which the best possible form of recycling and recovery is developed for every waste stream. The combination of Eco Refinery, Plastic Refinery and Gasum’s Bio Refinery treats the mixed waste before sending it to the waste-to-energy plant. Biowaste, metals, plastics and energy waste are separated for recycling or energy recovery. The Plastic Refinery separates, sorts and reprocesses plastics and sends them back to the plastics industry. The concept completes the source-separation activities, and assists in achieving recycling targets for municipal waste.

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McKinsey & Company: The Circular Economy – Moving from theory to practice. October 2016.

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3. Current EU policies in place

• Reduce the amount of waste generated. • Maximise recycling and re-use. • Limit incineration to non-recyclable materials. • Phase out landfilling to non-recyclable and non-recoverable waste. • Ensure full implementation of the waste policy targets in all member states.13 The EU study identified four regulatory enablers which help the EU and national governments to make the circular economy possible: • Better implementation of legislation. • Better information by improving the knowledge base. • More and wiser investment for environment and climate policy. • Full integration of environmental requirements and considerations into other policies.14 In order to provide a more long-term direction, the EAP sets out a vision of circumstances by 2050: "We live well, within the planet’s ecological limits. Our prosperity and healthy environment stem from an innovative, circular economy where nothing is wasted and where natural resources are managed sustainably,

and biodiversity is protected, valued and restored in ways that enhance our society’s resilience. Our low-carbon growth has long been decoupled from resource use, setting the pace for a safe and sustainable global society."

Waste hierarchy – a guiding principle The EU’s approach to waste management is based on what is referred to as the waste hierarchy, which sets the following priority order when shaping waste policy and managing waste at the operational level: prevention, preparing for re-use, recycling, recovery, and, as the least preferred option, disposal – which includes landfilling and incineration without energy recovery. Waste policy and legislation in the EU rely on the waste hierarchy and a wider aim of turning linear manufacture-use-throw chains into circular, resource-efficient processes.

Prevention

From a climate perspective, material recycling is better than energy recovery especially for segregated and homogenous materials. However, for complex, dirty, and contaminated waste streams, energy recovery is preferred. This depends heavily on required technical, economic and environmental criteria for quality recycling.

Reducing quantity, negative impacts and hazardous substances content of waste

Decontamination

Taking out from the circulation waste that contains unwanted hazardous substances

Preparing for re-use

Repairing, cleaning or otherwise returning waste products back to same use

Recycling Other recovery, i.e. energy Disposal

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http://ec.europa.eu/environment/waste.

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Technopolis-Group: Regulatory barriers for the circular economy. Final report July 2016.

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When applying the waste hierarchy, member states are expected to take the general environmental protection principles into account. Namely, these are precaution and sustainability, technical feasibility and economic viability, protection of resources as well as the overall environmental, human health, and economic and social impacts. Hence, the waste management hierarchy is not meant to be implemented too rigidly.

Fortum’s view view on waste hierarchy in safe Circularview Economy Fortum’s on waste hierarchy in safe Circular Economy

Environmental and economic desirability

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he 7th Environment Action Program (EAP) entered into force in 2014 and is the guiding European environment policy until 2020. It sets out the following priority objectives for waste policy:

Reprocessing waste materials to be re-used as raw materials or products Recovering energy from non-recyclable waste or other material recovery, e.g. backfilling

Treating waste without recovery, e.g. landfilling.


The Action Plan for Circular Economy In order to achieve the objectives set in the 7th Environmental Action Program, the European Commission has launched an Action Plan for Circular Economy and proposals for amending various waste-related directives in 2015. The plan includes a wide group of measures to close the loop of material cycles and treat all phases of product life cycles from production and consumption into waste management and markets for secondary raw materials. Part of the measures will be allocated to the barriers in specific sectors and streams; namely, plastics, food waste, critical raw materials, construction and demolition waste, biomass and bio-based products. The plan sets out recycling targets for municipal waste, and aims to put a cap on landfilling. Other goals include increasing recycling targets for packaging waste.

Waste statistics under improvement Significant progress has been made in compiling waste statistics since reporting started in the EU in 2006. The completeness of data delivery by EU member states has steadily improved, and statistics have reached a fairly satisfactory comparability across some of the countries, waste categories and sectors. However, further improvement of statistics is needed to monitor the achievement of the EU’s environment, industrial, and raw material policy objectives. Therefore, interpretations have to be made with caution.15

The EAP has set a target to reduce absolute and per capita waste generation in the EU. However, the trend of waste generation has remained relatively stable, and whether the waste reduction targets will be met by 2020 is uncertain.16 At present, the total volume of waste generated in the EU per year is about 2.5 billion tonnes. Of this total amount, construction waste makes up about 35%, and mining waste about 30%. Only around 240 million tonnes (10%) is municipal solid waste, such as waste from households, while various waste from other industrial and commercial activities accounts for around 480 million tonnes (20%). The volume of commercial and industrial waste (C&IW) is therefore highly remarkable. For this reason, policies should address these waste streams as much as they address that of municipal waste.

EU policy should place a greater focus on addressing commercial and industrial waste streams.

The EU’s policies on waste are based on the following principles: • Polluter pays principle — The producers of waste are responsible for the waste’s management and its costs. • Extended producer responsibility — Instead of waste producers, manufacturers and importers of certain product types must bear the responsibility for the management of their products when they become waste. • Precautionary principle — Potential risks related to waste and waste management should be anticipated. • Proximity principle — Waste should be disposed of as closely as possible to where it is produced. • Self-sufficiency principle — The EU and its member states should remain self-sufficient with regard to the disposal of waste.

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Report from the Commission on Statistics Compiled pursuant to Regulation (EC) No 2150/2002 on waste statistics and their quality. November 2016.

16

European Environment Agency: Environmental Indicator Report 2016 in support to the monitoring of the 7th Environment Action Program.

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MSW counts for one-tenth of total waste Municipal solid waste is mainly waste from households and similar waste from public and private sectors. Accurate information on the development of other waste streams is limited by the poor availability of reliable statistics. C&IW streams could potentially contribute substantially to resource efficiency. Today, the recycling rate for municipal solid waste is around 44% in the EU: material recycling 30% and composting 14%. Furthermore, around 27% is recovered for energy and some 28% is still landfilled. The trends of various treatments can be seen in the graph below. The average European person produces around 500 kg of household waste per year. This varies tremendously – between 300 kg and 700 kg – among different member states. This waste consists of food leftovers, packaging materials, diapers, discarded clothes, furniture and electrical equipment etc. A stronger focus should be placed on harmonising definitions, resolving possible overlaps or gaps in reporting waste streams, and developing more readily comparable waste statistics and key indicators to monitor the transition to a circular economy. For example, the Organisation for Economic Cooperation and Development (OECD) recommends comparing resource productivity using the ratio of gross domestic product (GDP) to domestic material consumption.

Waste in the EU by sector (2014)

Composition of municipal solid waste in the EU-27 by waste streams, 240 million tonnes (2015)

480 kg per capita

Construction and demolition waste 35% Mining and quarrying 28% Manufacturing 10% Materials recovery in waste treatment 8 % Households 8% Services 4% Energy supply 4% Water and sewage 1% Other 2% Source: Eurostat

Food waste 25% Paper and Board 18% Plastics 12% Other combustible waste 10% Garden waste 6% Rubble 5% Glass 5% Textiles 4% Metals 3% Other 12% Source: Eurostat

Treatment of municipal waste in the EU-27 MSW, kg per capita 600 500 400 300 200 100 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Landfilled/disposal Incineration (with and w/o energy recovery) Recycling Note: Composting is calculated towards recycling targets Source: Eurostat

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Composting Untreated


4. Drivers that facilitate the transition to a circular economy

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egislation is a strong driving force that fosters innovation and stimulates the development of new services within the circular economy. However, at times, regulation also acts as a barrier.

Drivers and barriers in the EU A report prepared for the European Commission (EC) recognises key regulatory obstacles that hinder the realisation of economic opportunities in a circular economy.17 Among other findings, the report points to inconsistencies between different definitions, such as those for waste and raw materials, for example. Legislation often addresses the symptoms rather than the core of the problem, and in many cases focuses on quantities through weight-based targets for collection or recycling, rather than on qualities and value. Incentives for high quality recycling are often lacking, and the relatively low cost of primary resources competes favorably against those of recycling. As an example, regulatory obstacles aren’t the main factor hindering highquality recycling and causing plastics to more commonly be down-cycled or incinerated. Instead it is the lack or ambiguity of legislations, such as those regarding end-of-waste criteria or quality standards for secondary raw materials. This creates legal uncertainties for the industry that make the continued preference for

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primary raw material inputs appear more rational. Varied and conflicting implementations of EU legislation among different nations makes the situation even more challenging.

Waste prevention is an essential part of hazardous waste management Waste prevention refers to the reduction of the amounts and harmfulness of waste, and the actions that must be accomplished before a product is relegated to waste. This includes, for example, re-using and prolonging the life-span of products through better design or by means of their shared use. It also involves reducing hazardous substances in products and waste to lessen their adverse environmental and health impacts. Waste prevention is strongly linked to the planning of manufacturing processes, consumption habits, and product design. For example, the longterm development of manufacturing processes has led to the prevention of hazardous waste solvents in many industries. To facilitate the monitoring of the development of waste prevention, indicators for re-use should be separated from the indicators for recycling. Moreover, relevant indicators to evaluate the decoupling of waste production from economic growth and population should be established. This would enable following up on the effects of actions and regulations.

KEY MESSAGE • More relevant indicators for the achievement of the circular economy would help in reaching the policy goals.

Traceability and detoxification Many products in daily use contain hazardous chemicals, and most of these chemicals remain when the products become waste. In a safe and sustainable circular economy, where wastes are recycled into new raw materials and subsequently reintroduced into new products, material fractions containing unwanted hazardous substances must be separated and decontaminated, and effectively taken out of circulation. This detoxification is a prerequisite for a sustainable and safe circular economy. Therefore, it is vital that hazardous waste remains traceable throughout its life cycle until its final destination. Restrictions on the use of certain hazardous substances, such as persistent organic pollutants (POPs) and substances of very high concern (SVHC), must also be considered in the waste management and recycling phases. Furthermore, there is an immense need to harmonise waste legislation with chemical and product legislation.

Regulatory barriers for the Circular Economy. Technopolis Group. July 2016.

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Without proper management of hazardous waste, there is a risk of recycling hazardous substances into new products, or for hazardous waste to be treated or disposed of incorrectly, thus introducing the danger of uncontrolled exposure arising from hazardous substances.

KEY MESSAGES • Ensure proper classification of hazardous waste. • Remove waste containing unwanted hazardous substances from circulation. • Ban the dilution of hazardous wastes.

CASE

REMOVING HAZARDOUS MATERIALS FROM THE CIRCULAR ECONOMY Fortum supports the circular economy by recovering materials suitable for recycling. Materials containing unwanted hazardous substances must be separated to detoxify the material cycles. Fortum treats the remaining hazardous waste in its three high-temperature incineration plants while producing clean energy and ensuring a safe final disposal for the waste that needs to be taken out of the cycle. Read more: www.fortum.com

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Better support for re-use and recycling Waste is a substance or object which the holder discards, or intends to or is required to discard. According to the waste directives, products or components which have become waste can – by repairing, cleaning or other recovery – be re-used. This activity is defined as ‘preparing for re-use’. Recycling means any recovery operation by which waste materials are reprocessed into products, materials or substances. It does not include processing into fuels, energy recovery or backfilling. It consists a large variety of recycling and treatment operations with different processing costs and values for recovered materials. The conditions for end-of-waste are set by legislation, and it is up to the waste holder to prove that these conditions have been fulfilled. There should be a market demand for waste-derived secondary raw materials meeting set technical criteria. The use of such secondary raw materials should not lead to overall adverse environmental or human health impacts. The EU has, for some time, aimed to develop general end-of-waste criteria for certain common recyclable materials to enhance the trading of secondary raw materials. However, as of today, there are only a few harmonised end-of-waste criteria in the EU. This work should continue with regard to relevant waste fractions in order to promote highquality recycling. Markets for waste and secondary raw materials for recycling, such as metals and paper, have evolved even without legislative pressure. However, the recycling markets for non-scarce materials and those of low value need to

Confederation of European Waste-to-Energy Plants (CEWEP).

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The recycling markets for non-scarce materials and those of low value need to be promoted.

KEY MESSAGES • Set recycling targets to cover all waste. • Adjust the EU waste statistics to facilitate the follow-up of the recycling targets. • Promote high-quality recycling. • Promote markets for secondary and recycled products.

be promoted in public procurements, by taking VAT exemptions into consideration, or through other means.

Energy recovery works in tandem with high-quality recycling Thermal treatment is needed and preferred in the treatment of nonrecyclable municipal, commercial, or industrial waste that no longer fulfils the technical requirements for recycling into new products. The recovery of energy from this treatment is a reasonable option that aligns with the aims of the Energy Union, which is the governing body established by the EC to coordinate the transformation of Europe’s energy supply. Waste-toenergy does not prevent high recycling levels from being reached. Rather, it is an essential component in achieving the goals of a circular economy.


Increasing recycling targets and the demand for recycled products of better quality will increase the amount of rejects and production residues. This waste – not suitable for recycling – is estimated to be 10% or more.18 These can be treated by waste-to-energy to generate heat and power instead of landfilling. Non-recyclable, sourceseparated waste from industrial and commercial sources should not designated for landfills. Metals can be recycled from incineration bottom ash, and minerals containing treated ash can be recycled as secondary raw materials in construction. Polluted residues that are not suitable for recycling can, by elective abatement techniques, be separated and safely landfilled. Energy that is recovered from the incineration of waste replaces heat and power produced from virgin fuels, both of biogenic and fossil origins. Around 10% of district heating in the EU is produced from waste.19 Therefore, there is great potential to de-carbonise

the heating and cooling sectors by designating non-recyclable municipal, industrial, and commercial wastes to waste-to-energy instead of to landfills. The taxation of energy recovery from waste is often proposed as a means to prevent waste production and increase recycling. Waste incineration taxation, which is implemented in some EU countries, would increase the costs of waste treatment for citizens and industries, making landfilling a more competitive option. It has been investigated that taxation on waste incineration has no steering effect on recycling rates, and instead, only serves as a source of fiscal revenue. This has been a reason for some countries to remove the tax.20 If such taxes are being designed, they should be proportionate with landfill taxes and with the energy recovery efficiency and they should cover all thermal treatment processes of waste, including co-incineration in industrial processes and energy production.

KEY MESSAGES • Recognise thermal treatment with energy recovery of non-recyclable waste as an important component in a circular economy. • Use waste-to-energy capacity and promote the transportation of waste to energy recovery to prevent the climate impacts of landfilled waste.

Mixed waste can be treated through wasteto-energy instead of being sent to landfill.

Recycling residues and non-recyclable waste streams to designate to energy recovery Examples of non-recyclable, source-separated wastes Residues from mechanical or biological treatment

Mixed household or similar waste

Hospital or other special waste

Multi-material packages, treated wood, dirty fibres, etc.

Special industrial wastes

Recovery

Recycling Metals recycling to industries

Recycling rejects and residues

District heat

Waste-to-Energy Plant

Electricity

Recovered energy to replace virgin fuels

Minerals containing treated ash to be used in construction

Landfilling Effective abatement techniques secure safe management of emissions and residues

19

EU Commission. The Communication on Waste-to-Energy. January 2017.

20

Håkon Jentoft: Reward good behaviour, punish bad behaviour. Afvalforum. 2010.

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CASE

WASTE TO ENERGY IN STOCKHOLM Since 1970, Fortum Värme, co-owned with the City of Stockholm, has turned waste into energy instead of sending it to landfill. The highly efficient CHP plants in Högdalen and Brista produce around 30% of the district heating sold to end-customers and of the electricity in its district heating and cooling (DHC) system. Read more: www.fortum.com

Including waste-to-energy in ETS does not support de-carbonisation It is currently possible for countries to include their waste-to-energy activities within the scope of the EU Emissions Trading System (ETS) as a means to comply with their renewable energy targets. For example, Sweden has included its waste-to-energy activities in the emission trading scheme. The ETS is intended to steer energy producers to switch to low-carbon fuels. However, for waste-to-energy plants, this approach is an ineffective one. Waste-to-energy plants treat varying fractions of non-recyclable waste, which consists of wastes of both fossil as well as renewable origin. It is neither reasonable nor possible to limit thermal treatment only to waste of renewable origin and start using biomass as fuel instead of waste. This is due to the fact that in order to avoid landfilling, all non-recyclable waste must be treated.

The bio-originated CO2 emissions from waste-to-energy are also somewhat difficult and expensive to measure. For this reason, including waste-to-energy into the ETS would only add costs to waste treatment and energy production.

Diverting waste from landfilling should be a primary goal Landfilling is at the lowest level of the waste hierarchy, and investments into landfills and preparing wastes for landfilling should be minimised. The EU-28 still landfills more than 62 million tonnes of MSW every year. Despite the recovery of landfill gases, the landfilling of biodegradable waste contributes the major part of waste management’s negative impacts on climate change. The EU landfills 1,409 PJ of energy embedded in waste each year – an amount equivalent to 13% of the total energy consumption of households in the EU. At the same time, the EU imports 53% of its energy at a cost of more than EUR 1 billion per day. 21

KEY MESSAGE • Ban the landfilling of recyclable and recoverable waste and minimise the landfilling of all other wastes through legislation and effective financial instruments.

The European Environment Agency (EEA) is researching the effect of policy instruments on diverting waste from landfills and encouraging recycling. All of the countries that show landfill rates well below the EU-28 average of 28% have either banned the landfilling of biodegradable or mixed municipal waste, or implemented a ban combined with a landfill tax of at least EUR 30/tonne.

De-carbonising heating and cooling

These countries have also been able to achieve the highest recycling and energy recovery rates in the EU.22 To reach the goals of the circular economy, commercial and industry waste as well as construction waste should be subjected to landfilling restrictions and

In the EU today, heating and cooling represent around 50% of final energy consumption, and district heating (DH) provides no more than 15% of heating consumption. Of the energy used in DH systems, 10% comes from wasteto-energy – but there is significant potential to increase this share.

21

Study of Joint Research Centre, 2016: Towards a better exploitation of the technical potential of waste-to-energy

22

European Environment Agency (EEA): Municipal waste management across European countries, 2016.

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The landfilling of biodegradable waste contributes the major part of waste management’s negative impacts on climate change.

taxation rules that are equal to those imposed on municipal waste. Legal certainty that waste must be diverted from landfilling will boost investments into technologies that are higher up in the waste hierarchy.


According to EU Joint Research Centre, there exists a further wasteto-energy potential of 20 TWh (+65%) of electricity, and 18 TWh (+25%) of district heat. Another option for increased energy recovery is the anaerobic treatment of biowastes.23 To plan future waste-to-energy capacity responsibly, efforts and targets for waste prevention and recycling need to be considered carefully. Nevertheless, district heating and cooling (DHC) systems are some of the easiest options for decreasing carbon emissions, and are also among the most efficient energy systems. Furthermore, they contribute towards securing the energy supply, which is in line with the aims of the Energy Union. The member states that at present have a low or non-existent dedicated wasteto-energy capacity and a high reliance on landfills should prioritise further well-coordinated and forward-looking developments in separate collection schemes, recycling infrastructure, and waste-to-energy. Many of these countries typically have high shares of imported natural gas in their energy mix, which could be replaced partially by local fuels.

KEY MESSAGE • Recovering heat and electricity from the thermal treatment of waste decreases the need for virgin fuels, and should be considered as carbonneutral.

23

Functioning waste markets help to utilise existing capacities Fossil fuels for energy production and wastes for recycling are traded globally. In the same way, waste for energy recovery should be able to move effectively within the EU to enable the optimal utilisation of existing and planned waste-to-energy capacities. When all non-recyclable waste streams are considered, there is no over-capacity in waste-to-energy in the EU, and neither can one be foreseen. Therefore, a functioning internal market for waste needing treatment with energy recovery is a key prerequisite for ensuring the utilisation of existing capacities and the prevention of stranded assets. Trading of waste can easily be justified both economically and environmentally when the alternative treatments are landfilling or incineration with low or no energy recovery. Allowing effective movements of waste for recovery purposes across the EU contributes to efficient use of capacities built for energy recovery. This leads to considerable reduction of net emissions of CO2, as the alternative is disposing the waste in landfills, which produce methane and other greenhouse gas emissions. Continuous globalisation has led to a worldwide increase in waste transports across borders. While traded wastes may often have a positive economic value and replace natural resources in industrial facilities, waste transports can also involve hazardous substances which can pose risks to human health and the environment. For this reason, specific legislation and the regulation of transboundary movements of hazardous waste are necessary.

KEY MESSAGES • Waste should move effectively within the EU to enable an optimal utilisation of existing and planned new waste-toenergy capacities. • Specific legislation and regulations for transboundary movements of hazardous waste are needed.

CASE

INDUSTRIAL WASTE IS UTILISED THROUGH PROCESSING Typical fractions in energy production and industry with a capacity for material recovery include bottom and fly ashes. Fortum utilises these wastes in connection with our present activities, such as environmental construction, constructionof roads, open areas, and streets, as well as upgrading soil, protecting groundwater, waste processing, and landfill construction. Read more: www.fortum.com

Joint Research Centre: Towards a better exploitation of the technical potential of waste-to-energy. 2016.

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5. Fortum’s policy messages

T

he EU and national governments have a key role in steering systemic and continuous societal and technical transition towards a circular economy. The governance of transition requires a diverse mixture of policy instruments. The European countries with the most stringent environmental policies are generally characterised by high levels of eco-innovation and economic competitiveness, showing good precedents already. The EU should utilise those experiences effectively and avoid the possible pitfalls of allowing extended transition periods

for member states that are continuously lagging behind. Tolerating lengthy and poorly grounded derogations would send the wrong signals, allowing member states to continue conducting business as usual based on linear economy principles. EU policymakers now have a unique opportunity to influence the creation of a sustainable and safe circular economy for all citizens. The prerequisites for making this a reality are the setting of targets based on transparent and comparable information; the establishment of a sufficiently level playing field; the segregation of

RECOMMENDATIONS FOR POLICIES AND LEGISLATION • Ban the landfilling of recyclable and recoverable waste and minimise the landfilling of all other wastes through legislation and effective financial instruments. • Ensure proper classification of hazardous waste, aiming to harmonise with EU chemical legislation. • Ensure health and safety, and protect the environment by removing waste that contains unwanted hazardous substances from circulation. • Ban the practice of diluting hazardous wastes and lowering its concentrations as a means to circumvent legal requirements. • Promote high-quality recycling by improving the recyclability of materials and products, and develop effective sorting solutions. • Recognise thermal treatment with energy recovery as an effective way to safely treat non-recyclable waste and produce carbon-neutral energy. • Promote the cross-border transport of non-recyclable waste for energy recovery as an environmentally and economically beneficial alternative to landfilling.

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waste with unwanted hazardous substances, and detoxification; and effective financial steering for market participants. There will always be materials and substances that will need to be removed from circulation to protect health and safety, and it is necessary for these to be treated appropriately. As recycling targets rise and the quality requirements for recycled products grow stricter, the volume of rejects and residues will also increase. Therefore, promoting the management of hazardous wastes and the recovery of energy from waste is vital in fostering a circular economy.


EU policies and legislation in place 7th Environmental Action Programme Resource Efficiency Roadmap General framework

EU Action Plan for Circular Economy

November 2017 Waste Framework Directive (WFD)

Waste management operations

Specific waste streams

Landfill Directive (LFD) Packaging and Packaging Waste Directive (PPWD)

Waste Shipment Regulation (WSR) Industrial Emissions Directive (IED)

Batteries and Accumulators Directive (BAD)

Rules on Chemical Production

Other relevant legislation

Fortum Energy Review

CLP regulation REACH regulation POP regulation

BREFs of Waste Incineration (WI) and Treatment (WT)

Waste Electrical and Electronic Equipment Directive (WEEE)

Other regulations

Publisher: Fortum Corporation Keilaniementie 1, P.O. Box 1 02150 Espoo, Finland tel. +358 10 4511

Authors:

Rules on Chemical Use

Rules on Products

Notifications Registrations Restrictions Authorisations Bans

General Product Safety Directive Toys Directive Eco Design Directive Food Packaging Regulation RoHS Directive

Source: European Environmental Bureau and the European Federation of Waste Management and Environmental Services (FEAD)

Harri-Pekka Korhonen, Martina Melander, Auli Westerholm

Fortum, Public Affairs: Esa Hyvärinen tel. +358 40 826 2646

More of Fortum's positions on topical energy issues: www.fortum.com > About us > Corporate Relations > Position papers www.fortum.com

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Fortum’s recommendations for policies and legislation to create a sustainable and safe circular economy that makes optimal use of waste • Ban the landfilling of recyclable and recoverable waste and minimise the landfilling of all other wastes through legislation and effective financial instruments. • Ensure proper classification of hazardous waste, aiming to harmonise with EU chemical legislation. • Ensure safety for human health and environment by taking out from the circulation waste that contains unwanted hazardous substances. • Ban the dilution of hazardous waste, in order not to lower concentrations and circumvent legal requirements. • Promote high-quality recycling by improving the recyclability of materials and products, and develop effective sorting solutions. • Recognize thermal treatment with the energy recovery as an effective mean to treat safely non-recyclable wastes and produce carbon-neutral energy. • Promote the cross-border transfers of non-recyclable waste for energy recovery as environmentally and economically beneficial if the alternative for the waste is landfilling.