Tanja Dietrich-Hübner, Head of Sustainability at Austria – REWE International AG, Michael Huber, Fund Manager at Raiffeisen KAG, Christian Pladerer, CEO of the Austrian Institute of Ecology, and Doris Ribitsch, Head of Molecular Biology at the Institute for Environmental Biotechnology at BOKU Vienna (University of Natural Resources and Life Sciences), discuss the challenges surrounding the avoidance and reduction of plastics under the moderation of Dieter Aigner, Managing Director of Raiffeisen KAG.
On closer examination, the topic of avoiding or reducing plastics in packaging is quite complex and is co-determined by many different interest groups. Where do we stand and what can we do in terms of sustainability in this area?
Tanja Dietrich-Hübner: The food retail trade and especially we as market leaders are confronted with very high expectations when it comes to packaging. The “BILLA”-branded plastic bag was a well-known trademark of us for a long time. And sturdy plastic bags no longer exist. Although at that time we already had a share of 80.90 percent recycled material. Today the thin plastic bags for fruit and vegetables are under discussion. But this is only the tip of the iceberg when we talk about plastic avoidance and reduction. The real levers are elsewhere. Finding sensible solutions with regard to ecology, social compatibility, but also economic efficiency is a high art. This applies not only to packaging, but also to food in general.
Can you give a concrete example?
Tanja Dietrich-Hübner: Last year we launched a disposable glass milk bottle on the market. This has triggered many discussions – also in our company – because we too would have preferred to have launched a returnable bottle on the market. But there was no supplier in Austria for it, so we would have had to move to Bavaria. We didn’t want that. Now one of our partners in the dairy sector has invested in such a product line and we will change over to returnable bottles next year. Behind this are enormous investments and we are moving on thin ice, because we do not yet know whether our customers will accept this. We must not believe that more sustainability will cost nothing. Companies often have to pay in advance and take some risk.
The Austrian Institute of Ecology also analyses the residual waste from households. What conclusions can be drawn from this?
Christian Pladerer: For example, we analyze the composition of residual waste on behalf of municipalities and companies. One thing has been conspicuous for many years: little has changed. The residual waste consists of 30 percent biogenic material. Much of it is food waste and even avoidable food waste. In other words, waste that would still have been edible. They end up in the garbage because too much has been bought, perhaps a holiday has been planned, habits have changed or the best before date has just passed. However, there is a high proportion of recyclable materials in the residual waste: paper and plastic packaging as well as glass and metal packaging. If you look at the residual waste from Bregenz to Eisenstadt, about 30 percent of the residual waste actually is recyclable.
Are we kicking the garbage right now?
Christian Pladerer: Austria has had a regulated waste management system for around 30 years, with a Waste Management Law and a Packaging Regulation. We have also concentrated on getting the landfills under control. There is regulated waste disposal, separation and recycling. Globally, we are among the leaders in waste management. And yet, the garbage is rising. Total waste in Austria increased by 14 percent between 2009 and 2016. The residual waste continues to rise. We didn’t do a good job in this regard. Although we’ve been talking about avoiding waste for 30 years. Not everything is sunshine and roses in our country either. We also have a lot of catching up to do when it comes to waste separation. Especially in the field of plastics.
Science and research make important contributions when it comes to innovative solutions for the degradation of plastic waste …
Doris Ribitsch: For a long time it was thought that it was not possible at all for plastics that were completely unnatural in terms of their chemical structure to biodegrade. But we have found and isolated microorganisms, enzymes, that can do that. We found what we were looking for on the compost heap: Because tomatoes, apples, etc. have a wax-like skin, and that’s nothing more than a polyester – although differently structured, but nevertheless. We then looked for microorganisms, such as plant pathogens, that could attack these fruits and tested them on plastics. They actually showed an impact. Now in nature there is not exactly the substance “PET”, but only a very similar one: Cutin. Since it is not completely identical, it is not as effective on our plastics as it is on natural polymers. We are therefore trying to improve these enzymes so that they can also be used industrially. We’re on the right track.
Can that solve our problem?
Doris Ribitsch: I can only answer that with a yes. Because there are so many plastics and applications, and we don’t have a solution for everything. But the three “Rs” – Reduce, Reuse and Recycle – that would take us a whole step forward.
Christian Pladerer: I would even expand this list to include the terms Rethink, Refuse – you don’t have to produce or consume everything – and Redesign, i.e. the packaging and products in such a way that they can be reused and thus brought into a circular economy.
What contribution do investors make?
Michael Huber: We take a close look at the companies with regard to their waste management and waste avoidance and work here with external research agencies that provide us with the data. The development of a company is also important to us, e.g. whether there is an improvement. Data quality plays an important role here. From our point of view, there have been many positive developments in recent years. Companies are aware that more and more investors are looking for sustainability. We see a positive trend there, and we try to generate a positive impact through our investment. As far as plastic packaging is concerned, you have to discuss things truthfully: The worldwide consumption of plastic packaging amounts to 78 million tons annually. 32 percent of these end up in nature or the sea. 40 percent on landfills, 14 percent are burned and only 14 percent recycled. Something’s got to happen. Companies are responsible, politicians and, of course, consumers are responsible.
Our aim is to communicate our point of view to the companies and to achieve a positive impact.
But also to generate revenue.
Michael Huber: Yes, of course. We don’t see things through rose-colored glasses. We want to earn money for our customers and can also demonstrate this conclusively on the basis of our performance figures. We show that the topic also brings financial benefits and that there is a second ecological and social return.
Waste collection and separation are organized very differently in each federal state. Is enough being done here by politicians?
Christian Pladerer: There is a difference between urban and regional waste management. It can also be proven in figures that the amount of waste per capita is higher in larger cities like Vienna, Linz and Graz etc. than in rural areas. Some of this is due to the fact that the collection structures and intervals are different. The taillight is Vienna. The infrastructure there only makes one waste paper bin available to houses in addition to the residual waste bin at maximum.
Michael Huber: Is less collected in Vienna because people know that the garbage is burned? And then you also sometimes hear that plastic is added so that the calorific value is good enough …
Christian Pladerer: That’s a legend that’s been around for years. No plastic is added there.
Waste separation will change massively in the coming years due to European legislation. We have recycling targets that we are far from meeting, especially in the plastics sector. In other words, we then need a massive increase in collection in order to achieve recycling at all. In addition, there is a 90 percent collection rate for PET beverage bottles, we have to fulfill as well. You can only do that with a container deposit. This is already working in Germany, Croatia, Norway and many other EU countries, where collection rates are around 95 percent. At the same time, however, the reusable system must be supported. Here, legal regulations such as a returnable quota at the trading level are the way to go.
Tanja Dietrich-Hübner: As traders we are critical of a deposit. Because on the one hand high investment and operating costs are incurred here, on the other hand it is not a holistic package. It’s not just a matter of converting the machines, but also of employees who have to manipulate them and logistics that have to be expanded.
More storage space in the branches is also necessary. The Austrian food retail trade is very strongly held accountable here for an issue affecting society as a whole.
What concrete areas of application are there in the field of biotechnology?
Doris Ribitsch: We see good application possibilities – and here we have already applied for a patent – In the textile sector. Many textiles consist of fiber blends with, for example, cotton, polyester and elastane, which can no longer be separated mechanically. However, separation is possible through the use of enzymes. We are faced with major challenges there. Organic waste is also a suitable field of application. It is hard to believe, but there is a lot of plastic in organic waste that prevents reactions in the biogas plant. Our enzymes can break up the plastic so that the waste can be processed accordingly. Nevertheless, we still have to reduce and be more conscious with plastics.
Would an incentive system make sense so that as little packaging material as possible is produced along the entire value chain?
Tanja Dietrich-Hübner: Incentive systems are always good. As a pioneer you are unfortunately not always rewarded, on the contrary: you often bear the high costs. With appropriate incentives, pioneering achievements could be rewarded with financial added value or otherwise. Funding is very helpful here.
Christian Pladerer: One example where it works without intervention and without incentive systems is transport packaging, the green, red or brown crates for fruit, vegetables, meat and bread. The system pays off, is ecologically better, and voilà: It works!
Tanja Dietrich-Hübner: I have to make an objection here: High investments and operator costs were and are necessary here. The crates need to be washed out. In the logistics centers, washing systems are needed to ensure that they are cleaned in such a way that they are suitable for transporting food. This naturally results in costs and not everyone finds these boxes as attractive as the more visually appealing cardboard packaging. Another topic is the hygiene regulation: Food safety is now so important that it sometimes resembles a religion and thus, for example, stands in the way of the reusable discussion. Another keyword is the bringing of own dishes by customers, in order to pack sausage or cheese. We have now made this possible, but it was extremely costly. With a very precisely defined process, we now comply with the strict hygiene regulations and at the same time can save packaging. But there is still the risk that a box that is not completely clean will spoil the goods more quickly and customers will complain to us.
Which companies are interesting from an investor’s point of view?
Michael Huber: We invest in innovative companies that are leaders in waste management and recycling. In Austria, this is Lenzing AG, which produces natural fibers. About one third of the microplastic is produced by the textile industry. By washing the clothes, the plastic fibers find their way into the wastewater. In the emerging markets, only 8 percent of wastewater is treated at all. And there’s the question of whether it is filtered through the sewage treatment plant. The clothing industry is a major contributor to marine pollution, and we are not talking about visible plastic here, but about what you can’t see. In the paper packaging industry we invest in Mondi, which is exemplary in the procurement of the raw material wood. We must also remain critical here, because if everything goes in the direction of paper, we have a problem with deforestation. Tomra is a company that produces reverse vending machines. We also find this field of business worth supporting.
Austria feels like a world champion when it comes to waste separation. The picture is a little clouded, there is still a lot to do. Where do we stand in 2030 – at best?
Tanja Dietrich-Hübner: I am optimistic that new technologies will bring more sustainable packaging to the market. But we also want consumers to be more aware when shopping and to attach more importance to sustainable products and more environmentally friendly packaging.
Christian Pladerer: It would be positive if the recycling economy were taken seriously in the sense of a proper recycling economy and we not only talk about recycling, i.e. not just the material, but the product itself, as packaging, as a returnable system in the cycle. Products must therefore also be designed in such a way that they can be recycled. It makes no sense to circulate harmful substances.
Doris Ribitsch: A major problem is microplastics, which can now be found everywhere. The avoidance of microplastics is therefore extremely important. Microplastics are mainly produced by plastics that have been released into the environment or by washing synthetic textiles. It will therefore be important to also develop new materials that cause less microplastics or are biodegradable. The general reduction of our plastic consumption is, however, the first priority.
Michael Huber: We can see that many new ideas are emerging in the companies and that the topic has arrived. Nevertheless, I am of the opinion that we must set an example and bring our expertise in waste management as quickly as possible to the countries where the large quantities of waste end up in nature.
Mag.a Tanja Dietrich-Hübner, Head of Sustainability at Austria – REWE International AG
Michael Huber, Fund Manager at Raiffeisen KAG
DI Christian Pladerer, Director of the Austrian Institute of Ecology
Dr. Doris Ribitsch, Head of Molecular Biology at the Institute of Environmental Biotechnology at BOKU Vienna (University of Natural Resources and Life Sciences)
Photo Copyrights: Wolfgang Pecka