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Defra's mixed response to key circular economy recommendations

Defra has said it will consider recommendations from MPs on PRN reform, buying standards and a sustainable industrial strategy but has rejected several other key proposals on the circular economy.

A series of actions were called for by the Environmental Audit Committee (EAC) after it conducted an inquiry earlier this year. Defra’s full response is available here and summarised in the table below.

One suggestion was that the Government introduce differential VAT rates to encourage the use of recycled materials. Defra said such charges were negotiated at the European Union level, and recent discussions had shown that it would be impossible to reach an agreement.

The department also said no further reforms to taxation were necessary as the landfill tax and the Enhanced Capital Allowance schemes, which provide businesses with tax relief for investments in energy or water saving equipment, were already proving beneficial.

Another EAC recommendation was to provide more direction to local authorities on waste collections, including the separation of food waste and a landfill ban. Defra said it had no plans to introduce such measures and the Government was already supporting councils to deliver more frequent collections through the Weekly Collection Support Scheme and the Recycling Reward Scheme.

Defra also rejected the proposal to use landfill tax proceedings to reverse cuts in funding for WRAP. It said it will continue to support the body and Innovate UK, the UK innovation agency, but argued that diverting the tax to specific projects could create inefficiencies.

The department welcomed or expressed openness on some other EAC recommendations, although no immediate action was announced.

Defra took on board the proposal to review the Packaging Recovery Note system to include an ‘offset’ or lower charge for products that have higher recycled content. It will be considered as part of ongoing discussions to improve producer responsibility scheme across Europe.

The department will also consider industry advice on barriers to the trade of remanufacturing products. “The Government would be happy to meet with the companies involved and any trade body that is active in the area of remanufacturing,” it said.

Another proposal welcomed by Defra was reviewing industrial strategy to ensure it reflected resource efficiency priorities. The Green Economy Council has been tasked to conduct such review.

Defra also expressed support for the European Commission’s “ambition and vision” on the circular economy as stated in its recent policy package.

“The Government is keen to make sure that the Commission’s proposals are developed with member states, allow flexibility, ensure that costs are justified by expected impacts, avoid unnecessary burdens on business and create an environment that welcomes innovation.”

EAC proposalsDefra response
Differential VAT rates and tax allowancesNo. VAT is governed at the EU levels. Reaching an agreement would not be possible. No further reforms to taxation are necessary at this stage
PRN reform to include an ‘offset’ or lower charges for recycled contentYes. Recommendations welcomed in light of producer responsibility regime review as part of the EU circular economy package
Set criteria for waste collections, including separate food waste collection and ban on food waste to landfillNo. There are no plans to compel councils adopt separate food waste collections
Compulsory eDocYes and No. Proposal to be considered in consultation with industry
GIB investment priority areas should follow the waste hierarchyYes and No. GIB and Government policy are already following the waste hierarchy
Ecodesign standards, including ban on products that are not recyclable, promote industry voluntary agreements, extend minimum warranty periodsYes and No. Proposals to be put to EC to incorporate waste prevention in Ecodesign criteria. No plans to require the recyclability of products coming onto market. WRAP isinvestigating extending warranty periods on electrical products as part of eSAP
Remove barriers to remanufacturing goods, including allow for them to be treated as new productsYes. Further information on that is welcomed. Government would meet with companies and trade bodies involved in remanufacturing
Extend buying standards to include greater emphasis on recyclabilityYes. WRAP is leading work on new business models, including leasing. Those could be included in the Crown Commercial Service
Supporting the EU circular economy packageYes and No.Government supports the circular economy vision but wants to ensure measures allow flexibility and prevent “unnecessary burden” on business
Use landfill tax proceedings to reverse cuts in WRAP fundingNo. Hypothecating landfill tax could create inefficiencies
Embed circular economy in industrial strategyYes. Green Economy Council will review industrial strategy and make recommendations

Readers' comments (1)

  • GIB and Government policy are already following the waste hierarchy? News to me. How much funding has the GIB made available for reduction or reuse?

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