Assessing and exploring (in)efficiency in Portuguese recycling systems using non-parametric methods

The “value of waste” is not a novel concept. It has been acknowledged since the 1970s, at least in the developed world, that managing urban waste efficiently provides value for money. Recycling is a good example of this not just because it might generate additional revenue but also because it avoids disposal costs and negative externalities. This paper measures the efficiency of Portuguese recycling companies. As required by the EU law (the Packaging Waste Directive), recycling systems must fulfil ambitious targets regarding packaging waste, which includes glass, paper/cardboard, plastic, metal and wood packaging (targets are set for each material individually and for the aggregate recycling rate). Taking into account the legal targets, companies strive to achieve higher benefits by optimising the recycled quantities (and the corresponding revenue) while trying to minimise their costs. Applying several non-parametric models to all Portuguese recycling companies, we found significant inefficiencies in their management. The results suggest that the lack of incentives is one of the main reasons for the low performance of the recycling systems.