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Focus on short-term costs devalues needs of recycling sector

The shift by Defra and the Welsh Government from insisting that commingled collection is a form of separate collection is to be welcomed and brings clarity on that particular point in their proposed waste regulations. However, the change gives rise to concern that the amendments still do not adequately deal with the requirements of the revised Waste Framework Directive (rWFD).

The Defra and Welsh proposal does not replicate the text of the rWFD into domestic regulations. Instead it switches “necessary” quality standards to “appropriate” in the proposal. This switch could devalue the needs of the UK recycling sectors and imply that wider economic benefits are secondary to the narrow collection cost considerations within the waste management industry.

This is particularly galling when other government departments are trying to champion manufacturing investment and growth. Vibrant recycling sectors will be key elements of a rebalanced economy.

The issue: If you are a global business looking to invest in material reprocessing in Europe would you choose to invest in a country that legislates to provide you with the “necessary” raw materials needed for high quality recycling or in one that legislates to provide you with “appropriate” raw materials? Hardly a flag waving “come and invest in the UK”!

Smurfit Kappa has two UK paper mills and each has quality standards absolutely necessary for efficient reprocessing of recovered paper into new paper. Without material to these standards both mills would simply become inefficient and uncompetitive in comparison to European and global competitors. This would manifest itself in a number of ways including higher waste disposal costs (getting rid of non-recyclable materials present in poor quality recovered paper), greater wear and tear on expensive machinery (paper machines are designed to deal with known quantities of contaminants), higher energy and chemical costs (needed to manage poor quality inputs) and higher machine down time (due to machine breaks and system clean ups).

As with any business or industry, uncompetitive recycling operations are not sustainable and the knock on economic and social impacts to the UK would be significant. Smurfit Kappa UK alone directly employs over 2,500 skilled workers in the UK on a ratio of 1:2:13 through collection, paper making and corrugated production respectively; bringing half a million tonnes of waste paper back into active life.

We also create significant employment through our service and supply chains and support other UK manufacturers, retailers and exporters with our product portfolio. This shows the economic and social value available to the UK if we get the first stage of the recycling process right and emphasises why quality standards at the collection phase are absolutely necessary.

Technically, environmentally and economically practicable (TEEP)

There is no doubt that the upcoming guidance on “TEEP” will be critically important to those wishing to deviate from the “separate collection” requirement within the new Regulation and no doubt there will be much debate and discussion around definitions. Through its own recovered paper depots Smurfit Kappa Recycling collects waste paper from a number of different sources “separately” from other materials so in this respect we have not come across any significant practicability issues. As a large recycling company we also hold a strong view that if “TEEP” is used to deviate from “separate collection” for a certain situation then it should not be used as an excuse to extend a “non-separate collection” system beyond the boundaries of that particular situation. All collections of paper for recycling should, by default, be through “separate collection” and where this is not deemed “TEEP” then the collector must be able to show clear evidence as to why “separate collection” has not been employed and demonstrate how this conclusion was reached. Local Authorities are right to worry about future legal challenge on this key point.

Necessary quality standards for the relevant recycling sectors

Clearly the proposed Regulation shows that “quality standards” and “TEEP” must both be considered when deviating from “separate collection”; meeting “quality standards” alone is not an acceptable reason for rejecting “separate collection”. However, if operators cannot demonstrate “TEEP” against “separate collection” then there is no need to consider “quality standards” as it is deemed that they will be met through “separate collection”. Smurfit Kappa agrees with this position based on its vast experience in the paper recycling industry.

Only if “TEEP” is a clearly demonstrable barrier to “separate collection” will “quality standards” need to be considered in their own right. In this respect Smurfit Kappa maintains the view that “separate collection” provides the best and lowest risk method of meeting the “quality standards” for the paper recycling sector. Our experience of recovered paper emanating from “co-mingled collection” is that it is of inferior quality to that offered by “separate collection” and would only ever meet the bottom end of the paper recycling sector “quality standards”. Smurfit Kappa is a significant part of the UK recycling sector for paper (reprocessing over 13% of UK recovered paper into new paper) and has specific and necessary quality standards to promote high quality recycling at each UK mill.

A point sadly missed in the consultation document is that “quality standards” are not just about the here and now. In order for the UK reprocessing industries to grow, remain competitive and contribute to government policies external to waste, “quality standards” will need to improve beyond where they are now. In its recent 2012 report on the UK paper industry (How can paper be made more sustainable?) Defra set out actions for the paper industry to achieve greater sustainability through waste prevention measures, reduced waste generation during production and lower process emissions. Each action is achievable by the UK paper industry but is very dependent on the supply of quality raw materials, particularly recovered paper.

On waste prevention, Smurfit Kappa Group recently announced a £98m investment in its Townsend Hook paper mill in Kent to install and commission a new lightweight recycled container board machine due for completion in 2014. This light weight machine will allow Smurfit Kappa UK to reduce the weight of its corrugated packaging where appropriate and will contribute to the prevention of waste in line with the rWFD waste hierarchy. However, lightweight recycled paper production places higher demands on “quality standards” for recovered paper and we remain concerned that UK waste policies are not supporting this need.

Lower recovered paper “quality standards” will lead to increased waste generation at the paper mill; not a reduction as targeted.

Water and air emissions from paper mills will increase if current recovered paper “quality standards” are not met and future reductions will be jeopardised if “quality standards” do not continue to improve.

Future opportunities in getting it right

With the UK consuming over 10 million tonnes of paper related products per annum, collecting over eight million tonnes of paper for recycling from the UK waste stream, yet making only 4.3 million tonnes of paper domestically there are clear opportunities for the UK paper making industry to grow significantly if the investment environment is right. Clearly raw material supply is a key element in this and we have an opportunity to take decisions now that support future investment rather than act as barriers. Our future generations will not look back fondly on us if we take decisions now based simply on short term costs at the expense of the bigger, long term picture.

Background

In 2011 the Department for Environment, Food and Rural Affairs (Defra) alongside the Welsh Assembly Government (WAG) published new Regulations, The Waste (England and Wales) Regulations 2001. These Regulations transposed the 2008 revised EU Waste Framework Directive (rWFD) into English and Welsh domestic law. However, a Judicial Review was then launched against these Regulations by the Campaign for Real Recycling (CRR) and its supporters, centred on the transposition of Article 11(1) of the rWFD relating to the requirement for “separate collection” of key recyclable materials. Basically CRR objected to the Defra and WAG interpretation that “co-mingled collection” was to be regarded as a form of “separate collection” within the transposing Regulations. In order to avoid almost certain judgement against the transposing Regulations, Defra and WAG reached agreement with the judge to postpone the Judicial Review while amendments to the Regulations were made. Defra and WAG are currently consulting on proposals to amend the Regulations and within their consultation document have conceded that “co-mingled collection” is not a form of “separate collection”. The Judicial Review from CRR will go back to court in June where a judgement on the effectiveness of the amendments is likely to be given.

Peter Seggie, External Affairs Manager, Smurfit Kappa Recycling

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