Resource efficiency

EIC welcomes the focus on waste prevention in the Waste Strategy Review – and the acknowledgement that progress in this area has been limited. EIC has recently published a report on Resource Efficiency: Increasing Competitiveness by Cutting Waste.

It has long been recognised that if we are to reconcile the goals of a strong economy and living within environmental limits we must make more with less – in other words we must be much more efficient in the way we use resources to produce goods and services.

There can be no doubt that the opportunities for resource efficiency are huge. There are many examples of UK and international businesses who have profited from reducing waste, as well as helping the environment.

For example in April 2003 a study from the Environment Agency The Benefits of Greener Business concluded that £2-£3 billion is lost each year by manufactured industry in wasted natural resources – equivalent to about 7% of total manufacturing industry profit.

Furthermore, there is an extensive policy framework in place to promote sustainable production including legislation, fiscal measures and advice and support.

Yet, despite this, the opportunities for major improvements in resource efficiency have been taken up by relatively few companies.

Resource efficiency offers the opportunity for Government to promote greater productivity in business and reduce the burdens on the environment at the same time.

For material resource efficiency the Landfill Tax is the key measure. The scheduled increases in Landfill Tax are forcing companies to give increasing priority to waste reduction measures by increasing the cost of waste disposal.

The Landfill Tax is set to increase by at least £3/tonne/year until it reaches £35/tonne. A faster rate of increase would be a more powerful driver for waste reduction as well as for the development and deployment of technologies that divert waste from landfill.

It would also raise more revenue to recycle into schemes to encourage and support resource efficiency. We return to this issue below.

The Landfill Tax should rise immediately to £35/T or more, or at least a much more substantial annual increment to provide a much clearer signal to the market of the need to provide alternatives to landfill.

The EU IPPC regime puts obligations on regulated installations to use Best Available Techniques to minimise the environmental impacts of their process – this includes resource efficiency. By 2007 it will apply to some 4,000 installations in England and Wales.

A recent review by the EA of IPPC as a driver for resource efficiency measures recommended increasing the emphasis on resource efficiency in the licensing and inspection processes, through better staff training and improved guidance.

The Environment Agency should put a high priority on resource efficiency under IPPC – and publish an annual report on the resource efficiency gains achieved.

The BREW programme has provided an important boost to Government programmes to encourage resource efficiency. However, due to the breadth and variety of the BREW partnership, there is confusion over the programme itself.

For example, who does what and how businesses can get direct help to be more resource efficient? At present, businesses must go to all the different advice providers to get a complete picture of the resources available. Better signposting of the support available is required.

The Government should provide a single web-based guide, which would help users determine which resource efficiency programmes would be most appropriate for their needs.

Recently the Government adopted 18 Sustainable Consumption and Production indicators to assess the effectiveness of the planned actions for sustainable consumption and production.

The aim of the indicators is to monitor the extent to which the UK is ‘decoupling’ the link between increasing economic growth and environmental damage.

EIC believe that these developments represent an important step in measuring resource efficiency in the economy overall.

However, there is still no clear framework for measuring progress towards resource efficiency in specific sectors. Once such a framework is in place it is then possible to set targets for resource efficiency.

The Government should introduce sectoral targets for resource efficiency to give industry clarity as to the ends Government wishes to achieve.

A wide range of Government and stakeholder reports have set out the huge potential of public procurement to play a leading role in sustainable development in general and resource efficiency in particular.

Whilst overall policy on sustainable procurement is in place public procurement decisions are made at many different levels in all departments and agencies, and there are very few measures to ensure that the policy is followed.

A recent inquiry conducted by the National Audit Office in September 2005, discovered the practical difficulties budget holders are having in procuring sustainably.

The Government needs to give political momentum to, and provide better guidance for, integrating resource efficiency considerations into public procurement.

Stimulating Sustainable Waste Management

The Waste Strategy Review also sets out the pressing need to recover more resources from waste that is produced. There are a wide range of options for reusing, recycling and recovering value from waste.

However whilst landfill remains the cheapest option there is little incentive for investment in these areas.

The scale of the change required should not be underestimated. The Review indicates that it will require in the region of 1,000 new facilities and £10 billion of extra spend on recycling and treating waste to comply with the Landfill Directive.

We are now seeing the combination of the Landfill Tax with other policy measures such as Landfill Allowances for Biodegradable Municipal Waste driving change in local authority waste management with much higher recycling rates being achieved.

However, our Members are not seeing significant changes in the use of landfill for the much larger volumes of commercial and industrial waste. This is because the cost of alternative treatment technologies remains greater than that of landfill plus tax, currently around £35 in total.

The Partial Regulatory Impact Assessment to the Waste Strategy Review 2006 (Annex I) estimates costs of from £43.50 – £181/T in 2009/10 for a range of new technologies, and industry discussions suggest that these costs are themselves being increased by construction cost inflation in response to the increase in demand.

It is likely, therefore, that the overall costs of landfill, including tax, will need to be at least c.£60-70/T before investment can realistically be made in alternative technologies, and the current slow rate of increase of the Landfill Tax will not have a major impact on switching away from landfill until it reaches at least £35/T.

The Landfill Tax should rise immediately to £35/T or more, or at least a much more substantial annual increment to provide a much clearer signal to the market of the need to provide alternatives to landfill.

Barriers to Sustainable Waste Management

The Review highlights the importance of simplifying the regulatory regime for waste management. The Environmental Permitting Review is a welcome example of measures in this area.

However the key regulatory barrier to technologies that can recover resources from waste is the fact that those resources often remain defined as waste by the regulators until they are actually reused. This can make such technologies uneconomic.

For example there is huge potential to divert contaminated soils from landfill for reuse on construction sites by developing soil treatment centres.

However if the soil is still defined as waste after it has been treated to a suitable risk assessed standard this is likely to make the economics of the process unviable.

EIC has worked closely with the Agency in developing its plans for waste protocols to help respond to this challenge and these should help.

There is also potential in the Waste Framework Directive for a formal EU process to define recovery for particular waste streams.

However it is of concern that in the Thematic Strategy the Commission appear to see this as an issue for just a few waste streams.

The Government should press in Europe for rapid progress of the Directive and for a broader waste streams to be addressed under the proposed process to define recovery – including contaminated soils.

The second major barrier is the problem of getting planning permission for a new waste facility.

The Government has implemented reforms to the planning system to help ensure new facilities are seen as part of the regional need to manage waste sustainably.

The Government now needs to monitor closely the ability of the planning system to deliver the new facilities needed.

A further barrier to sustainable waste management technologies is that the market can be undermined by illegal activity and lack of enforcement to tackle this.

This includes both criminal activity and misdescription of waste – for example hazardous waste as non-hazardous.

Investors will not put money into new waste management facilities if they think the market for those could be undermined by illegal disposal.

The Environment Agency needs to further strengthen its enforcement capability – and Government needs to provide the resources for this role.


One of the key Government measures to develop markets for recycled products through the work of WRAP has been the development of standards – including for compost.

The PAS 100 standard is most closely related to the opportunity to retail compost for garden use. However, the retail market will, at very best, only account for a very tiny fraction of the total waste that can be composted; maybe less than 5%.

Therefore, there is a need for standards for composts for land for food production and forestry.

WRAP should develop series of standards for composting waste for different uses.

Sustainable Waste Management Programme Board

Given the scale of the challenge, and the fact that many of the responsibilities are split between Government departments, EIC agrees that new institutional arrangements are required to drive forward waste policy and therefore welcomes the proposal for a Sustainable Waste Programme Board.

Standards for Recycling

As recycling develops the challenge of ensuring it is done safely and responsibly also becomes greater. EIC believes that standards are needed for recycling processes to ensure both safety and quality outputs.

A current example this is the implementation of WEEE which presents particular dangers. There are no proposed requirements for large parts of the storage, treatment and processing of WEEE

UK buyers of WEEE recovery and recycling services could use minimum performance standards to specify requirements and assess competitive offerings from recycling and waste management suppliers.

Independent certification and assessment will increase the confidence of buyers and regulators that best practices are followed.

Overseas suppliers could also be required to operate to the same minimum standards. This will address concerns about unsafe and environmentally irresponsible recycling overseas – the Environment Agencies are prosecuting several organisations for exporting waste improperly.

Minimum performance standards could be developed from existing UK best practice and codes of practice so that UK operators can demonstrate independent assessment against such criteria, using certification or permits for such as a means to promote their activities.

Standards developed by the UK could be used throughout the European Union to avoid local variations in WEEE regulations that act against the interests of UK organisations.

The Government should support the development and implementation of minimum performance standards in recycling.

Regulatory Impact Assessment

The RIA attached to this proposal contains a wide ranging estimate of the costs of benefits of measures proposed.

However there is limited recognition of the productivity benefits to the economy of waste prevention, reuse and recovering value from waste.

A wide range of reports have shown the costs savings that can be achieved through resource efficiency – including those resulting from the work of the Envirowise scheme.

There is also no recognition that changes to waste disposal practice will stimulate the sustainable waste management industry – which will then be well placed to export to the growing overseas market for technologies and know how in this area.

To provide a complete picture of the costs and benefits of action on waste the RIA needs to pay greater attention to these areas.

EIC was launched in 1995 to give the UK’s environmental technology and services industry a strong and effective voice with Government.

With over 290 Member companies EIC has grown to be the largest trade association in Europe for the environmental technology and services (ETS) industry.

It enjoys the support of leading politicians from all three major parties, as well as industrialists, trade union leaders, environmentalists and academics.

EIC’s Waste Resources Management Working Group represents over 80 companies involved in sustainable waste management.

Environmental Industries Commission

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