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Recycling! Recycling? About risks in the circular economy .

Updated: Jun 16, 2023


The circular economy is experiencing a true renaissance as part of the political Green Deal. dilitik has declared war on the throwaway society, and everyone is now eagerly awaiting new specifications and regulations from the EU. Understandably, the topic of "recycling" is of central importance in the context of the circular economy. And this topic also provides an excellent illustration of the pitfalls that can arise when implementing a circular economy in corporate practice.

You will read the following:

  • Everything you always wanted to know about plastics or simply should know now

  • Hurdles in the implementation of a transparent supply chain for companies based on the example of "recycling

  • How the German and European supply chain law makes the wind blow rougher

  • Outlook, which new ways exist

Anchoring sustainable cycles in law

The circular economy is at the core of the European Green Deal and aims to extend the life cycle of products and close material loops. This starts with innovative, forward-looking product and packaging design. After all, the design of a product is responsible for up to 80% of the environmental impact of a product's life cycle. Legally, this design is to be regulated by the Ecodesign Directive, which thus also replaces the German Closed Substance Cycle Waste Management Act of 2012: all product groups at EU level will be trimmed for environmental friendliness, recyclability and energy efficiency.

Recycling takes on a special role in this process. This is because only if the starting materials are recyclable can they be brought in in the sense of the circular economy. But this is where the gap between the green future and the recycled reality becomes apparent.

Renaissance of Recyclings

Recycling generally means the return of a waste material to the production process. The materials that have been processed in a product or packaging are to be returned to the material cycle in order to manufacture new products.

Walk through the supermarket today and you may have noticed how many packages have the note or seal "recyclable" or "made from 100% recyclable material - *except for cap". Recycling is a huge image factor in sustainability communications. In the 1980s, the age of waste separation began. The waste disposal practiced until then was recognized as one of the main factors of environmental pollution. For the first time, the media addressed the finite nature of our natural resources. Recyclable materials were to be recycled - voluntarily and on a private basis. Waste became a valuable economic asset: the secondary raw material. But next to the waste paper garbage cans, recycling remained rather in its infancy.

For although the Germans are actually considered a diligent waste-separating nation, their own ecological responsibility was readily outsourced to labels as time went on. The well-known Green Dot, for example, has a catch that is at least as green: it was designed to save recyclables from the landfill and instead return them to the recyclables cycle. And of course it promoted the tendency to separate waste among ordinary consumers. But in the end, products such as yogurt pots, including aluminum lids and cardboard wrappings, ended up and still end up in the same yellow garbage can. A guarantee that the recycling of all three recyclables is reliably prevented.

Hurdles to making the leap to a circular economy

„Regel Nr. 1 der Kreislaufwirtschaft: Plastik ist nicht Plastik“ Martin Stuchtey , german geologist and economist

In other words, plastic consists of millions of different permutations of polymers, laminates, pigments, additives, antioxidants, hardeners and plasticizers. And it is precisely this sum of all this that cannot be recycled (Brandeins, p 35). Moreover, recycling only works for those types of plastic that can be shredded and melted, and then pressed into new shapes.

So we face two challenges in a transformation to a circular economy: first, a firmly established, fairly convenient throwaway society. For up to now, it has been easy and inexpensive to buy quickly and throw away quickly. Thanks to petroleum, which has been a cheap raw material for decades.

And on the other hand, the variety of materials and their interplay, which are processed in a product and cannot just be recycled separately. And both challenges are intensifying each other unfavorably. And in all likelihood will lead to the next label jungle:

Recycling: a mechanism for „greenwashing“?

If you enter the keyword combination "recycling" and "greenwashing" in Google, you will get over half a million hits. Because the hurdles mentioned above are already becoming visible today - even though they are supposed to remain hidden behind all kinds of recycling promises and seals. And this affects consumers just as much as manufacturers! For one thing, studies by high-profile NGOs are stepping onto the media podium.

"Industry groups and large companies have pushed for recycling as a solution. In doing so, they have shirked any responsibility" Lisa Ramsden, Campaign Manager Greenpeace USA (Stern 24.10.2022)

On the other hand, there are also increasingly frequent false statements about the recycled material. This not only deceives consumers, but increasingly also manufacturers. For example, many packages are not recycled PET, but plastic newly produced from crude oil. As this is simply more cost-effective. What is missing is transparent, complete insight into the lower levels of the supply chain.

„It's like money laundering, the origin of the PET is not transparent. It can be concealed in the blink of an eye." Reinhard Schneider, Owner of Werner & Mertz (Öko-Marke „Frosch“)

The need for significantly more oversight and insight, not only into the recycling chain, is currently growing massively. Legal developments at German and EU level are casting their shadows ahead:

The transparent supply chain

From January 2023, the German Supply Chain Sourcing Obligations Act (LkSG) will take effect; a stricter supply chain law applicable at EU level is already in the starting blocks. Still thirsting for information regarding the LkSG - this way:

The LkSG will define what obligations companies have in complying with the protection of human rights and environmental rights, and will specifically require companies to identify, prevent, end or at least minimize risks and violations of human and environmental rights along their supply chains. This will be a major challenge for companies:

From raw material procurement and logistics to product returns and recycling processes, companies must document and store all manufacturing and production conditions and make them accessible to their stakeholder groups. 
This includes not only the actions of the company's own business unit, but also the actions of direct and indirect suppliers!

Penalty in the amount of up to 2%

of the total annual turnover.

If companies violate the LkSG after it has come into force, management must expect severe sanctions such as a restriction of market access or even liability risks of up to 2% of total annual sales. The LkSG at the European level even provides that companies should also be held liable for damages under civil law.

In simple words, it all boils down to a legally mandated, transparent supply chain to transform the economy into a circular economy.

The autonomous view into the supply chain

In all probability, a company's promising path to the circular economy will not run solely along standardized, regulated paths shaped by laws. Rather, it is precisely in terms of credible communication in personal responsibility and independent, proactive action.

Here, professional disclosure, screening and control of one's own supply chain - including all direct and indirect third-party suppliers - is gaining in importance. Because in the future, there will be two types of companies: those that rely on general standards. And those companies that take control into their own hands. Guess which of the two groups will be better protected from image damage.

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