MSW Management: EPR and Opportunities in Canada

1. OECD & Ministry of Natural Resources and Environment Waste Management SeminarSept. 2011Moscow Love Environment Inc. 126 William Street, Stratford, Ontario N5A 4Y1 loveenvironment@routcom.com Tel: 519- 305- 0984 Cell: 647-248-2500

2. Presentation Outline • Background • what is counted as MSW in Canada • MSW management as a shared responsibility • national MSW tonnes generated, disposed and diverted • current status of MSW in Canada • EPR • what is extended producer responsibility - OECD definition/history • Why/benefits of EPR • Canadian Stewardship Programs • BC/Quebec/New Brunswick/Ontario new initiatives • packaging and printed paper in Ontario • voluntary vs Mandatory programs • Lessons Learned • harmonization and the role business • EPR issues and opportunities in Canada • Possible implications as the Russian Federation considers EPR Love Environment Inc.

3. What is Municipal Solid Waste (MSW)? • MSW is any material (generally known as garbage, recyclables and compostables) for which the generator has no further use, and which is managed at disposal, recycling, or composting facilities • Includes materials from the residential and non-residential sectors: • Industrial, Commercial, and Institutional (ICI); and • Construction and Demolition (C&D) • In Canada (unlike the Russian Federation) residential and ICI waste are measured, managed and paid for separately Love Environment Inc.

4. MSW Management is a Shared Jurisdiction Jurisdictional Roles: • Municipal: • responsible for the collection, diversion, and disposal of MSW from residential sources; commonly own landfills and implement by-laws to drive diversion; primary service or contracting agent for residential waste services • Provincial/Territorial: • movements of wastes within jurisdiction, licensing of generators, carriers and treatment facilities, extended producer responsibility policy and program development; provincial generation, diversion and disposal tracking • Federal: • international agreements; transboundary movements of hazardous waste, hazardous recyclable material, and non-hazardous waste; CEPA 1999 • Developing national initiatives, gathering statistics and performing analyses, supporting innovation, providing information, and building capacity; encouraging inter-provincial collaboration (e.g. EPR program harmonization through Council of Ministers of the Environment) Love Environment Inc.

5. MSW Generation Quantities of MSW* generated (diverted + disposed) Love Environment Inc.

6. MSW Diversion & Disposal Quantities of MSW* diverted (recycled + composted) Quantities of MSW* to disposal (landfilling and thermal treatment) • * Includes Residential, ICI and C&D Love Environment Inc.

7. Opportunities • MSW between 2002 and 2008: • Generation: 12% increase • Disposal: 7% increase • Diversion rates: 22% to 25% (stagnant) • Residential waste between 2002 and 2008: • Generation: 6% increase • Disposal: 9.6% decrease • Diversion rates: from 23% to 34% • Non-residential waste between 2002 and 2008: • Generation: 16% increase • Disposal: 18% increase • Diversion rate: from 21% down to 19% • 97% of the MSW for disposal is landfilled • GHG emissions from landfills are decreasing slightly Love Environment Inc.

8. Life Cycle Flow Diagram Extracting Manufacturing Processing Use Disposal Recycling Defining EPR • Extended Producer Responsibility: • an environmental policy approach in which a producer’s responsibility, physical and/or financial, for a product is extended to the post-consumer stage of a product’s life cycle (OECD, 2001) • In Canada, EPR programs are commonly called “stewardship programs”; producers are responsible for the impacts of their products and packaging and are called (often in legislation) “stewards” Love Environment Inc.

9. Why EPR ? What benefits? • Waste quantities continue to grow – slowly but steadily • Total disposal: 2000 = 23,168,870 tonnes; 2006 = 27,249,177 tonnes • Per capita disposal: 2000 = 752 kg/capita; 2006 = 835kg/capita (Statistics Canada data); now over one tonne per person per year • Waste diversion rate have stalled at about 24% • Concerns about hazardous waste and toxic substances • Challenges with specific waste streams – e.g. used crankcase oil, household hazardous wastes, electronics, ozone depleting substances • Environment Canada/Health Canada Chemicals Management Plan – categorization, assessment and risk management (under CEPA 1999) • Need to address problematic wastes, avoid disposal and manage residuals in an environmentally sound manner • Need for cost accounting for the full life-cycle of a product • Need for incentives for better environmental design • THE KEY : Need to shift to a non-tax funding mechanism Love Environment Inc.

10. Canada has been at this a long time! • First curbside pilot recycling program – Kitchener, Ontario 1981 – I was there!! • Optimism about the waste diversion benefits of recycling • Municipally funded • Initial Ontario and beverage industry subsidy for operating costs and start-up capital • National Packaging Protocol – 1989 - 2000 • Voluntary shared industry, government, consumer responsibility model • Multi-stakeholder National Packaging Task Force formed in 1989 • National target of 50% reduction in packaging waste by December 2000 – 20% by Dec 1992; 35% by Dec 1996 • Statistics Canada surveys; Environment Canada secretariat • Met 50% target in 1996 • Mostly business efficiencies - less impact on consumer packaging • Wrapped up in 2000 Love Environment Inc.

11. Key developments in waste management/waste diversion in Canada & internationally in the 2000s • Advent of single stream recycling – recycling service must be as convenient as disposal (Ontario 3Rs Regulations) • Emergence & growth of organics diversion programs – windrow/in-vessel technologies (more tonnes diverted now from organics than household blue boxes) • Advancements in collection vehicles, processing systems (e.g. optical sorting technologies) and markets (e.g. thermoform PET) • Innovations in program financing – user pay/pay-as-you-throw programs & dedicated waste utilities • Consumer education, engagement & demands • Social media exploding Love Environment Inc.

12. CCME CANADA-WIDE ACTION PLAN FOR EPR • Canadian Council of Ministers of the Environment (CCME) EPR Task Force provided broad guidance on EPR • Canada-wide Principles for Electronics Product Stewardship • Canada-wide Principles for EPR • EPR product evaluation tool • Canada-wide Action Plan for EPR, October 2009 – promotes co-ordinated and harmonized EPR action on priority products by an agreed timetable: • Phase 1 (within 6 years) – packaging and printed papers; mercury containing lamps; electronics; household hazardous and special wastes; automotive products • Phase 2 (within 8 years) – construction and demolition wastes; furniture; textiles; carpet; appliances; ozone depleting substances • June 2011 CCME announcement emphasizes priority work on packaging Love Environment Inc.

13. Key EPR Program Elements • End-of-life responsibility is transferred to producers from municipal taxpayers • Costs are borne by producers but can and often are passed on to consumers through visible point of purchase fees • Producers are free to act collectively or individually • Producers obligated to prepare stewardship plans and meet targets • Governments level the playing field and monitor and enforce targets • Best programs operate within flexible performance-based regulatory frameworks i.e. minimal government role in operational details • Consumers have free and reasonable access to the program with a responsibility to participate • Programs aim to encourage environmental design (not very successfully so far!!) Love Environment Inc.

14. CANADIAN STEWARDSHIP AND EPR PROGRAMS (StewardEdge) Love Environment Inc.

15. CANADIAN STEWARDSHIP AND EPR PROGRAMS (MGM Management) Love Environment Inc.

16. Packaging and Printed Paper: Ontario 50% • Shared responsibility model • Program directed and approved through • Waste Diversion Ontario • Producers, through Stewardship Ontario, fund 50% • of net eligible municipal program costs – annual municipal data call by WDO • Municipalities have kept operational responsibilities • Waste Diversion Act review recommended switchto100% EPR in 2009 – recommendation has not been acted on – hampered by MHSW eco fee controversy • More complex and prescriptive approvals • process than in other provinces Love Environment Inc.

17. Stewardship Ontario – Ontario collective “steward” for printed paper and packaging • Created as “non-share capital corporation” in 2004 • 1800+ obligated companies are required to report packaging and printed paper tonnes sold into Ontario households each year • In 2011, stewards paid municipalities $92 million (50% of total costs) for blue box recycling for 4 million households– system diverts about 1 million tonnes/year • Stewards also invest (about $8 million/year)in municipal program improvements • Agreement stipulates that stewards pay to “best practice costs” Love Environment Inc.

18. Stewardship Ontario Blue Box Data 2003-2009 Love Environment Inc.

19. Recent Major Regulatory and Policy Initiatives British Columbia • May 2011 – mandates 100% producer responsibility for packaging and printed papers • Involved in Western Product Stewardship Collaborative (WPSC) - drafting a pacific coast EPR Action Plan Quebec EPR framework legislation and regulation June 2011 • Shifts blue box to 100% EPR – producers fund, municipalities continue to operate Mandates internalization of program costs New Brunswick Clean Environment Act regulations prohibit charging separate fees to • consumers in the waste paint EPR program Ontario EPR “eco fees” controversy - failed launch Phase 2 of the Municipal Hazardous and Special Wastes program – July 2010; Waste Diversion Act review underway Love Environment Inc.

20. The Move from Voluntary to Mandated Programs • Established and voluntary programs being covered by EPR regulations • Pesticide Containers Manitoba – CleanFARMS submitted a stewardship plan for their existing program B.C.’s packaging regulation will be expanded in the future to cover non-residential packaging, potentially including agricultural packaging • Batteries The RBRC Chargeup2Recycle program is now expanding to accept all batteries and is covered under EPR regulations in B.C., Manitoba, Ontario and shortly in Quebec • Hazardous Wastes Originally managed through some take back to retail initiatives In Manitoba, Ontario and Quebec significant numbers of these products are now or will be soon directly covered under EPR regulations Love Environment Inc.

21. Harmonization of Regulations and Programs Harmonization of Regulations and Policy • There is broad agreement on EPR policy in Canada and the need for level playing field regulations • Provincial regulators communicate regularly, particularly between adjoining jurisdictions where the lack of harmonization causes program difficulties • Generally regulatory harmonization still appears to be challenge for governments particularly given an apparent weakening of the CCME role Harmonization of Programs • Harmonization is increasingly less of an issue for producers who have shown an ability to work together between programs • Program cooperation and harmonization for electronics and used oil have shown results • Producers are also starting to coordinate within jurisdictions – e.g. Recently formed Stewardship Agencies of British Columbia organization – province-wide EPR program guide Love Environment Inc.

22. EMERGING CHALLENGES AND OPPORTUNITIES • EPR concept is well established in Canada - no longer any real debate about the merits • Debate has shifted - now focused on how to make EPR programs more effective and efficient for both producers and for governments • With growing program maturity there are a number of emerging challenges and opportunities: • Fulfilling the promise and potential of the CCME EPR Action Plan • Moving beyond residential wastes to those from the industrial, commercial and institutional sectors • Harmonization of both regulations and programs • Cost internalization and fees • Driving environmental improvements • Increasing complexity with increasing programs and product designation • Moving towards true producer “cradle to grave” responsibility Love Environment Inc.

23. Covering the Industrial Commercial and Institutional (ICI) Sectors • Historic focus on wastes and products from the residential sector • Waste diversion targets and environmental product improvement objectives cannot be met unless the ICI sectors are engaged • The CCME EPR Action Plan makes no distinction between residential and ICI sources • EPR regulations are being proposed to cover ICI sources as well as residential (e.g. Quebec and BC) • The move to cover ICI sources will bring a new set of producers, who at the moment are generally ill-informed about EPR • ICI sources will challenge existing recycling capacity - EPR programs will have to phase in and adapt to new volumes Love Environment Inc.

24. Cost Internalization and Fees – an on-going issue and debate in Canada • A complicated issue that needs to be addressed in the context of other issues such as EPR objectives to incentivize product environmental improvements • The Canada-wide EPR Action Plan supports program costs being internalized as a factor of production • A number of programs do operate with no visible fee to the consumer and internalized costing • The majority of EPR regulations in Canada are silent on the cost internalization/fee visibility issue • A significant number of programs operate with visible point of purchase fees • Visible fees have been accepted in the majority of cases by consumers; visible fee proponents point to its consumer education value – ie diversion costs money • Some producers are strongly opposed to cost internalization • Visible fees can however be very controversial - Ontario July 2010 • Quebec and New Brunswick are the only two jurisdictions so far to regulate against visible consumer fees Love Environment Inc.

25. EPR LESSONS FROM CANADA AND WHAT TO WATCH FOR • EPR Lessons • EPR is applicable to a wide range of end-of-life products and wastes • EPR programs can meet high waste diversion targets • Producers can organize and operate programs without compromising other business objectives • Successful programs are built on effective measurement and mature management systems • The public is supportive, generally governments of all political persuasions are on side and businesses are engaged • What to look for in the years ahead in Canada • Continuing growth in the number and scope of programs • Harmonization – largely driven by producers to reduce costs • Moves by governments and by producers to internalize program costs • Increasing coordination of program promotion and education • Municipalities vacating direct program operations (partly to reduce costs) Love Environment Inc.

26. What this might mean for EPR developments in the Russian Federation • Canada – Russia similarities • Both large land masses with dispersed populations • 34 mil vs 140 mil • 3.73 persons km vs 8.4 persons/km • Both also highly urbanized • Canada 80% urban; Russia 74% • Both have three levels of gov’t active in waste and cold winters (so seasonal organics and great hockey teams!) Love Environment Inc.

27. What this might mean for EPR developments in the Russian Federation • 1. Start “small” with something that is: • Manageable (e.g. beverage containers) • Important (e.g. litter reduction) • Sustainable (e.g. plastics/aluminum revenues) • Partners exist (i.e. private sector and other provinces/states/countries • Lots to learn from Nova Scotia, Alberta and British Columbia on how to develop/manage beverage container management programs Love Environment Inc.

28. What this might mean for EPR developments in the Russian Federation • 2. Data, data, data • Waste generation information • Residential/ICI information • Disposal/licencing information • Material specific data (e.g. on beverage container generation, packaging types, shipping Love Environment Inc.

29. What this might mean for EPR developments in the Russian Federation • 3. Learn from the successes and failures of other jurisdictions • Legislation • Roles of producer companies • Market development • Service providers/best practices • Municipal success stories • Learn from others mistakes before you repeat them! Love Environment Inc.

30. THANK YOU - FOR MORE INFORMATION • Organization of Economic Cooperation and Development (OECD) www.oecd.org/environment • Canadian Council of Ministers of the Environment (CCME) – Canada-wide Action Plan for EPR www.ccme.ca/ourwork/waste • Environment Canada www.ec.gc.ca/epr • British Columbia Ministry of Environment www.env.gov.bc.ca/epd/recycling • Alberta Recycling Management Authority (ARMA) www.albertarecycling.ca • Electronics Stewardship Association of British Columbia (ESABC) www.esabc.ca • Waste Diversion Ontario (WDO) www.wdo.ca • Used Oil Management Association (UOMA) www.usedoilrecycling.com • CleanFARMSwww.cleanfarms.ca • Geoff Love, LoveEnvironemnt, loveenvironment@routcom.com Love Environment Inc.