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German Outlook on Recycling Markets

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German Outlook on Recycling Markets Powered By Docstoc
					German outlook on recycling markets
by Florian Heinstein
Florian Heinstein joined West Germany’s Institute for Energy and Environmental Research in 1985, after serving 13 years as director of economics at the Duravit Porcelain Manufacturing Plant in Heidelberg. The institute for Energy and Environmental Research (IFEU-Institute) carries out studies and reviews in radioecology, energy, motor vehicle emissions, environmental impacts, air pollution and solid waste management. The institute, founded in 1978, is a nonprofit organization and sees its function, among others, as providing scientific information and advice for citizens and citizen initiatives, The information in this article was presented in a speech at the spring conference, “Recycling Markets: California and the Pacific Rim.” Germany is no different than other countries, where laws and regulations provide the regulatory and operational framework for solid waste management. But when non-Europeans assess German conditions, they often underestimate or ignore the relatively high degree of integration of the European Economic Community, a relationship that has important consequences for solid waste management by individual community members. Member countries tend to avoid actions that may interfere with the implementation of free trade within the European Economic Community, scheduled for implementation in 1992. Unique conditions To illustrate this, in 1986 the Federal Republic of Germany (FRG) was unable to prescribe catalytic converters for each new car manufactured, because this would constitute restraint of trade for other European automobile manufacturers. Denmark offers another example. The production and use of one-way beverage containers is prohibited by law. Other EEC member countries, Germany included, consider this ban as an impermissible trade barrier and have applied for an injunction at the European Court of Justice in The Hague. Most probably, Denmark will be the unsuccessful party in this litigation. Taking into account this restricted sovereignty, the FRG enacted new legislation in November 1986 that delineated responsibility for the disposal of solid waste: the disposal of nontoxic solid waste is delegated to the counties and townships, and the federal states are responsible for the disposal of toxic solid waste. The primary emphasis of this legislation is to avoid materials that will increase the amount of solid waste and only secondarily to increase the level of recycling and resource recovery. It evaluates equally “recycling and composting” on the one hand and “incineration and pyrolysis” on the other - despite the ecological advantages of recycling and composting. Materials remaining after source reduction and resource recovery activities will be deposited in landfills. The term “source reduction” has another connotation than its supposed equivalent in German, “Abfallvermeidung.” In German, “Abfallvermeidung” means a reduced production of materials that normally end up as waste. “Abfallvermeidung” covers, for example, the selling of beer in refillable bottles or the increased production of durable goods. However, the German term does not embrace the concept of increased recycling of materials that would usually end up as waste. When communities decide to introduce a source reduction program, they often promote a deposit system for beverage bottles and composting of organic material in one’s own garden. Markets for waste paper Buyers of waste paper are nearly exclusively paper manufacturers. There are of course other recycling possibilities-e.g., the production of pressboard panels or of coffins made of waste paper - but the current and probably future sales potential of these products is so marginal (at present less than 5 percent of total production) that they will not be addressed here. In the Federal Republic of Germany about 43 percent of the paper produced is made from waste paper. The corresponding number for the European Economic Community as a whole is 47 percent, whereas only 26 percent of the paper production consists of waste paper in the United States. The proportion of waste paper used to produce different sorts of paper and paperboard differs considerably. In the FRG 95 percent of the packing material, but only 11 percent of printing and writing

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In large processing plants, mixed trash is sorted to retrieve recyclable materials. Containers for recyclable materials, such as paper, glass bottles, plastic containers and scrap metal, are often sited in convenient locations.

paper, is produced from waste paper. Consequently, the greatest demand for the use of waste paper in the future will derive from the printing and writing paper market. Additional steps must be taken to reach this goal, especially measures to improve the public image of recycled paper. To pursue this goal, in 1981 the European Community proposed that member countries use recycled paper for their official correspondence. In Germany most public authorities have translated this recommendation into action. The “Umweltbundesamt” (the West German equivalent of the U.S. Environmental Protection Agency) goes so far as to insist on a written request if its employees want to make one-sided photocopies or photocopies on white paper. More recently, considerable controversy has surrounded the growth in public sector collections of waste paper. In 1980 and 1986, 3.3 million tons and 4.5 million tons of waste paper, respec-

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tively, were collected. During the same period, the amount of waste paper collected from private households increased from 0.6 million tons (18 percent of the total) to 1.4 million tons (31 percent). Established recycling dealers lamented the intrusion of the municipal collectors into their sphere of business. They argued that the paper industry could not absorb the additional quantities of waste paper and therefore predicted a decreasing amount of waste paper collection at those commercial establishments generating waste paper. The focal point of this argument is that the increase in waste paper collections from private households was achieved with little involvement of waste paper dealers. According to the dealers’ point of view, these additional quantities of waste paper were responsible for falling waste paper prices in 1985 and 1986. But the glut of waste paper cannot bear all the responsibility, because falling paper prices represented an international phenomenon. In addition, similar price fluctuations had occurred in the past when there was no surfeit of waste paper. And the decline of the U.S. dollar played an important role, because of the considerable waste paper exports from the U.S. German waste paper consumers do not agree with the opinions of the waste paper dealers. They project annual increases in paper production of 1 to 3 percent, which will require more secondary material. Since 1945, when its well-timbered former regions became part of Poland and the USSR, Germany has had to import raw materials for paper production, mostly from Northern Europe and North America. Compared to waste paper, pulp and mechanically treated wood pulp are far more expensive. For example, the price for one ton of pulp is about $600, whereas high quality waste paper is available for about only $60 per ton. Paper manufacturing equipment poses a definite obstacle to increasing the potential waste paper use by the paper industry. Nevertheless, the paper industry has promised to intensify its waste paper use to satisfy the growing demand for paper. Furthermore, the above-mentioned cost factor encourages increasing the proportion of waste paper for different types of paper. This trend is already apparent: the amount of waste paper in newsprint climbed from 32 percent in 1982 to 45 percent in 1986. Waste paper collections from commercial establishments have peaked. As a result, the paper industry insists on intensified household collections. Regarding 28
Resource Recycling July 1988

product is delivered to homeowners.

this subject, the industry shares the opinion of the communities responsible for the disposal of trash and of private waste hauling firms. The paper industry is willing to accommodate its processing capacity, subject to achieving two important conditions: long-term guaranteed supply and delivery of high-quality materials. Long-term guaranteed supply of waste paper is threatened by the increasingly dominant role attributed to mass burn incineration facilities and the declining willingness to collect paper separately if it is intended for thermal use. For these reasons, the paper industry revolted against the equal status of two methods of waste recovery - recycling and resource recovery - defined in the 1986 federal legislation. If quality standards are to be met, it will no longer be possible to sort out waste paper from mixed trash in large processing plants. Up to this point, these facilities have not able to deliver waste paper of satisfactory quality. As a result, systems to separate household recyclables have been developed in Germany. In addition to the curbside collection of waste paper, color-coded dropoff containers for different recyclables are placed at various locations in cities. Generally one container is supplied for each 1,000 to 2,000 residents. Another system that is working well provides each homeowner with a bin to separate recyclables.

These recyclables - mostly waste paper and paperboard, glass bottles, metal cans and plastic waste - are sorted in small processing plants. All collection systems provide satisfactory quantities. Household solid waste can be reduced by 5 to 15 percent by recycling waste paper only. It must be remembered that the amount of paper and paperboard in household solid waste in Germany is only half the amount in the United States. It is possible that recycling programs in the U.S. that combine the drop-off and collection systems could collect twice as much waste paper as is collected in West German cities. Public information efforts to promote waste paper use can help guarantee a long-term supply of waste paper for the paper industry. In addition, each authorization for the construction of a mass burn incinerator has to be considered carefully. The high quality standards for waste paper require separate collection of recyclables and thorough sorting methods. As a way to stimulate waste paper markets, sales subsidies for recycled paper products should be granted to the paper industry only when public opinion of the products has improved. Markets for waste glass About 12 percent of the household solid waste generated in the FRG consists of
Continued on page 57.

German outlook
(continued from page 26)

these materials totally or in part. If private firms undertake gardening work by contract with the city or community, the firm can be required to use compost. Public policy We should keep in mind that the significance attached the marketing problems of recycled products only attempts to cure the symptoms of our wasteful societies. The low prices paid for nonrecyclable virgin resources compound the problem of recycling economics. Sales potential of the secondary materials would be greatly enhanced if future shortages of primary materials cause price increases. In normal market conditions, a tax on all primary materials and nonrenewable energy resources would bring a corresponding decrease in consumption. Recycling secondary materials and selling recycled products would then prove to be a more economical alternative. Furthermore, this tax could serve another positive goal, the preservation of resources. Anticipated increases in the federal revenues from the tax could be used to reduce the labor costs associated with making recycled products. For the recycling industry, this measure would be favorable since it is characterized by high labor costs and low capital needs. Parallel efforts should be considered, however, for the developing countries that depend on exporting raw materials and would suffer enormously from such a tax. In order to compensate their drastic export losses, a part of the tax profits should be earmarked for them. But political reasons are a definite obstacle to the implementation of such a tax by a single country because its industry will suffer from considerable competitive disadvantages.

glass containers. About 41 percent of this fraction is recycled and 59 percent remains in the waste stream. The FRG glass container production market totals 3.1 million tons, equivalent to about 100 pounds per person per year. In order to analyze the potential capacity of the glass cullet market, one has to make separate calculations for each color of glass container. Technological reasons are decisive here: only green glass bottles can be produced from mixed color cullet. Flint glass containers must be manufactured with clear cullet only and amber glass from amber cullet only. Therein lies the reason why about 95 percent of green glass bottles are produced from cullet, but only 15 to 20 percent of flint containers and 10 percent of amber glass bottles are made from cullet. The amount of cullet used in glass container production could be doubled if glass containers were collected separately by color. The glass container industry relies on increasing collections through the use of igloos or other collection systems. Currently, cullet has to be imported because the German supply is not sufficient. Per capita consumption of soft drinks, wine and beer equals about 83 gallons per year. Of that amount, 62 gallons are sold in refillable bottles and 21 gallons in one-way containers. Fifty percent of the one-way containers are made of glass. On the other hand, the 25 percent that are one-way bottles cause 80 percent of the total waste resulting from beverage containers. Consequently, governmental action in this domain must give priority to limit the advance of one-way containers. Markets for compost In the past, compost was defined as household trash compost, sewage sludge or a mixture of both. Meanwhile, trash compost produced from mixed solid waste had a poor reputation and is still not very successful because the heavy metal content makes it almost impossible to sell to potential users. Because market potential is only marginal, compost from mixed solid waste is not considered here. Several years ago, a composting breakthrough occurred in the FRG through the use of a source-separated organic fraction. Nearly all compost plants are managed by public authorities. In a growing number of cities, including Heidelberg,

In a rainy region, compost windrows are kept under a roof.

households are provided with an additional trash receptacle, the bio-container, for organic waste only (food, plant material, tea leaves). The system has proved to be successful and there is good public participation, dependent on an efficient public relations campaign. Approximately one-third of household solid waste can be reduced by this method. Waste paper can also be added to this fraction. The result is a compost nearly free from toxic components. (See “Learning from Others: Waste Recovery in Europe,” Resource Recycling, March/April 1988.) In order to sell the compost, the principles of marketing management must be followed. In Germany, an open discussion about toxic problems has proved to be significant in this context; it has succeeded in restoring customer confidence. Convenient locations for customers can also effect a considerable increase in sales. An excellent example occurs in a large German town: on request of the homeowner, ready compost is delivered into the bio-containers that were emptied earlier by the hauler. The homeowner can easily transport the compost to the garden since the bins are equipped with wheels. Federal authorities are very interested in compost products and are major participants in this market. The creation and maintenance of public parks, for example, requires significant quantities of native soil, peat, etc. Compost can substitute for

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