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European Standing Committee C
Wednesday 15 May 2002
[Mr. Peter Atkinson in the Chair]
Packaging and Packaging Waste
The Minister for Industry and Energy (Mr. Brian Wilson):I am grateful for the opportunity to explain the current state of play on the European Commission's proposal to amend the packaging and packaging waste directive. I should make it clear that the current proposal focuses primarily on recovery and recycling targets to be met in 2006. The Commission intends to publish a further proposal for a more comprehensive revision of the directive later this year. The second revision will examine issues such as re-use of packaging, minimisation of packaging and producer responsibility. It will also focus on the European Parliament's sixth environmental action plan and Green Paper on integrated product policy. The Department of Trade and Industry's explanatory and supplementary memorandums of 14 January and 11 February 2002 respectively, the latter of which included a regulatory impact assessment, explain the background and potential costs in some detail.
I shall speak about the proposed amendment to the directive. The Commission has proposed higher minimum and maximum targets within the range of 55 to 70 per cent. for recycling and 60 to 75 per cent. for recovery, and differentiated material-specific targets, all of which must be achieved by 2006. The inclusion of differentiated targets is a departure from current practice and for details I refer the Committee to the table on page 1 of the submission by the Department of Trade and Industry and the Department for Environment, Food and Rural Affairs to the House of Lords inquiry. The proposal also gives new definitions of mechanical, chemical and feedstock recycling of plastics, as well as a binding annexe categorising types of packaging, to increase conformity throughout member states. It should be noted that as a result of Environment Council working group negotiations the definitions are unlikely to be included in the common position text.
As the Committee will know, the European rapporteur, Dr. Dorette Corbey, has proposed changes to the Commission's proposal. The United Kingdom is keen to see its recovery and recycling rate rise, but is concerned that the suggested 80 per cent. recovery target could prove exceptionally challenging for the UK in the proposed time frame. We are also concerned at proposals to broaden the scope of the current revision.
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I turn to the points raised by the European Scrutiny Committee. The European Commission suggested that the costs and benefits of the revision are broadly equal. The estimated costs to the UK during the next five years are difficult to calculate because they depend on making assumptions about the future costs of packaging waste recovery notes, which are market-driven by a range of factors, including the prevailing market price for recycled and virgin materials.
The cost to UK business of discharging the 2001 target of 50 per cent., of which 48 per cent. was achieved, was £70 million orif Conservative Members do not mind my translating that98 million euros, plus administration costs. That compares with the £36 million and £35 million to meet interim targets in 1999 and 2000 respectively. However, in Germany the cost in 2001 was 2 billion euros or £1.25 billion. The total additional costs to UK business between 2002 and 2006 of meeting the proposed targets in 2006that is, 60 per cent. recoveryare estimated in the partial regulatory impact assessment to be in the range of £458 million to £656 million. For the estimated 14,000 obligated businesses, that represents an average cost of £7,000 to £9,000 per annum.
The Council will be at least 18 months late in agreeing the targets for 2006, and the UK is therefore seeking an extension of the time frame, for which there has been support from a number of member states. Extending the target date to 2007 would save UK business between £28 million and £35 million. By extending the date to 2008, we would be able to save between £68 million and £84 million.
The UK's producer responsibility regulations do not place costs on local authorities. Authorities have statutory recycling targets to meet, and we can expect them to plan to extract more waste for recyclingperhaps by increasing the incidence of kerbside-collection systemsto meet their targets. The experience of Peterborough city council, which is starting to establish a successful system, shows that, for every 100,000 households, it would cost about £500,000 to start up, plus £300,000 per annum to run the scheme. Further details of the Peterborough recycling cell can be found in annexe B of the House of Lords submission. We estimate that for every percentage point increase in the targets between 60 per cent. and 80 per cent., as proposed by Dr. Corbey, the total additional cost to UK business will be in the range of £23 million to £53 million. We are resisting the 80 per cent. target.
To meet higher packaging waste recycling targets, there is now a greater need to extract additional packaging waste from the household waste stream and to develop recycling markets. The announcement by my right hon. Friend the Minister for the Environment of 2002 targets of 59 per cent. overall recovery and 19 per cent. material-specific recycling reflects that. The not-for-profit company, the waste and resources action programme, with more than £40 million of Government funding over three years,
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forms an important part of the Government's policy to address the issue of developing markets. Estimates for additional infrastructure costs associated with packaging waste will vary significantly and are strongly linked to the overall targets, the material-specific targets and other factors such as the international market for some packaging materials. Other costs have been considered in detail in the regulatory impact assessment.
I turn to the relevant issues in negotiation in the Environment Council working group, the European Parliament environment committee and the European Parliament itself. Some member states, and our rapporteur Dr. Dorette Corbey in her proposed legislative amendments of March 2002 to the Commission's proposal of 11 December 2001, have recommended increasing the minimum recycling and recovery targets and removing the maximum target. Although the UK supports challenging recycling targets, we are opposed to the proposals.
The very high targets suggested by Dr. Corbey would be very difficult and costly for the UK to meet in the time scale proposed. That is partly because of the need to extract more packaging waste from the household waste stream and the time lag involved in establishing new collection infrastructure. In addition, removal of the maximum target could result in an erosion of the single market. Moreover, removal of the maximum figure would ignore the fact that recycling has an optimum point, beyond which it is neither cost-effective nor environmentally beneficial.
In conclusion, the UK would like an initial revision to include an extension of the 2006 deadline to reflect the delays that have already occurred while the Commission has brought forward its proposals. We would also like targets for recovery and recycling that are broadly in line with those proposed by the Commission. We continue to have some doubts that differentiated, material-specific targets are a necessity, but we recognise the momentum towards that outcome.
The Chairman: We now come to questions, and I urge Members to keep questions brief; speeches come later.
Mr. Michael Jack (Fylde): I welcome you to the Chair, Mr. Atkinson.
In the interests of the industry, which is anxious to have sufficient time to make its plans to meet revised targets, I refer the Minister to the point about seeking an extension to 2007 before the measures are implemented. If the 2007 extension were agreed to, when would he envisage that conclusions on new targets would be reached?
Mr. Wilson: The first point is that the extension that we are looking for is to 2008, not 2007. It is important to emphasise that the reason for the rationale is the 18-month delay that has already occurred in the Commission's introduction of its proposals. I hope that, certainly in the next few
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months, we will have an outcome on whether we are likely to achieve that extension.
Mr. Philip Hammond (Runnymede and Weybridge): What work has been carried out to measure the positive impact of the existing directive and the regulations made under it on reducing the generation of packaging waste and the use of packaging overall? Before we look at raising the targets, we should look at their effectiveness in achieving the environmental objectives that lie behind them.
Mr. Wilson: I very much agree with the hon. Gentleman that there is no point in setting targets unless they have proven benefits. I also agree with the need to measure them, and there is constant monitoring of the benefits and the results achieved. The environmental benefits include landfill avoidance, energy savings, conservation of natural resources and contribution to the national strategy for the more sustainable management of wastein particular, the objective of increasing recycling. Those are all objectives delivered by the targets, and statistics are available on the results of them in other contexts.
The recovery rate of 60 per cent. represents the avoidance of 5.3 million tonnes of waste, 3 million tonnes of which would be household waste. The avoidance of landfill will also help to meet the targets in the landfill directive. The benefit up to 2006 to obligated businesses of landfill avoidance has been estimated at £80 million to £96 million. That is roughly £16 million to £19 million per annum. The estimated energy savings for industrywhich are tangible benefitsfrom using recycled materials, essentially by burning them, are as follows: aluminium 95 per cent., plastics 80 per cent., steel 62 to 74 per cent. and paper 30 to 35 per cent. The value of those energy savings up to 2006 is estimated at £16 million.
Another relevant, measurable benefit that has already occurred is that the growth in packaging used in our daily lives slowed to virtually nothing between 1998 and 2001.
Richard Younger-Ross (Teignbridge): Will the Minister put Britain in the context of the rest of Europe? The briefing that we have received refers to other countries' concerns about the directive. How does Britain compare on the scale of ability to meet the targets? Which are the clean countries, and which the dirty ones, in that sense?
Mr. Wilson: Sadly, we have a lot of catching up to do because we started from a very low base. A chart, which has been supplied to Committee members, gives the total recovery and recycling rates in member states in 1997 and 1998. That was a position that the current Administration inherited. On recovery rate, the United Kingdom languished at the bottom, with 26 per cent., rising to 33 per cent. in 1998. That put us behind, for example, Sweden, with 69 per cent., Austria with 66 per cent., Denmark with 84 per cent.
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and even Spain, the next lowest, with 37 per cent. We are now catching up on recovery and recycling, but there is a long way to go. Without the challenging targets, I have no doubt that we would have continued to lag behind.
To update those figures, recovery levels in the UK increased from 30 per cent. in 1998 to 48 per cent. in 2001. That puts our slight failure to meet the 50 per cent. target in perspectiveour rate has none the less gone up. Recycling had increased from 27 to 42 per cent. by 2001. I cannot immediately supply comparable figures, but the trend is apparent. We have much further to go, but we have narrowed a wide gap and I hope that we will continue to do so.
Mr. Jack: In the light of the extension, which the Minister hopes will be given before the targets have been finally set, will the Government, in their pursuit to help industry make arrangements to play its part in meeting the revised targets, introduce interim targets that are above current levels but below those that could ultimately be agreed?
Mr. Wilson: We have targets and we should get on with trying to achieve them. We had a slight shortfall, but it is important to achieve the targets and lay the ground for achieving more ambitious targets in future. Rightly, there will be a consultation this year on the possibility of setting more informal targets in 2003-04. Given the EU-led targets for 2003and, I hope, for 2008it makes sense to work internally for less formal targets in between to ensure that we move in the right direction in the interim.
Stephen Hesford (Wirral, West): Does my hon. Friend agree that the balance between short-term harm to industry and long-term gain for the environment is difficult to strike? Given that that is so, cross-party consideration and support should be given to the subject. What cross-party approach, if any, has he seen from other parties in assisting the search for that delicate balance?
Mr. Wilson: I certainly do not wish to fall out with anyone. The issue has a cross-party history going back to 1994, and the process was in train when we came into government. There may be the odd bit of sniping or disagreement at the margins, but I have no reason to believe that the parties have fundamentally different approaches to the need for targets or for a substantial improvement in our record.