Why BEIS should put the circular economy at the heart of its new industrial strategy

In a new report released today (13 September) with the help of environmental consultancy Eunomia Research & Consulting, Suez considers how policymakers can develop a system of enhanced producer responsibility and tax breaks to help businesses cut down on raw material usage and ultimately win the ‘war on waste’.

— READ THE REPORT —

“It is time for a home-grown, forward-looking strategic framework for the UK waste and resource management industry and our report – the first of its kind since the vote on Brexit – should provide BEIS with a way forward to capture some of the £9bn of value that can be unlocked and put back into the UK domestic economy,” said Suez chief executive David Palmer-Jones.

The report, A Resourceful Future – Expanding the UK Economy, identifies the key policy and legislative measures that the Government should adopt in order to successfully integrate resource conservation into its industrial strategy ahead of Brexit from the European Union (EU). Its release comes less than a week after Business and Energy Secretary Greg Clark admitted that the country’s industrial strategy is in need of “an upgrade fit for the future”.

BEIS should encourage greater use of secondary raw materials in products manufactured in the UK, the report claims. This would help to re-shore a significant percentage of the 14 million tonnes of secondary materials that the UK exports each year, which in turn would generate as much as £650m annually for the economy.

According to the researchers, the greatest economic uplift for the UK would arise if the nation could reach a 70% recycling level by 2030 – a relatively ambitious target previously touted by the European Commission, but not yet formally enshrined in law. Latest Defra figures show that UK recycling rates have flat-lined in recent years, sitting at 44.9% in 2014. If BEIS could work with the Treasury and Defra to reinvigorate these stagnating recycling rates, up to 27 million tonnes of carbon emissions could be negated by 2030, the report claims.

Strategic framework

Industrially, a system of incentives and taxation would ignite behaviour change surrounding the use and re-use of materials, Suez says. Its report notes that this new system should include: –

• Legislation on extended warranties – obligating manufacturers to offer longer-term warranties and thereby influencing the durability or reparability of goods.
• Obligations on public procurement to include percentages of reused or recycled materials in specific goods supplied to public sector organisations.
• Enhanced producer responsibility, where producers of a wider range of goods are obligated to pay the cost of recovering and recycling products and product packaging.
• Differentiation on tax regimes – for example, different VAT rates for recycled materials and primary materials, with more flexibility on tax differentiation if the UK leaves the EU.
• Research and development tax breaks for novel processing techniques.

“It would be a wasted opportunity for the wider UK economy if BEIS did not look to seize the opportunity and create a strategic framework to allow a greater range of industries to work with the waste and resource management industry, and ensure that a far greater share of the value from key waste streams goes back into the domestic economy as we look today towards the future of an independent UK,” added Palmer-Jones.

The report’s release comes on second day of UK Recycle Week 2016, the annual awareness-raising campaign from WRAP, which this year aims to draw attention to the less obvious recyclable items found in homes, such as aerosols and plastic cleaning bottles.

Yesterday, edie reported on two new public surveys which highlighted the need for greater standardisation and co-operation between retailers and policymakers to improve the UK’s recycling performance. 

And today, a major national recycling framework has been launched by an advisory group of representatives from across the sector. Supported by Defra and DCLG, the Framework for Greater Consistency in Household Recycling for England would see everyone recycling the same set of core materials by 2025, no matter where they live in the country, if it’s adopted by the Government.

Read the Suez and Eunomia report here.

Luke Nicholls