Deep Impact?

Victoria Hutchin, associate waste & resource management consultant for WYG, asks what might the forthcoming Resources & Waste Strategy mean for local authorities and consumers…

We are now only a few weeks away from the publication of the hotly anticipated Resources and Waste Strategy, and there is a lot of debate across the sector about what it might include, how radical the proposals might be and what the impacts will be for industry, local authorities and the public.

The Government’s commitment to the 50% recycling rate by 2020 and the revised Circular Economy Package provide some clues as to what the Strategy may include, and some of the current sector thinking and questions this raises are summarised below.

#1 Statutory Recycling Rates

The revised Circular Economy Package commits the UK Government to achieve a 65% recycling rate by 2035.  To put that into context, only 23% of English authorities have reach 50% and the latest national figures for England (2016) show a recycling rate of 45%, all with less than 2 years to go before we hit the 50% recycling target deadline.

A key concern for local authorities is how are we going to achieve these ambitious targets, what will happen if we don’t and whether there will be a reintroduction of local recycling targets. Socio-demographics, rurality, housing density and population transience, amongst other factors all have an impact on recycling performance. However, what is quite clear is that not all local authorities will be able to achieve 65% and there will need to be some recognition of this fact.

#2 Deposit Return Scheme (DRS)

It is understood that the Government is looking at several options in terms of the extent of the scheme’s reach; however, on a fundamental level the consumer is charged a recycling ‘deposit’ at point of purchase on recyclable packaging, refunded when the items are returned.

DRS administration would then be funded by producers as part of extended producer responsibility.  The income (from unclaimed deposits) is then fed back into the recycling system.

To date, RECOUP has found that public awareness of DRS is relatively low (66% of those questioned) and 59% thought a deposit would be 10p per container or more.

But, will it be for on-the-go litter or will it be more extensive?  What impact might it have on the kerbside collection services?

The concerns for local authorities are that this may result in a reduction in kerbside material and, hand in hand with this, a reduction in income from commodity sales.

There are certain frontline costs which are fixed or which can only be reduced to a point: there will be a minimum resource level required to provide kerbside collections to all properties; certain administration, management, supervision and central support costs / overheads which will remain; costs associated with existing assets (e.g. vehicles, plant and equipment) and infrastructure (e.g. depots, transfer stations, vehicle workshops, etc.); and contractual commitments may be expensive (or impossible) to vary mid-term.

What will this mean for local recycling rates? And will this matter?

However, it’s not all bad news. It has been reported that the potential reduction in litter could be as high as 90% and collective savings have been modelled to be as high as £35m a year (England and Wales).

Additionally, Zero Waste Scotland has stated that savings from a comprehensive DRS system could be £50m a year through avoided landfill tax and litter reduction.

#3 Extended Producer Responsibility (EPR)

Of the reported £773m it cost to collect and process our recycling in 2016/17, it is thought that 90% was funded by local authorities and only 10% by the producer. 10.2 million tonnes of material were recycled in 2016/17 which works out an average ~£73 per tonne cost for collecting and sorting household recycling.

The Government’s commitment to the revised Circular Economy Package requires that at least 80% of the full net costs (i.e. after considering commodity values) are recovered from producers to fund the collection and processing of the recycling of packaging waste.

One way in which an EPR scheme could work is by charging producers a ‘place on market cost’ (i.e. the point at which the consumer product, e.g. bottle of soft drink, is placed on the market) equivalent to the costs involved in the management of material net the commodity value.

In information leaked to the Guardian earlier this week, it was stated that income from EPR could be between £500m and £1bn, depending on which of the 4 (as yet unknown) EPR options is adopted. It is thought that these options might range from producers directly providing funding to local authorities to a levy which would be paid to central Government and then filter down to local authorities.

But will there be mechanisms to stop retailers and producers contracting with private sector collectors rather than LAs?  In time could the private sector replace the role of LAs?

#4 Plastic waste prevention

The consultation on banning plastic straws, cotton buds with plastic stems and plastic drink stirrers is a step in the right direction but when it comes to the negative effects caused by waste plastics in our marine environments internationally there is still much to be done.

Concerns have already been raised in the health and care sectors re banning of straws as they are vital for ensuring that the sick, disabled and elderly are able to get enough to drink. The consultation will hopefully provide a means for managing out unintended negative consequences.

The Autumn Budget announced just last week set out a consultation on a tax on plastic packaging with less than 30% recycled material content. However, this won’t be implemented until 2022 and there are no plans to introduce any taxes or levies on single-use coffee cups, for now.

Whilst this broadly looks like good news, it is disappointing that it didn’t match that announced by the European Community (35% recycled material content along with only allowing beverage bottles which can be recycled onto the European market).

Could this be the beginning of the erosion of the environmental ambitions of the EU many have feared would be a consequence of Brexit?

Setting minimum recycled contents will hopefully create greater demand for recycled materials within the UK and boost the domestic secondary commodities market. This demand drive may also lead to increased capture of recyclables and hopefully investment in reprocessing infrastructure in the UK.

#5 PRN Reform

There has been much criticism of the PRN system over the years due to the widespread lack of understanding of how it works, the opportunities for fraud and corruption, and the way in which it focusses attention on only achieving that years’ packaging recovery target with no links to longer-term sustainability.

At RWM 2018, Paul Bradley, team leader for Extended Producer Responsibility (EPR) and Packaging Reform at Defra, stated that packaging reforms would form a significant part of the Strategy and that DEFRA are looking at something which would work in a similar way to the current WEEE system.

What would replace PRNs and PERNs and would this come under the wider EPR umbrella?

Summary

One thing that is clear is that both DRS and EPR will have costs associated with them which will undoubtedly be passed on to the consumer. The effect of this is an Increase in the cost of products.

But this is not all bad news, there is a real potential to change the way in which people consume products: higher costs might influence buying behaviour such as a return of the milkman; increased use of reusable drinks containers; preferentially buying products with less packaging and so on.

In addition, DRS might change people’s mindsets about packaging, through creating a situation where we are buying the product but in effect renting the packaging.

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