Select Committee on Environment, Transport and Regional Affairs Fifth Report



MEMORANDUM BY ECT RECYCLING LTD (DSW 109)

Will Waste Strategy 2000 result in:

efficient use of resources and reduction of materials entering the waste stream

  There is a tendency in waste management to argue for regional facilities integrated with regional contracting. This is linked to the issue of which part of local government should be made responsible for meeting the targets.

  Waste disposal authorities have had almost no positive impact on UK recycling rates. In many cases they have been, and are, an obstacle to progress. The implied power of "direction" set out in the Environmental Protection Act (EPA) has been used by some disposal authorities to block recycling options that adversely affect disposal arrangements. For example, recycling has been limited to areas not serving an incinerator.

  In one case involving ECT Recycling, we were informed that recycled materials must all be delivered to the disposal authority or its nominated reprocessor. The authority implied it held exclusive rights to market recyclable materials derived from constituent local authority areas. This was clearly against the interest of the local collection authority in which we work and is a restrictive practice. We were prepared to test the matter in the courts if necessary and the disposal authority concerned did not subsequently pursue the matter. We also have recent experience of a similar difficulty whereby a LAWDC has claimed exclusive rights to newspaper and magazines. In this case the collection authority indicated that any recycling option must exclude the material concerned from any multi-material collection proposals. The LAWDC has effectively claimed a monopoly over the material to the exclusion of all other potential recycling options and providers. In this case it is clear that the experience and expertise of the LAWDC in the recycling collections field is very limited. This is clearly a restrictive practice and we believe it to be in breach of European competition and procurement law. However, many local authorities have been intimidated by these claims and inefficiencies will occur in consequence—double handling of materials, additional collection systems over that which is necessary etc.

  Almost all the most progressive work has been initiated and commissioned by collection authorities or unitary authorities acting in support of local policy. The collection authority has a closer relationship with the public. The type and scope of collection service impact on the standing of the collection authority and not the disposal authority.

  In this context we believe the statutory targets should be set for collection authorities and that the tradable permits for landfill should be made available to collection authorities rather than the disposal authority. A further option would be to extend the tradable permit system to include recycling as well as disposal to landfill.

  Waste management companies and many local authorities remain convinced that recycling can only be undertaken by developing large scale MRFs in conjunction with long-term disposal contracts. The argument is not convincing. It is made simply because shareholder return is earned in relation to the amount of capital deployed. Simple depot facilities and low-tech collection infrastructures work very well, they are also robust and offer decent jobs rather than unpleasant, poorly paid work within mixed waste MRFs.

  Waste reduction is not likely to be greatly impacted by the strategy. Reform of the producer responsibility system will be the key.

an increase of recycling of waste, particularly by greater development of markets for recycled material (including compost) and use of producer responsibility measures;

  Statutory targets will make a difference to local government attitudes. One of the excuses given for not meeting the previous targets is the fact that other services are deemed statutory and those that are not have received fewer resources.

  Market development is vital to ensuring that the push of statutory targets is not accompanied by stockpiling recyclables that have no market or market failures resulting in excessive additional cost to local government or the operators of recycling collection schemes.

  We welcome the creation of WRAP and the prospect of new investment in diversifying the market. The limited number of reprocessing facilities compared to the large diversity of collectors has given the reprocessing industry disproportionate influence to fix the market.

  We would also welcome additional investment on the large scale reprocessing capacity. The investment decisions of major international paper reprocessors are largely dictated by the availability of grant support. New capacity will not be created without matching investments offered in the rest of the EU.

  If this is not forthcoming it is highly likely that over-supply will cause a collapse in UK markets. This may create an indirect subsidy encouraging new investment decision due to the cheap secondary material available. However, existing operators and the local authorities will bear the consequences and both company failures and the withdrawal of schemes may result. Disruption of this type will clearly impact upon meeting the targets.

increased use of incineration as a waste recovery option—the Sub-committee would also wish to examine what the implications of such an increase would be;

  The strategy is likely to result in an increase in the amount of incineration. This waste management option will also be at the centre of political opposition to waste management plans and local authorities deciding upon this option.

  ECT Recycling does not oppose the incineration with energy recovery of "residual waste" where the alternative is landfill only—neither is particularly attractive. However, the structure of many existing contracts involving incineration can create obstacles for other more sustainable waste management options. In particular, earning a return on capital requires that significant capital is deployed, predicating private waste management companies towards promoting incineration and mass burn solutions. Significant capital investment is not a necessity for a successful recycling strategy, although the entire private sector promotes the development of large regional "Material Reclamation Facilities" MRFs, using relatively expensive vehicles for collections that replicate existing waste collection techniques. Return on capital is the primary motivation for the favoured solution. This inevitably results in the call for very long contracts—25 years or more with guaranteed throughput, minimum tonnage guarantees, minimum calorific values, exclusive rights to the waste etc. These factors become an obstacle to recycling.

a reduction in the amount of waste sent to landfill—in this context, the Sub-committee would welcome views on the effects of the Landfill Tax and its associated credit scheme;

  Assuming the statutory targets are enforced the strategy will reduce the amount of waste taken to landfill.

  The landfill tax credit scheme is operated almost exclusively in the interest of shareholders. ECT Recycling has previously lost landfill tax credit funding for a project funded by "Biffa Ward" following the award of a recycling contract to ECT Recycling where Biffa lost the contract. Given that the provision of the credit is at the discretion of the landfill operator the "independence" of the trust or body making the award is a fiction.

  The scheme shares the worst aspects of the "planning gain" system. Contracts are increasingly evaluated on the basis of the "landfill-tax package" associated with it. This clearly favours large landfill operators and discriminates against providers that have no landfill tax to give or do not wish to engage in this practice.

  Direct commercial benefit is derived from most landfill tax funded projects working in the recycling or waste management field, whether it is improved chances of receiving contracts or from the projects themselves. For example, a waste management company funding a kerbside programme using landfill tax in an area within which it holds the waste collection contract will benefit from the recycling undertaken—it will have less waste to collect, perhaps fewer trips to the transfer station and a cost saving. The value of the contract will not reflect this change. We are clear that in places that we operate, waste collection costs have been reduced. In Hounslow, a beacon council for waste management in which we work, the DSO state without the recycling service they would require between one and two additional RCVs to collect the household waste. The general claim of waste management companies and DSOs that recycling has no impact on wider waste collection costs is erroneous.

a reduction in, and better management of, hazardous waste;

  If the strategy delivers a source separation kerbside infrastructure, there will be significant potential to include hazardous items within these systems. The addition of batteries within a box based, kerbside-sorting operation is relatively cheap and efficient, assuming the reprocessing facilities exist. The development of processing capacity is essential.

significant action to improve the example set by Government in exercising "green" procurement policies;

  There has been significant resistance to the adoption of "green purchasing" with local and national government on the grounds that such a strategy will involve increased cost. The CCT framework was also used to obstruct the adoption of policies that would improve environmental performance.

  We welcome the new direction and believe that the Government can influence purchasing strategies throughout the public and indeed private sector. The adoption of ISO 14001 or EMAS within government will move the supply chain, if it is made clear to suppliers that they will also need to control inputs to ensure good environmental practice.

sufficient action to educate the public about the importance of sustainable waste management;

  The budgets committed to education and marketing have been derisory in the UK compared to countries with more successful recycling strategies. The procurement process has been part of the problem at the local level. Local authorities have generally sought service provision at the cheapest cost, spending on marketing is therefore seen as a luxury despite the impact this can have on recycling performance. Lambeth Community Recycling, part of the ECT Group has undertaken work with Waste Watch to test and measure the impact of marketing. The result demonstrate the success of this programme at a local level.

  We have achieved year on year growth in tonnage collected in every local authority within which we work, however, the actual results in each are a function of the marketing input of the local authority and amount of marketing specified in the contracts agreed.

  However, local marketing must be augmented by national campaigns that use television. Whilst we have seen some improvement we need much more. Increasingly large parts of the country will have access to kerbside schemes and the performance of those schemes will be improved by national awareness raising.

October 2000


 
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