Abstract
The paper seeks to examine the role of categorisation for circular economy by investigating the concept and definition of waste and waste management. In this paper, not only the legal interpretation provided by the Court of Justice of the European Union (CJEU) and legal scholars will be considered, but also economic analysis for an improved taxonomy of waste and resources (also referred to as ‘secondary raw material’). The broad concept of waste as developed by the CJEU as well as the uncertainty of end-of-waste-status-criteria create a major obstacle. The paper thus seeks to provide an alternative to the existing categories based on a more purposive approach that acknowledges the potential of resources more adequately. It provides an additional concept to waste within the legal framework and thereby acknowledges the role of categorisation as a driver for circular economy.
Introduction
Resource scarcity has been a big topic during the Covid-19 pandemic, when resources for microchips were short. 1 Resource scarcity is also tightly interwoven with the challenges from linear trade patterns and inefficient use of resources, and this holds true even for green business models. 2 Circular business models seem to be one of the most promising options to combat resource scarcity and to achieve sustainable production and consumption. In this regard, the European Commission published the Circular Economy Action Plan – first in 2015, 3 then in 2020. 4 Considering waste as a concept of valueless, end-of-life-status may constitute the greatest obstacle. One important approach is to turn waste into valuable resources through refurbishment or recycling; another would be to prevent a resource from becoming waste at all. 5 A washing machine at the end of its lifespan can still be a source of usable components for new or refurbished washing machines 6 – the landfill does not necessarily have to be its destiny. Keeping products and material in use can significantly decrease the use of virgin resources. 7 For the legal categorisation, it means we require a category that acknowledges the value of components even after the holder discards it. Secondary raw material can be such a category.
The circular economy (CE) is the idea of renewable products and material loops. Currently, most products start their life as something new – manufactured from raw materials – and end their lifespan as ‘waste’. One definition for CE out of other attempts 8 is ‘to close material loops, reduce inputs, and reuse or recycle products and waste to achieve a higher quality of life through increased resource efficiency’. 9 The material loop uses resources – both virgin and already found in products – and distributes them to new production streams, while considering waste as underutilised raw material. 10 A material loop requires a closed-loop supply chain, whereby the conventional linear, forward supply chain (manufacturer – consumer – waste) is combined with the reverse supply chain (consumer – re-distributor/recycler – manufacturer). 11
Despite the regulatory opportunity brought by the revision of the Waste Framework Directive (WFD) in 2008 and 2018, 12 the meaning of waste and its ambiguity remain unaltered. Secondary raw material in contrast to waste still does not play a significant role in the regulatory setting since it was not even defined in the WFD. Considering the central environmental policy targets set forth by Article 191 of the Treaty of the Functioning of the European Union (TFEU) this was not necessarily the case. The preventive and precautionary principle can provide the basis for waste prevention in a long-term perspective and not only - as is currently the case - for immediate environmental risks. This paper will demonstrate that the situation is rather unpredictable for remanufacturers and recyclers given the legal uncertainty of the end-of-waste status, due to national legal differences and the lack of a single ‘secondary raw material’ category in the WFD. It will be shown that the current approaches to determine the scope of waste are still insufficient to provide clarity and leave no room for CE-based businesses. After introducing the legal basis of the European environmental policy (2), the insufficiencies of the WFD will be explained (3). The author then presents considerations on the necessity and the framework for establishing a new category, ‘secondary raw material’ (4).
Environmental principles in a circular economy
The environmental principles find their basis in Article 191 TFEU in European law. According to Article 191(1) TFEU, the European Union has to pursue a preventive approach by enforcing protective measures. 13 At the centre of European environmental law is, among others, the protection of environment and human health. Further, Article 191(1) TFEU also encompasses the rational utilisation of natural resources, which will prove particularly relevant for present considerations. The enumeration does not include a certain hierarchy. In fact, the ambits of the different targets encompassed in Article 191(1) TFEU are overlapping. 14 The provision includes sustainability aspects for the next generation. 15 Thereby, a foundation for CE-guided measures exists already – the potential it offers remains, however, underutilised. The CE-based business model requires a radical change for how business and trade develop. The following will explain the preventive and precautionary principle (2.1), which in fact already provides a solid foundation for the CE-based environmental policy (2.2).
Prevention and precaution
Article 191 TFEU assigns the competence to act towards the protection of the environment towards the European Union. According to Article 191(2) S. 1 TFEU, the environmental protection shall be at a ‘high’ level.
The environmental protection primarily relates to the preventive and precautionary principle. The precautionary principle roots in the German principle of foresight, Vorsorge, wherein the preventive and the precautionary principles coexist. 16 The preventive principle encompasses purely preventive measures that seek to avoid any kind of action that causes environmental harm. The preventive principle prefers for substances to classify them as waste and let their potential for reuse remain subordinate behind their environmental risks. The fact that unused potential of substances leads to wastage and thus harm to the environment in the long run is not taken into account by the preventive principle.
Here the precautionary principle will play a key role. It becomes relevant when standards for policy actions and proportionate restrictions need to be adjusted according to science-based facts. 17 Precautionary approaches are thus more suitable for case-by-case decisions and allow for a relative approach. Despite the differences between the two principles, the Court of the European Union (CJEU) in past decisions has applied both without differentiating between them. 18 The central purpose of both principles is to take precautionary actions to prevent environmental harm, although their area of use and approach remains different. To achieve a successful transition towards circular economy a balance between both approaches must be found. Environmental damage that only becomes apparent over time but results in more serious damage must not recede behind short-term individual environmental damage. Whether the particular act or omission has the potential of environmental harm needs to be examined according to a risk assessment and the likelihood that damage would occur. 19 In this way, the environmental prevention does not discriminate every business action with even the smallest environmental risks 20 but allows for an ‘acceptable’ environmental risk. 21 This sets the foundation for a relative consideration of environmental impacts caused by the nature of substances themselves, and the damage caused by the unused potential of these substances. If the environmental rules are violated or environmental harm was caused, Article 191(2) TFEU explicitly provides for the ‘polluter pays’ principle as a repressive counterpart to its underlying preventive character. Article 191 TFEU thereby provides a comprehensive system for environmental protection that also enables a consideration of different temporal aspects.
Circular economy – A goal or The goal?
For a transition towards a circular economy, the pure prevention of the immediate or certain environmental risk may not suffice. Within a CE-based, closed-loop supply chain, different sales contracts lead to passing of ownership for a certain good. Thereby also the right to decide about the faith of the good and the inherent potential as a secondary raw material passes. 22 To prevent disposal of and pollution through waste, the enshrinement of environmental protection as a mere goal may not suffice. Rather, incentives must be provided to ensure that the reverse supply chain, namely the process that recovers waste or even prevents its status, will be successful. While the pure prevention of environmental harm does not necessarily require positive action, it does require omissions. Already the language ‘prudent and rational utilisation of resources’ suggests that positive economic action needs to be taken to preserve the national resources. Article 191 TFEU can cover business models that facilitate a material loop and sustainable development. 23 However, this strongly correlates with the question of what the balance between the economic and the environmental interests will be. This environmental protection has evolved from being of equal importance to economical goals to a superior importance. 24 In the recent case Client Earth, the CJEU affirmed a certain notion of in dubio pro natura. 25
But this preference for environmental protection must be seen in a broader picture, including possible consequences of regulatory actions that lie in the future. Resource scarcity will also hit green – but linear – business models. A consideration of the future value is not intrinsically alien to Article 191 TFEU as it permits an adequate consideration of the value of resources pre-recovery. 26 Article 191(3) TFEU is not without reason by requiring economic interests to be taken into account by the Member States. As stated above, environmental protection should not lead to unproportionable discrimination of other interests. Business models that ensure a material loop serve the same purpose of environmental protection as they assure the central goals of efficient utilisation of resources. This leads to the conclusion that in the context of CE, the purposive approach of Article 191 TFEU requires a balance between the immediate risk of environmental harm due to shipment of waste and waste disposal and the risk of future environmental risk due to prevented recycling and recovery. It is a matter of the acceptable environmental risk 27 whether the substance's value is ignored entirely or whether its potential should be acknowledged.
In general, Article 191 TFEU offers a potential user focus and opens up for a utilisation of resources by considering the user. 28 The CJEU, too, applies a purposive approach in its decisions aiming for an environmental protection. 29 By aiming for a certain purpose, the CJEU ensured its flexibility; at the same time, the purposive approach leaves judicial discretion and thereby allows for application of the proportionality test to the detriment of other interests. 30 In the past, the CJEU opted for the prevention of immediate risks and broadened the term ‘waste’. 31 The infinitive extension of the category contradicts a transition towards CE because it does not leave any room for business models that – considering the long-term development – provide more environmental benefits. If the obstacles for an economical reasonable attempt for recovery are too high, business models will not contribute to waste prevention and waste recovery. This also concerns the lack of transparency and unpredictability of categorisation. In the end, the CE can only be the ultimate goal of the preventive principle in Article 191 TFEU if it allows for a balance of immediate acceptable risks and irreversible risks of recourse scarcity, and possible exploitation for the future.
Categories under the waste framework directive
The WFD is the central legal framework that provides the relevant categories for the discussion at hand by defining the terms ‘waste’, ‘by-products’ and ‘end-of-waste’. What is missing, however, is the category ‘secondary raw material’. This category is, however, inevitable for a successful rethink towards a circular economy. In Article 1 of the WFD, it is expressly stated that the directive aims ‘to protect the environment and human health by preventing or reducing the generation of waste, the adverse impacts of the generation and management of waste and by reducing overall impacts of resource use and improving the efficiency of such use, which are crucial for the transition to a circular economy and for guaranteeing the Union's long-term competitiveness.’
In principle, the efficient use and a consideration of resources as secondary raw material is included in this target. However, aspects of reuse and repair of products are strongly related to the extended producer responsibility, according to Article 8 WFD. Secondary raw material is not even named as part of the extended producer responsibility. Rather, the WFD regulates waste and its disposal with the goal of waste prevention. 32 Article 4 of the WFD sets forth the presumed waste hierarchy whereby waste prevention is prioritised over reuse, recycling, other ways of recovery and disposal. Waste prevention measures set forth in Article 9 of the WFD presume that the substances have not become waste yet. 33 All other measures that terminate the waste status – such as recycling – can, according to CJEU jurisdiction, only apply to substances that have already become waste. 34
Thereby the WFD already provides a solution for the tensions between economic and environmental interests by providing for a certain environmental risk 35 and permits the utilisation of the potentially harmful substance to recirculate resources to the value chain. Article 4(2) of the WFD requires the Member States to ‘ensure that the development of waste legislation and policy is a fully transparent process’. This also means that the law should serve as catalyst for development and recovery of waste to facilitate reuse and to reduce obstacles for CE.
As will be shown, due to the narrow scope of ‘by-products’ and the extensive interpretation of ‘waste’, the WFD does not contribute to the transition towards a CE. The judicial practice and lack of a sufficient regulatory framework also show that the preventive approach is only considered to be applicable for immediate environmental risks. The potential for adjustment offered by the precautionary principle thus remains unused.
By-products – a step towards CE?
Article 5 WFD sets forth requirements under which a ‘substance or object resulting from a production process the primary aim of which is not the production […] is considered not to be waste, but to be [a] by-product’. A substance or object can only be considered a by-product in this sense if the ‘further use is certain’, if it ‘can be used directly without further processing other than normal industrial practice’, if it is ‘produced as an integral part of a production process’
Waste – beginning and end
The second and rather superior category is ‘waste’. Being the only category next to ‘by-products’, ‘waste’ works as a gatekeeper for CE business models. In Article 3(1) of the WFD, waste is defined as ‘any substance or object which the holder discards or intends or is required to discard’. Whether the substance or object is discarded remains to be determined by national law and must be assessed according to the will of the possessor of the product. From the provision's wording, preference is given to an active behaviour of the holder showing their intent to discard the substance or object. 37
No article within the WFD considers waste as a resource
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with an inherent value at the substance's end-of-life-status. Recital 2 merely emphasises the aim of ‘ensuring that
The WFD seeks to remedy the rigid nature of waste by at least allowing its status to end. Article 6 of the WFD sets out conditions under which a product or resource ceases to be waste. The Member States are obliged to take appropriate measures for the end-of-waste status under four cumulative conditions: ‘(a) the substance or object is to be
Recital 47 merely addresses this as follows: ‘Where waste materials cease to be waste as
CJEU – between extending waste and restricting by-products
Over the years, the CJEU has broadened the scope of waste extensively by referring to the effectiveness of the WFD, and the preventive and precautionary principles of environmental law.
The article focuses on some of the leading cases. 40 On the one hand, there is the CJEU's decision in Wallonie 41 and, on the other hand, the CJEU's decision in Arco concerning the quality of ‘LUWA bottoms’. 42 In the former judgement, the CJEU clarified that discarding the substance is conditional for recovery of products. 43
This was further emphasised in Arco where the ‘a substance used as fuel [was considered] the residue of the manufacturing process of another substance [and] no use for that substance other than disposal [could] be envisaged’. The CJEU stated ‘that
The preventive and precautionary approach thus required the court to extensively interpret ‘waste’ and ‘discarding’ but not to open the framework to effectively combating resource scarcity and use of resources. The court even took the common categorisation of the substance as waste into consideration. 45 This indication was clearly beyond the behaviour-orientated concept of ‘discarding’.
By applying an objective standard, the CJEU also considered value to a certain extent. Tension between the environmental protection against immediate risks and value-related interests of the holder arose in particular in the context of by-products. In Palin Granit, the CJEU had to concern itself with leftover stones and their quality as waste. The CJEU stated that the mere fact that a product is potentially recyclable does not mean that a product is not discarded. 46
The CJEU, again, referred to the ‘precautionary principle and the principle that preventive action should be taken’
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and linked the term ‘discard’ to the
They court acknowledged the commercial value of objects and substances discarded but denied these resources access to the value from the subjective perspective of the holder. Only in the case of a
The judgement formed the basis of the current Article 5 WFD. Even though the court acknowledged the inherent value of the substances, the threshold for being considered a by-product and not waste were set considerably higher. Relying solely on a case-by-case decision basis serves the precautionary principle but created, and creates until today, unpredictable obstacles which prevent a successful material loop. 52 Further, the divergent standards for recycling and the end-of-waste status of a substance or product according to Article 6 WFD even prevent the required positive prognosis under Article 5 WFD. 53 This is even more difficult for the holder or user if the market value of the product is negative, and the positive usage prognosis requires considerably more explanation.
A few years later, the court stated in Niselli: ‘According to Mr Niselli's evidence, the contentious materials were then sorted and sometimes treated, and
Remaining uncertainties
The revision of the WFD aimed to fill the aforementioned gap to a certain extent by including an ‘end-of-waste’ status in Article 6 WFD. However, in particular Article 6(4) WFD turned out to be a Pandora's box.
How far the unexpected interpretation can go was quite recently shown by the judgement the CJEU rendered in Tallinna 57 on the interpretation of Article 6(4) WFD. In this case, sewage sludge was considered a type of waste which never ceases to be waste. Even though this definitive decision provides the holder with legal certainty, attempts for a transition towards CE were eroded.
The CJEU emphasised that the specification of standards according to Article 6(4) of the directive belongs to the Member States’ competences, which also includes the freedom to specify that some type of waste never ceases to exist as such.
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Further, the court agreed with ‘the Advocate General […that] the Member State must ensure […] the objectives set by Directive 2008/98, such as encouraging the application of the waste hierarchy laid down in Article 4 of that directive, or, as is stated in Recitals 8 and 29,
The general mistrust in any kind of product or substance was again visible in the judgement in Tronex in 2019
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concerning the interpretation of the regulation on the shipment of waste.
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Some of the products shipped by Tronex BV were originally packed and others were opened and not packed. ‘If that is indeed the case, there is a risk that the holder will dispose of the object or substance in his possession in a
Both cases show how extensive the one-sided preventive approach taken by the CJEU is. Any likelihood of potential threat to the environment or human health suffices to prevent the resource's legal status as waste. The CJEU thereby only refers to immediate risks without taking into consideration that Article 191 TFEU on which the WFD is based also aims for the protection of the environment for future generations. Article 191 TFEU provides for a balance of contradicting interests with the purpose of protecting the environment. Economic interests in preventing inadequate resource usage should be considered similarly to the pure ecological concerns. Companies that contribute to the recovery of end-of-life products should therefore be provided with clear guidance and standards, rather than ambiguous concepts that allow for an even broader interpretation of waste every time.
On the basis of Article 6(2) WDF, the European Commission ordered a study that assessed the Member States’ practice on by-products and end-of-waste requirements and procedures to develop union-wide criteria for the end-of-waste status. 67 Given the actual status quo of the WFD, and its uncertainties as well as the one-sided focus on the preventive approach, 68 this is urgently needed. The study distinguished between different waste streams and categorised them according to the different resource types. Further, it also identified general barriers and drivers for an improved end-of-waste practice. It particularly emphasised the uncertainties for ‘users of [end-of-waste] materials about the quality and traceability’. 69 Further, the report identified the ambiguity of the qualification as waste at several stages of the waste management process as a barrier for CE. 70 This was also explained with the different responsibilities, administrative burdens, and the lack of data and standards. 71 Missing rules on end-of-waste products also created obstacles. 72 Once the substance is no longer considered as waste, the relevant applicable regime is unclear. Thus, the ambiguity of the definition of waste and its ambit provide hindrances that even reach beyond the end-of-waste status. Leaving the holder and user of substances with the ‘black or white’ principle would not do justice to the multilayered complex system of waste recovery and CE-based models.
Consequently, the end-of-waste status without clear European-wide standards and a strict guidance for end-of-waste products proved itself to be ineffective and contradictory, not only for a transition towards a CE. Moreover, it contradicts its own inherent principles of environmental protection. The rational use of resources and an acknowledgement of resources that have been processed as secondary raw material form part of the preventive principle. This is a preventive principle that anticipates resource crises and risks for coming generations, and not only immediate risks that may be outweighed by the future ones.
The necessity of establishing a category of secondary raw material
Considering the aforementioned, the role of categorisation becomes clear. Dealing with only one category – namely whether a substance is waste or not – creates a delicate hindrance for a successful transition to a CE. It is therefore worth considering a second category: secondary raw material.
The European Commission indicated the principle of ‘less waste and more value’. 73 This also entails the hypothesis of waste as something without a value. However, a substance or object which had a presumed primary usage that ceased to exist can have inherent value, and therefore may be considered secondary raw material. There are many suggestions on how to rethink the approaches taken by European environmental law. Some suggest focusing on resources instead of waste, 74 others want to emphasise the users’ perspective, 75 while others again recommend inventing an EU material law 76 instead of categorising the substance as waste. However, the author prefers the establishment of secondary raw material as a second category in addition to ‘waste’. While the status ‘waste’ may be achieved easily, a substance may fulfil the term secondary raw material as well through being useful to a user who seeks to make use of the substance in an environmentally sound manner. The cultural-economical circumstances speak for an establishment of a secondary raw material as its own category. This must be combined with a privileged regime of adjusted treatment and trade rules and could thereby provide for a rather practical and a user-adjusted value chain.
Cultural-economic indications
As briefly touched upon above, the WFD and in particular Article 5 WFD only covers one of the relevant processes in a reversed supply chain. Manufacturing-related substances may be covered by the category by-products while the two other categories can either be waste or not-yet-waste and thereby subject to waste prevention measures. For end-of-life products in particular, the inherent value of certain components could be covered by inventing a second category besides waste and by-products, namely secondary raw material.
A reliable category can help to combat the barriers for CE that were detected by Kirchherr et al. Some root in cultural and market-related causes; others are mainly regulation- and technology-related. 77 Culture-wise, a strong demand could lead to change towards sustainable production. Recycling products requires adequate processing by using technology which enables companies to comply with the recycling standards. 78 A lack of information on the availability of recycled resources, technological standards or expertise also creates obstacles. 79 Here, the secondary raw material market is key and requires as a basis a common understanding of the meaning of secondary raw material. Moreover, naming it secondary raw material would outweigh the predominant and hindering nature of ‘waste’. To be economically accepted, recycling and remanufacturing must at least be equally expensive as (or more profitable than) the mere disposal of the resource. 80 This presupposes that the costs of processing, e.g. time, technology and personnel costs, can be amortised in the end. Recovering waste and transforming secondary raw material into final products is often not profitable, inter alia because of existing cheap alternatives 81 such as cheaper virgin raw materials or the cost-intensive methods of recycling combined with a lower profit level. 82 Global standards for recycling are missing; downcycling is the natural consequence. 83 Therefore, the legal vacuum for secondary raw material also causes environmental harm – not immediate and directly, but in the long term.
The current combinations of standards with the category ‘waste’ or linking it to the ‘end-of-waste’ status does not provide a comprehensive solution. The categorisation as waste instead of a resource or secondary raw material causes major uncertainties in practice and even prevents recovery procedures. 84 This is due to the ambiguity of the definition of waste according to the WFD. 85 It is neither clear what will be qualified as waste – even for by-product eligible substances – nor is it certain whether, when and in which Member State a substance is no longer ‘waste’, or which status it reaches afterwards. The consideration as waste implies a stigma to the resource 86 which eventually hinders its inherent value for CE goals and business models being acknowledged. 87 The categorisation can thus be a hindrance if the categories’ ambit remains uncertain. On the other hand, categorising a matter can also serve as a driver if certainty is provided. 88 The availability of a resource can also not become known to the respective market participants if it is just labelled as waste. This potential of the resource, however, must be shown in the legal taxonomy as well. 89 A shift to a CE-based understanding of waste, whereby the character of a substance is recognised as resource or secondary raw material, is necessary to facilitate the material loop. 90 Otherwise, the uncertainties in case of trading, processing and reuse of secondary raw material will inevitably lead to financial disadvantages. 91 This would consequently hinder an establishment of CE models and strengthen the existing patterns of the linear economy. As the ultimate consequence, the preventive principle of the European environmental policy would be missed.
Visibility of CE through secondary raw material
Categorisation is only a driver for CE if its standards are clear.
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Furthermore, uncertainties about recovered waste streams are a major barrier.
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A lack of policy on a secondary raw material market evolves to a delicate obstacle for transition towards a CE if the aforementioned and already existing economical barriers are considered. The existing lack of Europe-wide policies with regards to secondary raw materials has already been criticised by the European Commission.
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Eurostat monitors all movements of resources and secondary raw materials, but, given the inherent complexity, this may seem rather opaque to consumers.
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The monitoring process does not solve the uncertainties caused by the ambiguous interpretation of waste. This makes it even more urgent to establish a second resource-focused category. Some national approaches show concepts focusing on secondary raw material. While this seems promising, it does not render a European and global approach obsolete.
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A recent Commission staff working document even explicitly demands ‘legislative amendments to
Secondary raw material – attempts for new recognition
The legal recognition of secondary raw material would help to overcome several existing economic hindrances and facilitate a holistic prevention of environmental harm. The following considerations seek to provide guidance for a new category that would exist in addition to ‘waste’ in the WFD.
Abstract versus Case by Case
Secondary raw material is a diverse resource, which covers electronic, plastic, packaging and glass resources – to name only a few. 103 However, addressing every single material would not help to create a counterbalance 104 to ‘waste’, which is likewise not differentiating between different waste types. Waste serves the preventive approach but only to the extent that it covers immediate pollutive risks, secondary raw material, contrary to the goal to achieve a CE – the prevention of environmental harm for the longer perspective. Here, Article 5 WFD does not go far enough to achieve this aim. Secondary raw material can also encompass resources and products considered for recycling and remanufacturing and thereby not only production residue or other types of by-products. Only if secondary raw material as an abstract category is included in the WFD can a chance of a secondary raw material market which may compete with the virgin raw material market be created. 105 This does not prevent the legislator from determining subcategories or listing substances in annexes to the category. On the contrary, it can help to combine the category with conditions, standards, 106 recovery goals 107 and licences. However, a privileged category of waste must remain to satisfy the preventive concerns of environmental law for types of resources that are simply too hazardous to be recycled. In contrast to waste, the secondary raw material should not cease to exist except for the case that recovery is not possible at all. In these cases, the preventive approach must prevail. For all other cases, the indefinite category ‘secondary raw material’ included in the WFD will serve as a guarantee that a defined legal regime remains applicable. Thereby, all different scenarios of a reverse supply chain will be covered, and a predictable legal regime will accompany the second half of the material loop at the end of the lifespan of a product. It allows for a predictable planning of remanufacturing and recycling processes without facing the discouraging obstacles of regulatory uncertainty and judicial unpredictability. It brings advantages for contractual and extra-contractual issues which inevitably will arise regarding products with lesser value. Inter alia, the compensation regimes of transport conventions 108 rely on the value or market price of the cargo, usually indicated by the invoice which is usually absent in the case of common shipment of own goods destinated for recycling. Such goods may often not have a value nor any indication in the invoices, given the lack of an existing sales contract. Goods that are not valuable cannot be diminished in value anymore, which is why any breach of contract under a transport contract would remain without consequences. If this product is abstractly considered secondary raw material, there would be a regulatory starting point to combine it with a fixed amount or determined value by, for example, the European legislator to encourage carriers to comply with its duty of care and delivery. Such a determined value would serve the purpose of more attractive liens and securities as well. But this presupposes a certain categorisation of the resource as a valuable one, precious enough that contractual mechanisms work. A transition to a CE requires private actors and users of secondary raw material to take an interest in resources. Giving them a certain legal basis that goes beyond the restrictive nature of by-products and a broad concept of waste would provide them with both regulatory certainty and incentives to comply with their contractual duties.
Objective-subjective dimension
As an objective pre-condition, secondary raw material must – in contrast to waste – be recoverable. 109 Hazardous waste such as nuclear waste, which can under no circumstances serve further use given its dangerous and polluting nature, cannot become secondary raw material. The criteria must be combined with the objective possibility to reach a certain quality of secondary raw material that is environmentally sound. 110 Similar to Article 7 of the WFD, excluded raw material should be listed in annexes since otherwise the preventive principle could be circumvented.
Beside this objective standard, a subjective element is important. The definition should link to the intention of the possessor or user of the substance to make use of it in an environmentally sound manner by guaranteeing compliance with European recycling standards and otherwise taking responsibility for disposal. 111 This also means a certain leap of faith for the users and holders of the resources. However, first, this is already known to EU law, inter alia with regards to used electronic products. 112 Second, the leap of faith should be regulated through licences or binding standards. Shipment and treatment of secondary raw material could, inter alia, only be allowed to certified companies; offering licences for recycling is an approach which is already pursued in the ship recycling regulation (EU SRR). 113 According to Article 13 ff. EU SRR, recycling can only take place in registered and approved facilities. Further, also models of the secured air transport chain where only certified companies can participate in aviation shipments should be considered as examples. 114 Also here, trust was regulated and potential risks to air security were accepted against prior abstract certification, including the training of staff members. Further, such a licence should only be granted if an adequate traceability of resources and compliance with recycling standards is ensured, 115 so a more feasible tradability and usability of the resources can be provided. The objective aspect of potential immediate pollution can thus be combined with the subjective interest of the holder and user of the secondary raw material to use the inherent resource value and combat wastage. In the end, this also reflects the combined subjective–objective concept of waste as it was developed by the CJEU. The explicit category may require the CJEU to adequately apply the purposive approach in a comprehensive manner, including the CE goal.
Secured traceability
Making the usable substance, and thus recoverable waste, visible by labelling it secondary raw material can help to trace it.
However, secondary raw material suitable for reuse and recovery may be similarly harmful to the environment as waste. 116 To preserve the preventive nature of the directive, standards issued at EU level should guide companies as to which recycling and recovery methods are considered environmentally sound. 117 In acknowledgement of the polluting potential of substances and the responsibility of the holder, every user should guarantee environmentally sound treatment. This meets the CJEU's concerns raised in Tronex that the resource can be burdensome for the future holder. The mechanism would serve as a guarantee and could also provide for the financial advantage of being able to start the waste processing under lighter conditions. This may therefore have the financial remedial effect to which the CJEU referred in Palin Granit. Such a guarantee is already available for transboundary shipment of waste, whereby the exporting party has to guarantee that sound recovery will be pursued and in case of impossibility the resource will be taken back. This would meet the needs of the PPP, whereby the financial risk is on the polluter. It could thus likewise serve as a model for waste management procedures in Europe. Combining the status ‘secondary raw material’ with this kind of guarantee would ensure that the leap of faith in the procedures will turn out to be not disappointing. The focus of future regulation should be on closing the material loop after a material becomes waste. This could also ensure that standards are complied with and that downgrading ceases to become an option from an economic perspective.
Conclusion
Categorisation indeed matters – it serves as a driver but also as a barrier depending on its shape, clarity and function. The paper started with the presumption that CE is not only just a goal within Article 191 TFEU, but moreover the central goal. It covers both the immediate environmental threat which needs to be prevented and the acceptable immediate environmental risk that enables an even greater prevention of environmental threats. For CE-based business models, the broad understanding of waste and the ambiguity of the conditions which allow for an end-of-waste status create a barrier. The judgements of the CJEU provided for an extensive understanding of waste which exclusively focused on the precautionary aim to protect the environment and human health. While this aim's importance should not be denied, the relevance of the efficient utilisation of resources should not be underestimated either. Article 6 of the WFD does not provide for a sufficient regulatory basis for the recognition of the substance or object as a resource. The study commissioned by the European Commission in 2020 emphasised the remaining differences that predominantly create obstacles for users. Inventing a new category in addition to waste could remedy these uncertainties and could enable a regime that applies throughout the entire recovery process. It could provide certainty on the applicable regime beyond the end-of-waste status. Union-wide recycling standards could easily be combined with this new category. In this way, the categorisation could act as driver to enforce Article 1 of the WFD in its entirety and evolve the principle of prevention and precaution into a holistic one, suitable for the environmental protection for future generations.
Footnotes
Declaration of conflicting interests
The author(s) declared no potential conflicts of interest with respect to the research, authorship, and/or publication of this article.
Funding
The author(s) received no financial support for the research, authorship, and/or publication of this article.
