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Treasury policy ‘damaging’ industry investment

Treasury

Industry figures have said unanticipated policy changes are damaging investor confidence and called for an English waste strategy to be introduced.

Respondents to a call to evidence from the Environmental Audit Committee (EAC) into the Treasury’s contribution to meeting recycling targets focused on the removal of subsidies for reprocessing and renewable energy facilities.

Many respondents agreed it was unlikely the UK would be able to meet its EU targets of 50% recycling by 2020, and potentially 65% by 2030, without Government intervention.

The EAC originally asked for submissions in December to its scrutiny of the Treasury’s role in relation to sustainable development and environmental protection, but made a renewed call to the waste sector last month.

Now industry figures including Veolia, the Confederation of Paper Industries (CPI), compliance firm Valpak and the Joint Waste Disposal Authorities (JWDAs) have all submitted evidence.

Veolia said: “What has hampered investment in recycling and waste projects since then has been moving the goal posts in terms of recent changes to energy subsidies, which has led to uncertainty and a difficult climate for investment in infrastructure.”

The CPI agreed that unanticipated policy changes, including feed-in tariffs, had made it more difficult for the industry to deliver high-quality recycling.

“Making paper is intrinsically energy intensive; for UK domestic paper recycling to be profitable then internationally competitively priced energy is critical,” is said.

“The UK has clearly not delivered on this issue, with UK-delivered electricity prices being around twice as expensive as those paid by competitors in Germany.”

It said a series of paper mill closures in 2015 meant that, currently, more than half the paper collected for recycling in the UK is exported unprocessed.

The JWDAs, which include the waste disposal authorities of Manchester, Merseyside and London, called for the creation of an English waste strategy to provide long-term policies and support.

“We believe that getting the right financial framework, with appropriate fiscal incentives, is imperative to achieving those targets,” it said.

“That framework must consider both adequate funding of collection systems, and the development of markets by augmenting the price of secondary materials compared with virgin materials.

“Consideration also needs to be given to introducing financial support mechanism for recycling companies that are vulnerable to changes in the spot prices for materials.”

Valpak said austerity could hamper councils’ ability to achieve higher recycling rates and the Environment Agency’s ability to enforce against waste crime.

EAC chair Mary Creagh called for more industry figures to respond this week, saying cuts to public spending of 40% since 2011 were being done “as a massive experiment” on the waste sector and on local government as a whole.

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