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by Tim Swabey 9th October, 2018
3 min read

Dishing the dirt on threats and opportunities in the waste sector

The waste management and recycling sectors are in flux. The policy landscape could shift dramatically in the next few months.

What is the most cost-effective way to source gold? According to the Economist, it costs around $40,000 to extract a kilogram of gold from the ground. Yet it only costs $2000 to extract the same amount from an old television set. It turns out that old TVs are a literal goldmine!

This may be a simplistic example, but it illustrates the value of collecting, managing and recycling waste effectively. The UK’s waste management sector has an estimated turnover of over £9 billion and provides a hugely important service to all of us. However, the Government is in the process of developing policies which could have wide ranging implications for how we manage waste in the future.

The incineration tax

In August the Treasury announced it was seriously considering a tax on incinerating plastic waste. While politically popular and highly supported by the electorate, many worry it could hinder effective waste management.

Operators say incineration is an effective way to dispose of waste while also generating power for local communities. Raising tax could result in more waste going to landfill, which is more visible and harder to manage. Many also worry that since China closed its borders to waste imports in early 2018, the materials we would have previously exported are now building up, meaning more incineration capacity is needed to deal with it.

This poses a significant challenge for the sector. We may also know the decision as early as this month’s Budget. It seems Theresa May announced the most eye-catching consumer policies a month early at the Conservative Party conference. New waste management policies could allow Philip Hammond to generate positive headlines for a budget otherwise lacking a big retail offer. If the Government goes to consultation afterwards, those in the industry must seize the opportunity to get their voices heard.

Radical producer responsibility reform

Producer responsibility laws in the UK require producers to purchase a set number of PRNs from reprocessors, which serve as evidence that their packaging has been recycled. A recent National Audit Office report found a need for the model to be reformed to meet the requirements of a true circular economy.

Environment Secretary Michael Gove, one of the most interventionist characters in the cabinet, has taken a keen interest in reviewing PRNs. What this could look like is yet to be announced. However Gove has stated that ‘radical’ change is needed. Clear input will be needed from the sector to ensure it accurately reflects the needs of the waste management system.

Expect more information in the Government’s new Resources & Waste Strategy published in the next few months. Gove recently trailed a new plan to allow more ‘waste picking’ to improve recycling rates. This could suggest DEFRA’s new direction of travel.

Local authority procurement

Almost 50% of local waste collection contracts will come up for tender in 2019. This coincides with a crushing squeeze on local authority budgets. To get around this, many councils are giving contracts to ‘Teckal’ organisations – bodies wholly owned by the council who can often offer services at a cheaper price.

While providing a short-term financial benefit, it’s not clear if this will deliver the money needed for innovation to improve services in the future. Some have criticised local authorities for procuring based on existing communities within their areas, rather than planning for future needs. This is a challenging environment to operate in, however there are opportunities for raising these issues with local authorities over the next year.

Brexit

The majority of waste management legislation comes from EU directives. From March 2019 there may be scope to shape how regulations after 2022. Several government departments are currently in listening mode. Now would be the time for someone with a clear vision of what an ideal circular economy or waste management system would look like to come forward.

The next six months are likely to deliver a range of challenges for the waste management industry. There is likely to be a public debate about the future of this country’s waste management processes. Industry representatives must articulate their arguments for a well informed debate.

For more information on how GK can support this, contact tim@gkstrategy.com

See more articles by Tim Swabey