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UK gets more value out of waste

During the past 10 years, the UK has improved the extraction of value from waste, Defra research on the importance of the waste industry has suggested.

The gross value added (GVA) to the economy per tonne of waste increased by 33%, from £32 in 2004 to £43 in 2012.

The department also notes that, in the past two decades, the GVA of the waste and resource management sector has grown at a faster rate than the economy (see graph above).

However, data indicates that the industry has not fully recovered from a significant drop at the beginning of the financial crisis in 2008.

The statistics are included in a report, Resource Management – a catalyst for growth and productivity’, which outlines the growth and importance of the waste industry.

It suggests that the core waste sector generated £6.8bn and supported 103,000 jobs in the UK in 2013. If the assessment is extended to include repair, reuse and leasing activity, this was even higher at £41bn and 672,000 jobs.

Resource minister Dan Rogerson says: “This analysis shows there is a massive opportunity for businesses to make money from repairing, reusing and remanufacturing equipment to extend the life of products.

“Using our resources more carefully is not only good for the environment, it’s also vital to building a stronger economy. The UK waste and resource management sector already makes a significant contribution to the economy, and this research shows there are even more opportunities out there.”

Defra also says its statisticians are compiling a dataset on how much material is reprocessed in the UK. It points out that “where commercially viable”, domestic reprocessing could add further value in the UK, supporting jobs and growth, and contributing to improving the UK trade balance.

However, it adds that export also plays a vital role because UK capacity is not large enough to process all the materials collected. For example, the UK recovers 7.9 million tonnes of paper but manufactures only 4.6 million tonnes annually.

The report also highlights that, as the global market for municipal and commercial and industrial waste increases, the UK is well placed to export its expertise. It mentions MRW’s report on global opportunities for the industry.

Defra says it receives “regular requests” from countries interested in learning more about how to manage the transition from landfill to recycling.

The department intends to discuss its analysis with industry trade bodies and work with them to raise awareness on global export opportunities, as well as identifying the potential of emerging technologies and further market growth in the UK.

Industry reaction:

Jacob Hayler, executive director at the Environmental Services Association (ESA): “ESA welcomes this analysis which clearly demonstrates the huge contribution that the waste and resources sector makes to the UK’s economy.

“The industry has gone through a period of radical change during the past 10 years and is now extracting more value from waste than ever before. This is helping to create thousands of productive and skilled jobs all around the country.

“But at the same time, we mustn’t shy away from the fact that these are currently hard times for the industry. Recyclers are struggling as local authority cost pressures are leading to more contaminated material being pushed on to the market which has little, if any, value.

“The resource sector’s true potential – as recognised in Defra’s report – will not be realised unless we can fix a broken supply chain which, at the moment, is not producing the valuable outputs the market demands.”

Simon Ellin, chief executive at the Recycling Association (RA): “We are particularly pleased to see a tacit acknowledgment that the Government recognises the important contribution of, and balance between, the UK and export markets.

“The RA would welcome further reprocessing investment in the UK across multi-materials because, as the report acknowledges, it adds tangible benefits to the UK economy on many levels.”

Steve Lee, chief executive at the Chartered Institution of Wastes Management (CIWM): “Minister Dan Rogerson wants to use the report to stimulate discussion on three fronts: does it fully reflect the sector’s contribution to growth and the opportunities available? Is there other evidence which strengthens the case for action? And what actions do we in the industry propose to take to capitalise on those opportunities?

“The CIWM will take up that challenge.”

Robert Hunt, Veolia’s chief corporate officer: “We welcome this Defra report which reflects our own thinking that resource management is one of the unsung heroes of the economic recovery. What is even more exciting is this is only the half of it. We see the transition to the circular economy and the extraction of greater value from waste as a huge opportunity to expand the sector, make an even greater contribution to GDP and boost resource efficiency.

“However actions speak louder than words. Now we need Defra’s backing to support our plans to invest in new infrastructure, limit the use of virgin materials to encourage the use of recyclates and back tax incentives to encourage the growth of the circular economy and with it UK Plc.”

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