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Archive for Targets

Ontario Blue Box program falls below 60% recycling target

Stewardship Ontario’s new 2020 Annual Report provides the most recent data on the performance of the Ontario Blue Box program.

Over 729,000 tonnes of packaging and printed paper were recycled in 2019, the most recent year for which data is available, resulting in a 57.3% recycling rate, down from 60.2% in 2018. The Ontario government’s mandated recycling target is 60 per cent, under the previous regulation.

Recycled Tonnes - Stewardship Ontario
Source: 2020 Annual Report, Stewardship Ontario

One of the main reasons noted for the decline in recycled tonnes is due to a reduction in newsprint.

The below Material Composition chart illustrates the decline in the printed paper category (which includes newspapers, magazines, and catalogues), showing it’s gone from 55% in 2004, down to 30% in 2019. Meanwhile, paper packaging has doubled from 20% in 2004, to 40% in 2019.

Material Composition - Stewardship Ontario
Source: 2020 Annual Report, Stewardship Ontario

And access to recycling programs remained high in 2019, with 94% of Ontario households having access to Blue Box programs. Not only do Ontario residents have access, but they actively recycle their paper-based packaging, allowing PPEC’s paper packaging mill members to continue to maintain high levels of recycled content in Canadian made paper packaging.

PPEC has been monitoring the activities related to the Ontario Blue Box program and its transition to the new producer responsibility framework. We have recently participated in webinars hosted by the Ontario Ministry of the Environment, Conservation and Parks (July) and the Resource Productivity and Recovery Authority (August).

PPEC’s key issues concerning the new regulation include the addition of packaging-like products to the Ontario Blue Box program, and the new paper-based recycling targets.

Under the Blue Box Regulation, there are several newly obligated packaging/products including packaging-like products, examples of which that have been provided by RPRA include paper bags and cardboard boxes.

PPEC is monitoring this closely as it pertains to PPEC’s members, who have not historically been obligated stewards of the Ontario Blue Box program. As our members are not directly supplying finished products into the consumer marketplace – and are typically engaging in business-to-business transactions with distributors – we expect this to remain the same, and we will continue to follow this as new information becomes available.

Of importance to PPEC and its members are the new government mandated paper diversion targets laid out in the final Blue Box Regulation: 80% for 2026-2029, and 85% for 2030 and beyond.

PPEC is concerned with the feasibility of achieving the government’s new targets.

As noted above, the overall composition of the paper category has been changing over the years, with newspaper generation continuing to decrease, while other categories, like corrugated boxes, already have high diversion rates, which we believe leaves little room for improvement.

Diversion Targets - Stewardship Ontario

It remains to be seen how the program will achieve the high diversion targets for paper. The hope is that a new producer responsibility model will achieve greater economies of scale, by gaining new efficiencies with collecting, processing, and marketing a more consistent and standardized set of Blue Box materials across the province. This should also result in lower contamination levels, as well as improved consumer behaviour at the household level in source separating wastes from organics and recyclables.

PPEC will be watching the diversion data in the coming years, and we will continue to monitor news related to the transition of the Blue Box program closely.

Rachel Kagan

Executive Director Paper & Paperboard Packaging Environmental Council (PPEC)

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Ontario Blue Box Update: GFL acquisition of CSSA and new PROs established

In June, the Ontario government released the final Blue Box regulation, which sets out the framework to transition to producer responsibility, and transfer the full operational and financial management of the Ontario Blue Box program to producers – the businesses that make and sell obligated materials into the Ontario marketplace – with implementation beginning in July 2023.

Chart of Transition to Full Producer Responsibility
Source: Ontario Ministry of the Environment, Conservation and Parks

Since the release of the regulation, there has been lots of news that PPEC has been monitoring, summarized below.

GFL acquires CSSA and forms new Blue Box PRO

On July 6, GFL Environmental Inc., a North American waste management services company, announced it acquired the Canadian Stewardship Services Alliance (CSSA), and formed the Resource Recovery Alliance (RRA), in response to the Ontario government’s shift to full producer responsibility for the Ontario Blue Box program.

CSSA was established to provide management and administrative services to obligated producers, and Producer Responsibility Organizations (PROs), providing support for provincial recycling programs across Canada, including Ontario’s Blue Box program, currently operated by Stewardship Ontario.

GFL’s RRA will become a new PRO for the Ontario Blue Box program. In an article in Recycling Product News, GFL’s Patrick Dovigi talks producer responsibility and the Ontario Blue Box transition, he said that “The end goal of RRA in Ontario is, number one, to work collaboratively with all producers. Number two, it is to meet or exceed the recycling diversion targets set by the province in the most efficient and cost-effective way. With our experience, from collection to processing, we think we can be a value-added partner, not only to our PRO, but for other PROs and whoever else is involved.”

In the Globe and Mail’s article “GFL eyes bigger role in Ontario recycling regime, but plan raises alarms for large producers of recyclable waste,” GFL also said “the new initiative will help it expand in the United States, where jurisdictions are also considering switching to EPR.” Most recently, Maine signed legislation establishing EPR (extended producer responsibility) for packaging, the first bill of its kind to become law in the U.S.

The acquisition of CSSA is subject to closing conditions and is expected to close in the third quarter of 2021.

Response to GFL announcement: concerns over competition and data

There are some concerns that GFL “could end up with an unfair advantage under the new rules,” given their size.

Under the new regulation, a PRO or group of PROs that has two-thirds of the producers of recyclables signed up, as measured by weight, can set the rules for the next iteration of the Ontario Blue Box program. Some are concerned that if GFL reaches that threshold, the recycling system would be managed by one large waste management company.

GFL is the fourth largest diversified environmental services company in North America with more than 11,500 employees. GFL’s recent earnings results show a 32% increase in second quarter revenue, with an estimated revenue of over $5 billion expected for 2021.

GFL’s CEO said it’s not GFL’s intention for their new PRO will dominate the system, and he expects that multiple PROs will work together. It’s also expected that RRA will form a board “that would oversee the competitive awarding of contracts,” and that “contracts for future curbside collection or processing of the province’s recyclables would still be subject to competition.” GFL performs a similar role for BC’s EPR program.

Stewardship Ontario responded to the GFL/CSSA announcement saying it is examining the acquisition announcement. Regarding concerns over protection of data, Stewardship Ontario’s response states that “CSSA has provided Stewardship Ontario with written assurance that, following the transaction, all Stewardship Ontario data will be held in confidence within RRA; will be used solely for the purposes of providing services under the current CSSA-Stewardship Ontario Services Agreement; and will not be accessible to GFL.” Stewardship Ontario will also consider if additional measures are needed to protect confidential data.

Industry forms a new Blue Box PRO: Circular Materials

On July 28, a group of 15 food, beverage and consumer products manufacturers, retailers and restaurants launched Circular Materials, a new, national, not-for-profit PRO to offer compliance services to companies obligated under EPR regulations in Canada.

The companies that founded Circular Materials include Costco Wholesale Canada Ltd., Empire Company, Kraft-Heinz Canada, Keurig Dr Pepper Canada, Lassonde Industries Inc., Loblaw Companies Limited, Maple Leaf Foods, McDonald’s Restaurants of Canada Limited, Metro Inc., The Minute Maid Company Canada Inc., Nestlé Canada, PepsiCo Canada, Procter & Gamble Inc., Restaurant Brands International, and The Clorox Company of Canada Inc.

And while Circular Materials is a national organization, in Ontario it will operate as Circular Materials Ontario. They plan to represent producers’ collective interests, with the goal of ensuring that the blue box collection system operates with fair cost allocation, an open and competitive procurement process, and producer-led governance.

In addition to Circular Materials and RRA, waste company Emterra Group also has its own PRO called Ryse Solutions Inc. Registered Blue Box PROs will be listed on RPRA’s website.

It will take some time to understand the implications of the GFL/CSSA deal, including transferring assets producers have invested in over the years, to a for-profit company; or how a waste management company PRO will compete with a producer-led PRO, and the difference in their approach and business model, but PPEC will be monitoring this closely.

Rachel Kagan

Executive Director Paper & Paperboard Packaging Environmental Council (PPEC)

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Ontario Blue Box will struggle to make 60% diversion, and none of the ministry’s proposed new targets will be reached

Green visions, aspirational goals, and political grandstanding are all very well in their place. But at some point, we have to be realistic. The fact of the matter is that the overall waste diversion rate of Ontario’s Blue Box is unlikely to improve much over the next ten years, and the new diversion targets proposed by the Ministry of Environment, Conservation and Parks (MECP) will not be achieved.

These are the stark findings of a PPEC-commissioned study by Dan Lantz of Crow’s Nest Environmental. Lantz has more than 30 years’ experience in the waste and recycling industries.

The study examines Blue Box diversion patterns from the current program’s inception in 2003 together with industry reports on the future of given materials and an understanding of the capabilities of the recycling system and end-markets. To establish future generation and recycling rates, all on a per person or per capita basis to account for population growth, the study determines and applies mathematical formulas to predict whether Blue Box materials will meet the ministry’s two new proposed diversion target dates of 2026 and 2030. The answer is no, they won’t.

Blue Box will struggle to make 60%

Where are we now? The Blue Box program is currently diverting 57% of the printed paper and packaging that ends up in Ontario homes. Its performance, though, has been steadily declining over the years as lighter and less recycled materials make up a growing portion of the residential waste stream.

The data tell the story. In 2003, the generation of printed paper (mainly newspapers) represented almost half (47%) of the Blue Box materials in Ontario households. By 2019, printed paper’s share of generation had shrunk to 27%. Its share of what was diverted shrank too (from 61% in 2003 down to 30% in 2019).

At the same time, plastic packaging’s share of generation increased from 16% to 25% and its diversion share rose from 5% to 13%. These trends are expected to continue over the next decade and to impact diversion rates accordingly.

And while the ministry has wisely not specified a new overall Blue Box diversion target, its consultation papers make clear it would like to achieve somewhere between 75% and 80% within the next ten years. That’s not going to happen, says Lantz.

“Based on projections out to 2026 and 2030, the ministry’s targets are not realistic under the current program structure.’’ In fact, he says, unless something major changes like the Blue Box giving people more opportunities to recycle (say through an extensive depot network) and the public becomes more engaged and recycles far more than it does at the moment, then the Blue Box will continue to struggle to achieve the existing 60% diversion target into the future. He forecasts just over 58% diversion by 2030.

It’s important to note that the ministry is talking about diversion targets here, not collection targets. It is one thing to measure Blue Box performance by collecting materials at curbside and depots, as British Columbia does. But in Ontario, diversion is measured after the collected material has been processed at a material recycling facility (MRF).

The level of contamination can make a big difference as the higher the contamination the harder it is to achieve better recovery rates. So, BC’s performance (aided by the strategic location of some 250 collection depots) should not be equated with what Ontario is proposing.

Another complication is that the Ontario ministry wants more material diverted from a wider range of sources. This is fine, but broadening how much needs to be diverted (the generation base) automatically reduces the diversion rate as well, because unfortunately not all of that new source material will be diverted.

The only way the diversion rate would improve would be if the new materials achieve diversion rates above the average. Considering that some of the new materials proposed by the ministry for collection (including straws and plastic cutlery which will not be recycled at all because they are too small to be effectively captured and will just end up going to disposal), the diversion rate will not improve above what is projected in the Lantz report.

The province has not offered any estimates of how large this new supply of material will be, making it harder to calculate whether its proposed diversion rates are practically achievable or not.

90% for paper ‘just isn’t going to happen’

And if the ministry is expecting paper to ride to the rescue, forget it. Paper material is the single largest component of the Blue Box with 67% of it currently being recovered for recycling. The ministry’s proposed paper diversion target for 2026 and beyond, however, is 90%.

“Ninety per cent just isn’t going to happen,” says Lantz. There will be even fewer newspapers in future, more online and digital transactions (therefore less paper use), and very little opportunity for significant increases in paper recovery (corrugated box diversion is already at 98%, for example). This means the paper group as a whole will likely come in with a 69% to 70% diversion rate, he says. Far short of the ministry’s wished for 90%.

90% diversion for paper just isn't going to happen

“A 90% target is unreachable. This would effectively require 95% of the population capturing and putting out for recycling 97% of their paper and making sure it is not contaminated at all. And then the recycling facility would have to capture 98% of all that paper (including paper that’s shredded) and send it on to the end-market. Add in the fact that some Ontarians use paper with kindling to start their fireplaces and woodstoves in winter and burn paper, and it’s just not reasonable to expect a 90% diversion rate.”

Other material groups won’t make targets either

Rigid plastics (bottles containing water, soft drink, laundry detergent and shampoo, and mixed plastic tubs and lids, cottage cheeses and ice cream containers) currently have a diversion rate of 26 per cent. The ministry is targeting an improvement to 60% by 2030. Lantz predicts, however, that there will be little change over the next ten years, maybe an increase to 47 per cent.

As for flexible plastic packaging (currently at 8% and targeted for 40%), he says 15% may be as far as it gets, unless there is a dramatic shift to mono-materials (single-resin) flexibles, that is, stand-up plastic pouches that are much easier to capture and recycle. “Most plastics aren’t hard to sort in a material recycling facility. People just don’t put them in the recycling system like they should, and until they do, recycling rates will stay low.”

He predicts that steel and aluminum diversion through the Blue Box will improve to maybe 60% (missing the metals target). Glass packaging will also miss its target but maybe reach 75% diversion by 2030.

Many Factors

There are many factors that could influence these projections: pressure for higher recycled content levels; landfill bans or surcharges; alternative collection systems including deposit/return; and the impact of the extra tonnes the ministry wants collected from a wider range of sources.

There are also behavioural changes that could influence the results. “It often boils down to that flick of the wrist decision where the householder decides whether to put something into the garbage or into the box,’’ says Lantz. “We need to be much clearer about what goes where, and to give people more opportunities to make the right decision.”

Lantz suggests the province should set disposal targets instead, thereby reducing the burden on municipalities that have to handle the recyclables that householders place in the garbage. Environmentally, he says, it would be better if we reduced consumption at the front end. “Setting unreachable diversion targets that effectively allow unfettered consumption, and relying on recycling to overcome that consumption, is not the best approach.”

The targets and the diversion predictions
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John Mullinder

John Mullinder, Executive Director, PPEC - Regular posts on environmental and sustainability issues impacting the Canadian paper packaging industry

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