Ready for the resource revolution

It is only three months ago that a few colleagues and I met with our CEO, David Palmer-Jones, to discuss the complexity of our sector and the possible headaches facing Defra as they grappled with developing their new Resources & Waste Strategy.

He was keen that we support them in any way possible and committed to getting the foundations right for a sector that underpins economic growth, protects environmental and human health and delivering more circular use and reuse of materials.

However, it became obvious very quickly that the potential mix of policy and practical interventions in and around our sector that might be core to the strategy was hard to fully appreciate, and so analysing their potential impacts and opportunities was nigh on impossible, or so we thought.

At the time, we were able to discuss a number of activities and ongoing work programmes that would be feeding into the Defra machine, from potential bans on single use plastics and an intention to deliver a deposit return scheme (DRS) to changes to energy incentives and the UK’s acceptance of the EC’s Circular Economy Package (principles and targets in full).

Added to this we had the outputs from recent Defra workshops where they outlined their early thinking in terms of the Resources & Waste strategy, the National Infrastructure Commission’s assessment of waste infrastructure, and the impending Plastic Pact launch. What this clearly demonstrated to us was the huge opportunity and significant complexity inherent in our sector’s contribution to UK plc.

We quickly agreed that inputting into each of these topics and work streams as opportunities arose would fail to fully describe how they are all connected and what the unforeseen consequences of impacting on one aspect could have on multiple other elements of the system.

David set us the task there and then of crating our own vision (or manifesto) of what the new English Waste & Resources Strategy should look and feel like, and we rose to the challenge.

The SUEZ vision

After many long days and several sessions in dark rooms (seven weeks to be exact) we published our manifesto, ‘A vision for England’s long term resources and waste strategy’. This brought together our current thinking, alongside eight years’ worth of detailed insights and analysis on a range of topics critical to our sector including reports on non-weight-based metrics, the value of a circular economy, and how to deliver DRS on the go.

Our vision proposes 80 different policy interventions across 22 different themes, reflecting the origin of the waste to the final products we currently, or could, make, in order to help demonstrate both the complexity and opportunity inherent within our view of the world.

These 80 interventions are, in our opinion, necessary for the revolution of our sector. A revolution which focusses on clean growth, delivers environmental protection and resource productivity, focuses on more circular systems and enables a low carbon post-Brexit economy to flourish.

In pulling together all the strands of the activity described above, we were able to show the huge potential that a more holistic waste and resource strategy has – adding up to £9 billion in gross value added (GVA) to the economy while saving tens of millions of tonnes of CO2e.

However, what is surprising is that over 70% of this benefit is likely to occur in the value chain outside of the direct activities of our sector, from better product design through to harvesting low grade recyclate for modern chemicals processing and beyond.

These benefits will only be realised if they are connected, coordinated, sequenced and compounded, rather than delivered in isolation. This is why Defra must be bold in engaging with other UK government departments to ensure that the UK climate change, transportation, industrial growth and waste management agendas are fully aligned for maximum impact.

Testing our vision

Over the last five weeks we have been testing some of these interventions with officials from Defra, plus a range of key stakeholders from across the supply chain.

These include manufacturers and retailers, collectors and regulators, and a number of trade bodies, local authorities and consultants which looked at the complexities of the current system, our proposals for its radical overhaul and opportunities and risks that will need to be explored further.

The final of the four workshops was hosted in London just a few weeks ago. Interest from the sector has built steadily over the course of the month, with more and more interested parties asking to be involved. This is really positive and encouraging as we are seeing our ideas actively debated by some of the biggest names in the UK economy (and not just the waste sector).

In addition to our strategy document, we will be publishing a workshop report from each of the four workshops we have hosted. Answers will be anonymised of course, but will reflect the deep dive discussions and any consensus we could reach on targets, metrics, DRS and EPR systems, harvesting, local authority services, littering, target materials, home grown markets and full cost recovery. These will be available over the next three weeks, and we would welcome your commentary and engagement on them in due course.

We are also planning on writing up the major themes from both the vision document and all of the workshops in to summary report, headlining how we can deliver the economic benefits with the key interventions and policy actions identified and explained. This report will be available in early August – so watch this space.

Fear of the unknown

But what has become evident from our work to date is that many of the key initiatives that we have proposed, and which have been gaining traction in recent months in both our sector and the wider environment, like EPR, DRS and Full Cost Recovery threaten the traditional approaches on which our sector are based.

Add to that the possibility that we may have to combine commercial and municipal streams (where the target materials align) to ensure we can feed the expected upturn in recycled content and we will simply muddy the waters further.

That’s before we look at the need for better data at all stages of the supply chain so we can track materials and their return to productive use, therefore making strategic decisions about all forms of harvesting, capture and reprocessing capacity. There is a real tidal wave coming to traditional waste management systems and local authorities might be swamped with the speed and scale of change needed.

Risk or opportunity for local government?

SUEZ can foresee a UK (at least England, but we suspect UK-wide is inevitable) where the brands and manufacturers will become more interested in their material supply chain, wanting to retain ownership of their products and packaging, and ensuring the quality of their feedstocks in terms of secondary materials.

This is inevitable if EPR and DRS come to the fore, and with full cost recovery (as set out in the Circular Economy Package) it seems only logical that these big brand companies will want need to fund elements of collection, segregation and harvesting systems but only those that guarantee their material supply quality.

Perhaps in 10 to 15 years’ time funding for local authorities could be dominated by fees paid by the materials’ users and producers and if they are funding the systems we expect they will want a ‘say’ over the design and operation of these collection systems.

Will they prefer take back schemes to collection from the household to ensure they get the quality they need? And just how many materials providers (authorities) will they want to deal with in terms of contracts and payments, and could this open the door for consortium or compliance schemes to act as the middle men?

Clearly there are some risks here for local government in its current format, but we do not believe this is the end of the road in terms of local authorities and local service provision.

Local authorities have the relationship with the consumers, they understand their local nuances and logistics better than anyone, but they may need to work smarter in the coming years to retain their place in the supply chain.

New opportunities to work better?

So let’s be positive and see the potential upsides for local government working in a more circular economy where materials have real value to end markets, both at home and overseas.

The potential threats outlined earlier could pave the way for greater consistency in materials collections (in a way that WRAP have been unable to deliver), making the life of consumers easier than ever before.

It could also open the door for greater joint working within existing two tier authority areas and beyond, to neighbouring areas where it makes more sense in terms of scale, infrastructure and logistics to ‘harvest’ the target materials in a similar way.

For example, if the large manufacturers want to deal with a smaller number of ‘collectors’ they could do it through sub-regional hubs (existing County Councils, new Joint Waste Management Authorities, or new entities set up to most effectively deliver this role). These oversee the flows of materials (from commercial and municipal sources) in their area and guarantee the quality of the feedstocks.

I can see the larger conurbations looking at this an opportunity for some local reform to enable collection zones to be identified with aligned services delivering greater efficiencies – surely this would be of interest to the regional mayors in Manchester, the West Midlands, and London.

Local authorities will then be in a position to charge for the collections of materials that the market doesn’t want, like hard to recycle and low grade plastics, composite materials, nappies etc.

And as only residual waste will be charged for, as recycling will be paid for as part of the full cost recovery system by the brands, Pay As You Throw (PAYT) systems should be far less contentious for both the public and politicians – and that would be a real step forward.

Change is coming and we must embrace it

Working in the waste and resource sector is complex, but that very complexity creates huge potential for us to leave our sector silo and play a lead role in the delivery of this huge, but very necessary, change as a fully embedded and essential element of the UK’s sustainable economic future.

The Resources & Waste Strategy will hopefully start the resources revolution that so many of us have been calling for over the last decade or more, and with that will come both threats and opportunities to local government and their service providers.

We welcome the debate that is happening now, and have embraced the opportunity to share our ideas and help inform the discussions that Defra and their support network (INCPEN and WRAP for example) are having.

In recent weeks I have also been part of any number of meetings with HM Treasury, BEIS and of course Defra looking in more detail at some of the interventions we have proposed and other interventions that they would like to test, including what I can only define as a very unnecessary and unpopular proposal for an incineration tax.

I would challenge everybody else to get involved in the debate now, before the opportunity to influence is gone. We have a once in a lifetime opportunity to shape together our new strategic agenda and the systems and services required, so please join the debate.

This blog was originally published on http://www.recyclingwasteworld.co.uk on 09 July 2018.