From Waste Management to Circular Economy

The article defines the essence and features of waste management in the circular economy. Over the past three decades, the entire progressive world has been striving to put into practice the concept of sustainable development, which involves the formation of a balance of ecological, economic and social aspects. The article is concerned with generalizing and systematizing modern theoretical and practical approaches to achieving the goals of sustainable development. A research of directions of improvement of waste management in the circular economy is carried out. Particular attention is paid to the concept of circular economy. The methodological basis of the research was the conceptual principles of sustainable development, the «green» economy, the circular economy (closed-loop economy). Analysis, synthesis, classification, observation, study of various sources of information were used as the main methods of scholar work. The possibility and significance of taking into account the goals of sustainable development in the management of general modernization processes in both society and the economy is proved. It is identified that development of the umbrella concept of the «green» economy, which acts as an instrument for achieving these goals, is based on the concepts of environmentally friendly production, the best available technologies and the circular economy. The theoretical and practical bases of circular economy as a new trend of implementation of the concept of sustainable development are considered. The normative-legal, market, financial, investment, economic, technological and organizational factors influencing the application of the principles of circular economy in Ukraine are examined. The results of the study can serve as the basis for achieving the goals of sustainable development at different levels and in the spheres of economic management with the help of circular economy instruments: circular business models, secondary markets, methods for managing the cyclicality of production and consumption.


Preface
After a three-year hiatus, EUROSAI WGEA's Spring Session was again dedicated to waste and circular economy issues. This is no surprise as our Members continue to express active demand towards events on these topics.
Symbolically, within these three years, a turnaround on the global waste management arena has taken place with the biggest trash-importing country banning the import of waste -a significant event also from the European perspective. Especially so since in many countries, waste prevention and recycling rates do not yet offer hope for reaching the goals of the ambitious European Circular Economy Strategy anytime soon. Such context demands us auditors to continue to investigate the fine mechanics of waste management, to map the bottlenecks and help decision-makers work towards achieving societies where waste is practically not produced but redirected into new value chains instead.
Close to 50 participants from 23 Supreme Audit Institutions took part of this year's Spring Session and experts both from Cyprus and Estonia as well as Flemish Institute for Technological Research (VITO) and EU Network for the Implementation and Enforcement of Environmental Law (IMPEL) provided support with their practical knowledge. Presentations and active discussions attested to the fact that audit experience in the circular economy field is still scarce. They also reflected that SAIs as guardians of public finances will need to keep their attention on developments in the field to be able to comment on the effects of various interdependent policy choices.
The following report has been compiled to provide a chance to 're-experience' the Spring Session 2019, to find useful information and references.

Mr Jānis Salenieks, SAI Latvia
Mr Salenieks talked about the impact of SAI Latvia's municipal waste management audit carried out in 2012-2014 wherein the SAI had investigated whether only justified expenses had been included in the waste management fee. SAI found that a total of 3,6 million euros had been overpaid by waste producers due to erroneous weight-to-volume calculations and illegal collection of natural resource tax on waste not landfilled but recycled. Among other things, waste management fees had been reduced post-audit resulting in significant savings for consumers.

Ms Vaida Barizienė, SAI Lithuania
Ms Barizienė presented an overview of six waste audits performed by SAI Lithuania in the decade of 2008-2018. She brought out key facts and results on each of these audits together with selected post-audit developments. Ms Barizienė also described how the topics of audits were being chosen and what types of sources for collecting relevant information were being used. She listed factors such as actuality, accessibility, responsibility, willingness and determination as key elements in the success formula of waste audits.

Mr Benjamin Groll and Ms Kristyna Liskova, SAI of Czech Republic
Mr Groll and Ms Liskova shared the results of the risk analysis carried out by SAI of Czech Republic with a view to choose the focus for the waste management audit planned for 2021. Funds earmarked for waste management measures as well as the principles of waste management hierarchy had been established as starting points for the planned audit. Audit team had mapped 10 risks connected to total waste production, legislation and strategy, landfilling, recycling and plastics, targeting of funds, data and transboundary waste shipment. SAI's Benchmarking Information Exchange Project (BIEP) would also be used for collecting international comparisons and knowledge from other SAIs.

Group activity
Participants were invited to discuss their recent and planned audits related to waste management and circular economy. For providing a structure for the discussion, a simplified model of circular economy for materials and energy 1 was used complemented by a list of potential policy instruments affecting the circularity of products throughout the product lifecycle: It emerged from all groups that most conducted audits had been focused on waste recycling and packaging waste; largely the 'waste'-part of the graph. It was noted that probably more focus should be put on circular economy and waste prevention in future audits; at the same time, it was also stressed that as several countries are yet to achieve their waste management and recycling targets, it was relevant for those SAIs to investigate the concrete waste management tools and measures as well.
Group Debate: Waste-to-energy -an opportunity or a threat?
Another group activity organized at the seminar was a debate on whether waste-to-energy (WtE) should be regarded as an opportunity or a threat in the context of circular economy. Participants were divided into groups, each to prepare arguments for a presentation by their representatives. Experts present at the event also provided their comments.
Arguments on waste-to-energy being an opportunity: • Solving the problem of landfilling -strong correlation between high recycling and incineration rates and low landfilling rates in European countries • Substituting the use of natural resources in energy production. Biowaste as a renewable source of energy helping to reduce dependency on fossil fuels. Energy security. • Relatively cheap waste management method • Creation of new industries -innovation, markets and jobs • Circularity opportunities (e.g. for using bottom-ash in construction) • Incineration overcapacity in some parts of Europe should be put to use in favour of others • WtE helps to capture and manage hazardous content in waste. There are cases of reuse, even (concrete blocks in Germany).

• Modern incinerators avoid air pollution (strict EU regulations)
• Subsidies are also used in the renewables' sector and other energy industries • Recycling has its limits (e.g. paper and cardboard in repeating cycles) • WtE as a safe sink for hazardous substances that would otherwise be landfilled or end up back in use Arguments on waste-to-energy being a threat: • Environmental concerns with burning materials such as air pollution, also storage of ash • Not a sustainable type of energy • Works against the concept of reducing and reusing waste in the first place and may even promote increased waste production • Not necessarily economically more viable type of energy production, as incinerators are often subsidized. Transportation costs also reduce economic viability. • Missed opportunity of preventing the production of virgin materials via recycling and reuse • WtE needs systematic monitoring and control to avoid corruption and environmental risks.
Where incineration is not very expensive, probably air pollution control technology is not state of the art • Not all types of waste can be incinerated • Incineration overcapacity in Europe encourages the production of waste and hinders waste prevention and circular economy solutions • Lock in with incineration capacity -capital investments demand a long-span operation of the incinerators

Mr Jan Vervoort, SAI Belgium
Mr Vervoort presented the ongoing Flemish food waste audit by outlining the general global and European policy framework and pointing out relevant concepts such as the Moerman's Ladder of food waste and the difference between food waste and food loss. He also described food sector's structural problemsmarket withdrawals, 'cosmetic' quality standards, food safety policy and dates on labels -that contribute to food loss and wastage. He indicated that SAI Belgium's audit would probe into whether the strategy and measures of reducing food waste enable reaching 2020 and 2030 policy targets.

Mr Robert Markus, European Court of Auditors
Mr Markus talked about ECA's food waste audit completed in 2016. The audit had been commissioned considering the high economic and environmental costs and global relevance of the food waste problem; also, while EU legislation and funds were relevant for all actors in the food supply chain, few studies about EU's actions and responsibility in the area had been made. As a result of the audit, ECA concluded that political ambition had not been translated into sufficient systemic actions and existing EU policies could have been better aligned to combat food waste more effectively. Increased policy action, better inclusion of food waste in future impact assessments (CAP, fisheries, food safety) and the promotion of food donations were among the audit recommendations.

Cooperative Waste Audit Discussion
SAI presentation: Plastic waste -a common problem so why not a common audit?

Mr Mariusz Gorczyca and Mr Wojciech Dudek, SAI Poland
Mr Gorczyca and Mr Dudek introduced SAI of Poland's (NIK) proposal for a cooperative plastic waste audit to be conducted by EUROSAI WGEA members starting from 2020 and informed that NIK would be willing to lead such a cooperative effort. Setting the scene aided by various global and European plastics' industry and plastic waste data along with relevant EU policy measures, Mr Dudek and Mr Gorczyca also laid out the proposed objective, main questions and risks along with timeline and key activities for the cooperative audit. The proposed scope of the audit would be to assess whether national authorities take effective measures to reduce the generation of plastic waste and ensure its proper treatment.

Group discussions
Three parallel discussion groups were organized to identify the interest of EUROSAI WGEA members to engage in cooperative waste audit(s) on the topics of plastic waste, circular economy and transboundary waste shipment.
Plastic waste group continued discussions based on the concrete project proposal presented by the SAI Poland. 12 SAIs indicated their preliminary interest to take part in this project. The general focus put forward by NIK seemed viable for most SAIs, but confirmations and further discussion on project details would need to be arranged. NIK indicated that it would continue with project preparations and investigate whether the BIEP platform provided by the SAI of Czech Republic could be used during the cooperative audit.
Circular economy group led by Ms Viire Viss from SAI Estonia did not arrive at any concrete project outline, but rather mapped several potential topics to be considered for cooperative audits in the future: • Public procurement: the role of the public sector in influencing the market and promoting circular economy. The implementation of green public procurement guidelines issued by EEA in different countries could be investigated. • Circular economy could also be audited from the viewpoint of one waste stream (e.g. plastics, food, construction waste, e-waste) and the whole production lifecycle could then be taken under review. • Recycling fraud and transboundary shipment (recycling and circular economy crossing national borders) Circular economy policy goals and strategies were deemed to be in too early stages to be audited and it was noted that the Environmental Environment Agency was soon to issue a comparative overview report on the status of circular economy strategies in Europe.
Transboundary waste shipment group led by Ms Lejla Marinko from SAI Slovenia concluded as a result of discussion that if an audit on the topic was to be launched, it would be more of a long-term project than a close one -relevant EU regulations were in the pipeline of being updated in 2020. The group also felt that a follow-up of the EUROSAI WGEA 2008-2010 cooperative waste shipment audit was perhaps not desirable due to the rather long time-interval. At the time being, it was deemed wise to wait for the results of the ongoing trilateral cooperative follow-up audit on the same topic conducted by the SAIs on Poland, Slovakia and Ukraine.

Mr Dirk Nelen, European Topic Centre of Waste and Materials in a Green Economy
Mr Nelen's address provided a perspective on waste management and circular economy policy challenges based on the research of waste management, green economy and material resource efficiency data and information in Europe.
• Linear economy vs circular economy • Waste management in a circular economy • Waste reuse and prevention • Measuring the circular economy • Circular economy paradox

Dr Myriam Fernandez, Team Member of the IMPEL's project 'Waste management and circular economy'
Dr Fernandez introduced the guidance prepared by IMPEL aimed at providing regulative authorities with perspectives and practical tools connected to circular economy. She informed that the guidance covered topics such as legislation, regulator's role in enabling circular innovations, the role of policymakers and views of businesses and a separate section on plastics. Dr Fernandez pointed out the diversity of tools employed by countries in assessing the end-of-waste status of materials -varying from prescriptive permits to legal opinions and flexible self-assessments by operators. She informed about IMPEL's proposal to create a voluntary international database to help permit writers, inspectors and operators to find information on end-of-waste decisions and verifications. IMPEL had also been working on a tool to help support inspections set up a system of end-of-waste inspections.

Mr Matti Vedenkannas, SAI Finland
Mr Vedenkannas talked about SAI Finland's forward-looking audit of cleantech procurement aimed at assessing the effectiveness of public procurement in creating markets for innovative cleantech and circular economy solutions. Several good practice cases were mapped during the audit in the sectors of road construction, district energy services and public sector real estate management, but SAI of Finland still noted that the market was growing rather slowly due to cautiousness of public sector buyers.

Mr Igor Vošnjak, SAI Slovenia
Mr Vošnjak gave an overview of SAI Slovenia's audit on the management of memorial candles waste. The SAI had found the system to not have been managed efficiently enough as the environmental tax had not induced the consumers to reduce the use of candles and data on the recycling of waste candles did not attest to a significant share being recycled, plus did not prove reliable. SAI had also pointed to the lack of strategic goals and evaluation of the impact of awareness initiatives on the part of the auditee. At the same time, good practices such as the promotion of virtual candles were highlighted by the SAI.

Ms Christina Meshiti, SAI Cyprus
Ms Meshiti presented the results of SAI Cyprus's audit on the national waste management strategy. She underlined the high percentage of landfilling as one of the major waste management concerns for Cyprus. The SAI had reviewed solid and municipal waste management plans and the national waste prevention programme and had come to the conclusion that on the whole, a more modern national strategy was needed for Cyprus with deliverable solutions, specifications, timetables and a better link to the EU waste and circular economy targets.

Ms Viire Viss, SAI Estonia
Ms Viss made a presentation about the potential risk areas of hazardous waste management in the context of circular economy, based on SAI Estonia's audit experience. She pointed out challenges faced by authorities such as the determination of waste, by-products and end-of-waste in complex industrial processes, defining recycling, control over waste producers and management companies, intersectoral issues and the support of prevention and recycling technologies -areas that needed to be kept in mind by SAIs as well. Ms Viss also presented some concrete 'waste or byproduct' dilemma cases that SAI Estonia had discovered in its audits.

Ms Katarzyna Radecka-Moroz, European Court of Auditors
Ms Radecka-Moroz finished the section of SAI presentations with her overview of ECA's inhouse project aimed at reducing plastic packaging waste. ECA had launched the initiative observing the related international and European policy goals as well as the local context of Luxembourg wherein the production of plastic packaging waste was the second highest in EU. The initiative was also well in line with ECA's internal environmental policy and its undergoing plastic packaging waste reduction audit. Ms Radecka-Moroz informed that single-use plastic cups had already been banned at ECA earlier and based on the mapping of the sources of plastic packaging waste, various measures were in the pipeline: removal of plastic packaging from the catering and laundry services contracts, ban of single-use plastics at receptions, substitution of freestanding plastic water dispensers with direct-piping ones, staff awareness campaign.

Group work
For the last group work organised at the seminar, participants were tasked with discussing potential future audit directions in the field of waste management and circular economy. The groups came up with the following 'buffet of ideas': • Waste prevention as a future audit direction • Looking at strategies and policies of waste prevention -whether these go beyond mere declarations and what kind of background information these are based on • Balanced approach is essential: lifecycle analysis to be used in policy decisions • A potential to cooperate with research institutes etc. to involve best expertise in audits, or to see whether the governments have done that • Investigating whether quantifiable waste management and prevention targets and indicators are stipulated in strategies • European Environmental Agency has compiled a long list of waste prevention measures.
Auditors could check whether their national measures correlate with their countries' profile and are accompanied by quantifiable targets. • Some SAIs have already made audits on the preparedness of their countries to implement SDGs -circular economy is part of SDGs as well and preparedness to fulfil that could be looked at in audits • Construction and demolition waste -how efficient are the buildings and how the waste is managed • Government's activities to promote circular economy -wide range of activities, but usually not very well focused. Awareness of circular economy among municipalities, business and citizens • Importance of inspections and monitoring • First stage of circular economy: eco-design, what governments do to promote this for circular economy. Green public procurement helping improve eco-design and circular economy • Landfilling problem -how to shift away from that. Strategy moving from that towards circular economy • Audit of waste management data -recycling • Planning of incineration plants from the capacity point-of-view + compliance with best available techniques to ensure environmental soundness • Audit of the preparation phase in circular economy -how the authorities define and what knowledge they have, and the knowledge and awareness that the public has • SAIs showing good practice, acting as role models in their own operations • Bioeconomy, circular economy, cleantech -different concepts on which awareness (auditors, auditees, public) needs to be raised Kesküla informed that the courseware had largely been compiled and was being prepared from testing, with a view to launch the MOOC in September 2019, open to everyone interested. The course would cover the following areas: the concept of waste and waste-related problems, waste management principles and economics, waste management actors and policy tools, design of a waste audit. As with earlier MOOCs, the course would be fully online and self-paced, and a certificate would be issued by the University of Tartu (Estonia) to participants that pass all tests and the final exam. Ms Kesküla encouraged the participants to either take the course themselves or invite their colleagues to do so.