A competitive market is essential for a circular economy

Media reports in recent weeks have not painted a pretty picture of the Austrian circular economy. There is talk of a waste cartel whose members are said to have enriched themselves over many years by unfair means. The investigations are still ongoing, and the first and last key witnesses have now allegedly been asked to pay, so it could be very expensive for the other cartel members.

Since the market was opened up in 2015, Reclay has been allowed to operate a packaging return system in Austria, in addition to Germany, France, Spain, Finland and Slovakia. Around two years after the market was opened up, the European Commission imposed a fine on ARA – Altstoff Recycling Austria for hindering competition and abusing its dominant market position. Despite this supposed liberalisation, fair competition is still not in place today: the Austrian Court of Audit came to the same conclusion at the end of 2022. The structures from three decades of a one-party market are too deeply rooted, which often leaves Austrian companies in particular with only a theoretical choice of recycling partners.

Nevertheless, the increased competitive pressure has already had positive effects: Packaging licensing fees have fallen by up to 50% since the market was opened up – an advantage for producers and consumers alike. Thanks to leaner structures and independent positioning, companies like Reclay can offer more cost-effective and efficient solutions.

Fair competition as an engine for Austria’s circular economy

The consistent approach of the Federal Competition Authority and new EU regulations on packaging recycling are opening up the opportunity for Austria to fundamentally reform its circular economy. However, further steps are needed to catch up with leading recycling nations such as Germany. A complete unbundling of the value chain in the recycling sector is just as necessary as transparent tendering procedures for waste disposal contracts. In addition, innovative recycling technologies should be promoted and consumer education on waste separation should be strengthened. Last but not least, the implementation of incentive systems for resource-saving product design would be an important step towards a sustainable circular economy.

Truly unleashed competition in the circular economy would not only reduce costs, but also promote innovation and ultimately lead to higher recycling rates. Austria now has the opportunity to actively shape this transformation and position itself as a pioneer of a sustainable circular economy. This opportunity must not be wasted.