knowledge 27 October 2022 |

The way forward is circular

The Government has described the new Circular Economy and Miscellaneous Provisions Act 2022 (“Act”) as a piece of landmark legislation.¹ In March of this year, it gave some context to the Dáil in relation to the upcoming Act:

The foundations of the linear economy based around the take-make-waste model are creaking at the seams. Embracing a regenerative circular economy, where waste is minimised, where economic growth is decoupled from resource consumption, and where the value of goods and materials is retained in our economy for as long as possible, is an environmental, economic and strategic necessity for Ireland.

The Act sets out a comprehensive suite of regulatory policy and economic measures that, taken together, are designed to help Ireland embrace the opportunities of a future defined by this circular transition.

What is the circular economy?

The “circular economy” is defined for the first time in Irish domestic law.

This is an economic model and the policies and practices which give effect to that model in which:

• production and distribution processes in respect of goods, products and materials are designed so as to minimise the consumption of raw materials associated with the production and use of those goods, products and materials;

• the delivery of services is designed so as to reduce the consumption of raw materials;

• goods, products and materials are kept in use for as long as possible thereby further reducing the consumption of raw materials and impacts harmful to the environment;

• the maximum economic value is extracted from goods, products, and materials by the persons using them; and

• goods, products and materials are recovered and regenerated at the end of their useful life.

Circular economy strategy

The move to a circular economy will be facilitated by a circular economy strategy. Section 7 of the Act now puts an existing Government circular economy strategy on a statutory footing. That existing version of the strategy was published in December 2021.² It provides an overarching policy framework for the public, private and voluntary sectors. It sets out the first high-level steps needed to make the transition to the circular economy possible.

Subsequent iterations will feature increasingly detailed and ambitious targets. Completion of a second, more action-orientated version of the strategy, is a current Government priority. Under the Act, the Minister for the Environment, Climate and Communications (“Minister”) must submit this second version for Government approval within 6 months of the commencement of section 7. The strategy will then be reviewed every 3 years.

Going forward, the strategy must set out targets in respect of construction, agriculture, retail, packaging, textiles and electronic equipment. In addition, it may set out targets in relation to other sectors of the economy. It must also promote the use of criteria relating to the circular economy in public procurement.

The targets to be set out in respect of any particular sector of the economy must include some or all of the following:

• reductions in material resource consumption and the use of non-recyclable materials;

• increases in the use of re-usable products and materials;

• increased levels of repair and re-use of products and materials;

• improved maintenance and optimised use of goods, products and materials.

Where the Minister has set out targets for a sector, he or she must also promote the entering into by sector participants of voluntary sectoral agreements in respect of those targets.

The strategy must also set out actions that are reasonably necessary to support Government policy on the circular economy. This can include measures to inform and promote public dialogue on the challenges and opportunities in the transition to a circular economy and the actions necessary to meet the targets set out in the strategy. The strategy will also contain social protections, including measures to protect low-income households and people with disabilities.

The strategy will be published online along with an annual implementation and progress report on targets and actions taken.

Circular economy programme

The circular economy programme was also launched in December 2021 and is now also put on a statutory footing by the Act. This programme is being implemented by the Environmental Protection Agency (“EPA”).  It provides evidence-led support to achieving the national policy objectives.

It builds on and encompasses the EPA’s previous national waste prevention programme, adding new features and with a focus on supporting the circular economy. The new features will have the same statutory basis as the programme's pre-existing waste prevention measures under the Waste Management Act 1996. The programme will be published and will be reviewed every 6 years.

Circular Economy Fund

Next, the Act re-designates the existing Environment Fund as the Circular Economy Fund. Currently, revenues from levies on plastic shopping bags and the landfill of waste are paid into the Environment Fund and are ring-fenced to provide support for environmental projects. The objectives of the new fund will be aligned more closely with the promotion of the circular economy.³

National food waste prevention strategy

Under section 15, the national food waste prevention programme is also placed on a statutory footing with the creation of a national food waste prevention strategy to be known as the “National Food Waste Prevention Roadmap”. It will set out the policy, objectives and priorities for the time being of the Government in relation to food waste prevention with the aim to halve Ireland's food waste by 2030. It will take various measures into account including the United Nations Sustainable Development Goals and a plan by the European Commission to propose legally binding targets to reduce food waste across the EU by end 2023.

The first strategy will submitted for Government approval within 6 months of the commencement of section 15 and every 3 years thereafter. It will be published along with an annual implementation report.

Environmental levy

We send nearly 200 million coffee cups to landfill or incineration every year in Ireland. To address this and other waste issues, the Act allows for the imposition of a levy on retailers in respect of single-use beverage cups, food containers and packaging,⁴ as well as re-usable alternative items⁵ and plastic bags.⁶ A levy will be between €0.20 and €1.00.

The aim here is not to raise revenue or to increase costs for businesses and consumers. Instead, it is hoped that most will seek to avoid the levy which will then reduce the use of single-use items and the associated waste.

Levies will be introduced incrementally with the initial focus on disposable hot drinks cups. The intention is to bring the first levies into force as soon as possible. The Government has indicated that, following a consultation process, the end of 2022 is the “rough timeline for the latte levy” but that levies on non-cup items are not anticipated before the end of 2023. Levy proceeds will be ring-fenced in the circular economy fund.

Any levy will be imposed by way of ministerial regulations in which the Minister must have regard to the level of “material wastage” associated with the item in question.⁷ Factors such as the cost of the item, if any, can feed into this analysis. The Minister must also be satisfied that an alternative to the levied item can be made readily available. This alternative should have a lower level of material wastage.

Certain items may be exempted from the levy having regard to factors such as intended use and place of supply. There may also be exceptions from the liability to pay the levy, payment deferrals and refunds in certain cases. Payment collection schemes are also provided for.

Certain failures around levy payments or other regulatory non-compliance will be criminal offences. Various presumptions in relation to the relevant products will facilitate prosecutions under the Act. Following a conviction on indictment, a fine of up to €50,000 or imprisonment for a term of up to two years or both can be imposed. If a person is convicted of an offence and the relevant contravention continues after that date, that person will be guilty of a further offence on every day on which the contravention continues and will be liable for continuing fines.

When the court is imposing a penalty here, it must have particular regard to the risk or extent of environmental pollution and any remediation required, arising from conduct concerned.

Prohibition on single-use items

Section 14 of the Act also allows for the prohibition on the supply in the State of certain single-use items and plastic bags. The Government’s stated ambition is to make Ireland one of the first countries in the world to eradicate disposable coffee cups with a range of single-use disposable products to be phased out over time.

Again, any prohibition will be by way of ministerial regulations with the Minister having regard to material wastage and the availability of alternative items. Any regulations here will have a run-in time of 6 months before they come into operation. The Minister will be able to prescribe exemptions from the regulations. Breach of the regulations will be a criminal offence. The sanctions laid down in respect of a breach of any levy regulations will also apply to a breach here.

Section 14(7) also obliges the Minister to publish a report examining how single‑use packaging used in the sale of fruit and vegetables can be reduced. This must be done with 12 months of the commencement of that provision.

Waste management enforcement and penalties

After dealing with waste prevention, the Act then moves to dealing with the waste that is already there. First, it tackles illegal fly-tipping and littering.

To this end, the Act amends the Waste Management Act 1996 (“1996 Act”) to allow the use of technologies such as CCTV and mobile recording devices by local authorities for waste enforcement purposes while respecting data protection legislation.

Safeguards are put in place to ensure that the use of any particular technology is necessary and proportionate, is subject to review and that there is no mission creep. Facial recognition and automatic number plate recognition technologies are expressly excluded from the legislation.

There will also be codes of conduct around use of the technology and the treatment of data collected. These will be prepared in consultation with the Data Protection Commission and others and will be subject to ministerial approval.

The Litter Pollution Act 1997 is also amended to allow the use of CCTV with similar safeguards and controls.

The 1996 Act is also amended to allow for the establishment of a GDPR-compliant register of addresses, identified only by Eircode, who do not avail of a waste collection service, do not deposit their waste at a facility or do not have their waste otherwise disposed of or treated in accordance with the 1996 Act. The amendment will allow local authorities to focus enforcement efforts on those who do not legally dispose of their waste.

In relation to penalties, the 1996 Act is  amended to provide for the extended use of fixed-penalty notices in respect of offences under that Act including in respect of additional waste streams such as the extended producer responsibility model for dealing with waste tyres and in respect of breaches relating to a waste collection permit. The amendments aims to reduce first recourse to the courts and the associated costs

Other waste management measures

The Act introduces a range of other measures around waste management. For example, it:

• introduces a mandatory segregation and incentivised charging regime for commercial waste, similar to what currently exists for the household market;

• provides for powers to include additional requirements in the permits held by waste collectors.

• requires local authority waste management plans to include targets related to reuse and repair;

• introduces a new waste recovery levy to apply to waste sent for recovery, such as incineration, in Ireland or abroad.⁸ The aim is to promote recycling instead. Revenue will be ring-fenced in the circular economy fund. Failure to pay an applicable levy will be an offence;

• allows for the regulation of end-of-waste and by-product notifications to the EPA and determinations or decisions following such notifications. This is intended to streamline the process, cut delays for industry and support the availability of recycled secondary raw materials in the Irish market.⁹

Natural resources

The Act amends the Minerals Development Act 1940 and the Minerals Development Act 2017 to prohibit the issuing of new licences for prospecting for coal, lignite and oil shale. This is seen as a component of the move to consolidate a policy of reducing reliance on fossil fuels.

Electricity generation

The Environmental Protection Agency Act 1992 is amended to allow for the licensing of emergency electricity generators. The 1992 Act will be changed to allow for a licence to be granted where planning permission has been disallowed under the emergency provisions recently introduced to section 181 of the Planning and Development Act 2000. This is related to the need for energy security and the capacity to bring in temporary energy generation facilities.

The Electricity Regulation Act 1999 is amended to create a regulatory framework for the participation of new actors, such as customers or citizen energy communities, in the electricity market. They will be able to participate in the market by way of activities such as generating and trading electricity, aggregation, demand response and energy storage. This transposes Article 59(1)(b) of the Internal Market in Electricity Directive.¹⁰

Conclusion

The Government has described the new Act as landmark and has said that there will probably be a series of legislative moves on the circular economy. This is just the first piece of legislation. The Minister has indicated that the legislation is so significant and wide in its scope that it will require further iterations, as we learn by doing. Over time, when there is further clarity as to how targets are being delivered, the Government will start to measure and set these targets with real precision. It may also set out further legal enforcement or regulatory powers to support the development of the circular economy.