That principle first emerged in the Palin Granit case 2002 E.C.R. I-3533, in which the ECJ held that the residues of a production process are in principle waste unless they are by-products which the undertaking does not wish to discard but intends to exploit or market on terms that are advantageous to it in a subsequent process, without any further processing prior to reuse. However, the ECJ has long held that the concept of waste must be interpreted widely in order to limit its inherent risks and pollution. For that reason, the court added that production residues should only be considered as by-products and excluded from the definition of waste if (1) the reuse of the material is a certainty and not a mere possibility, (2) it will not be processed further, and (3) it will be used as an integral part of the production process.
In other cases, the courts have stressed (in addition to the previous factors) the importance of ensuring that the production residues are suitable for the use to which they are put, if they are to be considered non-waste (e.g., Kingdom of Spain 2005 E.C.R. I-07569, and the English case, R v. W, C and C  EWCA (Crim) 927).
The WFD of 2008 offered an opportunity to revise the definition of waste but that opportunity was not taken: The definition remained essentially the same as in the previous version. However, the case law on by-products has been enshrined in Article 5.1 of the WFD, which is likely to stunt future development in this area. Article 5.1 states:
A substance or object, resulting from a production process, the primary aim of which is not the production of that item, may be regarded as not being waste . . . but as being a by-product only if the following conditions are met:
(a) further use of the substance or object is certain;
(b) the substance or object can be used directly without any further processing other than normal industrial practice;
(c) the substance or object is produced as an integral part of a production process; and
(d) further use is lawful, i.e., the substance or object fulfils all relevant product, environmental and health protection requirements for the specific use and will not lead to overall adverse environmental or human health impacts.
Another difficult question is: When does waste material cease to be waste? The ECJ has delivered a number of judgments on this topic that are not always easy to decipher. However, the gist of the case law is that material exits from the waste category when it has been processed into products or new materials that can be used in the same way as ordinary products or raw materials and with no worse environmental effects. See the ECJ cases Arco 2000 E.C.R. I-4475, Mayer Parry Recycling 2003 E.C.R. I-6163, Niselli 2004 E.C.R. I-10853, and the English case R(OSS Group Ltd v. Environment Agency  EWCA (Civ) 611. Again the WFD has intervened, but this time Article 6.1 merely provides that certain specified waste shall cease to be waste when it has undergone recovery and complies with specific criteria to be developed by the European Commission in accordance with the following conditions:
(1) the substance or object is commonly used for specific purposes;
(2) a market or demand exists for such a substance or object;
(3) the substance or object fulfils the technical requirements for the specific purposes and meets the existing legislation and standards applicable to products; and
(4) the use of the substance or object will not lead to overall adverse environmental or human health impacts.
Pending the development of criteria by the EC, the existing case law is to apply. Criteria have been laid down for iron, steel, and aluminium scrap. Other waste streams to be covered include copper, scrap metal, recovered paper, glass cullet, plastics, and biodegradable waste/compost.
Up to this point, the WFD does not signal any major change in dealing with the concept of waste. However, it then introduces a new requirement that should fundamentally alter the courts’ approach to interpreting the term “discard.”
Article 4 of the WFD requires EU Member States to apply the waste hierarchy in waste legislation and policy. The waste hierarchy that must be applied in the following descending priority order is prevention, preparing for reuse, recycling, other recovery (e.g., energy recovery), and disposal. Prevention means taking measures before something becomes waste to prevent or delay it entering the waste stream. The other options in the hierarchy relate to dealing with material after it has become waste. However, when applying the waste hierarchy Member States must take measures to encourage options that deliver the best overall environmental outcome. The WFD recognises that this may require departure from the hierarchy for specific waste streams where this is justified by life-cycle thinking on the overall impacts of the waste.
Although the waste hierarchy is not new—there was previously an obligation on EU Member States to take appropriate measures to encourage it—only under the WFD 2008 has it become mandatory.
The waste hierarchy requirement has been transposed in England and Wales by Regulation 12 of the Waste (England and Wales) Regulations 2011, which came into force on September 28, 2011. The effect of that regulation is to impose a duty on waste producers (other than households) to take all reasonable measures to apply the waste hierarchy so as to prevent material becoming waste (e.g., by reusing or extending the life of products). If it is not feasible to prevent the material from becoming waste, then the listed waste management options must be applied in descending priority order. However, companies may depart from the waste hierarchy priority order to achieve the best overall environmental outcome where that is justified by life-cycle thinking on the overall impacts of the generation and management of waste.
The duty to apply the waste hierarchy is enforceable by the Environment Agency by means of a compliance or stop notice, breach of either of which is a criminal offence carrying a fine of up to £5,000 on conviction in a magistrates’ court and an unlimited fine on conviction in the Crown Court. Waste transfer notes (which are obligatory under the statutory duty of care on every transfer of waste) must also contain a confirmation that the transferor has complied with the Regulation 12 duty.
This new requirement will have two consequences. First, it will require all companies to consider carefully how to prevent material from becoming waste (e.g., by extending its useable lifespan). It will nonetheless be lawful to treat material as waste (e.g., if it is no longer economical to have it repaired even though it would be technically possible to do so). Secondly, it should affect the way in which the courts and the regulatory authorities treat the distinction between material that is, and is not, waste. Until now, there has been a tendency for the courts to give a wide definition to waste in the interests of environmental protection. The waste hierarchy duty tilts the balance in the other direction by recognising that environmental protection is served by minimising the amount of material that has to be treated as waste.
The duty to apply the waste hierarchy is therefore likely to have a profound effect on the way industry deals with its material resources and on how the courts and regulators treat the concept of waste.