Meeting waste targets

Written by: David Burrows | Published:

As the New Year approaches, David Burrows discusses the major market, political and business forces that recycling and waste management companies (not to mention Defra itself) will face in 2016 – as well as some of the opportunities

This month, all the talk is about what happens post-2020. We have the first (official) sight of the circular economy package and a global deal has been brokered in Paris to reduce greenhouse gas emissions. But for the waste industry there are much closer hurdles to leap: 2016 brings us a year nearer to the 50% recycling target for municipal waste.

“Given the lead times for local authority service changes, 2016 is the year when decisions will need to be taken that determine whether the UK hits or misses the 2020 recycling target,” says Eunomia’s senior consultant Peter Jones.

The latest figures put England within touching distance of 45% (at 44.8%), but it’s no secret that the rates have been flat lining for some time now. Getting over the line will be far from easy, but there is positive talk from resource minister Rory Stewart, who wants us to become the “best country in the world for recycling”. Many, though, are wondering how.

Spending cuts

In his autumn statement the chancellor announced how he proposes to balance the books with another round of swingeing budget cuts across the public sector. Defra, the department responsible for waste and resources, has already agreed to spend 30% less – which has led some observers to suggest it’s now staring into the abyss.

The waste minister may be upbeat, but his staff are far less so.

A recent survey of civil servants at Nobel House reflected a “crisis of confidence”, as one headline put it. Fewer than a third of staff (31%) think the department is well-managed, and even fewer (18%) have confidence in its change management.

Can Defra, which has had its budget slashed already, be anything more than a flood-fighter and ally to farmers?

Will an apathetic workforce really engage with the intention of any current or future legislation on resources and waste? Steve Lee, chief executive of the Chartered Institution of Wastes Management (CIWM), says Defra will inevitably become “weaker” following George Osborne’s spending review. But being downbeat about it won’t change things. “There’s no point barking at government and saying they’ve got things wrong. We’ll have to find ways to cope.”

The dating game

Lee’s comments perhaps ratify how far removed from central policy the industry now is. Other industries, notably food, have noted a “ring of steel” around key departments since May. But while there is a barrier preventing access to Whitehall, within it there are signs of engagement between Defra and the Department for Communities and Local Government (DCLG).

The latter, and lead department for waste collections, is facing similar cuts to its budget as Defra.

In the past, the two departments have often found they are working at cross purposes: Defra focusing on the environment and improving recycling rates, and DCLG pushing councils to maintain service levels (which for so long was Eric Pickles’ argument for the weekly collection schemes). Throw in the constriction on budgets and it’s easy to see how battles ensued.

But Jacob Hayler, executive director at the Environmental Services Association (ESA), says the historic tension between the two departments has lessened since the election. Could this be the start of a beautiful, if frugal, relationship?

If you think central government is being told to work on a shoestring then local government is hanging on by a thread.

An analysis by the Financial Times in the summer found that local authority budgets have fallen by £18 billion in real terms since 2010 – twice the rate of cuts to UK public spending as a whole.

In the media, council budget stories are always illustrated with a row of bins – and yet services have been maintained, or in many cases improved. Bulky household goods collections have been cut, yes, and street cleansing reduced where possible. However, a satisfaction survey by the Local Government Association in October 2014 showed that 83% and 75% of residents were “fairly” or “very satisfied” with waste collection and street cleansing respectively; overall satisfaction with councils stood at only 65%.

Horror stories

It’s certainly not ‘job done’. With the money pot dwindling further, councils will be looking to simplify and innovate. More will be looking at frequency levels and whether the models implemented successfully in places such as Falkirk and Bury could work for them. Even without Pickles, local authorities must be mindful of how these moves will play out in the press.

“It’s a difficult option to ignore for those looking to find the money to improve their recycling services, but a controversial one, particularly in certain parts of the media,” says Eunomia’s Jones.

“There have already been stories in which reduced residual collection frequency is mentioned in the same breath as missed collections or a refusal to take side waste. All are lumped together as examples of poor service, symptomatic of councils that are unsympathetic to the needs of their residents.

“Councils need to be prepared for more stories like this,” he adds, “and to know how they will respond – highlighting the whole package of services they offer, and explaining why frequent residual waste collections aren’t the best way to meet residents’ needs.”

Household harmonisation

The kick in the teeth for local authorities is that budgets will likely be cut by another £9.5 billion before 2020.

“They’re going to be under tremendous pressure,” says the ESA’s Hayler. “We think more efficiencies can be found with joint working between local authorities, but it’s still going to be tremendously difficult.” Jones adds: “Some local authorities are expanding their partnership work, some are insourcing, and some looking at outsourcing. There isn’t a clear pattern, but there’s a widespread recognition that changes are needed.”

Harmonisation, though not a new concept – having been mooted at EU level back in 2012 – will also come to the fore. In Scotland, a Household Recycling Charter has already been agreed. “Consistent systems and communications” is how the Scottish government describes the ambition, and England is keen to follow that lead.

The environment minister, Rory Stewart, said recently that he wants to ditch the “craziness” of 300 different systems across the country. “We really need to find a better way of coordinating together,” he said.

The approach will be voluntary and Stewart admitted he will have to convince councils of the merits in terms of cost savings and higher recycling rates.

In the past few months, WRAP has been investigating the opportunities and challenges of having greater consistency in the country’s collection systems for the government. “We are not looking for a ‘one size fits all’ approach,” says Marcus Gover, the organisation’s director. “It is more about trying to identify a small number of approaches to recycling collections that will increase yields and quality, improve services while reducing costs and complying with regulations.”

Bending the rules

That government is actually looking at waste and recycling gives reason for cheer. It’s no secret, of course, that meeting the 2020 EU target on municipal recycling still hangs in the balance. Perhaps the government has (finally) cottoned on to this?

The sceptical are yet to be convinced.

Since the May election, the Conservatives have torn through a number of environmental policies and incentives and are showing little collective appreciation for the ‘green agenda’. Amber Rudd, the energy secretary, is leading the charge.

A recent letter leaked to the press suggested there could be a shortfall in the UK’s clean power targets to 2020 of around 25%. That could trigger huge EU fines, but it seems Rudd has a solution or two up her sleeve: negotiate the target (which is already lower than other member states’) downwards or buy ‘credits’ from those that have hit their targets. She did say that biogas from waste could make up some of the shortfall, while in the same breath cutting subsidies.

Rudd doesn’t have to worry about the recycling targets, of course; that’s for Elizabeth Truss at Defra. Her solution, as one industry source quips, may well be to hope for temperatures to rise through climate change, providing a bumper summer residential grass and shrubbery ‘crop’ which could be chopped down and recycled, pushing our rates over the magical 50% mark. Or she could just ignore the targets, as the government has done with air quality.

TEEP teething

With budgets constrained for councils and regulators alike, there is also a chance (threat, perhaps) that co-mingling dry recyclables will become the default option, says Adam Read, practice director for resource efficiency and waste management at Ricardo Energy & Environment. “No-one has been penalised for not adhering to Technically, Environmentally and Economically Practicable (TEEP) rules yet and councils will look at the option that costs them the least. It’s a great shame as TEEP could have been so much more.”

Quality of output may well fall further, prompting waste contractors to look at the ‘cleaner’ commercial waste stream, Read says the likes of Veolia and Suez are already looking at this closely. “If you can source C&I waste then that can swing the economics of sites. There’s also a big patriotic win if it also means closing the loop and keeping materials in the UK for UK manufacturers,” he adds. For some companies in 2015, the sums didn’t add up.

Falling commodity prices have reduced demand for secondary materials, for one, and this will remain a huge test for the sector going forward, especially if further investment is required to meet even higher post-2020 targets laid down within the long-awaited new circular economy package.

Wastecycle commercial director Paul Clements pulls no punches when he says: “The most likely challenge we’re set to face in 2016 is the continued volatility of the commodity market. This instability will likely put more firms under considerable economic stress, causing some to go bust – and from a wider perspective, it has potential to stifle or halt growth, investment and innovation in the industry.”

The political puzzle

And this brings us back to political will and regulation. Steady policies breed investment, and the new plans for the EU’s circular economy should have been published.

The European Commission has promised a “more ambitious” approach after it ripped up the previous package, but leaked drafts suggest no landfill bans, the reduction of recycling targets and confusion over re-use.

Member states may well have to measure food waste – definitely set to be a hot topic again in 2016 – but there are unlikely to be targets for reduction.

Scotland recently announced that it is planning such a target, an addition to its Waste Regulations.

Indeed, it’s easy to forget that there are four approaches to waste and resource management in the UK, and not just one.

“That spreads the ‘gene pool’ of good ideas,” says CIWM’s Lee. The sector will certainly need plenty of those in 2016, but would any of you have it any other way?

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