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By all means review the circular economy - but don't dump it

Every now and again, one of our leading companies engages in a debate which goes to the core of the sector – and it’s welcome when they do. FCC Environment is the latest to put its money where its mouth is by supporting a report – independently researched – from the think-tank Policy Exchange called Going Round in Circles.

In a nutshell, authors Richard Howard and Tom Galloway argue that the objectives of the EU’s circular economy (CE) package are unclear, it is not right for the UK, will cost business too much money and ministers should devise their own resource efficient strategy.

My immediate response on the last point is to be sceptical because, for reasons of either unwillingness or impotence, Defra has not shown much appetite to date for setting an engaging waste agenda.

On-the-record conversations between MRW and former waste official Colin Church have indicated that the department can struggle to make its voice heard against bigger departments and, because it prides itself on analytical decision-making, it is a harder task to persuade politicians who are driven by more emotive voter-driver policies, for example in education or the NHS.

And it cannot be easy for waste officials in a department where flooding and air quality are so important.

Policy Exchange’s Howard believes this situation is not prompted by any Defra disinterest. He argued that the 25-year environment plan, currently being slowly prepared, affords a great opportunity to meet the Government’s aspiration to leave the environment in a better place than it was when it came to power. Only limited reference to waste in the Government’s recent industrial strategy suggests much work is required of Defra.

Think-tanks rarely like the labels we journalists give them, but ‘centre-right’ or ‘Cameronite’ does give a flavour of its approach in this report, particularly in setting out a stall that puts business rather than the environment at the core of its thinking.

An over-emphasis in the CE package on ‘ever-higher’ levels of recycling fails to reflect economic fundamentals, the report says, and will add £1.9bn to UK business costs by 2035. And low secondary commodity prices make the whole situation worse.

This is another point of divergence for me. The authors do not see this as market failure or agree with my observation that a range of measures, such as beneficial tax rates for producers using recycled materials, could kick-start the sector and supply chains. They favour voluntary agreements such as those backed by WRAP and quote the ill-fated dairy road map that did for Closed Loop Recycling.

However, there is acknowledgement that policies can be framed to better reflect the ’polluter pays’ principle when it comes to producers not fully meeting the cost to local authorities of dealing with the growing amount of packaging.

I am in agreement with the report’s concern over data and metrics. It is daft that European member states do not have a consistent measure of what and when materials are recycled, and perhaps Brexit does afford an opportunity to nail that in the UK. And, while we are at it, why not use a carbon metric rather than weight, as the report suggests?

The challenge for data is wider than simply not having it: the richest and most useful seam is held by waste management companies such as FCC and is typically business-sensitive and confidential, especially in terms of the massive commercial and industrial sector. We must find a way to harness this data if we are to tackle the sector’s waste in a concerted way.

Going Round in Circles is light on commercial and industrial waste and the omission of the debate around pay-as-you-throw is a big one - perhaps that can be investigated in a follow-up? 

There is plenty in this wide-ranging report to support: greater emphasis on waste prevention and reuse; higher product design standards; household collections harmonisation; and ensuring more energy-from-waste output generates green gas or heat.

It is sensible to reconsider how the UK can be more resource efficient when it does not have to accommodate 27 other member states, and that is what the relevant departments in Whitehall, Cardiff, Edinburgh and Belfast must do in the coming months and years.

So that does mean taking a long look at the CE package leaving Brussels. But we must not lose our resource-efficient principles because of short-term concern about the impact on traditional ways of husbanding valuable and over-stretched raw materials.

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