Making reuse, repair, and recycling an opportunity for recovery

Collective position paper: for a new quality of life!

Rcube brings together French players in the reuse and repair sector who share the following objectives:to create a virtuous circular economy, to collaborate in order to strengthen cohesion and cooperation between players in the second-hand sector,to develop consumption patterns that combat waste and waste production, and to reassure consumers through the creation and development of best practices. The federation now has more than 100 members (associations, companies, freelancers, start-ups, distributors, manufacturers, networks of players, etc.) from various commercial and non-commercial sectors and the social and solidarity economy (SSE). They work together in numerous committees and working groups to co-develop joint projects such as the "Reconditioned Product Label" to certify the quality of reconditioned processes and products.

The reuse market provides some of the answers to the environmental challenges facing our societies by reducing waste from unused products that can be reconditioned or repaired if broken or defective. 

In fact, nearly40 million items break down without being repairedeach year and ultimately become waste, while approximately 113 million cell phones lie unused in French households, representing more than 3.60 billion kilograms of CO2 equivalent wasted (an average of 30 kg of CO2 equivalent is avoided per refurbished phone). However, it is estimated that only 10% of phones are reused in France each year (2.1 million). The possibilities for reusing goods are far from being fully understood today, and beyond the digital sector, reuse is a source of jobs in sectors as diverse as construction, garden equipment, textiles and fashion, packaging, furniture, sports equipment, public works, automotive, electronic banking, and catering, to name but a few. 

The reuse market also responds to a societal demand for more socially and environmentally responsible consumption. Players in the sector have been in high demand to support the French population, particularly during lockdown, whether to enable them to work from home or teach remotely, to repair equipment used by craftsmen and farmers, or even to manufacture masks or supply fabric. It is important to note that 77% of Europeans say they prefer to repair their products rather than buy new ones.

In 2018, the federation estimated the annual turnover of the reuse and second-hand sector at €100 billion and 100,000 jobs across all sectors. Rcube estimates that with sufficient investment, particularly in digital and industrial areas, this market could reach €300 billion in turnover in France and represent 700,000 direct and indirect jobs in three years. In a particularly uncertain economic climate,the reuse and repair sector is therefore calling for full integration into recovery plans in order to contribute toa reorientation of the French economy towards greater resilience, sustainability, and circularity. 

Conditions to be met in order to develop strong French and European sectors

1. A clear and ambitious legal framework

Rcube welcomes the adoption of thelawon waste reduction and the circular economy (LAGEC)lastFebruary. The Federation and its members have been actively collaborating for four years with all stakeholders in developing the Circular Economy Roadmap (FREC), participating in working groups on the repairability index, and organizing numerous open committee meetings (labeling, financing, training, etc.) and national meetings such as the Etats Généraux du Réemploi (Reuse Forum) that we organize every year. Numerous implementing texts are currently under discussion and the Federation would like to present its proposals:

• The definition of reconditioning (Article 37) should specify the criteria:
  • A refurbished product is a product that has already been sold once;
  • A refurbished product has been checked and has at least all the functional characteristics or equivalent of the original product, as well as its legal guarantees (CE standard, SAR, approvals, marking, etc.).
  • A distinction must be made between the repairer, the service provider, and the reconditioner, with the latter becoming the owner of the product that they recondition or have reconditioned. 
  • The original product must be usable and, in particular, must not be protected by patents or manufacturer software or patents that prevent its reconditioning or repair.
  • Products labeled as "refurbished" should be explicitly recognized as products with positive environmental and social externalities and thus eligible for clear and favorable tax treatment:
  • A reduced VAT rate because it stems from a social activity and a waste treatment service; 
• Reuse operators—reconditioners and repairers—should be exempt from the obligation to calculate the repairability index:as distributors and sellers, theymust be able to display the original index that manufacturers or importers are required to provide them with.

• Create a public-private financial fund for reuse and repair with:
• Cooperative governance: thisfund should be managed collectively by reuse stakeholders from both the commercial and non-commercial sectors.
• A financial envelope of€500 millionto support reuse: a portion of the €1.5 billion collected annually across all EPR sectors in the form of eco-contributions could be earmarked through calls for projects aimed at the social and solidarity economy, commercial players wishing to transition to social and solidarity economy status, industrial or R&D projects,  or even training and public awareness campaigns. This fund could help support reuse companies that wish to transition to cooperative status.

These investments could be earmarked to finance various projects in the sector, including: 

• Financing of industrial units: participation in the financing of industrial premises with the establishment of shared storage space, testing machines, repair workshops, financing the relocation of the manufacture of large-scale products for repair companies;
• Fund the creation of recycling centersand collection, repair, and reuse units in partnership with all waste disposal facilities in order to recover products and materials before they become waste;
• Funding the implementation of logistics and transportation solutions for used equipment to preserve its integrity and promote the development ofreverse logistics;
• R&D: financing of innovative projects (repair and reuse techniques – change of use, transport, robotic sorting, etc.);
• Training: setting up training courses for jobs in the reuse sector (reuse specialist/methodical dismantler in the construction industry, specialized repairer, etc.) and promoting these jobs of the future;
• Awareness campaign: financial support for awareness campaigns promoting repair and reuse over disposal, run by reuse organizations and reuse stakeholders targeting individuals and professionals, with gold medals for the 2024 Olympic Games made from French cell phones.
• Allocation of grants based on the novelty of projects and/or membership of the social and solidarity economy.
• Reviewing the governance of EPR sectors:

Commercial players in the reuse sector must be integrated into the governance of eco-organizations in order to participate in discussions on industry issues and the allocation of eco-contributions, and, as a priority, be part of the stakeholder committees of each eco-organization. Their integration could take place during the review of eco-organizations' accreditations and specifications, allowing reuse operators access to waste streams.

To go further, it seems important to encourage the creation of eco-organizations with the aim of recovering used products in accordance with the hierarchy defined by French and European law:creating one or more eco-organizations for reuse by EPR sector, which would really promote reuse over recycling, contrary to the current practices of eco-organizations. 

• ·Create and participate in the Reuse Observatory, bringing together all products in orderto produce studies and assess the current state of the sector by consulting stakeholders in the field (assessment of reuse in France, identification of technical feasibility, study of economic models, experiments, etc.). 

2. A healthy market for a more resilient national economy 

Put a stop to unfair competition:

The reuse and repair sector facesunfair competitionfrom certain foreign reconditioning companies viaonline marketplaces. These marketplaces pit companies from around the world against each other, with the main comparative criterion being the sale price, without any further transparency. Many refurbishers of digital and other equipment selling on these platforms face unfair competition from players:

• Fraudulently evading varioustax measuresto which French operators in the new and refurbished goods sectors may be subject (VAT, CFE, etc.);
• Noofficein the country of sale, therefore no fixed costs or social security contributions;
• Without providing certain services such as customer relations and after-sales service, and without any desire to establish a long-term position in the market;
• Specify that the Private Copying Levy system does not apply to refurbished products.

Rcube calls for:

• Reflect on these behaviors through verifiable checks on compliance with fair and transparent specifications applicable to suppliers and online commerce platforms. 
• Prioritize local stakeholders and the creation of French and European jobs.
• Natural competition with new prices

Furthermore, refurbished products naturally face competition from new products. Those involved in reconditioning fear that with the looming economic crisis, the price of new products will fall to the point where it is lower than the cost of repair for the consumer. We are therefore calling for price signals in favor of reconditioned products due to their positive environmental and social externalities, and for the cost of repairing a product to represent no more than 30% of the price of a new product.

• Gain independence

Access to secondary raw materials and flows of unsold or used equipment can be complicated for players in the sector, as they depend on:

• eco-organizations, in a quasi-monopolistic situation, to obtain flows of products to be repackaged;
• new players, often foreign, to obtain spare parts, but their (un)availability and/or price is a real obstacle.

In order to facilitate repair and reconditioning, reuse stakeholders are calling for:

• the creation of a Franco-European supply chain for standardized and/or reconditioned spare parts;
• Reform of the legal framework governing the definition of waste,which creates barriers to entry into the reconditioning market, in order to promote innovation and the creation of new industries.
• collaborative work between stakeholders in reuse, the social and solidarity economy, and recycling inthe collection and sorting ofequipment.

Traceability of secondary raw materials and used equipment, with a focus on excavated earth from the public works sector.

The debates that took place during the examination of the LAGEC brought the issue of traceability of raw materials and used equipment to the forefront. This topic, which has become central due to the overexploitation of these materials, is illustrated in the construction industry by the urgent need to reuse excavated soil. This sector is a symbolic example, as itis the leading consumer of raw materials, but it is also the leading producer of waste: 260 million tons each year in France. Excavated soil accounts for 160 million tons, or 70% of the waste produced by the construction industry, and its reuse addresses four key issues:

• recycling of materials and equipment (reuse and repurposing);
• waste recovery;
• substitution of demand for raw materials;
• optimization of transport distances and associated greenhouse gas emissions.

The lack of centralized and comprehensive traceability of excavated soil transport severely limits the reuse of good-quality soil on other construction sites or in landscaping projects, confining these practices to the informal sector, often under opaque conditions. This lack of traceability also applies to other sectors. We expect the LAGEC to: 

• improved traceability, through the reporting of information concerning soil batches;
• quality control of soil that is no longer classified as waste (particularly when this soil is reused without first passing through an ICPE-classified facility);
• the implementation of Cerema certification for development projects using alternative materials and reclaimed land classified as waste. 

However, in order to ensure the optimal implementation of the law concerning excavated land, RCube calls for the following three proposals to be taken into account when drafting the implementing decrees: 

• Make the granting of approval subject to ADEME approval

ADEME is the body best placed to issue this approval. This administration is firmly committed to combating global warming and the degradation of resources because:

• Since its creation in 1991, ADEME has been leading initiatives to mobilize citizens and various economic actors and has helped finance numerous projects, particularly in the areas of waste and soil.
• ADEME is working on issues related to contaminated soil, waste prevention through the 2014-2020 waste reduction and recovery plan, and, more broadly, the circular economy. 
• Since 2010, ADEME has been working with BRGM to develop a database dedicated to urban soils, known as BDSolU. The aim of this database is to bring together all available analyses of urban soils across the entire country. The purpose of this is to facilitate and optimize the management of polluted sites and soils.
• Require project owners to declare land

Under the "polluter pays" principle, adopted by the OECD in 1972, by the European Union via the Single European Act (1986) and by France via Article L110-1, II, 3° of the Environmental Code, "the costs resulting from measures to prevent, reduce and combat pollution must be borne by the polluter." In order for the polluter pays principle to no longer be considered a right to pollute but rather an obligation to report, we believe that choosing the project owner as the reporting party is the best solution. In addition, beyond a penalty, the declaration of excavated land removed from construction sites represents a real opportunity for contractors in three ways:

• Transparency: introducegreater transparency into the value chain by facilitating the reporting of work execution data from the service providers in charge of soil removal to the client.
• Governance: empoweringclients to monitor and adjust their environmental policies based on actual performance at their construction sites;
• Legal: provide principals with the means to manage the legal risks they incuraswaste producers.
• Include proof of the physical and chemical compatibility of soils in the declaration of information concerning soil lots.

This involves not only declaring the route taken from the production site to the receiving site using tracking slips, but also identifying, for each batch of soil transported, its detailed origin, destination, and physical and chemical quality. Particularly in the context of off-site reuse, the reporting system to be implemented must also provide all"physicochemical traceability" or "qualitative"data, enablingthe physicochemical compatibility of the excavated soil with the receiving site(s) and their use(s) to be validated.

Finally, for consistency, the information to be reported listed above must be supplemented by the provision ofa provisional selective excavation plan locating, in depth and on the surface, the excavation areas and depths for each reported lot, and quantifying them (mass balance).

Make reuse and repair the priority for the "treatment" of used and unsold products.

Reuse has a greater positive impact on the environment, society, and the economy than recycling (which destroys the integrity of the product) and should therefore be promoted as such, in accordance with the waste hierarchy, so that it becomes a reflex for the "treatment of used products" and/or unsold items. Reuse gives products a new lease of life and extends their use before they are recycled, a process by which they will be destroyed and, at best, recovered for their raw materials:

1.Launch a broad campaign to raise awareness of the benefits of reuse and repair.

The environmental, societal, and economic benefits of the reuse and repair sector should be promoted through a broad information campaign led by public authorities so that they are well understood and embraced by different audiences. This campaign, entitled "Don't throw anything away, choose to have your equipment repaired or buy reconditioned products,"could, for example, be integrated into the "Long live objects" initiative, which aims to prioritize the various ways of extending the life of an object according to its environmental impact:

• Reuse
• Reconditioning 
• Repair
• Reuse
• Recycling 
• Energy recovery

2. Establish a system for collecting reusable products.

As mentioned above, one of the challenges in developing the reuse and repair sector lies in securing the collection of raw materials. To this end, Rcube proposes to launch several types of initiatives:

• Prioritize reuse byrequiring that all unsold or used products be sent to reuse organizations to be sorted, tested, and directed to the best sales or reuse channel. Implement controls to ensure that eco-organizations, local authorities, and recycling organizations promote reuse before destruction.
• Raise consumer awareness:

Many pieces of equipment are stored and unused: Rcube proposes to support a national communication campaign so that everyone has the reflex to put this veritable gold mine back on the market for players in the sector looking for supply.

• Encourage government agencies and large companies to set an example:

In addition, various government agencies and large companies should be encouraged, or even required, to entrust their used equipment to French reuse operators (social economy and commercial sector) rather than having it destroyed by recyclers (whether or not through eco-organizations) or sold to companies that pay little attention to the traceability of flows.

Various mechanisms could be put in place:

• collection of used equipment from government agencies (computer and telephone equipment, gardening equipment, furniture, etc.);
• administration of and funding for the deletion of data on government websites by trained technicians;
• promoting the "Refurbished Product Label" to buyers in order to reassure them about product reliability and traceability.
• Mobilize large companies and local authorities to support reuse stakeholders: entrust them with flows, services (inventory, reconditioning, etc.), find premises, simplify administrative procedures.

3. Shift public procurement toward refurbished products.

RCube calls on the government to set an example by directing its public procurement towards refurbished products, in line with the development of"green public procurement." Various mechanisms could be put in place, including:

• setting a minimum threshold of 20% of waste allocated for reuse in public procurement contracts relating to waste management;
• steering local authorities' purchasing towards reused products.

Supporting the transition to more sustainable consumption

Citizens are ready to change their behavior, but consumers sometimes need an incentive. Although environmental and social criteria are increasingly taken into account, consumer choices are still most often motivated by two determining factors: price and trust.

It is therefore necessary to give concrete form to support for reuse through:

1. Taxation tailored to virtuous products

Taxation could have a decisive impact on the price signal sent to consumers to encourage them to adopt more environmentally friendly behaviors in general, and to choose reused and repaired products in particular. Theeco-contribution modulationsystem is a first step in this direction. Other measures could be taken:

• apply a reduced VAT rate for all reconditioned or repaired products set at 0%, as is the case for the waste sector, or, failing that, improve the VAT margin scheme for second-hand products so that it takes into account certain costs inherent to our activity;
• introduce a tax credit for repairs by classifying home repairs of all types of movable equipment as "personal services";
• Develop the financial bonus system (non-tax mechanism) through a premium, for example, of €10 per reconditioned product to promote, co-finance, and enhance the value of reused and repaired products compared to new products, particularly for products deemed economically irreparable.

2. An official mark of quality: towards a "Refurbished Product Label"

Alongside establishing a legal definition and conditions of use for the term "refurbished," it seems important to promote products that have been refurbished to a high standard:a label would ensure the quality of refurbishmentsector by sector.

Each sector (small and large household appliances, IT, telephony, automotive, etc.) would define the specifications for the applicable label. RCube has begun this work, which could serve as the basis for a collective approach under the sponsorship and impetus of the government. It could be developed as part of the experiments permitted by Article 15 of the LAGEC on environmental or environmental and social labeling and serve as an example for replication on a European scale.

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[1] SOFIES study conducted in July 2019, in collaboration with numerous stakeholders (AFNUM, Samsung, Apple, Ecologic, ESR, Rcube, etc.)

Co-editors and contributors, with our thanks:

Benoit Varin (Co-founder of Recommerce and President of RCube) Joel Couret (Fedelec), Christophe BATARDIERE (President of the Espace Emeraude group), Thierry Boucard (President and Founder of Exatec Group), Darani Sivathasan (Co-founder of Phone 2000, GSM MASTER), Bastien Rambaud (Co-founder of Vesto), Kamera Vesic (Co-founder of PikpikEnvironnement), Benjamin Burel (Co-founder of PSM Lorient), Adrien Montagut (Commown), Philippe Correia (Co-founder of Segundo), Mohamed Sefane (President and Co-founder of Les Artisans du Mobile), Renaud Attal (President, Co-Recyclage), Shu Zhang (President, Pandobac), Pierre-Etienne Roinat (President and Co-founder, Recommerce), Stanislas Lebas (President, Access Recycle), Gautier Feld (President, DOKIT), Emmanuel Morel (Co-founder and Director, Articonnex), Peter Nassa (Co-founder of Média Destock), Hélène de La Moureyre (Founding President of Bilum), Cédric Madianga (Trainer and Managing Director of eRepair Academy), Christophe Deuil (President of Zéro Impact), Stéphane Brault-Scaillet (Co-founder & CEO of Reparcar.fr), Lorraine Le Baud, Jérémy Tessier (President of Nippe), Alain Masmondet (Materiale Library), Christophe Reinling (Zoom Ici), Alexis Brut (Espace Emeraude), Anne-Laure Paty (ZeroWaste France), Emma Carré, Emmanuel Cazeneuve (President of Hesus), Nadjib Renai (RCube Project Manager), and others.