Comments on Proposed Integrated Management Approach to Plastic Products by Environment and Climate Change Canada

Inputs to inform the design and development of the proposals in managing single-use plastics, performance standards, end-of-life responsibility

Abstract

This document contains comments and recommendations to the proposed integrated management approach to plastic products to prevent waste and pollution. These recommendations are an attempt to support development of regulations concerning banning or restricting single-use plastic items including development of possible alternatives, recommended minimum recycled content in plastics, advantages and disadvantages of minimum recycled content, compliance requirements for businesses, innovative technologies and suited business processes to aid in the development of regulations and incentives thereof associated with the ongoing development. These recommendations also attempt to provide a harmonized outlook for a Canada wide Extended Producer Responsibility (EPR) framework.

Evidence to support development of regulations to ban or restrict certain harmful single-use plastics

· The discussion paper already states that plastic checkout bags irrespective of any thickness will be banned effective 2021. In a case where internal deliberations in ECCC are on to keep allowing plastic checkout bags of a higher thickness as they are comparatively easier to handle and thus are easy to recycle, the recommendation would be for banning all kinds of plastic checkout bags irrespective of their thickness. This can be seen in case of India where plastic checkout bags of thickness <50 mm were banned in 2016¹. The policy tools w.r.t the thickness lacked enforcement and the sale and stocking of thin plastic bags continued and moreover the bigger thickness bags could also not be recycled effectively due to non-strengthening of local municipalities’ infrastructure². A call for strict and blanket ban for any category which ECCC chooses to go with is required as graded allowances are difficult to enforce and increases complexity without bringing much benefits in the long run.

· The selection of harmful single-use plastic should be basis a baseline study identifying the extent of the single-use plastics in the waste stream irrespective of at either shoreline or inland. While the draft scientific assessment lays more focus on shoreline rather than inland as less and not much conclusive studies are currently present, the criterion for selection of problematic plastics is best as has been considered from the lens of environmentally problematic and value recovery problematic in the discussion paper. These criterion should be followed by assessing the extent and impact of those single-use plastics on both environment and value-recovery in “order of their extent and impact” and the items should be classified for restrictions or bans in that order³.

· Currently no alternative has been put forward as a government led transition to free the economy of the six proposed banned single-use plastic items. It has been seen across various developing and developed countries that paper bag is the best alternative which is a top of mind recall considering both consumers and transition by the factories equipped to manufacture the gamut of items in question. This alternative should be banned after a baseline study of its uses considering the Canadian context and vis-à-vis other five banned items. Even if we look at international studies, a paper bag puts much more strain on environment through its production, use and subsequent disposal as it does not last the minimum three times trip to the supermarket to offset the environment effects of a plastic bag currently in usage⁴. Additionally, a paper bag requires four times as much energy as a plastic bag to produce.

Ban leading to adverse effects of health or safety of any communities or segments of Canadian society

· The bans of the six identified single-use plastics will not cause any impact to the health and safety of any segment of the Canadian society in case where a sound replacement is made mandatory. The replacement in question is particularly related to plastic checkout bags. If they are replaced with paper as has been the norm in many countries where alternatives were either not mandated or there was a flexible policy to adopt any alternative but not plastic in its any form, the outcomes have been in the negative territory. The outcomes would predominantly be detrimental to senior citizens and differently abled persons as an easy alternative such as paper checkout bags are not sturdy, difficult to handle and there is easy wear and tear.

Ban on single-use plastics: Needs of people with disabilities

· Businesses should be allowed to offer plastic straws or any alternative material straws to disabled people for a limited time from the ban with an eventual phase out after a pre-defined time period. Disabled people have special requirements and straws are made particularly for offering convenience in the first place for drinking but they are not mandatory for all segments of the population. Keeping in mind the special needs, disabled people should be allowed the convenience of straws for a limited phase out window. Over time, market based solutions would be able to offer reusable straws which can be used by disabled people as well.

· In order to support people with disabilities, government should provide them with cloth or jute checkout bags free of cost at any of the frequented places such as grocery shops, places of worship, drug stores, medical facilities etc.

Innovative or non-conventional Plastic Alternatives

Compostable Plastics, bio-based or biodegradable plastics

· Bagasse (sugar cane fibers) or poly-lactic acid (PLA) based plastics are made from plants rather than petrochemicals as is the case with traditional plastics. Bio-plastics made of PLA are a positive alternative that can decrease the excessive amounts of non-biodegradable plastics created from petroleum. Compared to plastics made from petroleum, PLA is bio-degradable, but this is true under certain conditions and with the presence of specific microorganisms. A noteworthy characteristic of the currently employed international biodegradation standards is that the applied temperatures for the ISO and EN standard tests are higher than temperatures in the unmanaged environments that these tests mimic⁵.

· The current waste management and diversion initiatives under provincial governments has to deal with a lot of plastic types and by banning six types of single-use plastics but allowing bio-plastics will not make the task easier for them. Intermixing of bio-plastics with the common waste stream would only make waste diversion complex in the long run with no technologies currently existing to separate bio-plastics from the waste stream in a cost effective manner.

· Since bio-plastics are plant based, there is a risk of lowering food availability by increasing price of basic grains as a result of competition with bio-energy sectors for feedstock. The pricing of food grains and competition with bio-energy sectors is context and country specific but can be a threat internally when bio-plastics are allowed at environmental policy level and can spawn a new market altogether catering to the increased demand for such products.

· Production of bio-plastics also result greater amount of ensuing pollutants, due to fertilizers and pesticides used in growing the crops and the chemical processing needed to turn organic matter into plastic.

· Bio-plastics contribute more to ozone depletion than the traditional plastics, and require extensive land use.

· As is known, bio-plastics are degradable under controlled and high temperature industrial composting facilities to break down and as of 2019, less than 5% is thermally treated or incinerated and 95% is landfilled in Canada. Moreover, the existing thermal incinerators would have to be modified suiting the temperature and incineration requirements of bio-plastics.

· Bio-plastics are relatively expensive. PLA in particular can be 20 to 50 percent costlier than comparable materials because of the complex process used to convert corn or sugarcane into the building blocks for PLA⁶.

Considering the host of negative factors associated with the use of bio-plastics, these should be banned from making a foray into the market and should not be allowed to be sold as an alternative for single-use plastics.

Minimum recycled content requirements by sector and resin type

· Thermoplastics production contributes 89% of total production among thermosetting and thermoplastics in Canada in 2017. Almost 87% of the specialized thermoplastics domestic production is constituted by Polyethylene in 2017⁷. This means that a similar ratio is already under production of plastic products with polyethylene. Even when almost 40 percent of plastic products from domestic manufacturing are destined for exports, polyethylene garners a major share of the market output by weight.

· With a good chunk of produce lined for exports, manufacturers tend to naturally not design the products with their Canadian use and end-of-life in mind.

· Global share of plastic products in use is dominated by packaging industry and Canadian market is no different. Between 2000 and 2015, the share of plastic packaging as a share of global packaging volumes has increased from 17 percent to 25 percent. Plastic packaging volumes are expected to continue their strong growth, doubling within 15 years and more than quadrupling by 2050⁸. HDPE, LDPE and PE are the most commonly utilized packaging types for products in market and enjoy a majority share within the category.

· The price of plastic resins at 26 percent is a quarter of the share of total cost of plastic manufacturing with another 24 percent coming through labor costs. These are high share of costs in the industry. Industry is resistant to sudden shocks in operating requirements which tend to affect labor costs, technology costs, export costs, initial costs of recycled resins and other market adjusting costs.

· Polyethylene such as HDPE and PET are the most recycled types followed by PP and LDPE. They are easier to collect and has good recyclability properties. Recycled PET is currently allowed in many countries as a food grade plastic.

· Considering all above facts while giving enough room to the industry, Polyethylene resin should be targeted first for minimum recycled content requirements in a phase manner.

· Polyethylene resin because of its heavy usage in the packaging industry and also because of high potential for recycling is also the best-placed to increase the usage of recycled plastic.

Pre-requisites and Timelines for minimum recycled content requirements

· The recycled content requirement in plastics should be backed by legal certainty and should be consistent across all provinces and territories while allowing for exception to geographical and other unavoidable conditions. This would be beneficial across the value chain viz. collectors and haulers, producers, recycled-resin producers, manufacturers and brand owners.

· The government should considerably invest to create an enabling environment such as legally backed green procurement quotas for all government departments, incentives to develop innovative social or technological solutions for more sustainable management of plastics throughout their lifecycle, harmonized performance requirements and standards, infrastructure and innovations investments and an efficient and uniform extended producer responsibility requirements.

· With EPR already existing in most of the provinces and IPR in the offing in some provinces replacing traditional EPR, the minimum recycled plastic content requirement should be enforced through EPR principles and producers enforced to design the product with sustainability and recycled content requirements in mind.

· The minimum recycled content requirements should be enforced starting with the sector and resin type with the most throughput irrespective of whether the product is utilized domestically or is destined for export.

· Baseline studies should be undertaken and opportunities identified for moving the recycled plastic content requirements towards being sector and resin type agnostic.

· Effort should be undertaken by both federal and provincial governments to enable a unified & single market across provinces and a common baseline content requirement irrespective of whether EPR/IPR already exists in that market or not.

· A minimum recycled content of 30% by 2025 would boost the markets for recycled plastics within Canada. This should be reached in a phased manner starting with 10% recycled content in the year 2021 and increasing by 5% year on year.

· By 2030, around 50% of the recycled content requirements should be enforced.

Advantages of distinct minimum percentage requirements for each product grouping, sector or resin

· The distinct minimum percentage requirements for each resin and its subsequent product grouping will create a level playing field for the manufacturers and producers. This minimum percentage should be arrived at keeping in mind various factors such as resin type and existing recycling practices, current and potential recycling rates and possible interventions by government, potential for utilizing recycled resins and minimum recycled content in new plastic, risk appetite of the industry to cope with modified business models and feedstock, virgin resin and recyclate prices, public procurement and green operations.

· In addition to minimum recycled percentage requirements, government should enact labeling laws which would require products to be labeled with their recycled content percentage. This way the discerning consumers would be able to choose a better packaged product for the same food/non-food item and thus also propel demand for sustainably packaged goods.

· With the further introduction of minimum percentage requirements for a particular product group and sector, harmonization of product packaging by food types would occur which would eventually lead to better product design, standardizations and further improved recycling rates.

· By setting distinct minimum percentage requirements only for post-consumer plastic type and not for pre-consumer plastic, consumers would be sure that what they are buying has actually passed through all the stages for a post-consumer product and the recycled content is authentic.

· The harmonization led by adopting minimum recycling content principles through a Canada wide strategy would lead to various advantages. Eco-certification and standardization offerings by third party agencies can become a balancing force in the market in future and more such manufacturers would want to get themselves registered and get their products recognized.

· The import and export markets would also have to be compliant with fair trade rules and treaty obligations of Canada with various other countries.

Disadvantages of distinct minimum percentage requirements for each product grouping, sector or resin

· There is an inherent risk of wide variances among plastic category types and would invite business complexities for those involved in multiple categories manufacturing.

· Variances in minimum recycled content thresholds across categories can bear no relationship whatsoever with the demand and supply globally and within Canada. Careful baselines and demand supply studies would have to be undertaken to decide the recycled content percentages across categories.

· There are many different types of plastics each with its own particular usage and based on the usage different additives, resin and binding agents are used which alter the properties of plastic by a wide margin. This differentiation would invariably lead to variation in recycled content between packaging grades of same product type. In that scenario, harmonization in similar product category would be difficult to achieve.

· As the government has declared plastics as toxic material, recycling and repurposing plastic particularly for food grade acceptability would require careful calibrations in recycling and also long deliberations on what would be the ideal recycled content for use in food grade packaging.

· There can be limitations on increasing the recycled content across certain product categories as it can limit the quality of raw material and the capabilities of the finished product.

· The chain of custody requirements carry the risk of becoming too complex and a burden on the business involved in the production of plastics. Traceability, segregation, manufacturing process description including internal material flows and all material output declaration can become cumbersome in the long run.

Compliance requirements with minimum recycled content requirements

· The compliances would primarily be outcome based and be audited by third party agencies accredited by Environment and climate change Canada.

· The environmental labels and declarations made by companies can be classified using the CAN/CSA-ISO 14021-00 (R2009) standard and vetted with the third party agencies which can substantiate such claims by the companies.

· The marketing claims made by a company can be conformed by the Federal Trade Commission (FTC) guidelines for the use of environmental marketing claims and vetted by third party audit agencies.

· A national labeling guideline can also be established for each product type and certification of products can also be conducted and certified by product type. The existing Environmental choice program of Canada can be extended for many product categories.

· Existing eco-labeling programs can also be extended to include recycled content claims.

· On-site inspections and spot checks are another tool to ensure that the claims made by the companies are true.

Innovative Technologies and Business Processes to improve accuracy of compliance and minimize burden on companies

· A centralized registry should be developed at the applicable enforcing authority’s end similar to what RPRA has been building for batteries, tires and electronic waste. This registry and its associated database can store, analyze and deliver outcome oriented decisions.

· Additional digital technology platforms which can be housed on a cloud platform and easily accessible to all the participants in the waste management value chain would help in closing the material movement loop.

· Implementation of the program though a more integrated approach to risk management, one that facilitates a strategic and comprehensive method to risk-taking, the government can reduce administrative burden on companies and create competitive advantage by rapidly deploying such measures. Streamlining monitoring of key regulatory risks across businesses is needed.

· As per OECD guidance for removing regulatory burden and administrative simplification strategy, new age information and communication technologies such as digitization of administrative forms, simplification through re-engineering and automation of back office processes, electronic data storage and exchange are some of the steps which the government can undertake.

· As OECD recommends to improve administrative processes, the authority responsible for overseeing the programs should work with the highest political level for administrative simplification, undertake effective and efficient use of capacities and resources available, involve all stakeholders in administrative simplification and develop & improve measurement and evaluation mechanisms for meeting the objectives.

· The legislation should be outcome based to focus on maximizing compliance and minimize administrative burden on the companies. Additionally, to improve any new regulation in the public sphere which impacts businesses, the intent should be clear and it should focus on evidence-based analysis and move forward with public consultation during every milestone of the regulation.

Additional Incentives for Promoting and Rewarding Recycled Content in Plastics

· The government should work on establishing minimum recycling content thresholds with the first year as base year and simultaneously can come up with a tax incentive policy which would reward businesses through tax incentives who supply their product with over and above the minimum recycled content thresholds.

· Differential tax rates should apply for products failing to meet the recycled content requirements and also on sale of composite products which cannot be recycled.

· Additionally, tax on virgin resin should be increased and made higher including higher import duty. This tax can provide the necessary economic incentive for producers to use secondary resins but as a standalone tax, it would not be very effective as long as there is no adequate supply of secondary resin in the market.

· On the products where at least threshold recycled content is present and a deposit refund fee (DRF) can be applied, the government should also fund part of the deposit fund and indirectly aid in recycling.

· For companies investing heavily in research and improving design of their products so as to increase the recycled content and where evidence is present, the government can incentivize their promotion and education initiatives to alter consumer behavior and adopt more such generalized products in the market.

· A reward and punishment model can be used for businesses⁸ where producers can be rewarded for improving their product design, adjusting their recyclate purchase price according to prevalent market demand and supply, increasing their recovery rate through better technologies, establishing an independent recycling channel (independent channel has led to better control over costs, quality of recycled product and influence on consumer driven recycling) etc. and punished if the evidence supports their decisions moving away from a adopting a circular economy.

· Government should also strive and work towards increasing the overall proportion of businesses who meet recycled content regulations by increasing the reward and punishments thereby improving the enthusiasm of producers to actively implement the content requirements and also guide them towards getting more of their products under the ambit⁸.

· Eco-certification standards should be developed for using recycled content and the corresponding third party audit organizations should also be developed and promoted by the government. The registration and continuation costs should be kept low for more and more businesses to register for the certification schemes and marketing, P&E activities can be undertaken on behalf of the industry by the government for initial timeframe.

· Canada’s waste management governance is moving towards Individual Producer Responsibility (IPR) for multiple waste streams across provinces and ultimately individualistic recycled content requirement while being consistent across product categories. With this, the government should also embrace collective EPR in theory to bring improved design outcomes in a large number of businesses by carefully studying the different processing technologies in a recycling infrastructure and looping back to measuring and improving the design effectiveness taken as a collective EPR. This would bring dual benefits of mandating design principles across the board irrespective of any individual businesses and at the same time harnessing the power of EPR by extending the better design principles of one particular business across the product category and industry simultaneously⁹.

A Harmonized, Inclusive and Transparent Extend Producer Responsibility (EPR) framework for Canada

· The policy framework should be overarching and should be brand & geography neutral.

· There should be a level playing field for all stakeholders in the production value chain such as Producers, Importers, brand-owners and for the plastic packaging formats like PET, HDPE, LDPE, carton and other single-use plastic formats which would be allowed in production after banning any of the finally decided six items.

· Robust and enforced national regulation including minimum recycling requirements to increase recycling of all plastic packaging formats after baseline study of all material types, strengths and weakness of those materials w.r.t recycling and demand & supply metrics.

· Harmonized recycling targets across all provinces and territories depending upon best effort, underlying geographical conditions of all provinces and territories and by material type.

· An outcome based policy framework and regulation which specifies the objectives the regulated parties should meet, regardless of the means they achieve it with.

· A streamlined and consistent mechanism across provinces and territories should be adopted to determine which products should fall under the EPR umbrella¹¹.

· Clear roles and responsibilities of all the stakeholders in the full value chain such as Producers, Importers, brand owners on the production/marketing side, processors/recyclers/haulers/collectors on the collection and recycling side of the value chain.

· Defined segregation of roles and responsibilities between the producers, recyclers and provincial government in terms of implementation of the Extended Producer Responsibility goals as waste is a provincial subject.

· An appropriate financing mechanism should also be developed with clear roles and financing responsibilities including financing approaches by players in the value chain.

· The framework should also involve submitting of yearly EPR plans by those responsible including submitting the sales data of the product as applicable according to the working life of the product¹¹.

· The framework should also establish total working life of each of the product across waste category types so as to easily establish waste generation and recycling targets by product type and category.

· The framework should establish a centralized data registry where all waste generation and producer sales data including waste collection and recycling data can be populated so as to avoid any double accounting of recycled waste.

· A common reporting methodology should also be developed the aim of which should be to minimize burden on businesses and build transparency in the system.

¹¹This would not be applicable to single-use plastic products and other categories where life of product is short to be considered for waste generation calculation/does not meet criteria for including in EPR regulations.

References

1. https://timesofindia.indiatimes.com/home/environment/pollution/Centre-bans-plastic-bags-below-50-microns/articleshow/51455974.cms

2. https://wastefree.ca/wp-content/uploads/2019/02/SUPs-Jurisdictional-Scan-FINAL.pdf

3. https://wedocs.unep.org/bitstream/handle/20.500.11822/25496/singleUsePlastic_sustainability.pdf?sequence=1&isAllowed=y

4. https://www.bbc.com/news/business-47027792#:~:text=Paper%20bags%20require%20marginally%20fewer,have%20a%20greater%20environmental%20effect.

5. https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7240402/

6. https://blogs.ei.columbia.edu/2017/12/13/the-truth-about-bioplastics/

7. https://www.taxpayer.com/media/En4-366-1-2019-eng.pdf

8. http://www3.weforum.org/docs/WEF_The_New_Plastics_Economy.pdf

9. https://reader.elsevier.com/reader/sd/pii/S0956053X19307883?token=A549B1802C1BB30CD4E46055DDEB7942A35D77638D77C49D2DFC0519952458E3778383DB165257905936E5A0B96C7798

10. https://rady.ucsd.edu/docs/seminars/Design%20Incentives%20under%20Collective%20Extended%20Producer%20Responsibility%20A%20Network%20Perspective_nonblinded.pdf

11. https://reader.elsevier.com/reader/sd/pii/S0959652613005350?token=41E7FDCB216F74B9F7734FA49B7BA2436FD225E6CC7986DA9BACFCCE67D9341671030FBB128EAC42BA629E60F5B321CC

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