APPENDIX 3
Memorandum from Brunner Mond
EXECUTIVE SUMMARY
Brunner Mond supports the main objectives of
the Government's Waste Strategy 2000 and finds the waste hierarchy
useful, though the latter needs to be used in a more sophisticated
way to secure an effective mix of waste management approaches
based on Best Practical Environmental Option (BPEO).
We support the use of targets as a way of driving
the waste strategy but these must be used with caution, based
on a proper assessment of data and developing waste management
techniques.
Despite the lack of data on waste arisings and
recovery/recycling rates, there is evidence that industry is taking
positive steps to address the challenges of waste.
There are two main areas which pose major barriers
to the ability of industry to do more: the implementation of regulations
and concerns over the use of taxation.
Brunner Mond recommends the following action
to help sustain and promote the contribution of industry:
— Develop a national strategy for industrial/commercial
waste.
— Provide strong leadership from Government
and relevant agencies to support all elements of the waste hierarchy.
— Give greater attention to implementation
and consistent enforcement of waste regulation.
— Reform the land use planning system.
— Consider carefully future options
regarding taxation of industry.
— Continue to support and expand the
recycled materials market.
INTRODUCTION
Brunner Mond welcomes the House of Commons Environmental
Audit Committee Inquiry and the opportunity to provide evidence
to the inquiry. Waste is one of the most pressing environmental
challenges facing the UK and its overall management is critical
for sustainable development.
For all industries the basic requirements of
any successful approach to tackling the waste challenge include
the following:
— Clear objectives underpinned by joined-up
thinking and action between different but inter-related policy
regimes.
— Flexibility of approach, including
responsiveness to changing circumstances.
— An approach based on scientific evidence
and proper assessment of risks, costs and benefits.
— Support for competitiveness and recognition
of the needs of different sectors.
— Recognition of the timescales for
industry investment.
The current approach to waste captures some
of the above requirements. Progress is being made and it is important
to build on this. However, much work still remains and many obstacles
are currently in place.
ACHIEVING OBJECTIVES
The fundamental objective is to manage waste
and resources better through a waste hierarchy of reduce, reuse,
recover, recycle and disposal. However, landfill, incineration,
composting and recycling all have a vital part to play in an integrated
strategy based on Best Practical Environmental Option (BPEO).
The BPEO principles should be the first and foremost consideration
for waste management decisions.
Current UK waste strategy has a focus on targets
aimed at reducing both municipal and industrial/commercial waste
to landfill. The Landfill Directive sets targets for the reduction
of municipal waste to landfill, while the UK has also adopted
a target for industrial and commercial waste. This demonstrates
the increased move towards a target-based approach in attempting
to secure environmental gains in waste. Examples of this target-based
approach include regulations on End of Life Vehicles, the Waste
from Electrical and Electronic Equipment, and those derived from
the Landfill and the Packaging Waste Directives.
We support the principle of targets but their
use gives rise to a range of issues:
— There are major obstacles hampering
the ability of industries to achieve the target on industrial/commercial
waste landfill, due to issues of funding, land use planning and
policy uncertainty;
— The industrial/commercial target
requires, in effect, a reduction of waste sent to landfill by
6 million tonnes. However, it is unclear which element of industrial
and commercial waste should be prioritised to achieve the target.
— Setting targets for 2015 would enable
companies to develop longer-term plans for governing waste.
— The Packaging & Packaging Waste
Directive already sets challenging packaging recovery targets.
This Directive is now being revised with a view to setting even
higher recovery and recycling targets with an impracticable deadline
of 2006. There must be a realistic set of targets for recycling
and recovering packaging waste.
INDUSTRY POSITION
TO DATE
For any industry, performance on waste is likely
to be driven by a range of factors. Some will be of greater significance
than others to individual firms, but three broad elements are
of particular note:
— Commercial gain: Improved
resource efficiency and the re-use or recovery of products can
have a direct benefit on profitability. The positive impact on
brand and reputation can also be an important driver.
— Regulation: Industry acknowledges
that sensible regulation, properly enforced, can be effective
in tackling waste issues, but regulation carries with it the risk
of variable implementation (eg in different EU member states).
It is vital that there are consistent standards across the EU
and consistent enforcement within the UK.
— Fiscal instruments: Economic
instruments generally (including taxation) can be a useful tool
for promoting environmental goals. The ultimate acceptability
of such tools to industry, however, very much depends on their
design and the broader context of taxes levied on industry.
The complexity of regulation and the waste management
industry calls for a package of measures which optimises the balance
between voluntary action, market forces, regulation and fiscal
incentives.
Future policy and legislation should draw a
distinction between waste types which have the capacity for significant
reductions based upon achievable targets and intractable waste
where reduction is impossible due, for example, to the waste comprising
naturally occurring impurities in raw materials used in a particular
industrial process, such as brine purification or soda ash production
and other processes using extracted minerals. Industries which
produce intractable wastes should not be subject to impossible
targets for waste reduction nor be penalised with liabilities
for environmental taxes which are unlikely to have any benefits.
Industry experience in addressing the waste
question indicates there are some significant challenges in making
use of various mechanisms available to policy makers in promoting
changes in behaviour.
CURRENT AND
FUTURE CHALLENGES
Market for Secondary Materials
For many materials, the scope for recycling
is still limited by the size of the markets for secondary materials.
The level of recycling can be constrained by lack of clear standards,
poor awareness and prices for recyclates. Barriers are different
for different material streams, for varying economic sectors and
for geographical regions. It is essential that the market for
secondary materials be expanded so that more use can be made of
secondary materials.
Producer Responsibility
The Packaging Recovery Notes (PRNs) were introduced
as part of the Producer Responsibility Obligations (Packaging
Waste) Regulations. Due to the low price of the PRNs within the
first few years of the scheme being introduced, little revenue
was invested in the recycling restructure.
Incentives to Recycle/Reuse
The effort to recover an item of waste often
gives marginal cost benefits and not necessarily to the waste
producer. Often the costs associated with reuse or recycling are
greater than that of disposal. Government should promote positive
incentive schemes to increase recycling and reuse of products.
Hazardous Waste
The Environment Agency estimates that England
and Wales produced approximately 6.1 million tonnes of "special"
or hazardous waste in 2000, of which 43% (2.6 million tonnes)
was landfilled. The UK's definition of "special" waste
is soon to be amended to "hazardous", adding approximately
250 waste types to the list. This is likely to triple the number
of shipments and producers of such waste. The UK will therefore
face a significant increase in the quantity of waste classified
as hazardous. In addition, it is becoming increasingly apparent
that there will be a lack of suitable hazardous landfill sites
in the future. This is likely to pose a substantial challenge
for industry and Government.
Waste Planning System
The current UK planning system will not permit
the effective delivery of the Government's strategy on waste.
The current system is cumbersome and is a major cause of delay
in providing the essential infrastructure required to meet the
Waste Strategy. Due to both the length of time to get permission
and the inconsistency of decisions, planning is a major risk and
cost to industry. The current system is too slow and involves
many uncertainties. It is vital that this system is revised so
that it is more responsive to the huge demand for increased waste
facilities.
Many areas in the UK do not have adequate waste
planning policies to give long term guidance on waste facilitates.
This is a barrier to the waste industry being able to get investment
or plan suitable practices for the long term.
Funding
Government should ensure that the Waste Strategy
is properly funded. The review of the Landfill Tax Credit Scheme
recently undertaken by DEFRA/Treasury, discussed proposals to
use revenue raised by the tax to fund the management of municipal
waste. It is estimated that this would only contribute about 5%
of the funding required to deliver the Waste Strategy. This amount
will have no perceptible effect in reducing municipal waste sent
to landfill. It would also divert funds away from achieving the
benefits currently gained by the existing scheme. We believe that
this would inhibit the waste industry's ability to integrate effectively
with residents within the vicinity of landfill sites. Brunner
Mond therefore opposes the revenue derived from the tax being
directed to fund Government initiatives to manage municipal waste
which should be funded centrally to ensure the issue is addressed
fully and consistently.
Waste Hierarchy
Government should provide industry with a clear
steer on its commitment to the use of differing waste management
options. For example, a clear indication of the role of energy
from waste and composting should be provided. Brunner Mond and
others have spent considerable efforts over recent years to convince
Government of the benefits of using deep underground salt cavities
as a safe and sustainable waste management option. Government
should be receptive to such innovative waste disposal solutions.
Timescales
The process of consultation regarding recent
implementation of European waste directives (such as the Landfill
Directive) has been protracted and difficult. It has resulted
in late transposition with little or no guidance in place on which
industry can rely. The lack of certainty fails to allow an adequate
basis for industry to present a case for capital to invest in
improvements needed for compliance.
It is important that the Government provides
long term support where policy decisions are made, eg in relation
to incineration, so that industry can develop appropriate financial
and management strategies with the certainty that the Government
will support developments in the long term. Government cannot
expect commitment from industry to the Government's own waste
strategy if industry feels that the strategy may change significantly
in the short term.
Landfill Directive
The timescales to implement the Landfill Directive
have been known for some time. However, the UK legislation implementing
it was only passed in June 2002. There were several changes made
between the draft and final regulations which made it extremely
difficult for landfill operators and waste producers to assess
the impact of the regulations, and how they will affect their
own landfill sites or waste disposal activities.
This issue has been compounded by the fact that
guidance notes and definitions, eg waste acceptance criteria and
pre-treatment, have not yet been finalised. Landfill operators
cannot assess the impact from becoming a hazardous or non-hazardous
landfill site. This then has the effect that waste producers cannot
determine if their current waste disposal routes will still be
open, or if their wastes will meet the waste acceptance criteria.
EU Legislation
There has been much activity in recent years
developing new waste legislation at a European level; some examples
include:
— Batteries and Accumulators Directive
— End of Life Vehicles Directive
— Waste from Electrical and Electronic
Goods Directive
— Waste Incineration Directive
— Integrated Pollution Prevention and
Control Directive
— Hazardous Waste Directive
— Integrated Product Policy Directive
The process of preparing, transposing and enforcing
a programme of legislation continues to impose significant pressure
on the resources of industry and policy makers alike.
Regulation must be transparent and specific
in terms of its objectives. It should be clear that no further
liabilities will accrue to companies where they have achieved
the environmental objectives set by specific regulations.
The Government should avoid gold plating of
European law when it is implemented in the UK and should certainly
not impose any additional burdens or liabilities on particular
industries whilst allowing other businesses to "free ride"
or allow members of the public to avoid their own contribution
to sustainable waste management through waste minimisation, segregation
and recycling.
Enforcing Authorities
There is a need to improve the competency of
Environment Agency waste inspectors and the wider efficiency of
the regime. Resources should be provided across the Environmental
Agency to ensure the continuation of high standards of professional
service. Enforcement must also be both effective and appropriate.
The Environment Agency should focus enforcement activity on companies
whose business activities pose the greatest risk to the environment
or demonstrate little regard for environmental protection. A "lighter
touch" should be applied to responsible companies with good
management systems in place otherwise there will be a disincentive
to invest in environmental protection measures.
"Green" Taxation
The industry contribution to total revenue from
UK environmental taxes has increased in the five years to 2001-02,
such that nearly £1 in every £8 of tax raised from industry
comes from "green" taxes.
The two taxes most relevant to waste—the
landfill tax and the aggregates levy—constitute only a small
proportion of taxes paid by industry. However, their particular
importance to certain sectors and the broader context of a higher
industry tax burden makes any suggestion of increasing the rates
of such taxes beyond current plans a sensitive issue for industry
in general. Any increase in environmental taxation should be fully
justified and based on proper environmental grounds.
Industry has a poor experience to date of UK
environmental taxes. Relevant concerns include:
— A lack of evidence of the actual
employment benefit as a result of claimed fiscal neutrality, such
as the cuts in employers' NICs which accompanied the introduction
of, among others, the landfill tax.
— Inconclusive evidence on the behavioural
changes stimulated by such taxes.
— An inadequate acknowledgement of
the potential impact of tax measures on industry competitiveness.
— A perception among some that a consequence
of the landfill tax has been an increase in fly-tipping.
There have been calls for significant increases
in the rates of landfill tax. With UK landfill tax rates among
the lowest in Europe, there may be a strong temptation on the
part of policymakers to consider such action favourably. No change
should take place until its impacts on both the environment and
industry have been properly explored.
RECCOMENDATIONS
Brunner Mond believes that action on the
following key issues is essential:
1. Establish a national industrial/commercial
waste strategy. The establishment of a waste database should inform
the creation of a national industrial/commercial waste strategy
which should address the 6 million tonnes of industrial/commercial
waste to be diverted from landfill by 2005 and start to work on
longer-term targets and consider other factors affecting specific
sectors and waste streams.
2. Government and relevant agencies should
back all elements of the waste hierarchy. A more holistic and
scientific approach must be taken to the evaluation of the various
options so that proper justification can be provided for difficult
decisions.
3. Give greater attention to implementation
and enforcement of waste regulation. Government departments and
agencies need to learn the lessons of past failure in shaping
regulations. Enforcement must be both effective and appropriate
in order to address first the greatest risks to the environment.
With reference to the Landfill Directive, the Government and Environment
Agency are urged to release guidance so that industry has sufficient
time to meet the requirements of the gold plating of European
Directives should not be permitted.
4. Reform the land use planning process.
It is vital that this system is now revised so that it is more
responsive to the huge demand for increased waste treatment and
recycling facilities.
5. Ensure environmental taxes are appropriate.
Any change to existing taxes or plans for new taxes should be
reviewed in detail.
6. Expand recycled materials market. It
is essential that this market be expanded so industry can make
use of its recycled products. Industry and government should have
to work together to provide information to manufacturers and consumers
to justify, in terms of sustainable development, the desirability
of using recycled products.
CONCLUSION
This paper summarises Brunner Mond's concerns
and recommendations on sustainable waste management. Tackling
issues such as market imperfections, poor regulation, insufficient
capacity for sustainable waste management and the use of taxes
is crucial.
Implementing the above recommendations would
promote the overall contribution industry can make to sustainable
waste management. Wherever possible, Brunner Mond is keen to work
with government to resolve these complex challenges.
October 2002
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