Waste cartoon

Unlocking the economic value of waste

Government policy on waste is failing to keep up with industry's enthusiasm for recycling.

At a time when UK industry is under significant pressure from economic uncertainty, and as demand for raw materials increases across the globe, the search for ways to become more efficient and find cost savings is ever more urgent. Surviving the current economic storm will require an innovative manufacturing sector. Since the end of the recession, growth in the manufacturing sector has been three times that of the rest of the economy. Securing sustainable, reliable supplies of energy, water and materials is extremely important.

One way industry can minimise supply risks and cost pressures is to use resources more efficiently and cut waste. This is not new to manufacturers. At EEF, the manufacturers' organisation, members say they continually assess where waste occurs and what they can do. Research for the government suggests that resource efficiency savings worth billions of pounds are yet to be made. So why do these inefficiencies continue to linger? Can government provide a regulatory framework that enables and incentivises industry to be resource-efficient?

When the government launched its review of the waste policy it promised to help unlock the real economic value of waste and assess what policies were needed to achieve this. Six months on, we have looked at whether Defra, the Department for Environment, Food and Rural Affairs, has succeeded in increasing the opportunity for sustainable waste management and resource efficiency – and if not, what needs doing.

EEF's recent report, 'Defra's waste policy review: Six months on', which is part of our 'Green versus Growth' campaign, says that the government should have been more ambitious. We identify three challenges that would help manufacturers unlock some of the savings that studies have alluded to.

First, manufacturers still hold a deep concern about accessing secure resources at the right quality. In a recent EEF survey of manufacturing executives, 80 per cent now regard raw materials shortages as a risk. One in six said that a shortage of raw materials is holding up growth. We need a resource-management strategy to analyse how the materials we consume can flow more easily through the economy.

While there is some embryonic work considering what role government can play in helping businesses manage future supply risks, the government has not seized the initiative here and could, and should, be more ambitious.

Secondly, the legislative framework for waste is still confusing, disjointed and can act as a barrier to resource efficiency. Regulation makes the assumption that industry wants to send all of its waste to landfill – yet manufacturers send just a quarter. This assumption means that finding legitimate markets for 'waste' materials is shrouded in regulatory obligations.

Defra's review focused on the regulation of the waste management sector and how to elevate recycling standards. While we welcome better waste services and quality of recyclate, Defra has ignored the compliance headache for manufacturers. We need a cohesive policy centred on valuing waste as a resource, while ensuring the environment is protected.

There is a real opportunity for new regulations. Regulators can help by outlining what is permissible, rather than only stipulating what is not. There is also an argument for retargeting some of the existing regulatory stock. In particular, where a materials market is functioning well, government should reduce packaging and producer responsibility regulation, and shift the focus to materials that need more market intervention.

Thirdly, manufacturers need excellent waste services and expert advice they can trust. Announcements such as the local authority commitment to open up services to businesses and the responsibility deal signed by the waste management sector are positive steps.

Resource efficiency can give the UK a competitive edge while securing environmental outcomes. It is time for government to match the ambitions of business.

Susanne Baker is senior climate & environment adviser at EEF (www.eef.org.uk)

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