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Maximising the value of waste amid worrying reports

Recycling in the UK has become a force of its own. Tuesday’s reports that the percentage of rejected recycling is at its highest since 2011 is testament to the fact that the industry is broken.

What is needed is a sustainable waste strategy that balances and aligns environmental imperatives with hard, economic realities.

The very nature of conversation around recycling over the last twenty years has disassociated waste from the argument. Even the use of the term continues to further negative connotations about the things we perceive to have no longer use of.

But it’s time to change this, and begin talking and acting in ways that value waste as essential component of the UK economy, particularly in light of the unknown future of Government attention and support after the result of the referendum.

The latest European Commission Circular Economy Package calls for higher recycling targets in member states, while in the UK, the Government is currently striving for a 50% household recycling target.

Despite this, in both Brussels and Whitehall, there has been limited engagement with industry concerning waste management. Not forgetting, all under the shadow of an uncertain future over the termination of legal membership of the UK to the European Union.

What is becoming evident is a disconnect between the political environment and the economic reality. Our domestic economy has a great deal to gain by redefining waste as a commodity, whether that be in the form of secondary materials or energy.

Creating energy from waste is a sensible and sustainable option. However, in the absence of legislative drivers, there are no clear guidelines as to how this should be implemented.

We believe that ambitious recycling rates are unachievable and driven by the Green lobby’s agenda, rather than the reality of the market. This is heightened by enormous political uncertainty and the lack of an industry champion within Government.

The biggest dilemma facing our industry today is how best to balance and align environmental imperatives with hard, economic realities. The truth is, the industry is fragmented by:

  • Low commodity prices offering dwindling returns for re-processors
  • Recycling rates continuing to flat-line
  • Creative changes to recycling definitions in order to reach already existing targets
  • A lack of infrastructure capability and investment in new waste facilities
  • An increasing uncertainty around the value of RDF exports in the light of a volatile currency market

In addition to this, waste regulations only require waste collection providers and local authorities across England, Wales and Northern Ireland to separately collect four key recyclable materials (paper/card, metals, glass and plastics) from other waste if it is technically, economically and environmentally practicable (TEEP) to do so.

Ongoing confusion over the ground-level application of TEEP, which effectively provides a compliance opt-out, has been compounded by concerns over how to police it.

Inspections of business and waste sites to monitor the evidence will undoubtedly prove both time and resource intensive.

In addition, TEEP only requires a waste provider to offer a source-segregated service – the waste producer doesn’t have to accept it. Given these challenges, it remains questionable whether the regulations will ultimately achieve what they set out to do.

Looking at the wider picture, if the aim is to generate more recyclate in the long-term, will there be a commercially viable market for it? I believe we need to look more strategically at how other established resource recovery routes – such as thermal treatment of residual materials through EfW – can act as complementary technology choices.

We currently have a buoyant UK export market for refuse derived fuels (RDF), driven by demand for feedstock from overseas EfW facilities, low shipping costs and the strength of sterling. But in exporting our RDF, we are also exporting huge value out of the UK, and this future is increasingly high-risk.

On a positive note, there are enough EfW facilities either under construction or in the planning process across the UK to match future RDF capacity to demand. But it remains unclear as to how many of these plants will eventually become operational. Particularly, given concern about the risks associated with merchant development of future treatment facilities.

There is also a question mark over how different energy recovery technologies will integrate with each other as this sector matures. The emergence of advanced thermal treatment options such as gasification, pyrolysis and autoclaving have a relatively limited track record in the UK in terms of waste treatment, and only a few plants operate at commercial scale.

To be successful, these emerging technologies must be able to perform better in overall terms when compared with more mature EfW solutions.

Now more than ever the industry needs to take stock and look more holistically at how the economics stack up. With the new Government in place the industry needs greater consistency and clarity over waste and resources policy.

Putting in place this coherent, long-term directional framework would allow the sector to assess what funding mechanisms and timeframes are required to invest in infrastructure so that it can capitalise on its ability to improve the UK’s energy and resource security.

Paul Taylor, chief executive, FCC Environment Group

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