Earlier this week, the European Union signed a deal committing to legally binding food waste reduction targets to be met by 2030.
Under these targets, food processors and manufacturers are obligated to reduce food waste by 10% compared to 2021 to 2023 levels, the figure being 30% at the retail and consumption level.
EU countries are free to choose the means to reach these goals.
But how have food waste reduction policies been implemented in the past? And what has been their impact on business?
The significance of food waste
Food waste is a significant contributor to greenhouse gas emissions. According to the United Nations Framework Convention on Climate Change (UNFCCC), it contributes around 8% to 10% of emissions globally.
It’s also a lost opportunity to address food insecurity, which is significant even in the world’s richest countries, and increasing in the EU.
That’s why a new report is looking into ways this might be changed, specifically through legislation.
The report, by the Food Banking Network and Harvard Law School Food Law and Policy Clinic, explores the successes and failures of food waste ‘deterrence’ policies enacted at a national level in France, Peru and South Korea.
What were the penalties for non-compliance for business?
Food waste policies have three aims, which have a hierarchy. First and foremost, these policies are put in place to prevent food being wasted in the first place. Failing that, they should aim to ensure that the food is donated for human or animal consumption. Lastly, they should make sure food waste is composted or anaerobically digested.
These policies will usually have penalties for non-compliance to ensure they are carried out. In the report, the penalties were often heavy, impacting large waste producers the most.
The three countries in question had different food waste deterrence policies. South Korea used a pay-as-you-throw model and a ban on food waste disposal in landfill; France prohibited the destruction of edible food and introduced a source separation and recycling law; and Peru implemented a food destruction prohibition law and a food donation requirement.
Food waste deterrence policies
- Organic waste disposal ban – Policy prohibiting those covered from sending organic waste to landfill
- Mandatory recycling law – An additition to the organic waste disposal ban requiring those covered to subscribe to an organic collection service, or to send food waste to an anaerobic digestion or compost facility
- Food donation requirement – Very simply, it requires those covered to donate some or all of their suprlus food that remains safe to eat
- Waste disposal surcharge – Policies charging entities or individuals a landfill tax per unit of rubbish (specificallly food waste and organic matter) over and above general landfill tipping fees. They are usually aimed towards businesses
- Pay-as-you-throw-policies – Policies charging entities, individuals or households a fee based on the amount of organic waste sent to landfill. Unlike policies that charge a fixed fee, these charge based on the amount of waste generated
- Food waste tax penalties – These laws restrict entities from claiming a ‘business loss’ for wasted food if it was possible to donate. If the entity can’t prove that it was unfit for donation, they can’t write it off
These policies affected businesses in different ways. In South Korea, pay-as-you-throw, while applying to everyone, was relatively cheap for the average household, at $.06 per kilogram.
Large food waste generators felt the greater sting from the policy, as they were subject to additional requirements to report on their food waste and recycling plans to the local authority.
There were also large penalties for non-compliance. Improper disposal of industrial waste could result in up to seven years imprisonment and a fine of up to ₩70m (€46.7m).
France’s policy to sort waste initially targeted the largest food waste producers (those generating 120 tons or more per year) which gradually included smaller ones over time. At the end of 2023, the obligation to sort waste, for all businesses and individuals, became mandatory, regardless of volume of waste produced.
Commercial waste producers could be subject to a fine of €150,000 and four years in prison if they failed to comply.
Policies around food donation included smaller penalties, such as potential fines, which could, however, reach up to 10% of the distributor’s annual revenue for destroying unsold food.
The policies were successful, but with caveats. The food donation law saw a significant increase in donations shortly after implementation, with around half of surveyed supermarkets donating daily. Yet, the quality of donations eventually decreased, with much of the food being within 48 hours of its expiration date. More recently, food donations have slumped further.
Peru’s laws, which covered food warehouses and supermarkets, did not have significant enforcement mechanisms as the other two countries did, yet nevertheless saw significant successes.
The laws have seen a significant increase of food donations, steadily growing in frequency each year since the policy was implemented, with the exception of 2018.
However, despite an increase in donations, food waste has grown from 20,000 to 36,000 tons per day.
Significantly, in terms of methane emissions, Peru was less successful than France or South Korea. Over the periods covered, France’s and South Korea’s methane emissions decreased, while Peru’s increased slightly.
What would be the impact on business?
We’ve seen how non-compliance with these policies can punish businesses drastically. But how about compliance? What are the costs?
“Most of the food waste deterrence policies are designed to initially affect industry,” explains Heather Latino, one of the authors of the report.
Businesses, of course, must implement their own compliance with these regulations. Policies put “the responsibility on the one that is generating the waste,” explains Ana Catalina Suarez Peña, strategy and innovation senior director at the Global Foodbanking Network. This of course involves compliance costs.
In the long term, suggests Latino, these policies will actually reduce costs for businesses. For example, “companies get more efficient at the way that they manage their stock… and so they become more adaptive ordering the right quantities and figuring out other techniques to be able to sell food.”
The cost of food waste to companies, suggests Peña, is almost invisible because it’s only around 1% of a budget. Yet it exists, and reducing it can save money.
Yet short term, implementation may, Latino admits, involve some additional costs. For example, additional staffing costs may be needed for handling food to donate, there may be storage costs to keep it until it can be donated, and there may be additional transportation costs to take it to the donation point.
Several of the policies included measures to help companies offset such costs.
In France, for example, the government gave money to companies (as well as local governments) which implemented waste disposal programmes.
In Peru, businesses were given tax incentives to donate still-edible food. According to Latino, the increase in donations was attributed by many to these tax incentives.
According to the report, government investment in infrastructure not only helps companies, but makes the policies themselves more successful.