- Pull measures – creating sustainable markets for secondary raw materials
FEAD members wish to stress the importance of creating strong and resilient markets for secondary raw materials. Raising quality standards by itself will not create demand for secondary raw materials when commodity prices are low, as they are now and seem likely to remain. FEAD believes the revised package should have proposed a number of regulatory pull measures so as to correct existing market failures and stimulate the demand for secondary raw materials. Otherwise, given the current very low prices of raw materials, the collection, sorting of waste and reprocessing into secondary raw materials could become uneconomic.
The EC proposals to ban separately collected waste from landfill and to set binding recycling targets for municipal waste are very much welcomed. However, to stimulate the full circle in the circular economy market incentives are also needed to ensure that secondary raw materials can compete with virgin raw materials. Otherwise, where will the demand for this significantly increased supply of secondary raw materials come from? Secondary raw materials compete with low prices of raw materials from primary sources (caused in part by the drop in oil prices).
In some respects, such as homogeneity, secondary raw materials are at a disadvantage to primary raw materials. Recyclers also face challenges relating to the application of the REACh chemicals regulation. In other words, while the economic and environmental advantages of secondary raw materials are politically recognised, they are not reflected in current prices for these materials and the Commission proposals should have contained more concrete measures to address this. Of course, markets rise and fall and businesses must adapt to survive. But if Europe truly believes in the wider economic, environmental and social advantages of a circular as opposed to a linear economy, it must recognise that supply side measures on their own will not deliver a more circular economy. That is why FEAD is calling for more emphasis on the demand side in the Commission revised proposals.