The growing regulatory role of industrial alliances in transitioning towards circular plastic value-chains

By Amy O'Halloran, 16 February 2022

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Amy O'Halloran, Irish Research Council Government of Ireland, Postgraduate Scholar at the School of Law, University College Cork

The current scale of waste generation presents an economic problem in relation to the loss of valuable materials, and creates environmental problems as a result of the challenges associated with managing the huge volume of waste material produced globally each year. The World Bank has estimated that around 33% of the municipal solid waste is not managed in an environmentally safe way. The inadequacy of waste management practices and infrastructure around the world became particularly apparent following China’s ban on imported solid waste. Since then, restrictions have also been introduced by Malaysia and Turkey, leading to waste shipments from European countries being turned away by the relevant national authorities.

EU’s Second Circular Economy Action Plan

Confronting the problem of waste generation and alleviating the pressures on our waste management systems is imperative. The overarching ambition of the European Green Deal is the achievement of a climate neutral, resource efficient, and competitive economy. The European Commission has emphasised the necessity of transitioning to more sustainable economic systems based upon more circular patterns of production and consumption. The EU’s second Circular Economy Action Plan seeks to orientate Europe towards the achievement of these ambitions through technological and normative development.

The second Circular Economy Action Plan was published in 2020, following a first plan in 2015. The Plan sets out the Commission’s intention to develop a ‘sustainable product policy framework’ which aims to achieve greater circularity through product design, consumer empowerment and ensuring circularity in production processes. The Commission’s implementation strategy will involve greater engagement with industry. This approach accords with the European Green Deal which states that achieving a circular economy will require the “full mobilisation of industry”.

The rise of Industrial Alliances

The EU’s new Industrial Strategy published in 2020 and updated in 2021, seeks to orientate industry towards circularity by formalising cooperation through industrial alliances. An industrial alliance is an organisational form within industry which seeks to mobilise industrial actors towards conquering technological objectives.  To address the technological challenges associated with realising a circular economy, the Commission seeks to utilise a number of industrial alliances across key value chains, including the plastics value chains where the Circular Plastics Alliance was established in 2018 to assist the implementation of the EU’s Strategy for Plastics. In particular, the Circular Plastics Alliance has been tasked with progressing the development of product design standards.

Through their involvement in standard-setting, some industrial alliances are undertaking norm-making functions which have tended to be performed by the legal and political systems of states. As a result, industrial alliances such as the Circular Plastics Alliance could come within a functionalist conception of law such as Karl Llewellyn’s ‘law jobs theory’ (1940) for which William Twining (2009) provides a contemporary interpretation, seeing it as identifying six ‘law jobs’ (functions) that are necessary for the welfare of social groups. The most relevant jobs for pursuing an analysis of the EU’s engagement with industrial alliances are firstly, the provision of ‘net positive drive’ by the EU institutions, and secondly, the ‘rechannelling of conduct and expectations’ within industry by the Circular Plastics Alliance which will involve coordinating the plastics sector towards more circular patterns of behaviour.

Provision of Net Positive Drive by the EU

The provision of net positive drive involves the integration and incentivisation of a social group towards certain collective goals (the establishment of a circular economy). In the case of establishing a European circular economy, net positive drive is provided by institutions such as the European Commission. In the second Circular Economy Action Plan and Industrial Strategy, the Commission sets out a plan which seeks to incentivise and coordinate society and industry towards the collective objective of realising a circular economy. Net positive drive is important as it shapes the environment within which industry is embedded and thereby helps to steer the output of industrial alliances.

Coordination through the Circular Plastics Alliance

The net positive drive provided by the EU’s circular economy agenda will require greater cooperation across society and industry towards more circular patterns of behaviour. As part of the overall effort, the Circular Plastics Alliance has the operational objective of coordinating behaviour in the plastics sector in the short term through securing voluntary commitments from industrial actors, and in the longer term through the development of design-for-recycling standards, which may eventually regulate some design choices in plastics value chains.

In September 2021, the Circular Plastics Alliance published a Design-for-Recycling Work Plan which aims to develop design guidelines across the following priority sectors: agriculture, packaging, construction, and electrical and electronic equipment. It is anticipated that any guidelines produced will eventually be translated into European Standards (CEN standards and CENELEC Standards). Accordingly, the Circular Plastics Alliance may come to perform a significant norm-making function in orientating the plastics sectors towards the objectives of the Commission’s future sustainable product policy framework.

The capacity of the Alliance to further the EU’s circular economy agenda is acknowledged in the EU’s second Circular Economy Action Plan. The legitimacy of the Alliance will depend upon its contribution to furthering this agenda.  The location of the Circular Plastics Alliance within industry suggests that the Alliance may occupy a good position to coordinate collective action by responding quickly to innovations while also building upon the best industrial knowledge. The coordination of industry in this way could help accelerate the transition towards circularity.

Conclusion

The EU’s engagement with industrial alliances could prove to be an important element in the implementation of the second Circular Economy Action Plan. While the actual capacity of the Circular Plastics Alliance as a standard-setter is untested, its intention to develop design-for-recycling standards could signal significant potential. It has been estimated that up to 80 per cent of a product’s costs and potential environmental impacts are determined at the product design stage. Accordingly, if the Alliance can help to orientate  behaviour at the product design stage, then the Alliance could make a significant contribution to addressing the current waste crisis, and establishing circularity across plastics value-chains.


Note: This blog is based on the author’s doctoral research which is funded by the Irish Research Council and the Environmental Protection Agency and supervised by Professor Owen McIntyre and Professor Maria Cahill.

Tags: Circular Economy, Sustainability, Futuring Nordics
Published Feb. 16, 2022 3:01 PM - Last modified Feb. 17, 2022 11:52 AM
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