Economic-financial analysis of the Italian packaging waste management system from a local authority's perspective

Abstract

Abstract One of the pillars of the European Union legislation on packaging waste is the principle that each economic producer is fully responsible for the fate of the packaging materials he has introduced in the market (Extended Producer Responsibility - EPR). A system of financial transfers is then implemented between the industry and the local authorities which are ultimately responsible for the separated collection of packaging waste and its recovery. The paper reports an economic-financial analysis of the packaging waste management system in Italy from the perspective of the local authorities, building up from an extensive, rich and unique data collection for the Italian context. Both costs for separate collection and sorting and benefits arising from the financial transfers were considered. The cost savings that waste local authorities attain by diverting packaging waste from the residual waste collection services and disposal were also included. The results showed that the local authority benefits an average of 250 € per tonne of packaging waste separately collected. In contrast, if the savings associated with the diversion of waste are not considered (financial perspective), the benefits are significantly reduced to 58 € per tonne. As the services of separate collection and sorting of packaging waste represent 121 € per tonne collected, costs are fully covered only when considering an economic perspective. Conversely, this does not happen if the cost savings due to avoided disposal are not taken into account. The EPR principle, one of the Packaging and Packaging Waste Directive's cornerstones, is thus not being fulfilled, in a strictly financial perspective. Moreover, this means that if the EPR principle was to be strictly followed, the transfers to the local authorities should be increased. In any case, such transfers should be calculated based on the efficiency and peculiarities of each packaging waste system.