Waste's changing role: What does 2014 hold for the industry?

Written by: RWW | Published:

As far as waste management is concerned, 2013 didn’t end on a high. The new waste minister decided that he was “stepping back” from waste policy while new data shows that recycling rates are also clearly plateauing. Does this make for a tougher 2014? David Burrows investigates.

At the start of 2014, an important question for the waste management sector is: ‘Will there be more opportunities for a sector that, in the wake of the economic downturn, has managed to grow and still has the potential to drive green growth and create new jobs?’

Political imbalance

Having consulted a number of the industry’s experts, there were few who didn’t mention the grey cloud of confusion hanging over Whitehall and policies including waste, energy and the environment. 

The Renewable Energy Association (REA) noted that the public debate around energy policy in particular has gone “from fever pitch to farce”, with its members already reporting problems securing investment. 

“We need a clear statement from the government - not one party or the other, not one department or the other - but from the government, on its commitment to delivering the low carbon energy infrastructure this country so desperately needs,” says chief executive Nina Skorupska, following reports of the prime minister’s current thinking on green policies.

David Cameron is the man who, in opposition, went from hugging hoodies to hugging huskies. In power he then took three years to make one relevant speech on the environment. But he isn’t alone in turning from blue to green and then grey. 

Greenpeace recently published a series of the chancellor George Osborne’s speeches pre-2010’s election. Most notable among them are: “I see in this green recovery not just the fight against climate change, but the fight for jobs, the fight for new industry, the fight for lower family energy bills and the fight for less wasteful government.” 

And: “If I become chancellor, the Treasury will become a green ally, not a foe.”

Everyone knows what happened next. 

Friend or foe

The new waste minister Dan Rogerson seems to have followed their lead, having decided to reduce support for the waste sector. He feels the responsibility for taking work forward will largely rest with the industries concerned. 

In his open letter, Rogerson also said that support for local authorities will be cut “given the strong financial case for [them] to realise efficiencies from their waste contracts”.

Adam Read is practice director for waste management and resource efficiency at consultants Ricardo-AEA. He says Defra’s stance doesn’t help local authorities still struggling to adjust to high diversion solutions with budget constrictions. 

“I am all in favour of light touch government, but are UK businesses really ready to embrace the circular economy, to change their supply chains and to consider packaging and product redesign and new resource efficiency business models such as leasing, take-back and the like? 

“I don’t think so, not on the whole; and so we may find the transition painful and slow for the majority of UK plc. I would have favoured Defra and BIS [the department for business] taking a more active hand in the transition,” adds Read.

A group of industry representatives, including ADBA, REA, CIWM, ESA and the Resource Association reached out to Rogerson at the end of last year: “As organisations representing responsible operators and professionals in the sector we are concerned that progress in improving resource management in England had already stalled in a number of areas even before your recent announcement,” they wrote. “However, rather than simply criticise the government, and recognising the resource constraints in your department, we would like to offer to work closely with you and your officials at Defra to help turn this situation around.”

Clearly the government is seeking to reduce centralised costs across all sectors, thus support to local authorities and the waste sector will be hit. 

For Alban Forster, consulting director at consultants SLR, the key question is whether the support in recent years is enough to effect permanent change. 

He cites two tensions. 

First: as public sector procurements diminish will there be enough merchant-based market security for the further infrastructure investment that is needed - or has the government pulled the plug too soon? 

And second: with the removal of local authority funding, and specific targets, as well as incentives for source segregation of multiple materials, there may be an “erosion of recycling performance”.

Recycling plateaus

Swingeing cuts to public budgets have made life tough for councils, with recycling rates having tailed off in 2012/13. 

“Recycling is flatlining and industry bodies will need to work together to find ways to boost public awareness with messages that resonate with today’s householders,” says CIWM chief executive Steve Lee. 

The impact of the Waste Framework Directive [WFD] on recycling collections will also “start to bite” in 2014, he adds, “so all UK governments need to provide adequate guidance to local authorities to help them make legally sound decisions about the services they provide.”

Clarity on collection methods should definitely be on the agenda in 2014. 

Councils have been left confused following (former resource minister) Lord de Mauley’s letter in October, in which he suggested they will have to collect some recyclables “by way of separate collection” under the WFD.

Quality not quantity

Much was made of the drive for better quality recyclates last year, the Resource Association kicked things off with its Costs of Contamination Report, in which costs of £51m a year were associated with the management of poor and inconsistent quality recyclate. Mike Read, head of waste at Grant Thornton, says: “To drive value and high prices, the quality of products needs to be high and the UK is only just gearing up to deal with this. 

“Those businesses focused on delivering quality products, preferably on a closed loop basis, will reap the rewards,” he adds.

CIWM’s Lee agrees that quality will be a priority across all areas of the industry this year. 

Key issues include the much anticipated publication of the MRF Code of Practice, export standards and controls, HMRC guidance on low landfill tax rate materials going to landfill, and further action on waste fires and health and safety. 

However he adds: “It is easy to make it all about the ‘collection question’ but our sector’s twin remit to protect the environment and put valuable resources back to work means that we need to strive for greater quality in everything we do.”

Opportunity

The way in which the waste sector sees itself and deals with its clients is changing. 

Biffa Waste Management has now become Biffa Integrated Resource Management, for instance, but it is far from the only company now focusing on more resource use and less waste management.

“The most important trend we are seeing is the changing role of the waste management company, from a relationship built purely on price to one that actively helps clients achieve their waste and sustainability targets,” says James Capel, Simply Waste Solutions’ MD. 

“Clients want us to go one major step further and actively help them find innovative ways to reduce their waste. This may seem counter-intuitive, as less waste means less revenue for the waste contractor, but we see this as an essential requirement that creates long term relationships built on mutual co-operation and not just price.”

The concept of a change in waste collection models was included in a couple of major reports into food waste last autumn - one by Carbon Statement and the other by ReFood. 

“The subsidised cost of mixed waste within a general waste collection, together with the comparable weight of food waste, leaves little incentive to separate and recycle the waste once it has been mixed. 

“It is then harder to determine how much food waste is being produced and therefore it becomes difficult to reduce it,” says ReFood regional commercial manager, Dean Pearce.

Questions over the landfill tax

This also raises question marks over the landfill tax, which was originally introduced to encourage recycling by making disposal to landfill more expensive than recycling. If heavy bins can be collected for less than the cost of landfill tax, the economic benefit of recycling is lost, argues Pearce.

Others feel that the landfill tax, rising again this year, can drive more food waste away from holes in the ground. 

“We were certainly looking forward to 2014,” recalls Neil Grundon, deputy chairman at Grundon Waste Management. 

“The rise in landfill tax gives customers a solid financial reason to be much more focused on segregating waste, which creates additional opportunities for us. 

“That’s especially true of food waste. We all know it is second only to glass in terms of weight, and we hope the price rise will encourage more people to segregate food and remove it from residual waste to save them money. 

“Of course, it also comes at the right time with our new AD plant [a joint venture with Agrivert] opening in the Spring,” adds Grundon.

ReFood is also investing, with the company spending over £60m in infrastructure, including a new AD plant at Widnes and another in Dagenham, as well as the expansion of its existing site in Doncaster. 

“We are not alone and there are some 200 AD facilities in the pipeline,” explains Doncaster-based ReFood’s commercial director, Philip Simpson. 

“By tackling unavoidable food waste in such a positive way, we are helping to remove contaminants from other waste streams and unlock billions of pounds of value from all wastes.” However, Simpson feels that England is falling behind Wales, Northern Ireland and Scotland. 

The latter has new legislation being implemented this month that includes mandatory separation and collection of food waste for many businesses as well as an eventual ban on landfilling food waste by the turn of the decade. 

Following Scotland’s example 

Dealing with food waste effectively could save the UK economy £17bn by 2020, according to ReFood’s report in November, but governments will need to take the same steps as Scotland. 

This seems unlikely with Defra taking a back seat on waste policy. “It’s a shame that the government is unwilling to set a framework for positive change and proactively influence how we deal with waste in the future,” says Simpson. 

“It is a lost opportunity, but one which we anticipate will be seized by individuals within local government and business with the vision to drive change and reap the rewards.”

There is no doubt that with a little bit of the right type of guidance, a bit more direct funding and a clearer policy agenda for the UK as a whole that 2014 could prove to be far more interesting, productive and directional than 2013. 

Without these it could prove a longer, harder drag for many professional waste and resource managers. 

However, 12 months is a long time in this sector and there are elections on the way the year after. One thing is for certain; it certainly won’t be boring. 

Wish lists

RWW asked top industry experts what one change they would like to see in 2014:

“To reform the London Lorry Control Scheme. Banning our vehicles from 9pm-7am means we are competing with rush hour traffic, which is crazy. I think 11pm-5am would be much more sensible,” Neil Grundon, deputy chairman, Grundon Waste Management

“More investment into EfW facilities in the UK, particularly in London and the South East. 

That would help rationalise gate prices and make it more attractive for waste management firms to use facilities within the UK for waste recovery. 

“More facilities equals more competition to drive prices down and enables more waste to be treated closer to where it is produced,” James Capel, MD, Simply Waste Solutions 

“Some degree of better agreement in Whitehall on the priorities for energy, waste, local government and business growth. 

“Too many departments have a say yet none of them are thinking in a joined-up way right now. 

“This really isn’t the best way to use taxpayers’ funds, or to manage the increasingly complex waste management landscape evolving before us,” Dr Adam Read, practice director for waste management and resource efficiency, Ricardo-AEA

“For people to start taking pyrolysis and gasification (and indeed other technologies) seriously as part of the waste to energy mix. 

“These have been overlooked for too long and present a viable and highly beneficial contribution to waste management and energy production,” Nick Palmer, general manager, DPS Global (environmental division)

“A clear timetable for the phased introduction of a ban on food waste to landfill to come into full force by 2020, allowing industry the time to finance and develop an optimum collection and processing infrastructure. 

“We believe this simple step will send a clear message that food waste is a valuable resource that should never end up in landfill sites,” Philip Simpson, commercial director ReFood

“I would have liked to have seen a waste prevention plan with more teeth, it’s a missed opportunity as it stands,” Sarahjane Widdowson, principal consultant with
Ricardo-AEA

“The mindset of people who continue to litter. This is something that is so easy to deal with - there is no shortage of litter bins these days. 

“This would allow millions of pounds to be redirected to the more difficult challenges that face the sector,” Mike Read, head of waste Grant Thornton



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