Sustainability is the “S” in ESG goals, and Circular Economy—with international cooperation—is vital to the fight against climate change. We defined Circular Economy in our last post, but let’s start with a fundamental element of Circular Economy and define that, too: waste.

Let’s Talk About Waste

Despite advances in how we think about—and approach—creating a Circular Economy, many producers and consumers still tend to think about the global economy as a linear process: commodities move along a one-way value chain until they reach their final destination. At the end of this unidirectional conveyor belt lies waste—the inevitable byproducts of this steady churn of value creation.

In the context of this linear economy, calling something “waste” does not merely signify that it is the byproduct or leftover of some other process—it suggests that the product is valueless, having reached the end of life as a useful commodity. The notion that waste is completely devoid of value is so deeply ingrained in our understanding of the modern economy that it is actually baked into the ways we use the word “waste” in American English. We “waste” food, and much of what is not eaten is thrown away in the “waste bin.” Not seizing the moment is a “wasted opportunity”—an opportunity that is irrevocably lost to the past. “What a waste of time,” we sigh after an unnecessarily prolonged Zoom call, thinking of all the more valuable ways we could have utilized those lost minutes. Beyond a cultural nuance, “waste” is something that no longer has a place in this world.

This casual conflation of “waste” and “garbage” is reflected in our policy language as well. The U.S. Resource Conservation and Recovery Act (RCRA) defines solid waste as “any garbage or refuse, sludge from wastewater treatment plant, water supply treatment plant, or air pollution control facility and other discarded material, resulting from industrial, commercial, mining, and agricultural operations, and from community activities.” The EU definition of waste—“any substance or object which the holder discards or intends or is required to discard”—similarly implies that anything we no longer want should first and foremost be handled like trash.

This is not merely a semantic problem. These unclear definitions of waste introduce meaningful ambiguities into the way that countries handle, regulate, transport, and “dispose” of waste. The EU definition, for instance, leaves open the possibility that “a waste [may] ceases to be a waste,” such as when “the substance or object is to be used for specific purposes” or “a market demand exists for such a substance or object.” But the EU’s suite of waste regulations are so opaque that the default of handling used materials as anything other than valuable products—or not believing that the market demand is already present at the time the decision is made to recycle—creates serious opportunity loss.

Transitioning to an understanding of the global economy based on the Circular Economy model will require a better understanding—and adopted conviction—that waste is not part of the Circular Economy. Under a Circular Economy model, previously used, cast-off, and obsolete goods and materials that are recyclable and for which a market exists are reintegrated into the manufacturing supply chain as a secondary raw material input with a much greener footprint than freshly-mined, virgin materials. There is great value in that scenario.

The era of one-size-fits-all approach to, basically, anything – including in policy and nomenclature – is long gone. So here, too, with the outdated, simplistic definition and application of the word “waste.”

Close the Definitions Loopholes

Accepting this dichotomy between “waste” and “secondary raw materials” will also affect the meanings of the terms we use to discuss the handling of secondary raw materials—principally terms about recycling and reuse. Currently, the policy definition of “recycling” and “recyclable” and “recyclability” are a mixed bag. Incredibly, the United States does not have statutory definitions of these terms. Instead, there is an exemption to solid waste regulations for some—but not all—recycled commodities in RCRA. Recyclability guides with clear criteria for manufacturers to follow to guarantee the product is recyclable are available from credible industry sources, including the APR Design® Guide for plastics and the AF&PA Design Guidance for Recyclability for paper goods, but these guides are not endorsed by governments. Regulations have a role in ensuring proper post-use management of the things we use, but the lack of definitional clarity leads to mis-management, pollution, opportunity costs, material loss and a failure of the Circular Economy.

The United States could begin to close the loop on the Circular Economy by establishing clear statutory definitions of “recycling” and “recyclable material.” A definition of “recycling” was included in the bilateral infrastructure bill, the INVEST Act (Title IV, Sec 70401.a.3), but as written, it only applies to the narrow section of the bill that allocated funding to the Department of Energy for battery recycling. The federal government could apply this definition across its laws and regulations if teed up as such in a new law. That definition is:

The term “recycling” means the series of activities:

(A) during which recyclable materials are processed into specification-grade commodities, and consumed as raw-material feedstock, in lieu of virgin materials, in the manufacturing of new products;

(B) that may include collection, processing, and brokering; and

(C) that result in subsequent consumption by a materials manufacturer, including for the manufacturing of new products.

Furthermore, this definition references “recyclable material,” but no clear definition for that term exists, either. There is an exemption to the Definition of Solid Waste for scrap metal in RCRA [40 CFR §261.4(a)(13)], but the absence of a clear distinction between “solid waste” and “recyclable material” means that recovered materials—such as critical minerals needed in a range of renewable energy, defense applications and consumer goods—run the risk of being regulated the same as trash. Therefore, a definition of recyclable materials, consistent with the recycling definition above, could be the following:

The term “recyclable material” means a material that can be processed or was processed through a series of recycling activities into a specification-grade commodity, and consumed as raw-material feedstock, in lieu of virgin materials, in the manufacturing of new products.

It will take time for these definitions to (1) be taken on board for legislative proceedings and then (2) wind their way through the legislative process. However, obtaining U.S. government buy-in to these definitions—or something close to it that maintains the integrity of distinctions between “waste” and “recyclable materials” (aka “secondary raw materials”)—would lay the foundation for U.S. leadership on the Circular Economy globally.

Getting the Nomenclature Right

What do these changes to the definitions of “waste” and “recyclable material” mean at a practical level?

The Harmonized Tariff Schedule (HTS) is managed by the World Customs Organization (WCO) and is used to track trade in all goods and materials. The system forms the fundamental infrastructure for facilitating trade by informing customs agents about the goods entering and exiting a country. The codes are organized in a digit system, with the first two digits indicating the high-level product group and following pairs of digits to further describe the product. All countries are obligated by the WCO to use the same first six digits universally; after that, countries have discretion to use additional digits to refine the product description further.

The HTS includes “waste and scrap” codes for most building block materials to allow nations to track the movement of aluminum, steel, paper, plastics and other end-of-life materials across their borders. This separate set of codes for “waste and scrap” allows governments to track trade in these goods independently from the trade of their virgin or finished-good cousins. But the fact that these codes cover “waste and scrap” artificially conflates waste/disposal materials and scrap/recyclable materials. Unfortunately, it would likely take years—if not decades—to change these codes—but why not take steps now to change that?

The good news is that some of these changes are already underway. On January 1, 2022, the WCO implemented new “waste and scrap” codes for electronics under subheading 8549. Like the “waste and scrap” codes for building materials, these new codes will allow nations (for the first time) to track the movement of reusable and non-usable electronics separately from new electronics. It will likely take several years to get a comprehensive picture of trade in these products, especially to understand the volume of goods moving to countries that do not have the capacity to properly handle them. But the new codes are a step in the right direction.

Of course, more work remains to be done. Currently, WCO members—at the request of the Basel Convention—are reviewing new codes to further disaggregate different plastic “waste and scrap” streams, of which there are currently just five. The WCO could be asked to look at other opportunities for codes that would allow for better tracking the trade of post-use materials.

These are all important tools to improve the tracking of trade in these materials, but what is still missing is a regulatory mechanism to distinguish waste/trash from secondary raw materials so that these codes cannot be used by fraudsters to illegally move trash (which has its own codes) into other countries. These regulatory reforms—if paired with a broad-based consensus that secondary raw materials are invaluable manufacturing inputs—would help set the world on a path toward realizing a Circular Economy model.

Photo Credit: iStock, ChayTee