Recycling ‘not enough’ to insulate industry from commodity price risk
The UK's reliance on primary materials and its exposure to commodity price rises will be determined to a certain degree by the lifetime of products.
This was the key message from Eunomia Research & Consulting chairman Dr Dominic Hogg, speaking at the Resource Association conference in London yesterday (July 9).
He said that relying on recycling to insulate the economy from swings in the commodity markets was not a solution to the resource crisis.
In offering his thoughts on future resources policy, Hogg told delegates in his keynote speech that recycling was “all very good but there are some issues here with product lifetimes”.
“You put something out on the market – how quickly does it come out into the waste stream?” he asked. “At any one time, you are going to have an amount of secondary material that is in stocks that is in use in materials in society.”
Hogg explained that this wasn’t such a problem with products like newspapers that had a very short lifetime. However, with products like wind turbines, which used dysprosium, a scarce rare metal, it was more problematic as the valuable material was locked up over a long period of time.
“The longer the lifetime, the more the material that you might want to get as a consequence of it being used and that might arise in the waste stream, the longer it’s going to be locked up in the stocks,” he warned.
Hogg pointed to some modelling that Eunomia had carried out to see what this meant in terms of primary resource requirement if the UK was achieving 100% recycling.
“If you’ve got a short lifetime product and the demand is growing, you will still need some primary material in the future but because the material keeps coming back to you, you will be able to reduce the requirement for the use of primary resources quite significantly,” he explained.
“The picture is really different for a product that has a long lifetime, and if the consumption of that product is growing and the use of that material is growing … you are never going to reduce your primary demand and you will not be able to provide all of the consumption material through the secondary market.”
Hogg told delegates that if the UK was serious about commodities going forward, it needed to have high-capture policies in place. One he said was pay as you throw.
“It’s so difficult to reconcile the fact that it’s so politically controversial when it seems such a no-brainer,” he said.
Hogg also said that producer responsibility could be used as a measure to ensure that the commodity prices were reflected in the fees that producers paid rather than pushing the cost back on to contractors and local authorities.
“I am not that optimistic about the future in economic terms,” he concluded. “I think the generation coming up are going to have a tough time.”
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