New rules on organisation of the Danish waste sector are on the way. The rules implement the climate plan for a green waste sector and a circular economy which the government has concluded with a majority of the parties in the Danish parliament. Private operators will play a larger role. The purpose is to invest in new recycling plants and development of green solutions within waste technology with a view to export.

The government’s proposal introduces new restrictions for municipalities which are to make room for private operators, including:

  • A prohibition against municipalities participating in activities in connection with disposal of waste suited for materials recovery.
  • Obligation to invite tenders for disposal of household waste suited for materials recovery.
  • A prohibition against municipalities’ establishment of waste disposal schemes or collection of industrial waste suited for materials recovery.
  • Transitional scheme for existing municipal plants to handle waste suited for materials recovery with a requirement for company conversion.
  • A possibility for businesses being able to use a private operator to collect combustible waste.

A prohibition against municipalities’ participation in recycling activities and requirement for the invitation of tenders

The prohibition against municipalities participating in disposal of waste for materials recovery will apply from 1 July 2022. The proposal implies that municipalities shall invite tenders for all contracts on disposal of waste suited for materials recovery from 1 July 2023. The in-house rule is abolished. Therefore, municipalities will not be able to undertake the activity without inviting tenders, neither within the municipal operating organisation nor through a municipally owned waste disposal company.

Municipalities may still collect, transport and reload waste for materials recovery. They may also handle waste from the municipalities’ own institutions and businesses. Disposal of hazardous waste and waste suited for incineration or landfill is not covered by the prohibition. It is not possible either to apply for an exemption, e.g. if the municipality has tried to invite tenders for the contract in vain.

Municipalities may not collect industrial waste suited for materials recovery

Municipalities may still collect household waste for materials recovery.

It is prohibited for municipalities already today to collect industrial waste for materials recovery, but there is an exemption scheme. The proposal is that the exemption scheme ceases as of 31 December 2027.

Transition scheme for existing municipal plants

Municipalities with existing plants may participate in a transition scheme to still be able to participate in activities for disposal of waste for materials recovery. An existing plant means:

  • Plants commissioned as per 16 June 2020.
  • Plants at which material irreversible investments have been made as per 16 June 2020.

The proposal is that the exemption scheme will run until 1 July 2027 when the municipalities having participated in the scheme must sell their recovery plants or at least cease the activity. In the transition period, the municipalities may not make reinvestments in the plants. Only ordinary maintenance will be permitted.

In the transition period, the municipality must divest the activity to a separate company (an A/S or an ApS) in which no other activities may be carried on. The company must be run on commercial terms and be liable to tax. The purpose is to ensure a formal and real divestment of the municipality’s authority tasks and other operating tasks.

The deadline for complying with the divestment requirement is 1 January 2024. It is expected that the municipalities participating in the scheme must report no later than 31 March 2024 whether the activities have been divested.

Businesses may use a private operator to collect combustible waste

The duty of businesses to use municipal collection schemes for combustible industrial waste is abolished. Waste-producing businesses may thus use private collection schemes both for the business’ recyclable and combustible waste.

The municipality will still be obligated to establish a collection scheme for combustible industrial waste, but it is voluntary for businesses to use it.

Contacts

Line Markert

Partner

Henriette Soja

Partner

Rikke Søgaard Berth

Partner

Renée van Naerssen

Assistant Attorney