How to distinguish by-products from waste
11. 1 .2023,
The biophysical environment is already structured not to waste resources, suffice it to say that the oxygen derived from photosynthesis in the plant world is not the main product of the chemical reaction between sunlight, carbon dioxide and water. In fact, plants want to produce glucose, a sugar that is essential for their own development, while oxygen molecules are a waste that is released into the atmosphere, which for us instead becomes essential in an extreme example of mutualistic symbiosis.
What are by-products?
In our industrial world, by-products are residues and waste from industrial processes that are not classified as waste but as assets. They are not end-of-life materials on which a recovery/recycling operation is required but are directly reusable in the same or a different production process.
For example, suppose we have a company that produces orange juice. During pressing, the main residue from the processes that turn oranges into juice is an organic matter consisting of peel, pulp and seeds. Clearly, in order to be considered a by-product, the pulp must not contain matter in a state of putrefaction.
In February 2019, Italy notified the European Commission of a draft regulation on the production, marketing and use of citrus pulp as a by-product for its agricultural and livestock use (notification 2019/62/I).
But let’s take a closer look at what the process is for the authorisation of by-products in general:
How to recognize a by-product? The 4 mandatory requirements for the Italian legislation
In order to be considered as by-products, waste must comply with a clear regulatory requirement described in Article 184-bis of Legislative Decree 152/06, i.e. satisfy all four of the following conditions at the same time. Let us look at them one by one:
"the substance or object originates from a production process, of which it is an integral part, and whose primary purpose is not the production of that substance or object".
The first condition is quite intuitive and self-explanatory, the waste product cannot be the primary result of production. For example, if I own an orange juice business, I cannot consider the juice as a by-product.
Let us observe the second condition: "it is certain that the substance or object will be used, in the same or a subsequent production or use process, by the producer or a third party;".
As in the first case, the second requirement is quite straightforward. To be a by-product, the waste must have a function or purpose. In practice, it must have qualities that allow it to be used in the production of something; whether it is done in-house or by a third party.
In short, if our waste from juice production served no purpose at all and/or no one, we would have to classify it as waste.
Compared to the first two points, the third leaves more room for interpretation. In fact, Article 184-bis of Legislative Decree 152/06 states that: "the substance or object may be used directly without any further treatment other than normal industrial practice;" but at the same time there is no pure definition of "treatment".
However, we can make the meaning of this term more specific by considering some rulings of the Supreme Court:
- the treatment does not affect or cause the material to lose its identity, commodity characteristics, or environmental quality, it does not determine a structural change in the chemical-physical components of the substance or its radical transformation;
- the treatment corresponds to those ordinarily carried out in the production process in which the material is used and, in particular, to those ordinarily carried out on the raw material that the by-product is intended to replace.
Returning to our oranges, if, for example, our waste were to go through processes to remove toxic or hazardous fractions, we would have to proceed towards classification as waste.
The last condition requires that the application or use of the waste must be authorised by law without having negative effects on the environment and health.
The text of the article is as follows:
"the further use is lawful, i.e. the substance or object meets, for the specific use, all relevant requirements concerning products and the protection of health and the environment and will not lead to overall negative impacts on the environment or human health."
If the waste does not meet even one of these conditions, it should be treated as waste and not as a by-product.
How to recognize by-products?
The presence and existence of these prerogatives must be proven by the producer. In order to proceed with its recognition, the producer must complete a data sheet that includes specific information on the waste material, its production process and the actors involved in its production and future use (producer, user and any third parties).
The sheet must be filed with the Chamber of Commerce and if it is approved, a so-called Declaration of Conformity must be made. A useful tool for the correct management of by-products, in particular to meet the requirement of "certainty of use", is the drafting of a commercial contract between the producer or holder (possible intermediary/trader) and the company in whose process the by-product will be used.
It should be noted that the preparation of technical data sheet and contractual documentation (methodologies proposed in Ministerial Decree 264/16) is not compulsory, but to date it is the only recognised pathway for demonstrating the existence of the requirements required by the regulations to bear the burden of proof for the purposes of qualifying a production residue as a by-product.
How to proceed with recognition more easily and quickly
Cyrkl’s circular economy consulting experts can support you in the recognition process by analysing the material and compiling the documentation. They are also able to find counterparts interested in purchasing by-products. For more information on this service, you can book a no-obligation online appointment with one of our consultants.
What are the benefits of considering a waste as a by-product?
Recognising waste as a by-product has several benefits for the producer.
Because by-products are considered as goods, they do not have to be treated as waste and can therefore be transported without the need for special authorisations such as waste transporters. At the same time, they do not have to be disposed of as waste and can therefore turn a management cost into a profit.
‐ Martina Campora