Brexit is happening: how can the waste industry realise the opportunities?

In recent months I have heard many people in the waste industry portray Brexit as a huge risk to their businesses. Granted, there is much uncertainty at present about the details of Brexit. But I think the industry needs to realise that Brexit is happening; adapt to this reality, and realise that it is as much an opportunity as a threat.

Brexit is happening: how can the waste industry realise the opportunities?

In my previous blog post, I argued that Brexit offers a big opportunity for the waste industry.

A report published by the influential think tank Policy Exchange in March provided a critical review of European and UK policies concerning waste and recycling. Waste is one of a number of areas of environmental policy in which the UK has largely ceded control to the EU. European Directives define the overall framework for how we manage waste, set targets for recycling and landfill reduction, and regulate the operation of landfill sites and energy from waste facilities.

Successes and failures

The combination of these policies has had a transformational impact on the way we manage waste and resources in the UK. Our total resource consumption has fallen by 20% since 2003, whilst the total amount of waste generated in the UK has fallen by 16% since 2004. Municipal recycling rates in England have increased from 12% in 2000 to 43% in 2014. Since 1990, there has been a 75% reduction in greenhouse gases emissions from waste management, whilst dioxin emissions from waste incinerators have fallen by 99%.

However, whilst there have been some notable successes, there are also some significant shortcomings in the EU’s approach towards waste:

  • Objectives are unclear: The objectives of European waste policy have evolved over time, and are now rather muddled. This is particularly true of the Commission’s proposed Circular Economy Package, which appears to be justified as an end in itself, rather than a means to achieving a particular set of economic, environmental or social outcomes.
  • Fails to reflect UK context: it is clear that the EU has designed waste policies that are not in the interest of the UK. The European Commission’s own analysis shows that adopting the proposed “Circular Economy” package would create additional costs for UK businesses and households.
  • Ignores the fundamentals: European waste policies fail to reflect the economic fundamentals: commodity prices have fallen sharply since the Great Recession, undermining the economics of recycling and leading to a number of notable company failures in the recycling sector in recent years.
  • Poor data and definitions: Waste policy suffers from some serious issues regarding definitions, measurement, and data quality, making it difficult to develop effective policies.

Developing a new approach to waste policy

Given these shortcomings, it is clear that following Brexit, the UK should not simply accept current and proposed European policies concerning waste. Instead, the Government has an opportunity to define an approach which better suits the UK.

This needs to be reframed around a much clearer set of objectives, underpinned by a coherent set of targets and policies. Rather than the nebulous language of the “circular economy”, waste policies should be framed around the concept of resource productivity  –  a concept which is likely to be more salient for businesses. There is a sizeable opportunity for UK businesses to improve their productivity and competitiveness by increasing their resource productivity. This is rightly recognised in the Government’s Industrial Strategy green paper, but further thinking is needed on how to realise this opportunity. The waste and resource management industry is a key player in this debate.

Beyond this high level reframing of waste policy, our report made a number of key recommendations on how waste policy could be changed for the better:

  • Outcome-based targets: Government should provide more clarity on the environmental objectives we want to achieve through waste policy. High level targets should focus on outcomes (such as the carbon emissions saved through waste management practices) rather than means (such as the current system of recycling targets).
  • Prevention and Reuse: Waste policy should focus far more on waste prevention and reuse, to reduce the amount of waste we generate in the first place. For example, Household Waste and Recycling Centres should be used as a collection point for reusable items, which can then be sold or redistributed to local charities. There are a number of examples of such schemes around the country, but they fall in a legal grey area under current rules.
  • Standardisation: Local Authorities should use one of three standardised systems for collecting waste and recycling – simplifying the more than 400 systems which currently operate across England. The current system leads to confusion amongst householders about what can and cannot be recycled, and inefficiencies for the waste industry.
  • Innovation: Government should encourage innovation in the recycling and reuse of materials, and help to develop markets for scrap materials. 
  • Energy generation: Government should also promote efficient forms of energy from waste – for example using black bag waste to create ‘green gas’ which can then be used for heating or as a transport fuel. Last year the UK spent £280 million exporting over 3 million tonnes of residual waste overseas (mainly to the Netherlands) where it was used to generate energy. We should be generating more energy from this waste in the UK.

The vote to leave the EU provides an opportunity for the UK Government to re-examine waste and other environmental policies for the first time in decades. The Government needs to grasp this opportunity, and develop a more coherent and effective set of policies which is smarter, greener, and cheaper. The waste industry needs to engage constructively in this debate, and help to realise a more resource efficient future for the UK, rather than clinging on to the European waste policies of the past. 

Richard Howard is head of environment and energy at Policy Exchange 

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