Julien Tremblin, General Manager at TerraCycle Europe, gives his blueprint for a sustainable future and explains how the UK can finance the transition to a circular economy.
The transition from a linear take-make-dispose model to a circular economy is one of the defining challenges of our time.
While the environmental and social imperatives are widely accepted both by governments and the wider population, two key questions remain: ‘How do we pay for it?’ and ‘how much does it really cost?’
For decades, our economic system has been built on cheap, disposable materials, but the models for managing their end-of-life are proving to be costly.
This financial imbalance has created a deadlock, leading to a visible stagnation in recycling efforts, not just in the UK, but across Europe.
While the UK’s household recycling rates have mostly stagnated at around 44%, even in countries like Germany, where the recycling rate is 69% and is often portrayed as the poster child of European recycling, have also seen their progress slow down.
We have now reached a critical point where we must confront the true cost of recycling and decide who will take ownership of the bill. We must take action today; it’s a question not of whether we can, but of how we fund the journey.
Why our current system is not conducive to a fully circular economy
The financial model of the linear economy does not support appropriate end-of-life management and preservation of resources.
Since the advent of cheap plastic packaging in the 1960s and 1970s, we have seen an inverse relationship between the cheapening of the packaging and the recyclability of said packaging.
Take beverage containers, for example. Originally, we had returnable glass delivered to our door. A durable product that went through many cycles before needing to be replaced. And when it did break, it was easily recyclable.
Over time, the packaging became lighter and disposable but still highly recyclable with aluminium cans (high material value), followed by PET bottles (decent material value). The push towards lightweighting and reducing costs has led to the introduction of drinks cartons or even flexible on-the-go pouches.
But whilst glass, aluminium and PET are considered valuable materials to recycle, other packaging types are harder to recycle and processors are struggling to extract enough value to cover their recycling costs – let alone covering collection and sortation.
This is why aluminium cans are widely recycled – with 70% of these recycled globally – whilst drink cartons are hovering around 52% in Europe (and estimated to be 28% globally), and flexible pouches are barely recycled today.
Likewise, for many everyday items – from medicine blister packs to cosmetics packaging and pens – the cost of collecting, sorting, and processing them is higher than the value of the recovered material.
In order to recycle such materials at scale, significant funding is required to ensure that the costs of collecting and reprocessing them are not higher than the value of the recycled material.
The challenge is made harder by a lack of understanding between packaging producers and brands on one side and recyclers on the other.
Brands will often argue that they are making efforts to create packaging that should be collected by local authorities and recycled by reprocessors. However, recyclers will rightly argue that the intrinsic value in the material is too low for them to process it.
This leads to millions of tonnes of so-called ‘non-recyclable’ packaging being incinerated across Europe, and valuable resources being lost forever.
So how can this be fixed?
TerraCycle’s history has shown that complex packaging and products can be recycled at scale with the right investment from brands and retailers.
Not only have such partnerships led to recycling breakthroughs (from pens to blister packs or cosmetic packaging), but they often bring commercial advantages, from brand differentiation, increased foot traffic in store or consumer loyalty.
This return on investment proves that economic benefits can be derived from a circular approach and justifies taking on the upfront costs.
On top of that, regulatory pressure, particularly through Extended Producer Responsibility (EPR) legislation, is helping to force a change.
In the UK specifically, the introduction of the Recyclability Assessment Methodology, which will see packaging classified as ‘Red’, ‘Amber’ or ‘Green’, according to their recyclability, should encourage the packaging sector to take action.
Packages that are viewed as ‘hard-to-recycle’ will lead to financial penalties for brands and retailers that put them on the market.
These penalties may well bring an economic incentive for brands and retailers to set up large-scale collection and recycling solutions just like the ones TerraCycle has been running. This could well be essential to help scale recycling rates for these difficult-to-recycle packaging.
From recycling to reuse: The next economic challenge?
While recycling is a critical step, we know that reuse will play a critical role in reducing the amount of waste in the UK and beyond. This is where our Loop business model comes in.
By designing durable, reusable packaging and creating the infrastructure to collect, clean, and refill it, we create a truly closed-loop system. But for this model to work, three elements are essential to ensure positive economic outcomes:
- Scale, which can be achieved through a large commitment by at least one leading retailer in any market.
- Legislation to ensure targets are enshrined in law with either incentives or penalties.
- A financial mechanism from Producer Responsibility Organisations to help subsidise costs whilst scale develops.
Based on our experience of piloting reuse in five different markets, the UK, the US, Canada, Japan and France, where France has successfully grown from pilot to industrial scale, we now know what is required in a market for reuse to thrive and become scalable in any country.
Financing the circular economy isn’t an abstract concept; it’s a practical business strategy that is already being implemented.
The combination of proactive brand partnerships, an EPR regulatory framework, and innovative platforms like Loop and TerraCycle proves that we can turn today’s waste problems into tomorrow’s economic opportunities.
The companies that are embracing this challenge today are not just protecting the planet, they’re future-proofing their businesses. The tools and economic models are in place. What we now need is ambition.