APPENDIX 22
Memorandum from Shanks Group plc
SUMMARY
The waste industry is fundamentally influenced
by legislation. The changes that we are being asked to undertake
as part of the revision of waste management practices in this
country are huge and will require significant investment. Shanks
embraces the concept of resource efficiency and wishes to play
its part in helping the country make more use of materials. This
will come through a balanced approach that embraces minimisation,
re-use, recovery (materials and energy) and established disposal
techniques. It is therefore of utmost importance to Shanks and
the other waste companies in the UK that legislation is clear
and unambiguous, well defined and the path to implementation creates
an equal and ordered market. It is our observation that in many
aspects of trying to change UK behaviour this has not been achieved,
and represents a significant barrier to investment. This point
dominates everything because without investment the change will
not happen.
Therefore we seek:
— Early announcement of the future
of Landfill Tax levels.
— Clear and unambiguous implementation
of legislation with known time-scales, that create an even opportunity
for all to compete.
— Vigorous and uniform enforcement
of legislation by the regulating agencies.
— Recognition of the balanced roles
that minimisation, material and energy recovery will play in the
future.
— Stimulation of demand for materials
that contain recovered materials.
— Development of mechanisms that encourage
public participation in minimisation and diversion of waste.
For the sake of brevity we will constrain our
comments and observations to brief points, but would be pleased
to expand upon these if required to do so.
INTRODUCTION
Shanks Group plc is one of the UK's largest
waste management companies and, with its operations in Belgium
and The Netherlands, is also a leading independent operator in
the European market. Beyond Europe, Shanks is also active through
its environmental remediation services. As a Group, Shanks employs
over 4,500 people, based at more than 120 sites and involved in
200 operations.
The Group provides an extensive range of waste
management services and handles a wide variety of wastes, including
domestic refuse, commercial waste, contaminated spoils and hazardous
waste. Operations range from collections, domestic and commercial
waste recycling, composting, thermal treatment systems, industrial
cleaning and special waste treatment, to high temperature incineration
and modern landfill. Shanks is one of the largest generators of
electricity from landfill gas and produces a range of fuel-from-waste
products.
1. Waste Strategy 2000
Shanks supports the aspirations of the Waste
Strategy. We anticipate that England & Wales will not meet
the targets due to (amongst others):
— The current uncertainty about the
level of Landfill Tax in the years after 2004.
— The delay in establishing detailed
Waste Acceptance Criteria for landfill post July 2004.
— The inevitable delay to developments
caused by the planning system.
— The lack of UK based re-processing
infrastructure to handle the recovered materials.
— The confusion in interpretation of
implementation of legislation that will enable new processes and
markets to be developed (eg composting, renewable energy).
— The multi-layered structure of municipal
waste management (separate planning, collection and disposal bodies)
leads to tension and inaction.
— The lack of "teeth" in
enforcement against local authorities who do not meet the required
standards.
2. Commercial and Industrial Waste
The commercial and industrial waste market is
larger than the municipal waste market by a factor of two, and
is characterised by short term contracts, multiple handling between
producer and disposal point and a lack of definition regarding
composition. We seek:
— Certainty of Landfill Tax increases
to enable investment decisions to be made.
— Clarification of definition of waste
and recovered materials to promote recovered material markets.
— Clarity in the operation of recovery
for energy production.
— A uniform approach to enforcement
by the Environment Agency across the entire waste industry. We
believe that the larger companies receive a disproportionate amount
of attention because they are easier to police.
3. Landfill Directive
The implementation of the Landfill Directive
has created uncertainty and delay because of the lateness of it's
transposition into UK law and continuing uncertainties about Acceptance
Criteria. The most important point is that investment is needed
to provide alternative facilities that will process the diverted
materials. In large measure this is not happening because of the
uncertainty associated with the implementation. This is illustrated
by what is happening in the hazardous waste market, but will be
replicated by other materials as the Directive is implemented.
It is also highly unlikely that the planning
system will be able to cope with the high volume of applications.
For every landfill that is to be substituted approximately 10
new facilities will be required (to provide recycling, composting
etc). Often these new facilities will need to be located close
to the centres of population.
4. Best Value
Best Value represents a good initiative but
in our view is only designed to perform as a measurement mechanism.
The solutions to the problems it can help identify lie elsewhere.
5. Data
The waste stream in the UK is poorly characterised.
For municipal waste this is not too much of a problem, as there
is sufficient information to make broad management decisions.
This is a much larger problem for commercial and industrial waste
due to the dis-aggregated nature of the market and it does require
attention by producers/collectors and disposers.
6. Instruments
Shanks supports early announcement of the future
for Landfill Tax. We think that there is a strong need for an
incentive mechanism that encourages householders to minimise waste.
Direct or variable charging for household waste should be strongly
considered alongside adequate provision of diversion systems that
make it easy for everyone to participate.
We think that the current make up of the Renewable
(Electricity) Order does not have a strong enough linkage to waste
(due to the need to use advanced thermal technologies) as it places
an artificial barrier to obtaining finance that the funding community
does not find attractive. We would argue that recovery for energy
production should form part of a balanced waste management solution
and that in order to help the UK meet its Kyoto commitments the
RO should be modified to make it easier for waste projects to
be included.
7. Community Sector
The community sector plays a valuable role in
managing parts of the waste stream. We believe that this should
be encouraged wherever possible. However we firmly believe that
there is a need to maintain a balance between this sector and
public and private sectors to ensure that (in particular) the
private sector can compete with the community sector on a comparable
risk and reward basis when their activities overlap. Also it should
be noted that the community sector does not have access to the
capital required to achieve the diversion targets.
8. Benefits
The waste industry needs to invest at a rate
of c £1 billion per annum to meet the challenge ahead of
us. A significant part of this could be spent with British based
companies if the investment horizon was clearer. Government can
help in this respect by creating a framework that delivers the
regulatory certainty.
Many jobs will be created as a result of moving
towards a re-use and re-process based industry. US initiatives
have shown that down-stream processing can create four times as
many jobs as are involved in traditional collection and disposal.
The waste and energy sectors are on slowly converging
tracks. The use of energy recovery from waste does not necessarily
imply that we need to build new incinerators. The large energy
using sectors (power, chemicals, cement) are able to recover energy
from selected waste streams that are entirely consistent with
the environmental protection issues associated with this topic.
In Europe this is already happening, and if UK industry cannot
access these materials it will increase their cost base relative
to their European competitors. For the country this will help
secure the future of these sectors, reduce imports of fossil fuels,
count towards our renewable energy production targets (in part)
and can reduce pollution as a result of substitution of dirtier
fuels. We seek greater "joined up thinking" between
the DTI and DEFRA to encourage the appropriate development of
this method of managing wastes.
This change needs encouraging alongside a need
to allow appropriate waste materials to used on the land in a
form that is suitable for their purpose. The UK is depleting the
quality of its soils and we are approaching a situation that will
prevent us recycling the carbon and nutrients from suitable parts
of the waste stream for that purpose in the name of effective
policing against potential abuse. This would represent a wasted
opportunity.
Our view is shown below:
As recycled materials have a finite life before
they have no economic value (ie they can no longer be profitably
recycled), it is vitally important that the country has options
for final disposal. Ultimately this is to land or conversion into
energy. We should seek to achieve the maximum value increase that
can be achieved at an acceptable cost; this balanced approach
will deliver the most sustainable solution.
9. Public Sector role
The public sector can help all of this change
to happen through:
— Innovating in the procurement process
of waste services to reduce the cost and risk to the private sector.
PFI/PPP procurement is becoming prohibitively expensive and will
lead to reduced competition. The system is in urgent need of simplification.
— Stimulation of recycled material
markets through specification of recycled materials in purchasing
decisions and the removal of specifications that discriminate
against the use of recycled materials.
— Help the public understand by moving
towards waste collection systems that are simple and easy to understand
and are uniform across regions.
— Making the planning system and planning
guidance easier to obtain permission for new waste facilities.
This may mean allowing further development of established waste
facilities.
— Avoiding the use of the "proximity
principle" to govern waste planning decisions and instead
use "Best Practical Environmental Option" which includes
proximity. This will be especially true for London and the South
East where land use density implies movement of waste to established
waste handling facilities which may be some distance from the
point of origin. Encouragement of impact mitigation measures such
as movement by rail or water should be considered.
— Providing DEFRA with increased resources
to address waste policy matters.
October 2002
| 
