Examination of Witnesses (Questions 345-359)
DR LIZ
GOODWIN AND
MR RAY
GEORGESON
WEDNESDAY 5 FEBRUARY 2003
Chairman: Good afternoon and thank you for coming.
Mr Challen
345. I want to come back to the question about
the £40 million. I am always intrigued to know how these
figures are arrived at. Are you able to tell us anything at all
about what negotiations took place, and with whom, to arrive at
this figure of £13.3 million over three years each year?
(Mr Georgeson) I will do my best to try
to explain that. You may need to address that question in more
detail to the Ministers or officials from DEFRA. At the time when
the idea for WRAP was created figures are arrived at. Are you
able to tell us anything at all about what negotiations took place,
and with whom, to arrive at this figure of £13.3 million
over three years each year?
(Mr Georgeson) I will do my best to try
to explain that. You may need to address that question in more
detail to the Ministers or officials from DEFRA. At the time when
the idea for WRAP was created by what was then the DETR, the predecessor
department, that was on the back of a piece of work which DETR
commissioned on market development for recycled materials. A market
development group was convened with a fairly wide range of stakeholders
in waste management. That came up with the overriding conclusion
and primary recommendation that a new body was needed to kick-start
and catalyse action on markets. My understanding is that from
that the DETR managed, in whichever phase of the last spending
review they were in, to find some resources from within the department
precisely to fund that work. The creation of WRAP was the main
product of that report from the market development group, and
it was a significant element in the publication of the Waste Strategy
2000 in May 2000. As to precisely how the figures were generated,
that is probably a question for Defra officials. Although I can
say at that time I spent a short period on secondment into the
department from my previous job as Barbara Herridge's predecessor
from Waste Watch, I am afraid the mechanics of how the resource
allocation was made is a bit of a mystery to me. I think it was
the best judgment by officials at the time. We put together a
programme to accommodate the resources that were made available.
346. This is a personal question. Is it enough?
(Mr Georgeson) The easy answer is to say: no, it is
not enough. In practice, certainly in the earlier stages, and
I do not think we have done this, it can be foolish simply to
throw money at a problem. A lot of the problems that we have tried
to tackle are not simply about throwing money at them; they are
about changing product standards, changing public attitudes and
business attitudes and dealing with some fairly unglamorous and
not necessary expensive work, which is difficult and hard work
and takes time. You can see in a number of situations, particularly
in the way that Government funding is allocated in three-year
tranches but with annuality, that a number of Government-funded
organisations find themselves in the position of having to worry
about the year-end because they may lose some of their allocation;
you cannot carry it forward into the next year. Frankly, I think
you will know that this is something that bedevils a lot of organisations
that are publicly funded.
347. What sort of progress has been made since
the launch of the strategy to find and develop these new markets
for recyclable materials?
(Mr Georgeson) We feel we have made fair progress,
as an organisation, from a standing start, to use your phrase
of earlier. My colleague, Liz Goodwin, will talk in a little more
detail about the work which we have undertaken in the first 18
months, particularly on research and development.
(Dr Goodwin) We have funded two rounds of research
and development projects across all the four main material streams:
paper, wood, glass and plastic. There is a total of more than
30 projects. Some of those are going to create quite exciting
new market applications for those materials. For example, in the
glass area using glass as a filtration medium for drinking water,
which is a really high value application. There are some other
ones, for example using glass as a flucting agent in brick manufacture,
which actually has energy and emission benefits as well as being
a useful outlet for the glass; it also improves the brick characteristic.
There are some really exciting applications that those projects
are going to deliver when they come to fruition.
348. You would claim direct responsibility for
those developments? You claim the credit for that?
(Dr Goodwin) We are funding the research projects
that it is going to result in those applications being brought
to the market in the UK.
(Mr Georgeson) It is probably worth saying that so
far we have invested about £5.5 million of the money that
we have had allocated to us in research and development projects,
all of which has been directly match-funded by partners in those
research projects . Around £11 million is directly going
into research and development on new uses for materials in the
future, much of which will come to markets, and some of which
will not, because that is the nature of research.
349. Do you think the assessment of energy efficiency
schemes and environmental impact of recycling activities is part
of your brief and, if so, why?
(Dr Goodwin) It is certainly one of the considerations
we take into account because we are trying to look at the overall
environmental benefits of a project and an end application. Some
end applications are going to be more environmentally beneficial
than others.
350. How do you go about measuring that in terms
of the environmental impact?
(Dr Goodwin) It is difficult, and we are developing
processes at the moment as we get a better understanding of what
some of the factors are that we need to take into account. If
you look at completely different end applications, you have to
take different things into account.
(Mr Georgeson) On all occasions, we have also asked
our research applicants to demonstrate to us the environmental
benefits that they feel they can show from the research they are
going to undertake. We have not yet completed a piece of work,
but it is under way, which is currently being peer reviewed, which
will assess the benefits of recycling in relation to the reduction
of CO2 emissions. Our first assessment is that recycling could
contribute anything between 10 and 15 % of the UK's Kyoto target.
We need to do a bit more work to verify that, so I mention it
to you as a piece of work that we have ongoing. Peer assessment
of that still has to be undertaken. It is important we do that
because often, quite rightly on occasions, there has been scepticism
about the value of recycling and we do need to demonstrate where
possible that it is adding environmental value to a material.
351. What are the major barriers to developing
these markets for recycled materials?
(Dr Goodwin) They differ for the different material
streams. In some cases, it is trying to make sure that there is
a sufficient range of end applications and in some cases it is
availability of the material, getting the material, out of the
waste stream and to the reprocessors in the right form and in
the right quantities for them to be processed. In some instances,
it is standards specifications and, in particular, we have been
doing some work on compost standards because we felt that that
was a priority area for that particular material. In many cases,
it is also information and public awareness and being aware that
a good quality product exists.
352. Do you feel that business attitudes are
actually enthusiastic, that people running businesses want to
see more recycled materials and want more help on recycling the
stuff that they produce?
(Mr Georgeson) Business certainly wants more help
in reducing waste and on recycling materials that they generate.
Indeed, our colleagues in Waste Watch have evidenced that from
the servicing of their own Wasteline, their information service.
We are finding that from our own help line service as well. The
desire to buy-recycled is less prominent in business. Businesses
do not want to buy-recycled for the sake of doing it. They will
buy a product if it meets their quality specifications, at the
right price and with the right availability. If it happens to
be recycled, so much the better.
353. They do not go and seek it out?
(Mr Georgeson) There is little evidence of businesses
seeking it out. We did conduct some survey work of business attitudes
to recycling; somewhere around 20-22 % of businesses said they
would be prepared actively to seek out recycled products. We would
want that figure to be higher but really we are much more interested
in products that are serviceable in the marketplace, and if they
are recycled, so much the better. It may be that in due course
we will get away from the imagery around recycling, which is still
one of the barriers that we face, that it is has a poor perception,
is of poor quality with dirty and lack of rigour in specifications
and so forth. There are many examples where that clearly is not
the case, but dealing with that perception barrier is both difficult
and time-consuming.
Mr Jones
354. During the course of the evidence that
we have heard from this inquiry, we have repeatedly been shown
that our recycling compares rather unfavourably to many, if not
most, of our European neighbours. You are nodding, so you agree
with that. Why is it that we are trying to develop new materials
for recycling, trying to develop new markets, when our near neighbours
have presumably developed these new markets and new materials?
Why do we not just copy what they are doing?
(Mr Georgeson) That is a good question. The first
thing to say is that there is endless debate about how you compare
the statistics for different European countries. I would not want
to get into the detail of that because I do not carry it around
with me.
355. You were nodding in agreeing that they
are doing more. If they are doing more, they must have developed
these markets greater than we have and developed products more
than we have. Why do we not just copy them?
(Mr Georgeson) First and foremost, we have relied
for generations in the UK on a plentiful and cheap supply of landfill,
which has been the easy option for disposal of waste. When you
get into specifics, for example in glass, other European countries
make wine and they have localised glass production and bottling,
and we do not. We import all our glass. We drink a lot of wine
but we do not make it. We have difficulties sometimes in absorbing
that material into our economy. One of the things we are doing
with glass is investing in a range of uses for glass other than
glass containers because the UK glass container industry is a
particular size and it has been slowly shrinking for years alongside
quite a lot of the UK's manufacturing base.
356. I buy that example. Give me another one.
(Mr Georgeson) Let us talk about the paper industry.
Paper manufacture is a global business. International companies
make and sell paper across the world. We have three newsprint
mills in the UK, all of which will be close to running to capacity
for the use of recycled paper, and we still import something like
half, or maybe a little more, of all the newsprint that we consume.
We are voracious readers of newspapers in the UK; we are not voracious
manufacturers of newspapers. We are living in a very productive
and energetic economy with materials flying in and out all the
time. There are inevitable imbalances between our ability to utilise
raw materials in indigenous manufacture and our desire to consume
products. That is something that certainly, in part, we are looking
to address by giving local authorities in particular more options
about how they sell or pass on the materials that they are going
to collect and have to collect for recycling.
357. Your answer explains why different countries
are different, but it does not provide much of an answer to why
all the countries around us, we are told, do far more about recycling
than we do and why we cannot import their ideas?
(Dr Goodwin) A lot of these countries started way
ahead of us. Switzerland started 10 or 15 years ago collecting
plastic bottles, whereas we have not really woken up to that one
yet; we have only just started. Some of these things do take a
long time to come to fruition. They did start before us. Also,
in some of the European countries the philosophy is different,
so they plough a lot of resources into the collection infrastructure,
whereas we are taking the approach of developing in the end markets.
Once they have collected all that material, it does not actually
mean that it is being recycled. Quite a lot of it will then go
for export rather than for use within the country in applications
for those materials.
(Mr Georgeson) To give a particular example, there
is a lot of plastic collected in Germany and much of that is exported
to the Far East. As a member of the public in Germany, you might
feel satisfied that you are separating your waste and that it
is being diverted from landfill, or even from incineration in
your country, but ultimately it is being sent several thousands
of miles away and it is no longer your problem. In our own way
in the UK, we are trying perhaps to inject a little more sustainability
into the process by keeping material circulating within the UK
economy where possible.
David Wright
358. I was interested in that batch of answers.
It strikes me that the two key themes here are quality and price.
Let us start with quality. I think there is a problem in the marketplace,
is there not, that people think that recycled goods are of a lower
quality. I remember when recycled paper first came out, for example,
everybody looked at it and thought it was awful, but now you cannot
tell whether paper has been recycled or not. There is an issue
there about quality that I think still permeates the market. I
would welcome some comments on that, as I would on price differentials.
Is there a view in the business environment that recycled goods
are, firstly, of lower quality and, secondly, there is a very
wide price differential? Could you give examples where that is
not the case?
(Dr Goodwin) In response to the first point, there
is a still a shortage of good quality recycled products. We want
to encourage the development of some good quality products so
that people have confidence that these products exist, that they
will do exactly the same job as virgin products and there is no
comparison. In terms of the price differentials, in looking at
the individual recyclate materials, for some of the materials,
there is definitely a price differential where the recyclate tracks
the virgin price and it is generally lower; it will also be slightly
more volatile than the virgin price. It will fluctuate more drastically
in price than the virgin price varies. That is largely because
people perceive that the recycled material is of inferior quality,
or that they are buying second best. We are trying to understand
the parameters that affect volatility and how people could manage
that volatility. Our belief is that the way to approach this is
actually to make organisations more robust in their management
of that volatility, eg to work on market transparency so there
is visibility of prices of the materials that they are buying.
There is quite a lot of greyness about whether they actually are
seeing the real price that they need to pay. Organisations also
need to consider their contractual arrangements. A lot of local
authorities, for example, are selling their material on a spot
basis. They would be far better to be tied into long-term contracts
where they have some stability. We are doing some work both on
looking at model contracts and also on the transparency side of
things.
(Mr Georgeson) I can give you one very specific example
which I have in front of me of high density polyethylene, a plastic.
The current price for virgin polyethylene is £376; the current
price for recylates is £290, which is 23 % lower. That may
well vary in the way that it is described. If you want them, we
can find you further examples of this.
359. How are you transferring that into the
business environment and in terms of when in doubt? That is the
real problem.
(Dr Goodwin) We are undertaking some work at the moment
to establish what that fluctuation is and what sort of level of
transparency there is out there, so that we can then decide how
best to manage it. There are a number of options we could take.
We could publish it all on our website; we could identify somebody
else who has already got that information and make sure people
are aware of it. We need to decide what is the best role WRAP
can play: is it pointing people at the right place or is it doing
it ourselves?
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