Recycle or pay

Olga Nikitina, Alexey Shapovalov – Kommersant newspaper, 07.11.2017

The Ministry of Industry and Trade does not intend to renounce the idea of demanding the disposal of a number of goods in 2018: the authority believes that in Russia there are enough capacities for recycling them and expects investments from manufacturers in the system for their collection. The Ministry of Natural Resources has not yet taken into account the idea of the Ministry of Industry and Trade in the draft report to the president, but officials expect to finalize the document. Market participants believe that the initiative of the Ministry of Industry and Trade will result in the sale of recycling certificates or an increase in the payment of environmental tax and waste disposal. 

According to Kommersant's information, the Ministry of Natural Resources sent the draft report to the Ministry of Industry and Trade on the execution of the president’s instructions – on expanding the list of goods and packaging subject for recycling, and increasing its standards. The department proposes to maintain the standards for 2018 for most goods at the level of 2017, and to expand the list from 36 to 49 product groups. The department did not include in the document a proposal of the Ministry of Industry and Trade to oblige manufacturers to completely dispose a number of goods and their packaging, including household non-electric devices, lighting equipment, and from 2019 – paper, cardboard and products made of them, tyres and plastic products, and from 2020 – computers and household appliances, accumulators, refrigeration and ventilation equipment (see “Kommersant” of October 2).

As Kommersant was told, the Ministry of Industry and Trade would insist on revising the report. “The market participants had two years to create a collection system”, they note, adding that “the capacities of processors of tyres, accumulators, oils, technological fluids, paper, metal, and glass in Russia are loaded at 50-60%", and in countries, that have introduced the extended responsibility system, manufacturers invest in the recycling industry. “The standard of recycling in the Russian Federation is reviewed every three years and with powerful lobbying capabilities can stop in tracks for undefined time or even turn the clock back”, – officials fear.

The business representatives, interviewed by Kommersant, support the Ministry of Natural Resources: changes should be made in advance – they affect the budgets of companies. Expansion of groups of goods and packaging for recycling is due for the addition of packaging to them, which “previously was not regulated as part of goods, and could not be identified”, Lyubov Melanevskaya from RusPEK explains. “The outcome of shortcomings in the bylaws has already been the disruption of the declarative campaign for the extended producer responsibility for 2016 as well as gap of the state ecological tax (1.5 billion rubles instead of 6.5 billion roubles)”, – she adds. It should be noted that in the draft budget for 2018-2020, eco-tax revenues are expected in the amount of 2.3 billion roubles, in 2017 – 1.3 billion roubles.

As Ms. Melanevskaya believes, 90% of waste management operators are still not ready for separate waste collection, in particular because of “the risks of building waste incineration plants that will intercept the flow of secondary raw materials”. Part of the recycling facilities mentioned by the Ministry of Industry and Trade, are not actually engaged in processing or do not work. “Sometimes these are enterprises, where people resell non-ferrous metals”, – says Anton Guskov from RaTEK.  – Often it is because the company does not have a license that the capacities are not loaded enough”. According to him, there are no capacities for reprocessing refrigerators and air conditioners in Russia.

High standards of recycling “did not contribute in increasing the collection of worn-out tyres”, says Nadezhda Churmeeva from the Tyre Manufacturers Association. For some products offered for full disposal (corrugated packaging, in particular), producers and importers “are invited to include in the price of goods the expenses for paying eco-tax for what is already being processed”, Mrs. Melanevskaya says.

“In the absence of transparent regulation, companies are not ready to invest in the system of recycling”, – Anton Guskov says.  – Producers will be forced to abandon execution of the extended responsibility principal, actually, in favour of a turnover tax. No one will deal with the issue of recycling, the landfills will grow, and reprocessing will lose all customers”. The market participants also see the risk of mass trade of recycling certificates. “The cases of selling “empty” certificates have already happened in the world practice. This led to the collapse of the waste management system”, Lyubov Melanevskaya adds.