We publish the winning survey of the Mani Tese Award for Investigative and Social Journalism 2019 which aimed to support the production of original surveys on issues concerning the impacts of business activities on human rights and the environment. The award was created as part of the "New Business for Good" project with the contribution of the Italian Agency for Development Cooperation (AICS) within Mani Tese’s program MADE IN JUSTICE.
AMAZON, A DISPOSAL
ABOVE ALL SUSPICION
From the mass destruction of unsold goods to a new circular economy.
by ROSARIO DANIELE GUZZO, ELISABETTA MURATORI, ROBERTO PISANO
1. FREE TO DESTROY
The sequence of trucks arranged at the back of the warehouse stretches as far as the eye can see. The gaylords, huge containers filled with thousands of objects, are ready to be stowed on the waiting trucks. On the boxes the destination: destroy.
According to the testimonies collected, in Italy the online commerce giant Amazon destroys up to 100,000 new products every month in the logistics hubs of the territory. These are damaged returns and unsold goods: only a small part of these find a second life on the shelves or become a gift. For the rest of the goods, the terminus is the press of a company hired by Amazon for the disposal of goods that no longer find space in the aisles of its huge warehouses.
The products condemned to destruction have a long gestation but a short life: from the raw materials to build them extracted in the other hemisphere to the assembly, which often takes place very far, up to the most varied means of transport, to arrive by road, rail or sea in the Italian warehouses. And finally, unsold, still wrapped in their plastic wrapping, straight to the pulp.
It is in the folds of a regulation forged by the rapid conquest of foreign markets that the game of responsibility is played. The product we order can have three different types of origin: it can be owned by Amazon or by a seller who only uses this digital showcase (today 58% of the units sold on the platform). Or again, the goods of an external supplier that purchases only the logistics services.
In the last case, it would not be the Seattle multinational, nor its Luxembourg-based subsidiary, the small paradise that welcomes giants who want to stay with one foot in the European Union, to decide the fate of returns and products at the end of the expiry date. To order the destruction of the objects beyond the agreed stock is the supplier himself, owner of doing what he wants with his goods under a legislation on voluntary destruction that develops at the end of the nineties. The elimination is carried out by a small local subsidiary company to which disposal is contracted.
For a few cents less. According to the tariff in force between 2017 and 2018, the disposal tariffs made it immensely cheaper to destroy rather than return: 25 cents per unit the cost of returning to the supplier for an item of standard size (up to 12 kilos and dimensions of 45x34x26cm) against 10 cents for disposal.
In addition, twice a year the inventory items remaining in the logistics centers between six and twelve months were charged for long-term storage of 500 euros per cubic meter, which jumped to 1,000 euros per cubic meter for higher stocks. All rates net of VAT. For years, therefore, suppliers were forced to destroy in order not to pay the high costs of storage or return. A perfectly legal process, which does not provide for penalties for the environmental damage generated. An impact that legislators could not configure when they laid the foundations for waste legislation.
Browsing through the pages of Amazon services in the last few weeks, we notice an announcement indicating changes in progress to the fulfillment rates. From 3 September 2019 the costs of removal and disposal are equal, and incremental as the weight for destruction increases. Will it be enough to convince producers not to choose the landfill route?
2. FORCED TO THROW
We meet Maurizio, invented name, a former Amazon employee who, asking for anonymity, agrees to explain to us how the phase preceding disposal works.
Maurizio worked three and a half years in Castel San Giovanni, he began his adventure through the temporary agency, uniformed in green, then he was stabilized indefinitely, he became "a blue". He immediately heard from his colleagues about these pallets destined for destruction, about the tablets they had requested for an internal raffle or a discounted sale. A couple of years later he was assigned for some time to the Vendor department, Returns section.
«When the storage periods expire, the practice is to open a trouble ticket and ask the supplier if he wants the goods back or not». Often the supplier, given the cost system, indicated the way of disposal. «This happened about 70% of the times and the company sent everything to destroy, goods completely intact». More than two out of three objects. «What is destroyed? Everything, even telephony and valuable IT products, I have seen a thousand euro smartphone with the seal go to destroy. The main categories are electronics and food» he says.
Unsold and damaged goods go to disposal, but also material which, although recoverable, is sent back because the customer considers it non-functional. According to the testimonies, since customer obsession is Amazon's pride and the customer is always right, the checks made to verify the actual malfunction are often not rigorous. Only a small part has new life as warehouse deals, refurbished items and discounted relisted items.
The figures are huge. We ask him how many products are destroyed on average every day and he explains that «the number is very variable. They range from 30,000 to 100,000 pieces every month in the Castel San Giovanni warehouse alone. The department is operational according to the periods of the year». This discontinuity depends on the workers available in the outbound sector. For example, if there is an overload, for Prime Day or for the most intense seasonal periods, the whole workforce moves into outbound and the Destroy could be closed for two, or even three weeks. «You can imagine the amount of tickets. We have accumulated 120 thousand pieces to be destroyed all together. It happens that in the morning the manager of the area calls the external company and by noon everything is ready for collection».
In Piacenza, the area where the objects to be sent for disposal are collected are towers A and B, where the trucks dock. Until recently, each starting block was sealed with a packing list with product details. Today, the need to ward off prying eyes has reduced outbound information flows, with very stringent confidentiality clauses and information protection measures that make every story slip into criminal law. The employees of the department, only those stabilized, are trained with a special course to manage the destroy and, outside the sector, the colleagues know nothing. Once the paper lists with the products have disappeared, the files are visible to the partner company only by accessing an online platform.
After the insistent reports of the workers, donations to associations begin: Caritas, a kennel, a hospital ward. Toys, books and tablets for some local school or library. The initiative came from employees who considered the destruction an unacceptable waste: «Amazon takes credit for it: headlines appear on the news or in the famous provincial newspaper, often on the front page». The company governs media relations in a scientific way. But the percentage of goods that are given to charity is very low compared to the amount of destroyed products «which often cannot be donated or returned to the market».
We also collect the testimony of Enrico, not his real name, a former employee of the Vercelli warehouse, a process specialist who came into contact with the destruction activities. The MXP3 logistics hub handles medium to large non-sortable goods weighing no more than 35 kilos. Also in Vercelli the destroy department deals with articles that can no longer remain and must be returned to the supplier.
«Among the goods destined for that department there are also products that are damaged and for which there are less than 60 days to expire that by law cannot be sold. Electronic items or small household appliances can also be disposed of without having defects. Numerous perfectly functional pieces leave the warehouse to be sent for destruction, sometimes they are obsolete models or those that take up too much space in the warehouse». In some cases they are sent to the supplier, but in many cases it is the latter who does not accept them and they come back once again, to the press direction.
In Vercelli «every week hundreds of working items go to the Destroy: coffee machines, blenders, microwave ovens».
Every citizen can book a free visit to the warehouses of Castel San Giovanni and Passo Corese and be guided among the canning machines (the "bread machines" for employees), see the robots in action where the collection is automated. We go there three times and when asked about the fate of the unsold goods we receive as many answers: a lead tells us that «it remains in a dedicated warehouse», her colleague that everything is rigorously sent back, the third employee declares that he does not know.
The production model triumphs in wide availability and immediate delivery: a voice that stays out of the constantly low sales prices thanks to powerful algorithms. Thus, the internet economy that was supposed to save us from waste offers a relief for the customer portfolio, but becomes an ecological boulder, for suppliers and workers.
3. FACING UP WITH WASTE
Waste is one of the many mysteries of the multinational. Italian law provides for the obligation to fill in a loading and unloading register that details the physical characteristics of the waste. Seeing it is almost impossible and a regional commander of the ecological operational unit, the environmental section of the Carabinieri, confirms it: nothing to do without initiating a judicial procedure.
We met some officials of the Emilia-Romagna Regional Agency for Environmental Protection, who were able to show us only the single environmental declaration model, with the special hazardous waste that the company disposed of in 2018. Three tons of fluorescent tubes, thirty of discarded equipment, 65 of hazardous organic waste. Figures that are not negligible, but it seems only the tip of the iceberg.
It appears that disposal in Castel San Giovanni is entrusted to TRS Ecologia, a company specialized in the integrated management of industrial waste, in the collection of special and hazardous waste and in environmental remediation. We try to get in touch with them several times, but they dodge our questions and evade requests for meetings. Ecos Service does the same for Passo Corese. Environmental Logistics also boasts a collaboration with Amazon. Contact is broken in all cases when we show interest in their customers.
Not even the precious waste cadastre helps us: a list of codes that reveal detailed categories, but all under the label of the intermediary, who works for different clients. The practice of destruction is common and also affects other warehouses: space has a cost and, whatever the reason why the goods are not sold, disposing is the simplest solution.
In the third quarter of 2019 alone, Amazon made $ 70 billion in sales worldwide. In 2018, sales grew by 18% compared to the previous year and the company exceeded the psychological threshold of the market value of one trillion dollars. It is not difficult to understand why: unbeatable prices, delivery times that were unthinkable only a few years ago, a model of organizational efficiency. Who wouldn't want to tie their name to such a success story?
Let's try to reconstruct the volume of waste backwards. Getting your hands on Amazon accounts is complicated. The company does not publish the revenues of individual countries, yet, some observers argue that skyrocketing sales are accompanied by a negative operating result. It is possible to triumph by taking into account a loss on each product sold. This gap would have as an explanation a mantra that the upper floors also repeat to employees in the warehouse: investments. Since 2010 they have announced for 1.6 billion euros: technology, new warehouses, jobs.
The growth strategy may have changed following the European Commission's condemnation of paying hundreds of millions of euros in evaded taxes. The mechanism was that operating profits would slip into a group company, probably an empty box for the taxman. Then better reduce margins - offsetting the healthy profits from overseas sales and cloud services - by devouring market share in retail. Perhaps waiting to raise prices again and replenish margins. In the meantime, who bears the conditions that guarantee the success of the platform?
FOCUS - A PRICE WAR: AMAZON AND PUBLISHING
The Amazon system aims to dominate the market and to do so it implements positioning strategies. The case of publishing is peculiar: according to an investigation by the Wall Street Journal, Amazon is reducing the profits of the "miscellaneous" sector through the publication of numerous low-cost books, self-publishing and using its subsidiaries. An army of fifteen sub-brands that range across the United States between genres, for a market that is worth several billion dollars a year.
Sandro Ferri, editorial director of E/O, told us how aggressive the attitude of the Seattle giant is: «To our refusal to apply an ever-increasing discount, the answer was to send back all the E/O titles in stock, causing us a great economic loss under the Christmas holidays». Leaving the system is not always a question of will: «Our books are still on the platform via the marketplace and we can't do anything about it. The paradox is that, not being able to apply a reduced price, people looking for immediacy and convenience buy there by paying more than what it would cost in the bookstore».
In Italy, to protect the publishing industry, it is not possible to discount the price by more than 15%, not everywhere it is like this: «We know that Amazon in some countries sold our books at a price even lower than that paid to us, losing money on them».
Babalibri, a Milanese publishing house for children, is also out. Francesca Archinto, editorial director, talks about the months of negotiations: «In May 2016 we reached an agreement. When the negotiation is closed, a condition appears: the retroactivity of the contract from January, only to be discussed again at the end of the following year». Five months of negotiations every two years? «No, thank you: our time must be dedicated to content». At first, Amazon often negotiates better terms with publishers to build the relationship and tie the fate of the turnover. Conditions to review, which can become blackmail when a third or more of your sales take place on their platform.
In the meantime, the company is carving out its role as a wholesaler: Amazon Business for Bookstores is the service designed for book retailers, which offers more than 800,000 titles. Discounts for school texts reach up to 12%, up to 35% for "various" books. The surviving bookstores could become hubs for Amazon itself.
Can a bookseller buy from Amazon and finance his own executioner? «The lack of awareness of the weight of one's choices flourishes with a misleading narrative, in ambiguous forms of marketing, such as customer donations to schools». An admirable offer that leads other institutions to buy right on Amazon.
The law about the book? «It will be applied to everyone, but they will find the trick to continue to have priority. In France, prices can be reduced by up to 5% for physical bookstores, in no case online. Amazon then decided that it would not give discounts but would deliver them for free. At that point, the government imposed an obligation to charge the delivery cost. So, Amazon set it at one cent».
A long-time business consultant tells us that at first Amazon was making a loss on the books, or at least not making a profit. «The customers who buy the books are the most loyal, so they were crucial to increase the number of users, to whom the washing machine would then be sold. The key was the discount».
4. LIFE AS A SUPPLIER
To become a supplier you can receive a personal invitation or propose your business. It is the Vendor team that can offer you a virtual marketplace with over 300 million potential consumers. But on which terms?
We read on the supply contract: "The ownership of the products transfers from the supplier to Amazon upon receipt". The latter manages a large part of the process: logistics, transaction, shipping, marketing. It also suggests an unbeatable price, which Amazon agrees to pay the supplier, which may also differ from the selling price. It may happen that it sells at a lower price than the one requested by the supplier.
The conditions, however, require high performance: tight supply times - because the disappointment of a single consumer can be costly - precise packaging standards, delivery methods to warehouses. One mistake and costly penalties kick off.
We meet a supplier of IT products in the Modena area. Even before crossing his path with that of Amazon he managed an important flow of business, some European partnerships to his credit. When he tells us about his relationship with the distribution company, he does not even smile: «If every slightest delay in supplies is punished with very high penalties, their idea of over-supply involves excess stock, or continuous costs for us. Goods that circulate back and forth».
The prices that our supplier decides to set are systematically higher than those recommended by the platform: «We would certainly lose out otherwise, and in any case our sales turnover through Amazon is falling». Will it be an exception, given that the site speaks of 78% of sellers who have increased their turnover by choosing Amazon logistics services?
The system continually proposes to suppliers a reduction in prices. It is no coincidence that the only part in evidence in the supply contract is the limitation of liability of the Seattle giant: they are not considered attributable to indirect damages "including, without limitation, economic losses, of profits, in the business activity, goodwill and similar".
The list of charges is not short. For certain product categories, the supplier is required to take out an insurance policy for third party liability for at least one million euros per event and to keep it for at least one year after the termination of the contract. In the event of Amazon insolvency, however, they get their hands on: at most, the supplier can recover the goods in stock, nothing else is due. And in any case you submit to the non-exclusive jurisdiction of the courts in Luxembourg. Thus, the giant who wants to retaliate against the small trader could drag him to where there is a jurisprudence of its liking.
For the supplier too, the management of returns is an important chapter, which partly explains the birth of so many unexpected waste. «It is Amazon that sends us the products or puts them back in its warehouse, then asks to issue a credit note in their favor. A relationship endured unilaterally».
In the case of direct imports from abroad, the contract states, Amazon is not obliged to check or return any of the returned products and a customer's decision "is conclusive proof".
A truly efficient system? In the case of our supplier, 75% of the goods returned to the warehouse are labeled defected but they have no problems: «We cannot contact the end customer, to know what the problem is with the device. Technically, a piece in perfect condition can come back for sale on their website or on our portal». Our supplier, however, says he doesn't want to betray the reputation he has built over the decades, so most of the working returns go on sale at a 15% discount. It is not known how others behave.
"Amazon customers are not supplier customers". The contract, in fact, prohibits interaction with buyers and obliges, if you are contacted by mistake, to report the conversation on the appropriate channel, where everything is monitored.
A fair amount of information that throttles the possibility of developing a business outside of Amazon's only large church, while strengthening its market position. The US Antitrust Authority last July opened an investigation into Amazon's use of third-party vendor data, which could contribute to its dominant position. Commissioner of the European Union Margrethe Vestager also monitored the use of information from independent retailers, to verify that anti-competitive behavior does not compress the benefits for consumers.
As one of the scrupulous manuals that guide suppliers indicates, with a couple of quick clicks on Vendor Central the products can instead be disposed of directly at the Amazon logistics hub: Select the return in question and click on the Destroy button.
5. GREEN LOGISTICS ACCORDING TO AMAZON
Our questions to intermediaries and operators attracted the attention of Alessandro Chiarmasso, Amazon's head of Public Relations for Italy. He wanted to offer us his version of the facts electronically. Many questions have been posed to management, for example quantifying unsold goods for which suppliers preferred destruction in 2018. Or why they do not commit to donating more goods, if obstacles indeed arise in doing so.
The company argues that eliminating waste is at the top of its concerns: «For Amazon, physical destruction of products is the last resort and the least attractive option, ecologically and economically».
«Everyone must be made responsible in order to reduce the destruction of products along the entire supply chain». For this reason, Amazon collaborates with local food banks and associations and in Germany is a founding partner of Innatura, a non-profit organization that acts as an intermediary with charities. In addition, it has launched a return and excess inventory donation program in the US and UK for resale or donation.
This seems impossible in our country «because the regulations require companies to pay VAT on the cost of the donated property, with the exception of a few product categories. And then there is the obligation for charity organizations to issue a quarterly certificate to the donor of the goods». A high administrative cost?
Third party sellers have many solutions to manage returns and excess stock such as the Outlet service, while customers can buy certified used or refurbished products. On the other hand, the problem does not really seem to exist because «the vast majority of excess or returned products are resold to other customers or liquidators, returned to suppliers or donated to charities». How many there are is not known: «we cannot share the commercial information of our sales partners».
Yet the testimonies of the workers we met tell another reality, especially on the evaluation of returns that should follow "a detailed inspection process", while in many cases they directly find the way to destroy.
According to the company, the destruction, however, would affect «less than one percent of our products, and we are working hard to bring this number to zero». A commitment light years away from the production routine that the workers have told us about. In 2018, Amazon sold up to 750,000 products in Italy in a single day. One percentage point would still represent at least 225,000 products per month.
6. THE PARADISE OF LOGISTICS
In Castel San Giovanni, Amazon employees exceed three thousand when the peak arrives, the period in which thousands of workers selected by temporary agencies enter the company with short contracts for the season - often of three mandatory days a week and as many optional days for a total of 48 hours a week, without surcharges. The overtime highly recommended to continue to be called, structural night work all year round, Sunday work, shifts over six days of the week during peaks.
The union has made its way some time after the opening in Castel San Giovanni, called to negotiate agreements based on the trade contract, even though it is logistics. In autumn 2017 the first mobilization arrives, to oppose the needs of life to the imperative of technical-productive reasons. The last renewal took place a few months ago, torn up in haste without dialogue.
Nothing surprising for a large company where the production model evokes a nostalgia effect of the assembly line. However, it is interesting to note how care and precision, usually the pride of a company, are overshadowed by speed and productivity. The number of "pieces" per hour is the only relevant meter, even more than the error, which is already foreseen and will be managed by the solvers.
We talk about it with a former lead from Passo Corese, who voluntarily left the company. «Anxiety accompanies every phase of work, but I saw the only moment of panic when we missed a cut-off». This is the official shipping time for the system. Going long involves reporting to national and European management, with an impact on the fate of general managers, and on their bonuses. It is important not to stop, because no one is irreplaceable: the tasks are defined and elementary, the productivity is maximum, the human relationships reduced to a minimum.
«The military organization gives it a complicating role to create involvement, in a place where the vast majority of workers repeat the same gesture for seven and a half hours». Employees receive letters of reprimand for leaving a stool out of place, staying in the bathroom longer than necessary, or talking to colleagues.
Passo Corese is now first for performance in Italy, and always among the top three in Europe for volume of products shipped. The frenzy that constantly accompanies executives is linked to performance: «Senior operations managers have to justify all the numbers in their department. You are efficient not if the subordinates work well, but if you manage to achieve the same result as yesterday with one less resource».
Amazon employees earn swaggies from security actions rewarded by their superiors. With these they access designer prizes including shower kits, backpacks, jackets and models of Amazon Prime trucks.
Leading the market does not always combine with respect for competition and small independent companies, let alone with the protection of the environment. «The only limit is space, everything has to be shipped as soon as possible: during the holidays, a product with a moistened box disappears. The damage becomes directly destroy and you move on to the next pallet. If a box has nine elements out of the ten foreseen, all in the waste». Furthermore, same-day shipping and customer obsession have a huge impact: couriers cannot miss an appointment.
The projection of a positive imaginary is constant and the environmental objectives are ambitious: the full use of renewable energy sources and the reduction of CO2 emissions from shipments by 50% by 2030, as well as zero carbon emissions by 2040. The company has decided to invest $ 700 million in Rivian Automotive, with which Jeff Bezos plans to build a future fleet of electric vehicles for his shipments.
Amazon says its packaging is fully sustainable: since 2008 with Frustration-Free Packaging, more than 665 thousand tons of packaging materials have been eliminated, thanks to recyclable packaging and without additional shipping boxes.
Interesting initiatives, which clash with a reality of waste «such as the 80 thousand euros of cartons finished in pulp when the design of the boxes changed without having planned the times», comments the former employee.
7. SHARING IS CARING: DONATE TO SAVE
In January 2019, the cameras of Capital, program of the French broadcaster M6, sneak into the Saran warehouse and show four million spectators the last journey of hundreds of plasma screens, pallets full of books and branded toys to the incinerators. In that warehouse, more than 300,000 unsold items are sacrificed every quarter.
That same evening, the Secretary for Ecological Transition of the French government, Brune Poirson, undertakes to make France the first country to prohibit the destruction of untouched and unsold non-food products.
The anti-gaspillage draft law expressly prohibits shops and remote sales platforms from sending non-marketed goods that are still usable to landfills, with particular attention to electronic, textile and daily hygiene products. It prescribes to donate them, put them back on the market or recycle them appropriately, except in limited cases with serious risks to safety and health.
Flavie Bertin, a young French lawyer who follows the government's environmental policies, helps us to orient ourselves. «The papers tell an interesting reality, starting from the preliminary studies. The French agency for the environment and energy management, in collaboration with the Agence du Don en Nature, has estimated the value of unsold durable consumer goods in France at 800 million euros». A slice of resources that can be exploited through discounted sales and re-placing on secondary markets.
The donated assets are worth only 140 million: donation is a widespread practice exclusively in certain sectors, such as playful items, but snubbed by all the others, who do not make use of the incentives for donations. The French tax authorities provide for a deduction of up to 60% of contributions from taxes, but only one in five clothing or electronics companies takes the opportunity.
«The environmental code already in force sanctions food waste and prohibits making unsold items still in a condition to be enjoyed unfit for consumption». The extra step is to turn to electronic platforms that offer services for the management of unsold goods or hold the products directly. «It's not just about obligations and penalties, but also about relieving businesses of the cost of eliminating unsold items. And consumers with limited resources will have access to new distribution channels at more accessible prices».
Not to mention the impact: «According to studies, reusing or recycling only unsold textiles in France will save 250,000 tons of CO2 per year». The equivalent of what 125,000 cars emit. The numbers would easily be right for this controversy, not to mention the role of landfills, which all Member States have committed to reducing with the European directive 850 of 2018. A promise destined to remain in the realm of black humor, for an Italy still looking for sites to open new ones.
In the meantime, the French environmentalists have collected a victory: the Senate approved the anti-gaspillage law presented on 24 September 2019 and it will soon be examined by the National Assembly which has proposed some changes.*
In Italy, the only outpost against the destruction of usable goods bears the name of Maria Chiara Gadda, a democratic deputy who wrote the "anti-waste law" in 2018, focusing on each of the stages of production, transformation, distribution and administration of products. The idea is to encourage recovery and donation for social solidarity purposes, limit negative impacts on the environment and extend the life cycle of products.
The impression, however, is that all of the monitoring of the transfer process is delegated to the two parties (donor and donee), who are responsible for all the related bureaucracy. The donor has the burden of making everything given as a gift traceable, and the third sector body that receives it must guarantee non-commercial purposes. With last year's budget law, procedures were further simplified. A successful example is the Buon Fine project of Coop Alleanza 3.0: from 5 thousand tons of food recovered in 2015 to 7 thousand tons in 2017, from 24 million to about 33 million euros in value.
For large logistics operators, the application of the laws on donations is complicated by the distinct contracts with their suppliers, which in fact make the relationships at stake difficult to frame. A donation mechanism struggles to engage, as long as it can be compatible with this management model.
8. THE CIRCULAR WAY AND ITS LIMITS
To measure the environmental impact of individual goods or services, the scientific literature offers various methods. For example, the Carbon footprint evaluates the impact of human action on the global climate in terms of greenhouse gas emissions over the entire life cycle of the product. The Water footprint considers the total volume of water consumed or polluted throughout the entire supply chain.
However, we must not overlook the complete picture, in an overall assessment of the scarcity of resources: an order of magnitude much worse.
Beyond the destroyed products, the delivery does not necessarily imply a negative environmental impact. According to some scientific papers, e-commerce could leave a less harmful footprint than an army of consumers heading to the mall each with their own car. But the promise of same-day delivery does not allow for full process rationalization.
Just think that an ordered product is placed without considering the distance of the buyer from the warehouses. So it doesn't matter if a pair of headphones ordered in Milan travel a few tens of kilometers or fly from Spain. The customer cannot guide his choice, provided he is aware of the environmental cost.
“An economic system in which the flows of biological materials can be reintegrated into the biosphere and the technical flows can be enhanced without entering it”. Thus the Ellen McArthur Foundation defines the concept of circular economy.
The founding principle of the circular economy is that new raw materials can develop from the waste of a product. Extended to the limit we would have zero waste, a distant horizon if we consider that today each Italian citizen produces on average more than two quintals per year. A pivot of the European environmental strategy is that of the bioeconomy, the umbrella that brings together all modern sectors and production systems which structure rely on biological resources, respecting biodiversity and the environment.
The practices of destruction of unsold items collide with the commitment of the European Union in the last decade, in a slow path towards the ecological transition that has recently taken effect. With the approval of the Circular Economy Package, the process begun in 2015 with the increase in the necessary funding and the guidelines on waste prevention and the management of waste produced is completed. A simple idea: consider the entire life cycle of the products.
It will be the obligation of individual Member States to transpose the Directives of the Package into legislation taking into account the characteristics of the national economy. The issue of the destruction of unsold products was not addressed directly in the preliminary discussions, contrary to what happened for specific issues such as food waste and electrical and electronic waste, regulated by the new directives. Lawmakers struggle to capture the evolution of production models and its effects.
Two policy officers of the European Commission of the General Environment Division have confirmed to us that the European regulations do not provide for particular obligations. Only general recommendations on the commitment of Member States to reduce waste generated upstream, to limit the total waste that is sent to landfills to 10% by 2035. A rather ambitious goal, which refers only to municipal waste, while for many objects there are no recycling targets.
However, a fundamental concept is improved: extended producer responsibility (EPR), financial and operational, in all phases of the life cycle, which aims to normalize on univocal standards at Community level.
In the complex landscape of logistics, a distinction must be made between the entity that produces a good and the one that places it on the market: «The nominal responsibility lies with the producer, but it could also be the distributor: for example, in the case of the importation of goods, it is not the foreign company to be considered as a producer, but the company that places them».
Responsibility is understood as applied to the End of Life phase, as it happens for example for electronic equipment (WEEE). Anyone who distributes these products on the market must pay an Extended producer responsibility fee (EPR), a tax that compensates for the expenses necessary for managing the waste. This motivates the producer to use materials that are more easily disposed of and recyclable, but the cost is often absorbed by the consumer through a price increase.
The companies that produce packaged products are also subject to the EPR tax, but European officials tell us that it is not very easy right now to identify who should actually pay: who produces or who imports? «Some companies entrust the management of waste to third parties, so they are not subject to payment as they are among those who manage waste on their own».
FOCUS - BEYOND PLASTIC: FOR A LOW IMPACT E-COMMERCE
The over-packaging of many products, including those of e-commerce, sometimes derives from marketing choices that ignore the environmental dimension. Packaging represents 4 out of 10 of products made of plastic and according to extended producer responsibility the costs for collection and management to be borne by producers must be proportionate to the recyclability of the packaging. By 2030 at the European level, all plastic will have to be recyclable and the recent debate on the plastic tax has brought the issue to attention.
Sustainable manufacturing can be a hallmark in building reputation in the market, helping to intercept sensitive consumer niches and educating others. At the same time, sustainable processing and supply chains save raw materials and energy and generate jobs.
Some researchers and professors of different disciplines at the University of Bologna have set up a thematic group to bring study areas and businesses together, and to systematize interconnection opportunities to open new markets. The group has created a database that collects information on more than one hundred innovative products, identifying twenty of them with great potential for commercial exploitation in the near future. By enhancing some solutions that replace traditional fossil-based chemicals, for example, resistant and performing carbon fibers can be created.
Paola Fabbri, associate professor of Materials’ Science and Technology who coordinated the research team, talked to us about the solutions aimed at closing cycles, the commercial valorization of waste and the magic of bioplastics.
«There is a plastic for every situation, due to its barrier properties and its resistance. But the complexity is difficult to manage at the time of recycling, due to the extreme variety and the lack of plant engineering, composting and treatment». Low environmental impact chemistry then comes to the aid starting from agricultural waste, without interfering with environmental chains, creating completely biodegradable alternatives in composting sites and non-pure water.
Not only sustainable packaging, but also enormous potential for the biomedical and automotive sectors. Even urban waste from one production process can then become an intermediate good in another process. To do this, different supply chains need to collaborate and create value chains.
«Italy has a pioneering competence in the field, we have world-class excellence active for years, an exportable know-how. On the one hand, we study performance in the laboratory, on the other hand the legislator must establish the criteria that promote the spread of new materials, correcting the disadvantage of the higher costs of production standards compared to traditional materials even at the cost of making unpopular choices. And by building great information campaigns»
The imperative is to orient consumer behavior towards sustainability, not just expect them to make the change. To avoid the paradox of having innovation at hand and not knowing it.
The legislative push has already given birth to virtuous examples. A European directive requires the automotive industry to use only materials from renewable sources, recycled or at least recyclable, which we don't even realize when we get on board our cars.
On the other hand, the direction of single-material packaging imposes design for recycling: designing products not only looking at their life, but also at managing their end of life.
Large-scale distribution and logistics have enormous potential, because in addition to being able to choose the best materials and large quantities that favor management, they can count on the great traceability of the products they distribute. The green revolution can begin right here, where today hundreds of thousands of new products are being destroyed.