BIN THERE, (NOT) DONE THAT: Brazil's Recycling Potential

Photo Credit: WM (Waste Management)

By Thomaz Talarico

According to Brazil's Institute for Applied Economic Research (IPEA), Brazil recycles only 12% of its urban and industrial waste, losing up to 8 billion reais each year for not re-injecting the latter in the Brazilian economy [1].

In light of this, the Association of Recyclers from Rio de Janeiro and the Recycling Parliamentary Front held a public hearing to discuss public policies and regulatory issues regarding the recycling production chain in Rio de Janeiro. Gathering civil society represented by garbage collectors, public officials including state and federal congressmen and the Brazilian Bar Association's Commission on Environment [2], to name a few, the public hearing took place at Rio’s city center and focused mainly on the regulatory burdens the recycling sector faces today in Rio de Janeiro and Brazil.

The unsustainable path is more incentivised than the sustainable path

According to the remarks of both civic and government-level representatives, the main bottleneck for the recycling production chain to thrive in Rio de Janeiro and in Brazil lies on the regulatory and fiscal realms. The bi-taxation charged on recycling companies is not only a source of lack of motivation for entrepreneurs/business sector to explore the recycling sector but also a reason for lower prices of raw materials such as paper and plastic.

“Today, there are more incentives for the private sector to cut trees than there is for it to recycle paper. This happens because regulation considers that when you cut down a tree you are generating credit, and by recycling paper you are not. This is not true…” recalls Edson Freitas, president of the Association of Plastic Recyclers (ABREPET).

Understand how it happens in Rio

Recycling companies are obliged to declare taxes once they buy raw material from collectors and on the final product after the raw material is processed and transformed. The President of the OAB’s Commission on Environment, Dr. Reinaldo Martins, explains, “… for example if a company acquires 1 kg of primary resource for 1,70 reais and during processing and transformation, it adds 0,60 reais to this primary resource, due to the constitutional principal of non-accumulation of taxes, it should be charged taxes only on the additional 0,60 reais, and not on the 2,30 reais (1,70 + 0,60) as it happens today.” This excessive taxation obliges the companies to buy the primary resources for a cheaper value from the garbage collectors, who are heavily affected and have restricted bargaining power to negotiate.

Waste management chain is not circular neither sustainable: billions are being dumped

The waste management chain in Rio de Janeiro is not circular neither sustainable. It begins, mainly, by truck collection (with no adequate separation at this stage) and proceeds to a transshipment area where it is then taken to landfills and/or dumping grounds and the cycle is ended; incinerating the refuse in open air or grounding it.

Ideally, a more sustainable cycle would represent substantial economic gains, ample job creation while coupled with less environment degradation. This could be done firstly by an initial stage marked by source separation, followed by recycling cooperatives collecting and transferring the raw materials to the recycling plants, where then companies would transform it into final products to be reintroduced into the economy.

In Germany, the waste management and transformation industry contributes thoroughly to the national economy generating an average annual turnover of approximately 40 billion euro and employing over 200,000 people [2]. They have long succeeded in developing a strong and effective recycling chain and according to the OECD, it re-injects 65% of its municipal waste to the economy through sustainable recycling policies, one of the highest waste recovery rates in the world [3].

It works in Germany because it applies a countrywide strategy for recycling

Germany’s waste management success is founded on two major pillars: robust, comprehensive public policy measures and active citizen engagement committed to the recycling agenda.

In Brazil, the efforts are being steered to the same direction, and according to Edson Freitas, “The problem will only be resolved if there is a massive public demand and engagement, asking for our authorities effective public policies to untangle the regulatory issues that the sectors faces”.

Indeed, the participation and role of civil society groups is central, however, policymakers and legislators should also act towards a comprehensive recycling strategy in Brazil, reframing the subsidies and incentives being granted to specific industries and making sure the unsustainable path is not more attractive than the sustainable path.

Despite the long road ahead, a top-down coupled to a bottom-up recycling strategy in Brazil would not exclusively pave the way to high economics prospects, but also serve as a driver for improved health and reduced poverty for both the Brazilian population and its rich, resourceful landscapes.

[1]: http://www.ipea.gov.br/portal/images/stories/PDFs/100514_relatpsau.pdf

[2]: http://ac.els-cdn.com/S1878029616300901/1-s2.0-S1878029616300901-main.pdf?_tid=83270298-87f9-11e7-9378-00000aab0f02&acdnat=1503489317_0c526cac3edc01453c261de3e2a8dc0a

[3]: http://www.keepeek.com/Digital-Asset-Management/oecd/environment/environment-at-a-glance-2015_9789264235199-en#page51