European Court of Justice, Judgment on Recycling

In June 2003 the ECJ issued a judgment on the definition of recycling in relation to scrap metals. This judgment is another in a now long line of cases resulting from a lack of clarity in definitions used in European Union waste law. A wider message that can be taken from this case and the previous cases is the critical importance in interpreting EU Directives of taking a "purposive" approach to such interpretation. A literal interpretation may very well have assisted the claimant, Mayer Parry Recycling Ltd, but unfortunately for that company this is not how EU law works.

The ECJ judgment arose from judicial review proceedings before the High Court brought by Mayer Parry against the Environment Agency in connection with the Producer Responsibility Obligations (Packaging Waste) Regulations 1997 ("Packaging Waste Regulations"). Mayer Parry treats ferrous scrap metal (including packaging), turning it into what is classified in the industry as "grade 3b". This is sold to steel makers as a raw material in producing steel ingots, sheets and coils.

Mayer Parry argued that it was the "reprocessor" of this ferrous packaging waste, thus entitling it to PRNs under the Packaging Waste Regulations. In November 1999 the Environment Agency rejected this argument deciding that "recycling" did not take place until the steel maker had actually turned the grade 3b into steel ingots, sheets or coils. Thus in the Environment Agency's view the steel maker is the reprocessor. It was this decision that was the subject of the judicial review.

In the judicial review the High Court referred certain questions in relation to the definition of "recycling" and "waste" to the ECJ for a preliminary ruling. There were a number of parties who intervened in the ECJ proceedings. Generally they all intervened on the side of the Environment Agency. They included steel makers Corus (UK) Ltd and Allied Steel & Wire Ltd, the governments of a number of Member States and the European Commission.

Mayer Parry relied heavily on a 1998 UK court ruling in its favour where the UK court declared that scrap metal that was treated to grade 3b ceased to be "waste". Mayer Parry argued therefore that it must be the recycler. This was a strong, simple and logical argument but one that was ultimately unsuccessful. The case was complicated by arguments about the interrelationship between the EU Packaging Waste Directive (94/62), which the UK Packaging Waste Regulations implement and the EU Framework Directive on Waste (75/442) and, critically, the objectives of those directives.

The ECJ came down firmly in favour of the Environment Agency and the interveners. It held that recycling is not complete (for the purposes of the Packaging Waste Directive) until the point where grade 3b is transformed into steel ingots, sheets or coils. In essence what the ECJ held was that whilst Mayer Parry was producing secondary raw materials for the steel makers in the form of grade 3b, it was not producing new steel. That was done by the steel maker and thus it is the steel maker that is the reprocessor and can issue the PRNs.