Government will authorize companies to buy recycling credits, says agency

The government will launch a program to allow companies to buy recycling credits instead of implementing their own waste reverse logistics systems, two sources involved in drafting the measure told Reuters.

According to these sources, the initiative will bring environmental benefits, in addition to reducing the costs of these services and increasing the collectors’ income.

Due to the program’s design, the invoices obtained by cooperatives and collectors when delivering the collected products can be converted into a kind of title of property right. The private sector will be authorized to buy these papers to account for compliance with the recycling requirements provided for by law, in a logic similar to that of the already widespread carbon market.

A federal rule obliges manufacturers, importers, distributors and traders to implement their own reverse logistics systems – a mechanism for waste to be disposed of in an environmentally appropriate manner, with companies taking responsibility for the goods that are sold and, eventually, discarded by consumers.

An estimate by the Ministry of Economy points out that more than 240,000 companies currently have this obligation, although the ministry’s sources argue that the rate of non-compliance with the rule is high.

With the new system, cooperatives and collectors will register with the Ministry of the Environment, recording the invoices for the waste sold to recycling companies. The ministry will check the operations and issue certificates, which can be purchased from the hands of collectors and cooperatives by companies.

After this stage, the companies will present the certificates to the government, which will proceed with the verification procedure that the reverse logistics goals have been met.

“A company, for example, that has an obligation to recycle nine tons of aluminum, set up a recycling structure instead, calls a recycler and buys the right linked to the invoice of the waste already collected. It is an intangible value associated with the sale of the physical product, which creates extra value for recycling”, explained the source, who spoke on condition of anonymity.

According to the minister, the amount to be paid for the acquisition of these notes will depend on the type of product and volume, with prices established by the market itself. Credit related to less currently collected items, such as glass and batteries, is expected to be more expensive.

According to the sources, the measure is ready for editing and should be announced in conjunction with other economic stimulus proposals. The instrument to implement the project is a decree, which does not depend on congressional approval.

Under the plan, the system can also be used in the public sector. A city hall, for example, will be allowed to develop its own recycling system and sell the credits to the private sector.

According to this member of the portfolio, when the market is advanced, it will be possible to develop a mechanism for anticipation of receivables. “If you have a flow of monthly purchase of credits from the cooperative, it will be possible to make advance payments”, said the source.

A presentation produced by the Ministry of Economy on the proposal and obtained by Reuters states that, in the current format, the cost of maintaining its own reverse logistics system is between 9% and 15% of a company’s revenue.

According to data gathered by the ministry, Brazil produces 67 million tons of solid waste annually, with a recycling rate varying between 3% and 5%. The estimated waste of pulp due to non-recycling is 3 billion reais per year.

According to one of the sources involved in the project, European countries such as Spain and England are already adopting systems similar to the ones the Brazilian government will launch. The objective, according to him, is to reach a recycling rate of 70% in Brazil in 20 years.

In the social area, the ministry estimates that the new program has the potential to increase the income of collectors by 25%, who currently have an average salary of 930 reais. Currently, there are more than 800,000 recyclable material collectors in the country and 1,100 cooperatives, according to data from the ministry.

Regarding possible gains for companies, the ministry expects a strong reduction in expenses, with the average cost of returning a ton of packaging being around 350 reais, 81% less than the estimated average expense for reverse logistics. own.

Sought, the Ministry of Economy said it does not comment on measures still under analysis. The Ministry of the Environment did not immediately respond.