News
CEO Ruud Sondag: Give products a raw materials passport
1 October 2011
The European Commission is sharpening European sustainability objectives in order to alleviate the scarcity of raw materials. The Commission wishes to improve the free market system for environmentally friendly products, so that companies will be given an incentive to use recycled materials in their production processes.
The Dutch government also recently outlined its position in this respect in two important documents sent to the House of Representatives. The Raw Materials Memorandum and the Letter on Waste break away from traditional thinking on CO2 and justifiably broaden the sustainability agenda with a 'raw materials file'.
As a pioneer in the area of sustainability and because of its unique position in the global logistics chain, the Netherlands advocates 'raw materials roundabouts'. Closing recycling loops for raw materials and advanced recycling techniques will receive more focus, which will benefit both the environment and the economy. The present government explicitly links economy and ecology. I would like to make several additional concrete proposals that would transform the circular economy into a cutting-edge marketing tool for 'The Netherlands Inc." even more quickly.
Raw materials labelling
The present government's target for recycling is 83% by 2015. However, we will only be able to close the recycling loop if we also make arrangements for minimum reuse percentages. This means that a substantial proportion of new products will have to consist of recycled materials. Manufacturers could already take this into account in the design phase, which would make it interesting to give products a "raw materials passport". How exactly is a given product put together? How much recycled material was used and what quantities of natural raw materials were extracted from the environment to make it?
Products could be given a raw materials label similar to the nutritional data placed on food packaging. This would enable manufacturers to show clearly how their products are made and the details of their arrangements in respect of this aspect of their chain responsibility. In this way, consumers could choose for sustainably made products. The label is also needed for effective recycling and upcycling. Knowing what a product contains makes taking it apart and separating the components much easier.
I also think it would also be worthwhile to introduce a VET (Value Extracted Tax) scheme that could function alongside or perhaps even replace the current VAT system. The more natural raw materials extracted from the environment that a product contains, the higher the rate of VET. Incidentally, this is not a new idea. It was proposed by the late entrepreneur and management guru Eckart Wintzen several years ago, but it now seems to have gained sufficient momentum to warrant introduction. The VET could function as a stick or carrot for the material reuse percentage in products.
International agenda
Although the Netherlands could be an important pioneer, the raw materials issue should not only be tackled nationally. Europe has always played a pivotal role in linking economy and ecology. Alongside the establishment of the internal market, environmental legislation is one of the most positive of the European Union's accomplishments. The international aspect is vitally important to ensure that any scheme for raw materials is set up with appropriate and adequate care.
Europe could also once again play a significant and innovative role by adding the political discussion on raw materials scarcity to the agenda of existing international consultative platforms for climate talks. This could, for example, break through the impasse that has held up the drawn out debate on CO2. The reason for this is that recycling reduces CO2 emissions and, as a modus operandi, could therefore become a weapon in the fight against climate change. This would also make it possible to tap into existing UN climate funds, with which necessary innovations could be accelerated.
Scarcity
The fact that increasingly more reclaimed raw materials will be used is irrefutable because it is backed up by one of the most fundamental economic principles: scarcity. However, recyclables will only obtain the upper hand when it is cheaper for manufacturers to use recycled instead of virgin materials. The government should carry out the difficult task of adjusting the financial break-even point in favour of important material flows. If this is not done, this point is only likely to be reached when supplies of a given raw material are virtually or entirely exhausted.