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Doing less, with more – Why the environmental performance of the Blue Box is decreasing over time

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Written by Calvin Lakhan, Ph.D, Co-Investigator: “The Waste Wiki” – Faculty of Environmental Studies at York University

Can recycling be bad for the environment? This is a question that I have posed to students in the past – almost universally, the answer has been a resounding no. For decades, Ontarians have been inundated with the message that “recycling is good” and that it is our collective responsibility to recycle in order to preserve resources for future generation. In fact, Ontario’s Blue Box program is expected to play a critical role in helping the province achieve its carbon reduction and zero waste goals, and remains as the centerpiece of the Waste Free Ontario Act. With all of this in mind, recycling must surely be a good idea, right?

I would be disingenuous if I told that recycling was bad for the environment. However, I do feel that not all recycling is created equal. What we recycle, when we recycle and why we should recycle is very much contingent on a number of site and situation specific circumstances. When evaluated in isolation and all things being equal (cetterus paribus), recycling will yield a positive environmental outcome. However, the situation becomes much less clear once we begin to include other factors (economics, social equity etc,) and the “opportunity cost” of recycling activity (where opportunity cost is the forgone benefit that would have been derived by an option not chosen.).

Looking at the performance of Ontario’s Blue Box program, we observe a troubling trend – the environmental performance of the Blue Box (measured in terms of GHGs abated) has decreased every year since 2015. In that same period, the net cost per tonne to recycle all Blue Box materials has increased by 21%, while overall tonnes diverted has fallen by more than 80,000 tonnes. In short, the province is doing “less with more”, as the cost of the Blue Box program continues to increase by double digits year over year, while recycling less material and abating fewer tonnes of carbon.

It is important to note that this “decrease” in performance cannot be attributed to any particular cause – the rapidly changing nature of what packaging is made up of, uncertainty regarding the scope and timeframe of proposed legislation, volatility in end markets and realized revenues etc. are all exogenous factors that affect what is being recycled and the costs of doing so. The Blue Box of today is fundamentally different than it was even as little as a decade ago. Over the past 5 years, the program has seen overall paper recycling drop by more than 159,000 tonnes annually (an approximately 38% reduction). Steel packaging and glass cullet have also seen their overall recovered tonnages decrease, while aluminum, PET and HDPE have remained flat. Of particular interest, is that the share of plastics #3-7 (LDPE Film, Polystyrene, Plastic Laminates and Other Plastics) of all tonnes generated and recycled has increased significantly during this same period. This change in the mix of materials generated into the market and recovered tells a story of a system that is increasingly being made up of expensive, difficult to recycle materials.

In light of these challenges, the province now finds itself at a crossroads of sorts, and faces questions that are fundamental to the very nature of the program.  1) Does Ontario continue to promote recycling policy in the hope that a producer operated system will realize operational and economic efficiencies that overcome these problems? 2) Does the province explore  alternative modes and methods of waste diversion that are no longer rooted in recycling, and 3) What is the goal of the program, and what are we willing to spend to achieve it?

For me, this last question is probably the most important one. In many ways, we have a decoupling of environmental and diversion goals. For decades, we have been taught that ‘more’ recycling is better for the environment – but conspicuously absent from this feel good message is what should be recycled. Is the decision to recycling everything (everywhere), economically feasible or environmentally desirable?

As noted earlier, a message that cannot be stressed enough is that not all recycling is made equal – while counterintuitive, a higher recycling rate does not necessarily result in a superior environmental outcome – a system which prioritizes recovery of materials such as aluminum, newsprint etc. (low cost, high impact) can achieve greater carbon reduction, even in a scenario where overall recycled tonnes decreases. In 2016, the university published a study titled “Optimizing emissions targets for residential recycling programs: Why more is not necessarily better with respect to diversion” (Lakhan, 2016 doi: 10.1177/0734242X16659923). The following is an excerpt taken from the paper abstract:

This study demonstrated targeting specific materials for recovery could result in a scenario where the province could improve both overall diversion and emissions offsets while reducing material management costs. Under the modelled scenario, as the tonnes of greenhouse gases (GHGs) avoided increases, the system cost per tonne of GHG avoided initially declines. However, after avoiding 2.05 million tonnes of GHGs, the system cost/tonne GHG avoided increases. To achieve an emissions target in excess of 2.05 million tonnes, the province will have to start recycling higher cost non-core materials (composite materials, other plastics, etc.).

While the paper itself goes into much greater detail surrounding the methodology and findings, the key take away was that what is being recycled, is often more important than how much is being recycled. Much of the current dialogue surrounding waste management revolves around increasing recycling rates and waste minimization, but we must take a step back and ask whether a higher recycling rate should be the focal point of policy objectives. Are there metrics beyond recycling rates and emission impacts that need to be considered when evaluating the long-term sustainability of waste management systems?

While movements towards more sustainable waste management options should certainly be promoted, we must recognize that the most sustainable system is not necessarily the one that recycles the most material. Although recycling is a central component of developing sustainable waste management systems, its adoption must be weighed against budgetary, social and environmental considerations. For every one dollar we spend on one activity, is one dollar less to spend on another – in a resource constrained world, how we chose to prioritize our goals and allocate these resources is of paramount importance. The careful balancing act between continuous improvement in diversion, GHG abatement and cost containment is a topic that requires more attention now more than ever.

Note: For the purposes of this editorial, I have defined carbon abatement/reduction as being a barometer for environmental performance. I recognize that carbon/GHG reduction is only one component of a much larger environmental footprint, and a true life cycle analysis should consider things like water consumption/acidification/eutrophication/toxicity etc.

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About the Author

Calvin Lakhan, Ph.D, is currently co-investigator of the “Waste Wiki” project at York University (with Dr. Mark Winfield), a research project devoted to advancing understanding of waste management research and policy in Canada. He holds a Ph.D from the University of Waterloo/Wilfrid Laurier University joint Geography program, and degrees in economics (BA) and environmental economics (MEs) from York University. His research interests and expertise center around evaluating the efficacy of municipal recycling initiatives and identifying determinants of consumer recycling behavior.

Why expanding the list of acceptable Blue Box materials hurts more than it helps

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Written by Calvin Lakhan, Ph.D, Co-Investigator: “The Waste Wiki” – Faculty of Environmental Studies at York University

Preface: For readers outside of Ontario, the Blue Box refers to the province’s residential recycling program for printed paper and packaging.

What is being proposed?

On October 19, 2020, Ontario’s Ministry of the Environment, Conservation and Parks released a proposed regulation to govern the Ontario Blue Box program under the Resource Recovery and Circular Economy Act, 2016 (the RRCEA). The regulation will transition Ontario’s blue box recycling program for printed paper and packaging to full extended producer responsibility (EPR).

The proposed regulation expands the list of acceptable Blue Box materials to include “packaging-like products” and certain single-use items. Examples of packaging like products include: aluminum pie plates, tin foil, plastic wraps and food trays, plastic cutlery/plates and single use drink containers.

The intent of this change is three fold: 1) By including packaging-like products, the regulation targets items that so far have been free riders in Ontario’s Blue Box system. 2) Reduce public confusion regarding what is considered an acceptable Blue Box material in their jurisdiction. The proposed change will standardize accepted Blue Box materials, with the same set of materials being collected throughout the province 3) Move towards harmonizing approaches to managing packaging waste at a national level – British Columbia has announced plans to include single-use and packaging-like products in its list of obligated materials by 2023

What is the issue?

The MOECP’s decision to expand the list of acceptable Blue Box materials to include “packaging like products” is inconsistent with previous direction from the province and contradicts the messaging surrounding the federal single use plastics ban.

Prior to the transition plan, municipalities actively discouraged accepting packaging like products in the Blue Box. The primary concern expressed by municipalities was that it was extremely difficult, if not impossible, to recycle many of these materials. The costs associated with attempting to collect and recover packaging like products was prohibitive, and could not be rationalized given that these materials were often treated as contamination (both at the material recycling facility, and downstream re-processors), and subsequently disposed of.

Under a full EPR system, wherein packaging producers assume 100% of the physical and financial responsibility for managing packaging waste at end of life, the messaging surrounding packaging like products has now changed. While the infrastructural and technical barriers to recycling these materials remains unchanged, who pays for it has. The potential costs to producers is significant, as none of the pre-requistes for effectively recycling packaging like products are in place – there is limited infrastructure, no viable end markets and no end use applications for these materials.

With respect to the federal directive to ban single use plastics, Ontario’s decision to try and include these items as part of the Blue Bin program is perplexing. Allowing households to place single use packaging in the Blue Bin erroneously suggests that these materials are going to be recycled. As a result, the public receives two conflicting messages – the federal government is saying that single plastics should be banned due to their lack of recyclability and impact on the environment, while the provincial government is saying to include these materials as part of the residential recycling program.

Consumers already struggle with differentiating between what products can be recycled, and what cannot. Consumers have also expressed skepticism as to whether the materials that are collected are actually recycled at all. With this in mind, the decision to include packaging like materials as part of the Blue Box program is likely to exacerbate uncertainty, and serve to undermine the efficacy and credibility of the federal single use plastics ban.

It is the university’s assertion that expanding the list of acceptable materials will result in adverse economic, environmental and social outcomes for Ontarians and lead to consumer confusion regarding what materials are actually recyclable.

What will this cost?

Quantifying the economic impact of expanding the list of acceptable Blue Box materials is enormously challenging, largely because the vast majority of packaging like products cannot be recycled in our existing system. Further complicating matters is that we don’t have a clear understanding of the quantities of packaging like products that are being generated in the province – in short, there is not enough data at this time to make informed policy decisions.

With that in mind, this section attempts to model a scenario using best available data that is intended to provide directional guidance as to what this change will cost. Additional research needs to be done in this area as better data becomes available.

Note: The data used in this section is based on the Stewardship Ontario Pay in Model (used as an analog to estimate net costs per tonne for packaging like products) and 55 waste audits conducted throughout Ontario, between the periods of 2015 and 2020. Audit data is used to estimate the quantities of packaging like products that are being generated by households each year.

Based on the waste audit data, Ontarians, on average, generate approximately 567kg of waste per household every year (Note: Estimates range from as little as 411kg/hh to more than 740kg/hh depending on where the audit was conducted). Overall residential waste generation in Ontario, based on a population of 5,169,175 households, is 2,933,196.66 Tonnes.

Of this, packaging like products makes up approximately 4.01% of all waste generated. Table 1 below provides a detailed breakdown of waste composition, as well as net cost per tonne to manage these materials as part of the Blue Box.

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Weighted Average Net Cost Per Tonne: $2002.52/T

% of Packaging like products of overall waste: 4.01%

Based on our aggregated audit data, 39% of packaging like products are found in the recycling stream (Blue Box), 8% in the Organics Stream (Green Bin) and 53% in the garbage stream (Trash)

Using the above data, we can now estimate what the potential cost would be if Ontario were to move forward with the decision to include packaging like products as part of the Blue Bin. To reiterate, these numbers should be interpreted with caution due to the paucity of available data. This modeling assumes that the material analogs we have taken from the PIM model, accurately reflect packaging like products. We also assume that packaging like products are being recycled, as opposed to being screened as contamination and subsequently discarded. The results of this analysis are shown in Table 2 below:

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Are there environmental benefits?

In light of the enormous costs attributable to expanding the list of acceptable Blue Box materials, it seems prudent that we evaluate the environmental benefits of this decision. The increase in costs could potentially be rationalized if it yields a more sustainable outcome (in this context, we refer to environmental sustainability)

Unfortunately, the inclusion of packaging like products in the Blue Bin does not mean that these materials will be recycled. Based on available infrastructure, processing technology and end markets, there is a very strong likelihood that these materials will be treated as contamination (either at the MRF, or at the processor) and subsequently discarded.

If the landfill is the likely outcome for these materials, it begs the question, “What are we trying to achieve?” At this juncture, it’s not entirely clear what expanding the list of Blue Box materials achieves other than a higher cost for producers (and subsequently, a higher cost for households).

While proponents of this legislative change will cite that packaging producers will have the ability to innovate and develop new end markets and end use applications for these materials, there is very little evidence (if any) of that occurring. Policy makers often erroneously assume that packaging producers have a significant degree of autonomy and control regarding what happens with their products at end of life. The reality is that the vast majority of CPG companies are “market takers”, subject to macro-economic conditions that ultimately determine the value and recyclability of a particular material. In short, if a material had inherent value at its end of life when recycled, then markets would already exist for these materials. Forcing packaging producers who operate in Ontario to invest and develop the infrastructure to recycle packaging like products places them at a distinct disadvantage, as they are incurring an additional cost to manage and recycle materials that would not be recovered if left to a free market.

An argument could even be made that the decision to include packaging like products as part of the Blue Box yields an inferior environmental outcome relative to landfilling. Based on the modeling shown in Table 2, we estimate that the decision to include packaging like products would result in an additional 45,872.26 tonnes being managed as part of the Blue Box system. These are materials that would ultimately have to be collected, transported and sorted – all of which have a carbon impact associated with each activity. For context, GHG impacts of recyclable collection and sorting (at the MRF) makes up approximately 19% of the total carbon footprint of recycling activity. If packaging like materials are ultimately sent to disposal due to a lack of adequate infrastructure or end market demand, then the province’s decision would have actually added GHGs to the environment, not prevented it.

Whatever environmental benefit that may result from including packaging like materials in the Blue Bin is predicated on these materials actually being recycled. Both the public and policy makers need to understand that diversion/recycling is not based on the quantities of collected material inbound to a MRF – at present, recycling is defined as baled and marketed material. In the absence of end markets for packaging like materials, what does the province think is going to happen to the material that is collected?

Caveats to this analysis and key considerations

To reiterate, the estimates used in this analysis use the costs associated with attempting to actually recycle packaging like products. Given that these materials are not actually recyclable in the given system, we have used cost analogs taken from the Stewardship Ontario Pay in Model. Numerous parties (including the university) have expressed concern regarding the accuracy and validity of the data found within the PIM model, but at this juncture, there is no alternative source that can be publicly referenced.

If packaging like products were to be included as part of the Blue Bin, the most likely scenario is that the vast majority of the material is going to be screened and end up in landfill. Even in this scenario, producers would be obligated to pay for the costs of collecting, sorting and disposal – while significant, the only credible way to estimate what this would cost would be to conduct an activity based costing study.

In a review of the proposed changes being put forward by the MECP, there are two key takeaways are: 1) What are we trying to do? If these materials can’t be recycled and ultimately be discarded, why bother including them to begin with? The decision to do so would result in industry spending millions of dollars to achieve an outcome that is no different than what is happening today.

2) At this juncture, there is insufficient data regarding how much of these materials are being generated, where it ends up, and what it costs to manage them. Given the degree of uncertainty surrounding the credibility of the data, it would be in the best interest of all stakeholders for the government to defer the decision to include packaging like materials in the Blue Box (until the potential impacts are better understood).

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About the Author

Calvin Lakhan, Ph.D, is currently co-investigator of the “Waste Wiki” project at York University (with Dr. Mark Winfield), a research project devoted to advancing understanding of waste management research and policy in Canada. He holds a Ph.D from the University of Waterloo/Wilfrid Laurier University joint Geography program, and degrees in economics (BA) and environmental economics (MEs) from York University. His research interests and expertise center around evaluating the efficacy of municipal recycling initiatives and identifying determinants of consumer recycling behavior.

Ontario’s Proposed Blue Box Transition Legislation: Progress, or doubling down on a broken system?

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Written by Calvin Lakhan, Ph.D, Co-Investigator: “The Waste Wiki” – Faculty of Environmental Studies at York University

For much of this past week, I have been asked by a range of stakeholders and media outlets to provide my thoughts on Ontario’s proposed Blue Box transition plan. Generally speaking, the headlines surrounding the province’s announcement have been positive: “Ontario is developing a stronger, more effective Blue Box Program”, and that the proposed changes will be “Good for the environment, good for the economy, encourage investment, job creation and spur innovation in the recycling and resource recovery sector”.

Before I offer my opinion, let us first touch on what changes are being made to the Blue Box program, and what the perceived benefits are supposed to be:

What is being proposed:

  • Standardize and increase the list of materials accepted in the Blue Box, including paper and plastic cups, wraps, foils, trays, bags, and other single use items such as stir sticks, straws, cutlery and plates.
  • Transition the costs of the program away from municipal taxpayers by making the producers of products and packaging fully responsible for costs, resulting in an estimated savings of $135 million annually for municipalities.
  • Expand blue box services to more communities, such as smaller, rural and remote communities, including those under 5,000 people.
  • Set the highest diversion targets in North America for the various categories of waste producers are expected to recycle such as paper, glass, beverage containers and rigid and flexible plastic, encouraging innovation such as better product design and the use of new technologies for better environmental outcomes.
  • Expand the steward obligation to include three additional IC&I sectors (long term care/retirement homes, elementary/secondary schools, and private multi-residential buildings)
  • Provide bin “twinning” in all public spaces (increasing density of both garbage and recycling collection points in public spaces and other high foot traffic areas)

What are the (purported) benefits:

  • The transition to 100% producer responsibility will reduce municipal costs by approximately $135 million dollars annually
  • Municipalities will pass this savings on to households, in the form of reduced property taxes or levy-rates.
  • Standardizing the list of materials accepted in the Blue Box makes it easier for Ontarians to understand “what goes in the bin”
  • Expanding the list of materials accepted in the Blue Box makes it easier for Ontarians to participate “Put it in the bin, and we will figure it out”
  • Increasing service coverage to ensure that smaller communities, particularly in the provinces rural and northern areas, are able to receive Blue Box collection
  • A producer lead system is believed to have better control at containing costs, realizing operational efficiencies, and designing more sustainable packaging
  • A producer lead system will be able to invest in sorting/processing infrastructure and develop robust end markets for difficult to recycle light weight and composite materials
  • Investments in recycling infrastructure will lead to job creation and spur the development of new secondary industries.

For all intents and purposes, the province has doubled down on their approach to try and recycle “everything” and “everywhere” – after all, more recycling can’t be a bad thing, can it? This is the question that I find myself grappling with as I consider the scope and potential impact of these changes – telling people that recycling can actually be a bad thing has made me a relatively unpopular figure in Canada’s waste world.

While I have written on this subject extensively in the past, I think the easiest way to start this conversation is: “How much are willing to spend to recycle something?”. Now, the answer to this will depend on the material in question, perceived risks to the environment, available infrastructure and the attitudes/opinions/awareness of the person answering the question, but the purpose behind the question is to gauge at what point is it no longer beneficial (economically or environmentally) to recycle a product? In an ideal world, we would want to recycle everything, but our reality (particularly in Ontario), is that we operate in a resource constrained system. There is an opportunity cost to every decision that we make – a dollar spent on one activity, is one less dollar spent on something else. Which is what makes the government’s announcement so perplexing…. The costs of operating our existing Blue Box program have grown exponentially in the past decade, as waste management infrastructure has become increasingly incompatible with the types of packages that are being used today. This is actually one of the primary concerns expressed by municipalities in Ontario – our households want to recycle and put everything in the Blue Bin, but much of these materials are either not recyclable, or are virtually worthless as a commodity.

I have personally been part of conversations advising municipalities about what does and does not belong in the Blue Bin – overwhelmingly, the sentiment was that many composite and light-weight materials shouldn’t be collected, and the challenge was educating households (and city councils) that some things are better off not being recycled -a daunting task given Canadians love affair with recycling)

Catalyst for change

So, what has changed? Why do we suddenly want to expand the list of materials accepted in the program, including materials we know cannot be readily recycled in our current system? The answer as it turns out, is who pays the bill. In the transition to full producer responsibility, packaging producers (often referred to as stewards in Canada), will be financially and physically responsible for end of life packaging waste. The transition to 100% EPR has been a long time coming, but the decision to expand the list of approved materials and include three additional IC&I (Industrial, Commercial, and Institutional) sectors came as a surprise to many. The province has repeatedly said that the costs associated with these changes are relatively minor ($15 million dollars in their original estimates) – however, when faced with push back on these estimates and questions were raised regarding the methodology used to calculate them, the province acquiesced and revised their estimates to $115 million dollars (please see attached regarding the university’s cost model critique that served as the basis for the revised numbers). This is in addition to the $135 million that producers will now have to pay because of the transition to 100% EPR.

Regardless of these cost increases, the sentiment shared by many advocates of the transition plan is that if a producer makes it, they should pay for it. Even if it cannot be recycled now, then producers will have to find ways to develop the necessary infrastructure and end markets to make their packaging recyclable in the future. It is these investments in the recycling system that will not only lead to increased diversion but spur economic growth in the sector. This is a very easy message to get behind and sell to the public – multi-billion dollar CPG companies have shirked their responsibilities for too long, and they must pick up the tab for keeping packaging waste out of landfill. But let us dig a little deeper into the implications behind transitioning the costs to producers, as well as what it means to expand the scope and scale of the Blue Box program.

Right off the bat, we know that the minimum bill that producers will face is $250 million dollars annually, as estimated by the MOECP. But this paints an incomplete picture of the broader situation – We must consider the costs of developing the collection and sorting infrastructure to effectively capture new materials (something that has yet to be modeled). If Ontarians are now able include plastic cutlery, foil trays, wrap and bags etc. in their Blue Box, our waste management system will require a massive overhaul.

As of today, most of the items listed above are treated as contamination, screened out at material recycling facilities, and ultimately landfilled. Municipalities don’t want to collect these materials due to the difficulty (and cost) associated with recycling. End markets do not want them either as they have little to no value, and limited end use applications. If anything, the presence of these materials in the recycling system increases the costs of managing all other materials – something that the university has attempted to explain using the endogeneity hypothesis: “the “endogeneity hypothesis” refers to a situation where the cost of one material is dependent on the presence of other materials being managed in the system.  As a crude example, a hypothetical material mix of just newsprint and cardboard may take minutes to sort one tonne, but a mix of newsprint, cardboard and film would take substantially longer to process the same amount. There is a collinearity in the impact on costs that materials have on one another that are virtually impossible to predict.

While there have been no formal attempts to model the marginal costs associated with infrastructural investment, it is a fair assumption to say that it will not be $0 – the $250 million dollar estimate made by the MOECP fails to capture the financial impact of developing, operating and maintaining new infrastructure. These are costs that will not be absorbed by industry, as (in my opinion) costs will be transferred to consumers and ultimately manifest in the form of higher prices for packaged goods. While many have vehemently disagreed with this assertion, arguing that EPR will save households money as a result of a decrease in municipal taxes, the math says otherwise.

Impact to industry and households

In a previous post, I mentioned that York University had conducted a study examining the impact of the Blue Box transition plan on packaging prices (and subsequent effect on households). This study found that depending on locality, the increase in “basket of goods” prices resulting from the proposed legislation would range between 6% and 12% (a number that has been criticized by transition advocates). However, even if we are to set aside assumptions surrounding the direct, indirect and induced effects resulting from the proposed legislation; and assume that municipalities reduce property taxes/levies in direct proportion to the $135 million dollars resulting from the transition to 100% EPR; we are still adding (at minimum) an additional $115 million dollars in annual program costs as a result of service expansion. If we begin to add in the costs associated with building additional infrastructure, end market development, P&E and administrative expenses, it quickly becomes apparent that producers will be on the hook for hundreds of millions of dollars over and above what they pay today. Even if people disagree with whether these costs will be downloaded onto the consumer, costs internalized by industry can result in numerous unintended and unwelcome outcomes. Perhaps it is best to think of the issue as reducing investment in the province by $115 million dollars – can these costs be readily borne by industry, and if not, what will the outcomes be? (job loss, operational contraction etc.).

These proposed changes would be much more palatable if it resulted in superior environmental, economic, and social outcomes for Ontarians. However, the benefits of trying to recycle many of the materials that are being added to the Blue Box are highly questionable. In addition to the technical difficulties associated with trying to recycle these materials, the costs to do so are enormous. To make matters worse, the carbon savings resulting from recycling are nominal relative to the benefits of high impact materials like aluminum, OCC/OBB etc. As a result, producers are going to be paying a huge bill for the Blue Box, but to what end?

What are we trying to achieve?

Returning to the topic of opportunity cost, the primary issue is trying to determine what we want to achieve with the Blue Box. Based on what the province has put forward under the transition plan, it appears as though Ontario’s goal is to recycle more, expanding the list of accepted materials and setting the highest material specific diversion targets in North America. The Blue Box transition plan is trying to eliminate the barriers to recycling, making it simpler, easier to understand, accessible and convenient to all households. But there in lies the problem – despite Ontario’s fixation on recycling, it is not, nor has it ever been, the preferred end of life scenario. It seems a touch ironic that the Blue Box transition was announced during waste reduction week. We continue to conflate recycling with sustainability, reinforcing the narrative to households that recycling is our primary goal.

In many ways, the proposed legislation can do more harm than good – even if we are to set aside the costs of operating the system – what is it are we asking Ontarians to do? Based on the government’s announcement, we are making it as easy as possible for households to participate. While this can certainly encourage participation, it can also lead to complacency and confusion. Households (as much as possible) need to understand that not all recycling is created equal, and that waste reduction, reuse and composting are additional strategies that may be more appropriate depending on the waste in question. Our goal should not be to trying to maximize the quantity of material being put in the bin – it should be about achieving the best environmental outcome at the lowest possible cost. What good is it to have households put plastic wrap and foil trays in the Blue Bin, only for it to get tossed as residue, or downcycled at an exorbitant cost.

Proponents of a “recycling first” approach will make an argument that recycling will help maximize the full use value of a material, and ultimately help keep these materials out of landfills and our environment. I don’t disagree – however, I do think that we need to remember “what did I have to give up doing it?”.  Over the past 10 years, Ontario has spent almost 3 billion dollars on the gross costs operating the Blue Box program. During this same period, recycling rates have stalled and are trending downwards, year over year increases in operating costs are in the double digits and changes in the packaging mix have rendered existing infrastructure dated and incompatible. Was this money well spent? Could it have been better utilized on other sustainability initiatives? Could we have used that money to invest in end of life technologies that do not rely on recycling to divert material? Despite my criticism of the program, I do not have an answer for this. In hindsight, the province could have done things differently, but nobody could have predicted package light weighting, the Chinese sword and collapses in commodity prices etc. Considering these unexpected challenges, Ontario should be commended for what it has accomplished with the Blue Box. However, now is the time that we should be moving away from our reliance on recycling, not  doubling down on it.

Moving forward

When reviewing the proposed changes to the Blue Box program, I am reminded of the quote “Insanity is doing the same thing over and over again and expecting different results”.

For almost 20 years, we have seen the growth, maturation and success of the Blue Box, as well as the more recent challenges that have called into question its long-term viability. The current narrative surrounding Blue Box legislation is that the transition to 100% EPR producer run system will somehow be able to overcome these issues. According to the government, the Blue Box transition will usher in an era of reduced taxes, more sustainable packaging choices, new processing technology, increased accessibility, and improved diversion. Based on research done to date and experiences from other jurisdictions, it is questionable as to whether any of these things will happen.

What I find truly perplexing is the insistence that packaging producers will somehow be able to operate the system more effectively than municipalities and find solutions to the problems that plague our existing system. How exactly will producers be able to sort, process and market materials that currently have no end markets (film, multi-resin plastic, coated fiber etc.)? How will producers be able to effectively provide service to rural and northern municipalities under 5000 residents? How do we expand the steward obligation to include certain IC&I sectors, when we do not know how much waste is being generated and who is managing it? If municipalities have historically struggled to address these issues, why would producers be able to?

Handing producers the keys to the system and saying, “You figure it out”, is absolving the province of the responsibility to develop legislation that is effective, economic and equitable. It will also negatively effect Ontarians, as they will be the ones left having to pay the tab for any costs borne by industry. There are literally hundreds of millions of dollars at stake annually, so it is prudent that we make informed and reasoned decisions.

It has taken Ontario the better part of a decade to adopt a 100% EPR model for packaging waste, and now the province wants to introduce a slew of additional changes, without fully understanding the potential impacts. This was aptly highlighted when the MOECP revised their estimates surrounding the cost of the proposed changes, as they were an order of magnitude off (factor of 10). As we move forward with the new legislation, I think it is critical that the province approach any proposed change with caution, evaluating the full range of impacts to all affected stakeholders.

At a more general level though, I think it is time we re-evaluate the role of recycling in both our society and in promoting sustainability. For the better part of 30 years, we have been inundated with the message to recycle – it has been a fixture in many of our lives, and my earliest memories as a budding environmentalist was putting kraft paper in the Blue Bins in elementary school. The act of recycling makes us feels good, because we think it does good (for the environment and the economy). But that does not mean that we can’t be doing better. I do not want people to misconstrue this post or my opinion as being anti-recycling or anti-EPR – I think both can play a significant role in helping achieve our diversion and carbon abatement goals. What I do want to emphasize is that recycling will not always yield the best outcome – it is merely one tool in our tool box, and the decision to recycle something will depend on a multitude of factors that are site and situation specific. Waste reduction, reuse, composting, energy from waste and even landfilling may be preferred to recycling depending on the circumstance.

In my opinion, the Blue Box transition plan is a new coat of paint on a dated strategy – while it does move the province towards a 100% producer responsibility model, it is premised on a prescriptive “recycling first” approach. It is time for the province to start thinking “outside of the Blue Box” and identify new end of life strategies to help Ontario achieve its sustainability goals in the long run.

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About the Author

Calvin Lakhan, Ph.D, is currently co-investigator of the “Waste Wiki” project at York University (with Dr. Mark Winfield), a research project devoted to advancing understanding of waste management research and policy in Canada. He holds a Ph.D from the University of Waterloo/Wilfrid Laurier University joint Geography program, and degrees in economics (BA) and environmental economics (MEs) from York University. His research interests and expertise center around evaluating the efficacy of municipal recycling initiatives and identifying determinants of consumer recycling behavior.

Ontario’s blue box transition: Bringing individual producer responsibility to packaging

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Written by Jonathan Cocker, BLG and Denisa Mertiri, Green Earth Strategy

On October 19, 2020, Ontario’s Ministry of the Environment, Conservation and Parks released a proposed regulation to govern the Ontario blue box program under the Resource Recovery and Circular Economy Act, 2016 (the RRCEA). The regulation will transition Ontario’s blue box recycling program, covering paper products and packaging (PPP), to full extended producer responsibility (EPR).

Since 2002, Ontario has operated a shared responsibility framework for EPR, with municipalities and producers each bearing half the cost of municipal blue box programs. Municipalities, however, have remained in charge of operating recycling systems. The new regulation transitions both financial and operational responsibility to producers. It also aims to refine EPR using the innovative policy mechanism of individual producer responsibility (IPR), making each individual “producer” of PPP directly and individually responsible for resource recovery of the PPP placed onto the market in the province.

Using IPR, the province aims to hold individual producers accountable for the entire lifecycle of their own products – a watershed event in the development of a circular economy for PPP.

There are a number of notable requirements in the draft regulation implementing an IPR framework for PPP in Ontario.

Expanded list of materials

Currently, the blue box system includes paper products and packaging materials. The new regulation expands this list to include “packaging-like products” and certain single-use items. By including packaging-like products, the regulation targets items that so far have been free riders in Ontario’s blue box system. These include aluminum pie plates or bags bought in bulk. These items are indistinguishable from many considered packaging, such as aluminum plates used to package pies sold in supermarkets. With respect to single-use products, the regulation targets products such as straws, cutlery, plates used to consume food, and drink containers that are “ordinarily disposed of after a single use, whether or not they could be reused.”

Ontario’s choice to include these items aligns Ontario’s list of materials with those regulated as PPP in British Columbia. BC recently announced plans to include single-use and packaging-like products in its list of obligated materials under its EPR system by 2023. Perhaps this is a sign of more cross-country harmonization on PPP regulation, consistent with the federal initiatives in this area.

Special rules for compostables

Citing challenges with determining proper management approaches for compostable materials, the new regulation imposes registration and reporting obligations with respect to compostable materials, but does not mandate collection or management requirements.

It is hoped that these lowered obligations will provide policymakers with the information necessary to determine how these materials are used in Ontario, and to suggest better approaches to their management. Only a few facilities in Canada may be able to manage compostable materials. Optical scanners at most material recovery facilities cannot sort these materials, while manual sorters cannot easily tell the difference between certain types of compostable and conventional plastics.

This arguably reflects the ongoing uncertainty around the role that bioplastics and alternatives to plastics will play in Canada’s management of PPP.

New definitions targeting online free riders?

Online retail is growing rapidly worldwide, particularly during COVID-19 when physical stores are, at times, inaccessible. Ontario is no exception to this trend. This heightened online retail activity is, however, introducing in Ontario’s market products by producers that have no presence in Ontario or Canada and may not be registering as producers or paying fees to fund Ontario’s recycling system. This scenario has exacerbated the quantities of free riders in most EPR systems, whose products are collected by local recycling systems that they do not fund. Past product stewardship laws in Canada have reinforced this divide by only obligating resident sellers.

The draft regulation appears to address this challenge by designating “marketplace facilitators” that contract with “marketplace sellers” as producers if they are resident in Canada. The regulation defines “marketplace facilitator” as a person who,

(a) contracts with marketplace sellers to facilitate the supply of the marketplace seller’s products by,

(i) owning or operating an online marketplace or forum in which the marketplace seller’s products are listed or advertised for supply, or

(ii) transmitting or otherwise communicating the offer or acceptance between the marketplace seller and a buyer, and

(b) provides for the physical distribution of a marketplace seller’s products to the consumer, such as by the storage, preparation, or shipping of products

This definition appears to capture many online retailers who make the products of many sellers available to Ontarians.

Annual allocation table

Most surprisingly, the regulation also sets out a number of rules that will govern the creation of an “annual allocation table,” the first of which should be submitted as early as March 31, 2022. These rules help to determine which producers will be responsible for collecting from which sources, notionally allocating to them specific residences, facilities or public spaces each year.

The rules also set out the factors to be considered in the making of these allocations. Although the regulation leaves allocation decisions with producers and their producer responsibility organizations (PROs), once in force, the rules will have a regulatory effect over all producers and PROs in the system.

The allocation method is a novel approach to regulating producer responsibility and appears to run counter prior provincial commentary that the new blue box regulation under the RRCEA would be outcomes-focused and not prescriptive as to the manner in which producers chose to fulfill their obligations. The possibility that the Minister might either police existing rules, or even make rules for producers and/or their PROs should they fail to successfully do so themselves, appears to deviate from the free market foundations of this IPR model.

Conclusion

The new blue box regulation under the RRCEA is innovative in its decisions to implement a policy as complex as IPR for PPP. In addition to the novel approaches already discussed, many others bear mentioning, including reducing management requirements for use of recycled content in products, and joint and several liability between and among producers and their PROs for certain obligations under the regulation.

The proposed regulation is available for public comment for 45 days (until December 3, 2020). In addition, the province is also looking for feedback on amendments to Regulation 101/94 under Ontario’s Environmental Protection Act. Regulation 101/94 sets rules for recycling and composting municipal waste and standards for blue box waste management systems, including collection, acceptance, transportation and processing. As much is changing, stakeholders may have a lot to say before Ontario finalizes the new PPP regime.

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About the Authors

Jonathan Cocker, a partner at BLG, provides advice and representation to multinational companies on a variety of environmental and product compliance matters, including extended producer responsibilities, dangerous goods transportation, GHS, regulated wastes, consumer product and food safety, and contaminated lands matters. He assisted in the founding of one of North America’s first Circular Economy Producer Responsibility Organizations and provides advice and representation to a number of domestic and international industry groups in respect of resource recovery obligations.

Denisa Mertiri J.D., is the founder of Green Earth Strategy. Green Earth Strategy advises industry, cities and government on how to create and maintain practical and effective circular economy and waste management strategies with staying power.

Timeline extended for Ontario Blue Box Transition Plan

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Stewardship Ontario, recently announced that the Ontario government had granted an extension for the submission of the blue box transition plan to the Resource Productivity and Recovery Authority (RPRA).  Stakeholders now have until July 8, 2020 to submit input on how Ontario’s Blue Box recycling program should be transitioned to a full producer responsibility model.

Stewardship Ontario is a not-for-profit organization funded and governed by the industries that are the brand owners, first importers or franchisors of the products and packaging materials managed under recycling programs in the Province of Ontario.

The RPRA is an arms-length Ontario Government organization that was set up to support the transition to a circular economy and a waste-free Ontario.  The RPRA oversees three waste diversion programs- Blue Box, Municipal Hazardous or Special Waste (MHSW), and Waste Electrical and Electronic Equipment (WEEE)– and their eventual wind up.

Now being developed by Stewardship Ontario, the plan was originally scheduled for submission to the Resource Productivity and Recovery Authority (RPRA) on June 30, 2020 but the timeline has been revised as follows:

  • Stakeholder feedback on transition plan proposals extended to July 8, 2020
  • Transition plan submitted to RPRA no later than August 31, 2020
  • RPRA approval maintains original deadline of December 31, 2020

Consultation materials supplied by Stewardship Ontario originally scheduled for the week of April 6 have been postponed and are expected to be made available to stakeholders shortly.

Stewardship Ontario will be reaching out to stakeholder group associations to schedule meetings and discuss initial feedback on the materials before the rescheduled consultation webinars.

Ontario looking to revamp recycling and plastic waste programs

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The Ontario government recently appointed a special advisor to assist in revamping the Province’s recycling programs.

The Ontario government has engaged David Lindsay, currently the President and CEO of the Council of Ontario Universities, as a Special Advisor on Recycling and Plastic Waste prepare a report by the end of the summer on how to tackle plastic waste and litter, improve recycling, increase products that can go into the blue box, and ensure producers are responsible for managing plastic and other packaging at end-of-life.

Ontario Environment Ministry, Rod Phillips, stated in the news release that he was engaging Mr. Lindsay in an effort to find solutions to the Province’s languid recycling rates. The current Blue Box Program has been in place since the 1980s and had world-renowned success in recovering residential printed paper and packaging for recycling. However, Ontario’s waste diversion rates have stalled at just over 60 per cent for the past 15 years.

“Ontario families take pride in doing their part for the environment. In fact, our own city of Kitchener was the birthplace of the world’s first Blue Box program,” said Minister Phillips. “Knowing this, I was disappointed to learn that, while Ontario families work to sort and recycle properly, government and industry are failing them. Ontario’s recycling rates have been stalled for 15 years and up to 30 per cent of what is put into blue boxes is sent to landfill. Not to mention, recent stories highlight how some of Ontario’s plastic waste is being unsustainably shipped across the ocean to the Philippines and Malaysia.”

In the open-facing letter to the Special Advisor, the Environment Minister has requested that work be guided by the following public policy objectives:

  • Standardization across the province of what can be recycled in offices, parks, public spaces and homes;
  • Improve diversion rates and increase what materials can be recycled;
  • Reduce litter and waste in communities and parks;
  • Improve Ontario’s Blue Box Program by requiring producers to pay for the recycling of the products they produce, through achieving producer responsibility;
  • Maintain or improve frequency of Blue Box collection; and
  • When increasing diversion in the residential sector, consider how these policies can also enable diversion in the institutional, commercial and industrial sector.

As Special Advisor, Mr. Lindsay has limited direct experience with waste issues. Prior to his current role as the President and CEO of the Council of Ontario Universities, he was President and CEO of the Forest Products Association of Canada and of Colleges Ontario, an advocacy organization for the province’s 24 colleges of applied arts and technology. Mr. Lindsay has experience in the Ontario Public Service previously holding the position of Deputy Minister for the Energy and Infrastructure, Northern Development, Mines and Forestry, Natural Resources, and Tourism and Culture portfolios.

David Lindsay

“I’m looking forward to helping Ontario’s municipalities and producers work together to address plastic litter and improve recycling in our province,” said David Lindsay. “Having stakeholders come together to identify concerns and find solutions will be integral to reinvigorating the province’s Blue Box Program and solving the problem of plastic litter and waste.”

In the Made-in-Ontario Environment Plan, Ontario committed to transitioning the costs of the Blue Box Program away from municipal taxpayers to make the producers of products and packaging fully responsible. Shifting to producer responsibility will obligate producers across the province to pay for and manage their materials. Based on 2017 costs, municipalities would save about $125 – $175 million annually once full producer responsibility for the Blue Box Program is put in place.

Reducing plastic waste and litter and making producers responsible for the end-of-life management of their products is a key part of Ontario’s Made-in-Ontario Environment Plan.