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Reidy (1992) reports that the average composition of waste in Sweden in the years up to 1990 is 35-45% paper, 8-10% plastics, 20-40% other assorted recyclable materials, and 25-35% food and garden waste. A high content of paper and increasing content of plastics with reduced content of metals leads to high calorific value of 10-12 MJ/kg. Packaging waste accounts for about half of all municipal solid waste in Sweden. Around 35 billion packaged products are sold each year. Attempts have been made to divide domestic waste into fractions, and to segregate products at source. Three different systems are operated:

  • Households separate waste into four fractions prior to collection.
  • Source recovery from the ordinary collection of refuse.
  • Recovery of resources from centrally located facilities.

All municipalities in Sweden are served by a drop-off system for packaging collection. (One drop-off point per 1 100 inhabitants). 5% to 10% of households are served by door-to-door collection. Collection is undertaken mainly by private companies.53

The packaging collection scheme affects almost the whole country, despite parts of Sweden being very sparsely populated with long distances from large centres of population. For waste from companies there is a system with 32 delivery points, where they are paid for their sorted plastic packaging according to quality and quantity. Sorting into different type of polymers is done by four privately owned sorting plants. Rigid packaging from households and companies are sorted. Sorting is done according to demands from the recycling industry.

53. EPRO(2001); DKR (Deutsche Gesellschaft für Kunststoff-Recycling) Recycling plastics in Sweden, Markets/International/Country portrait, www.dkr.de/en/maerkte/212.htm.

Table 3.14. Collection (tons)

LDPE transport film

Total collection of plastic waste


13 6S9

31 672


13 219

43 158


15 437

48 074


16 071

45 641


15 163

41 823

Source: EPRO (2GG1).

Source: EPRO (2GG1).

Derry (1989) reported that for Sweden the plastic content of waste is between 6-10%, and around 24 kg per person. PVC content was 0.4% and waste also contains PET from various forms of PET bottle. In 1999 just over 50% of plastic waste was used for energy recovery, with just over 10% being recycled and the balance unrecovered (APME 2000a). Attempts were made to recover paper and plastic as material resource recovery, as well as in the form of Refuse Derived Fuel (RDF). As the quality, yields and markets for recycled plastic material were all inadequate at the separation plants, attention had switched to RDF.

Public awareness of environmental issues is generally high in Sweden. There is strong public support for measures to tackle waste issues (demonstrated by a good response to the user delivery system for collecting glass which has been in operation since the 1980s) and industry acceptance of the principle of producer responsibility for waste. Although the Swedish Parliament first recommended legislation on producer responsibility in 1975, it was only introduced into Swedish law with the Ecocycle Bill in 1993. The objective of the Ecocycle Bill is to improve the management of materials so as to reduce the high consumption of material resources and mitigate associated environmental impacts, through the re-use, recycling and recovery of energy from materials. It makes manufacturers responsible for their products after the end of their useful life.

The Ecocycle Bill sets recycling targets for packaging. Agren reports that a number of actors interviewed, for her Environmental Assessment, agreed that the targets were political in nature. The Centre and Green Parties were keen to establish stringent legal requirements for producer responsibility for packaging, with ambitious recovery and recycling targets (Agren, 2000). The Swedish Environmental Protection Agency conducted a number of studies including: life-cycle assessments, to assess the environmental effects, cost effects and technical options for these targets. These suggested a softening of the targets for 1997. This was based on an assessment of the technical feasibility of reaching the targets for plastics and led to the target being reduced to 30%.

There is concern over the potential harmful impacts associated with landfills and reducing the use of landfills is one of the goals of national environmental policy. There is also some concern amongst sections of the public over the environmental impact of the incineration of waste. There are currently 21 waste incineration plants in Sweden, all with energy recovery programmes. In 1994, 1.2 tonnes of MSW were incinerated.

The Packaging Ordinance

A specific Packaging Ordinance came into force in October 1994. The Ordinance requires producers, including manufacturers, importers, producers of packaged goods and retailers, to collect, re-use and recycle packaging waste. From 1 January 1997, 90%-95% of glass bottles must be refilled. The Ordinance also sets quotas for recycling other materials. This ranges from 30% for paper to 70% for glass. "Recycling" legally means resource recovery or incineration with energy recovery. The Ordinance sets targets for the year 2001 of between 50 and 65% of materials to be recovered and between 25 and 45% to be recycled. A minimum of 15% by weight of each material type must be recycled. The bill also establishes the following waste treatment hierarchy:


  1. Material recovery.
  2. Energy recovery.
  3. Landfill.

However, it is stated that the method chosen should be that which makes the best use of resources. The Ecocycle Law provides the government with a mandate to demand more producer responsibility where this can lead to resource use which is environmentally beneficial and technically and economically viable. The aim of producer responsibility, laid down in the Ecocycle Bill, is to reduce the amount of packaging waste by reducing the use of packaging and promoting re-use of the waste. Producer responsibility is seen as providing incentives for:

  • Cleaner production.
  • The development of products with a better environmental performance.
  • Recycling and re-use of materials and improved use of waste products.
  • Minimising the use of landfills.

Producer responsibility is one means of internalising the waste externality, and should lead to the waste disposal and recycling costs being included in packager costs, and reflected in consumer prices. Where targets for recycling are added to producer responsibility, then a command and control rather a market solution will arise. Legislation also requires consumers and other waste generators to sort packaging from other waste at source and leave it for collection by producer. Separation should be between rigid and flexible packaging. This is done by contractors who organise waste collection stations in residential areas. These have five collection bins one for separate materials. Major commercial users recycle through recovery centres.

The legislation set the recycling rates for plastic at 30% excluding PET bottles, in 1997, and 70% recovery with 30% recycling in 2001. PET bottles are covered by a deposit return system. Packaging waste amounts to around 200 000 tonnes. It includes containers such as bottles and crates, but also shrink and stretch film. 90% of packaging plastic waste is PE or PP. The intention is that packaging similar to plastic bottles will be recycled into a timber substitute. This allows for mixtures of colour and of type of material. Plastic film is intended to be melted to form granulate which can be re-used in production of virgin plastic. There remains the problem though of contaminated and mixed plastic material, and the schemes intention is that this will be incinerated for energy recovery. Unlike Germany, producers are not obliged to take back packaging. Instead, they are obliged to organise and finance collection schemes with minimum goals.

The REPA scheme was established by representatives of the sectors affected by the Packaging Ordinance. The firms were in favour of the ecocycle approach and producer responsibility but wanted the flexibility to determine the means by which the targets set should be met. The producers were concerned about the costs of waste collection and treatment, which would be pushed up by separate collection, re-use and re-cycling. It was important for them to have control over these costs, rather than have a charge imposed by municipalities or central government. In particular, the representatives were keen on establishing control over the whole waste stream, including collection, so as to control costs.

In the absence of a system for spreading responsibility for managing packaging waste, the burden of complying with the Ordinance would probably have been borne by the retailers. However, all companies who produce, use or sell packaging must provide a system for the collection and recycling or re-use of that packaging and report to the EPA. If they are not registered with the materials companies via REPA, they must have established an alternative system. This provides a strong incentive to register under the REPA scheme.

There are 8 200 companies registered with the "REPA" scheme. For a fee, determined by the amount and type of packaging used by the producer, each firm can register with the appropriate materials companies, who undertake to meet the company's legal responsibilities as established under the Ordinance. Fees for recycling plastics are based on weight SEK 1.5 per kg to REPA which co-ordinates the system collecting data on how the system works. This provides an incentive to use thinner and lighter plastic packaging, which may result in its own waste problem. There is also a one-off affiliation fee of SEK 400, and fees for the different types of packaging based on the amount used. For companies with a turnover below SEK 3 million, a standard annual charge can be paid instead. This amounts to SEK 500 per year for a turnover below SEK 0.5 million, and SEK 2 000 for a turnover between SEK 0.5 and 3 million.

Table 3.15. REPA fees by material type




100 öre/kg


1S0 öre/kg


40 öre/kg

Corrugated board

12 öre/kg

Source: Agren (2000).

Source: Agren (2000).

Companies have the option of registering with and paying the fee to REPA, or setting up their own collection, recovery, recycling and reporting system to fulfil their legal obligations under the Ordinance. Charges are levied by this body on packaging, and are paid by packers or importers of packaged products. Thus the system is based on the idea of internalising the social costs of waste. The materials companies provide collection bins for the centralised collection of packaging waste. There has been some debate over the issues of bin numbers and siting. Although the material companies need to meet the targets set out in the Ordinance, the provision of more bins increases their investment and collection costs. Municipalities are still responsible for the door-to-door collection of municipal solid waste; the less packaging waste collected, the higher their costs per ton/volume of waste. The companies originally intended to provide one collection point per 10 000 inhabitants. Some municipalities have negotiated the provision of one per 1 000 inhabitants.

The packaging industry has set up five organisations to organise collection, sorting, and recycling, both from households and commercial packaging, allowing for competition between the materials on the basis of cost. The organisation responsible for plastics is Plastkretsen AB. Plastkretsen ("Plastics Circle") organises the recycling of plastics and its re-use, apart from PET bottles which are included in refundable deposit schemes. Plastkretsen is jointly owned by Association of Swedish Plastic Producers and Converters (60%), fillers and packers (15%), trade and retail syndicates (15%), and petrol stations (10%). It recycles all plastic packaging (household & commercial) which are collected by Plastkretsen.

Figure 3.13. Sales of recycled material collected by Plastktretsen (2000)

Figure 3.13. Sales of recycled material collected by Plastktretsen (2000)

Source: EPRO (2001).

From households there is separate collection of:

  • Rigid packaging for mechanical recycling (bottles and cups).
  • Flexible packaging for energy recovery (films, bags, vacuum packs). From industry and trade there is separate collection of:
  • Transport film (LDPE) for mechanical recycling.
  • Rigid packaging (drums, big bottles and barrels) for mechanical recycling.
  • Other plastic packaging for energy recovery.

Figure 3.14. Destination of recycled material from Plastkretsen (2000)

Figure 3.14. Destination of recycled material from Plastkretsen (2000)

Chart Ldpe Recycling Epa
Source: EPRO (2001).

The REPA scheme should allow for target-sharing between companies for given materials, by spreading the costs of collection and treatment over many firms, and allowing savings through economies of scale. In addition, the fact that there are separate companies responsible for the different materials, allows for competition between different types of materials, preventing cross-subsidisation between materials activities and allowing packaging users to opt for the least costly material.

The view of the stakeholders is that the REPA scheme and materials companies allow the Ordinance on producer responsibility for packaging to be implemented more efficiently than it would be under many other options (such as the DSD system in Germany). It is likely, given the cost-savings, that the EA has been more cost-effective than the existing municipal collection scheme. On the other hand, the system also imposes external costs to the public who bring waste to the collection points. The following table the progress made in meeting the targets. The data shows that the progress for plastics is poor compared to the target.

Table 3.16. Compliance with the Packaging Ordinance

Level of recycling and re-use (%)





January 1997 (%)





Source: Agren(2000) ; APME (2000a); Swedish EPA www.internat.naturvardsverket.se/index.php3?main=/ documents/ issues/prodresp/packag. htm.

Source: Agren(2000) ; APME (2000a); Swedish EPA www.internat.naturvardsverket.se/index.php3?main=/ documents/ issues/prodresp/packag. htm.

Bottle recycling

PET bottles are covered by a 1991 Act on Recycling of Certain Beverage Containers. This requires fillers to show that they are taking part in recycling or re-filling scheme. If they fail to do this they pay a tax. This levies a charge on returnable containers of 8 ore, and a charge on one way bottles based on volume. For returnable bottles there is a different charge for each material once differing volumes are taken into account so that returnable glass corresponds to a charge per litre per trip of 0.27 ore assuming 30 trips, whilst for PET the charge is 0.8 ore per litre assuming 10 trips for a 1 litre bottle.

AB Svenska Returpack was set up to organise deposit scheme on aluminium cans. Following on from the success of this, a pilot scheme for PET bottles was set up on island of Gottland. 0.5 SKR deposit was imposed on all PET bottles 0.5-3 l and recovery rate of 60-70% obtained. Four different kinds of reverse vending machine were used and collected material was sent to Wellman in Ireland for reprocessing. The Wellman plant there converts PET into fibre, but Wellman do have clearance from the US FDA for a post consumer recycled PET for food applications. On the basis of this trial it was suggested that PET bottle recovery should be extended to the whole of Sweden with deposit of 1.5 SKR in order to increase recovery rate to 80-90%.

Soft drinks (mainly carbonated) have a market share of 60%. They are predominantly filled in re-use PET bottles of 1.5 litres. One-way bottles dominate the small volume soft drink market. The very high share of PET bottles for soft drinks and water is different from the situation in non-Scandinavian countries. Market shares in% of bottled (mainly carbonated) of beverages (beer, soft drinks, water) sold and produced by members of the Swedish Brewers Association for 1997 is given in the table below. They have 99% of the market.

Table 3.17. Market share (based on filled quantity) for re-used and one-way PET bottles



Soft drinks

Bottled water


Re-use PET





One way PET





Source: Golding (1999).

Source: Golding (1999).

Time series figures for soft drinks are not available but glass reuse systems declined until 1991 to a market share of around 40%. After the introduction of re-use PET bottles in the beginning of the 90's, the share went up again to around 60%. The deposit for the bottle is 4 SEK and has a return rate of 98% compared to a target for PET return of 90%. The volume of PET return has been steadily increasing since its introduction in 1991 (Golding, 2000). For imported bottles, a code label of the re-use PET-bottle shows that the bottle is connected to the Swedish system. Breweries and importers of beverages in PET-bottles need to show that bottles are connected to a system for reusing or recycling. That means the producer/importer must make an agreement with the official recovery company, Returpack PET AB.

A study of the Packaging Charge was undertaken by Millock (1994). This uses the model of Pearce and Turner (1992) to calculate a charge corresponding to a Pigovian tax for beverage containers such as plastic PET bottles. Ideally, to derive an optimal charge this would be calculated as the marginal damages from final disposal, which would be set equal to the marginal costs of preventing waste. The social cost of packaging is set equal to the marginal costs of: packaging production (a private cost), waste collection, waste disposal, litter and landfill user cost. After allowing for recycling which in this case is solely the return of packaging for re-use, and then dividing by either the volume, or weight, of packaging type a tax per unit volume or weight could be obtained. This can be compared to the actual packaging charge implemented, and the actual return rate with the target return rate to assess how close the implemented system might be to one based on an optimal charge.54

Because of the large difference between how much the total amount of waste is comprised of packaging by weight or by volume, two sets of charges are derived. One is a weight based charge, the other a volume related charge. Further, in order to reflect uncertainty in measuring environmental externalities and the possibility that higher environmental standards may be imposed a 50% enhanced volume related disposal cost is also used. Various data problems arise. It is not possible to obtain data on marginal costs so data on average costs is used instead. Data for waste disposal was derived from the charges levied on households for waste collection. Data on litter showed large variability and so these costs were excluded and landfill costs are also left out.

Table 3.18 gives the calculations of Millock for one-way and returnable PET bottles. The first three rows are the tax in ore per litre (or kr/100 l) calculated on the basis of 1990 data. The final row is the charge actually levied in 1990. The results show that the actual charge was substantially more than the Pigovian calculation would suggest. The low level of the Pigovian tax in relation to the overall price of the product would provide little incentive for changes in consumer behaviour. However, the difference between a one way and returnable charge could be sufficient to alter the behaviour of producers in favour of returnable PET bottles. The high level of the charge would be justified if the environmental costs of litter and landfill, which are excluded from these calculations, were sufficiently high.

Table 3.18. Assessment of the packaging charge on PET bottles (KR/100 litre)

Collection cost

Disposal cost

Returnable 1.5 l. PET bottle

One way 1.5 l. PET bottle

Pigovian Tax

Weight related

Weight related



Weight related

Volume related



Weight related

Volume related



50% higher costs

Packaging charge



Source: Millock (1994).

Source: Millock (1994).

If the charge is high in relation to the optimal level, too much will be done by way of return and waste reduction. Comparing the amount of return that the charge generates to the level that the charge was intended to achieve will provide further evidence on this. Golding (1999) reports that, in 1997, the return rate actually achieved for PET was 98%, whereas the target rate was set at 90%. So on the basis of both the packaging charge being higher than the Pigovian Tax calculated by Millock, and the target level for PET return being exceeded, it might be concluded that at a 98% return rate perhaps too much in the way of PET bottle return is taking place.

54. The taxes calculated by Millock follow the methodology of those advocated by the OECD for use by the DSD in the German Green Dot System (see OECD, 2003 p. 165).

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