A fresh start?

Written by: Maxine Perella | Published:

The Environmental Services Association’s Jacob Hayler explains how the biggest issues cited in its new strategy paper – a fragmented supply chain hampering consistency and efficiency, and lack of innovation in fighting waste crime – can best be resolved. Maxine Perella reports

A new waste policy for England is long overdue. Despite the publication of Defra’s Waste Management Plan for England in 2013, a lack of government vision on waste and resource issues continues to hamper industry efforts in clarifying the direction of long-term travel. Post-Brexit, a new government administration offers an opportunity to remedy this, and so the launch of the Environmental Services Association’s (ESA) new strategy paper ‘Resourceful: Delivering a strong and competitive UK resource economy’ this month could be seen as fortuitous timing.

According to the ESA’s executive director, Jacob Hayler, it was Defra’s former resources minister Rory Stewart who provided the impetus behind the paper.

During an industry roundtable meeting last January, the minister invited those around the table to come up with new proposals for a waste strategy for England that could potentially be taken forward by government. ESA set up a working group with some of its members to brainstorm ideas and from this forged some key principles for reform.

“Currently there’s a lot of duplication of effort that’s going on,” says Hayler. “There’s a lot of inefficiency in the way things are done, there’s a lot of scope for improvement, there’s a lot more scope to realise economies of scale.”

Hayler sees two fundamental issues that need to be overcome. The first is the fragmented nature of the industry’s supply chain – not only the inconsistent nature of local authority service provision in regard to waste collection and disposal, but the sheer number of small-scale commercial waste operators, which makes it harder to create consistency and economies of scale.

The second issue is the ongoing nature of waste crime, which arguably needs a more innovative approach. “The government in the past few years has put a lot of money and resource into looking at waste crime issues, the Environment Agency has been granted more powers, but still we’re concerned that perhaps we’re throwing more money at the same old solutions,” says Hayler.

What the ESA proposes is a four-pronged approach built on bold reform. The paper identifies four main areas for action: transferring resource ownership from the public sector to product supply chains; building resilient recycling and recovery markets; realising economies of scale; and driving waste crime out of the sector.

“We thought about what areas would lead to much better outcomes – outcomes that drive greater efficiencies, more economies of scale, more investment, more jobs as well as environmental benefit,” says Hayler. “We want something that is deliverable in practice and that means it must be supported right across the supply chain. We’re very mindful of trying to build a broad political consensus behind some of the proposals that we would like to see taken forward.”

Pushing the envelope

The first proposal – to transfer resource ownership to product supply chains – is the most radical. The paper recommends introducing extended producer responsibility (EPR) schemes in which the producers of products and packaging are made responsible for funding waste collection systems. It’s a suggestion that undoubtedly will be met with resistance from waste producers.

Hayler believes any extra costs imposed on producers would be accompanied by additional benefits which might act as a sweetener. For example, producers would be able to influence the system to ensure they get the right type of materials back into their supply chains – at the right price, and of sufficient quality. “By virtue of being responsible for the costs, that would put a strong incentive on them to ensure that whatever collection system is in place is fit for purpose and appropriate for their end need.”

He continues: “There would be more certainty and consistency around [this] and also around what [producers] have to pay into the system. If you take packaging for example, PRN revenues are extremely volatile and it makes it impossible to plan for the future, which undermines investment in new recycling of packaging. If you took the upper end of the range of PRN values, you would find that the cost to producers probably isn’t that far away from what it would be under a fully funded [EPR] system.”

The paper calculates that if EPR were applied to the whole of the domestic waste stream, it would save council taxpayers on average up to £250 per annum – assuming that the savings are passed onto householders. EPR would also naturally incentivise recyclability, but this mechanism could be further strengthened by setting minimum thresholds for use of recycled content; producers that don’t abide by these thresholds could face the prospect of a levy.

The paper points out that any such tax needs to be considered in the current context of falling landfill tax revenues and how the total tax take to the exchequer can be protected. “One possible post-Brexit opportunity might be for us to be more flexible with our use of VAT as an instrument,” Hayler says.

Taking the creative approach

New ways of joint working – particularly within the public sector – are also mooted as a necessary step forward. One ESA suggestion, to engage local enterprise partnerships to help match resource flows with regional industrial demand, is particularly creative. Under such a scenario, the potential outputs from post-recycling waste (not only power and heat, but also chemicals and other high-value applications) could be utilised as inputs to help power local industry. It’s an approach that could fit well with the newly formed Department for Business, Energy and Industrial Strategy (BEIS).

“The new government administration’s re-energisation of the idea of an industrial strategy presents a really positive opportunity in the waste industry,” says Hayler.

He sees potential for future waste infrastructure to be co-located with industrial clusters to offer a fully integrated circular ‘waste-to-feedstock’ solution.

Waste crime meanwhile could benefit from a more flexible, risk-based approach. “When regulation is too rigid it can act as a block to innovation,” Hayler maintains. “We’ve had good political engagement on the issue of waste crime, but there is still a long way to go in terms of stamping it out. So what would be the next big step change in terms of delivering much better compliance and outcomes?”

The paper calls for more stringent requirements on waste crime, particularly around operator competence and fit and proper persons tests for permit-holders. The ESA has just commissioned further research on this topic – it is estimated that waste crime costs the UK economy £330 million to £810 million each year, so there are potentially huge savings to be made.

A starting point

The ESA emphasises that the package of proposals detailed within the paper should be viewed as an outline framework. The organisation recognises that extensive consultation would be required with a wide range of affected stakeholders, and is already embarking on this exercise. Hayler believes the proposals are “Brexit-proof”, but acknowledges that there is a high level of political flux right now.

“We want to ensure that having gained some positive traction, momentum and engagement with the last set of ministers, that we’re able to take that forward and reconnect with the new ministerial team,” he says, adding that the benefits from the approach outlined within the paper would be equally applicable in other parts of the UK – not just England.

New legislation is costly, and much depends on what level of appetite the government has for such reform. The theme of the ESA paper is very much aligned with circular economy thinking, which might bode well given that parts of the EU’s Circular Economy Package could still potentially apply to the UK, depending on Brexit negotiations, to help facilitate trading with Europe.

Hayler remains optimistic. “We have shared versions of our initial paper with several government departments, we shared some of our early thinking with Rory Stewart in May – he was very positive, particularly around producer responsibility. We will be trying to engage with the new ministerial team as quickly as possible to maintain as much momentum as we can.”

Next steps: How the ESA intends to build on its waste vision

An evidence base will need to be built to support the ESA’s proposals and create a strong case for change. The ESA has committed to carry out a number of actions over the following months. These include:

  • A detailed assessment of the future role of EPR and how future scheme design would meet strategy objectives
  • An exploration of opportunities for using post-recycling residual waste as a feedstock for the UK’s industrial and chemicals sectors
  • An assessment of the role of energy from waste to support decentralised energy systems
  • A look at how resource management systems can be integrated into smart cities planning to address issues created by increasing urbanisation
  • A new report on waste crime to examine the case for a new regulatory settlement for the sector

Maxine Perella is a freelance journalist

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