Memorandun submitted by the Babtie Group
Ltd.
Babtie Group is one of the leading UK Environmental
Consultancies.
We currently act as technical advisor on nine
waste PFI contracts, including East London, Central Berkshire,
Dumfries and Galloway, and The Highlands Council. We also advise
the leading waste contractors on technology and site selection,
design and procurement, including the largest waste recycling,
composting and treatment plant in the UK at Milton Keynes.
We have advised DEFRA on Hazardous waste disposal,
recycling incentives and data collection.
We have prepared strategies for numerous Local
Authorities and are managing the Welsh Assemblies' Waste Exemplars
project.
We are acting for Jersey to bring their collection,
recycling and disposal of waste to European standards.
We are investigating CHP from waste and the
integration of waste and sewage sludge treatment.
We have focussed our response on two key areas,
that the experience listed above has shown us to be critical to
the success of any waste strategy in the UK
These two issues go beyond the superficial setting
of (often spurious) targets. They identify fundamental structural
problems that are inhibiting, and will continue to inhibit, the
development of a sustainable waste management infrastructure in
the UK
1. CAPTIAL FUNDING
AND SUPPLY
RISK AS
A BARRIER
TO RECYCLING
Abstract
The approach to recycling as an "end of
pipe" solution, with material emerging from the waste bin
to go for use as replacement for virgin feedstock in existing
production processes is not sustainable.
The need for capital investment in reprocessing
facilities will require waste supply guarantees from Local Authorities
as onerous as those required by energy from waste plants, preventing
waste minimisation.
Once established, reprocessing plants will require
an unchanging waste stream, restricting opportunities for the
introduction of new materials with less environmental impact.
The transport implications of the recycling
targets, particularly for inner city areas, are profound. The
recent East London contract, with high recycling levels, will
triple the vehicle movements compared with the current practice,
and quadruple the emissions to air.
Introduction
The debate surrounding waste management in the
UK has coalesced into a view that recycling will supply all the
answers and that by setting high recycling targets and supplying
some grant aid the Government has provided the structure and means
to achieve them.
An examination of the structure of waste management
and the impact of capital funding on it shows that this panglossian
view is wrong. It also misses a vital opportunity to create real
producer responsibility and significantly improve the sustainability
of society.
Current recycling practice
When assessing a waste management proposal,
planning risk is a significant issue. Recycling is seen as low
risk because the actual recycling occurs elsewhere. If a transfer
station or MRF included a steel works, paper mill, aluminium smelter,
or glass plant, with the impact and emissions they create, the
planning risk would be different!
These plants are few and scattered. No "proximity
principle" is applied to them. WRAP provides grant aid to
greatly increase the capacity of one at Shotton which will have
to attract paper from a catchment of several hundred miles, and
almost all by road. Bulkers carrying 20t loads of paper and card
use a litre of diesel a mile. Their emissions are not measured,
and yet the impact of road traffic is one of the few quantifiable
on health, particularly on children.
So distorted has the debate become that no "environmentalist"
voice is raised against this.
Current collection practice
Collection of recyclates from domestic bins
is grossly inefficient. Recyclates are bulky, and quality requirements
of re-processors (competing with virgin feedstock remember) make
mixing or compacting difficult. Hence most collections use additional
vehicles, which fill rapidly requiring frequent trips to tip.
The recent East London Waste Authority contract will triple vehicle
movements in a congested area, and generate significant additional
pollution in the streets.
Collections from households are very vulnerable
to contamination. The results are serious, as contaminated material
has to be double handled and disposing of it devalues the additional
collection impact, as it is not offset by the benefit of recycling.
Collection is funded from the community charge.
Producer responsibility is avoided because of this and the cost
should be met directly by those supplying the material (usually
packaging). To create pressure for minimisation, this should be
through a point of purchase charge, NOT by creating a market for
the material.
The logical result of this would be a deposit/return
system.
Investement in recycling capacity
Investment in new facilities to process recyclate
will require the usual bank securities. Apart from reassurance
regarding the marketability of the product, they will require
a guarantee of feedstock supply.
The feedstock comes from the domestic waste
stream, which is controlled by the relevant local authority. Contractors
collecting and processing this waste will undertake to recycle
it only if the constituents of the waste stream stay as they are.
In other words the Local Authorities have to guarantee not only
a quantity of waste, but the make up of the waste as well.
Waste constituents are clearly outside the control
of the Local Authority and this guarantee is simply to underwrite
the investment. To avoid paying out, the Council is faced with
maintaining volume and resisting changes, however beneficial,
in waste contents.
Investment in re-processing capacity will impede
minimisation and the upgrading of packaging to more environmentally
friendly forms.
The Packaging Regulations, as configured in
the UK reinforce this. The principle of "draw through"
by creating a market is flawed for the same reasons described
earlier. A market will simply fossilise packaging into its current
forms, and prevent the entry of lighter, cleaner materials. Some
innovative plastics are good examples—able to replace cans
and glass—but alas! Not recyclable, so unattractive as they
will fail to meet targets.
Conclusion
Recycling is not a panacea. It creates many
impacts above and beyond the more efficient use of materials.
Recycling must create dedicated markets, local
to arisings. Using glass as aggregate is a good example.
Investment in reprocessing with the current
structure of waste management in the UK will reduce minimisation
by creating demand and prevent changes in packaging materials,
including beneficial ones.
Recycling must be an integrated part of the
flow of materials in society, not an isolated end of pipe solution.
Producer responsibility should mean just that.
Packaging (most recyclables are packaging) should include a point
of purchase charge covering its recovery. The collection of packaging
should not be the responsibility of the Local Authority.
2. INTEGRATING
BPEO WITH CONTRACT
PROCUREMENT
In order to move waste up the hierarchy, local
authorities will be contracting with private sector parties, followed
by planning applications for integrated waste management facilities.
Whilst everyone talks about getting the Best Practicable Environmental
Option (BPEO), it is easy for the complexity and uncertainties
which are inherent in such assessments to obstruct any planning
decision ever being made.
Clear guidance on how to build BPEO into local
authority contracting arrangements is therefore needed.
Apart from site-specific amenity factors, the
main current reasons for refusal of waste management planning
applications appears to be inadequately demonstrating that they
are the BPEO.
The risks to progressing integrated waste management
contracts lie in three principle areas:
1. Risk of challenge by an unsuccessful tenderer.
This is rare but increasingly likely given the bidding costs (up
to £1million per contract). It could occur if the contractor
felt they were unfairly discriminated by the assessment process,
or that the assessment criteria fell outside the scope of the
current UK and EU procurement rules (see discussion below).
2. Risk of delay at negotiation stage due
to Council Members not agreeing with the Project Board Recommendation.
For example the Members could attempt to put more weight on one
Indicator when making the short-listing or BAFO decisions. This
could occur if they were not expecting a certain solution to pass
the assessment, or there is a lot of public opposition to a particular
site or technology. This risk is mitigated by ensuring Members
understand the weighting system that will be applied in assessing
tenders.
3. Risk of refusal of planning application
or PPC. This is a major risk for current waste projects in the
UK. This risk can be mitigated by briefing the planning committees
and officers that are involved in the contract assessment criteria
and do not adopt different priorities when actually determining
planning applications. PPC is a new requirement and also entails
a delay risk if the Agency view is the process/solution is not
BAT (Best Available Technology), or they have not encountered
the technology before.
The ODPM Guidance "Strategic Planning for
Sustainable Waste Management: Guidance on Option Development and
Appraisal" notes that local considerations are an important
consideration. The regional strategy is therefore unlikely to
provide a blanket BPEO that automatically validates any individual
local proposals. These need to be appraised on a case-by-case
basis against local criteria.
The problem with strategic BPEO assessments
are that they can result in a prescriptive input based solution,
which goes against the procurement guidance to give an Output
based specification (eg stating targets to be met, not the exact
way in which they should be achieved). Whilst a particular scenario
may be best on environmental grounds, the full costs and deliverability
will only be revealed when tenders are invited.
It is interesting to note that formulating the
BPEO option from a blank sheet of paper is rarely seen today.
The achievement of targets and capping on contribution of particular
technologies is a material consideration, regardless of whether
it results in the most sustainable option. A good example of this
is the North West RTAB (Waste Management Technical Report July
2001) which subsequently excluded the scenario that was judged
to be BPEO (Option five) on the grounds that it did not meet government
targets (see section 9.32 of the RTAB Report).
We would interpret the "Practicable"
element of BPEO as including issues of deliverability (planning,
technical and legal) and financial viability. In this respect
the BPEO / Sustainability Appraisal process should effectively
be the complete Tender Evaluation Process that is applied, and
not a sub-set of it. The Practicable element of BPEO is the part
which has been least well refined when local authorities have
set out their preferred solution. It is related to the standard
tender assessment of Deliverability, and is likely to comprise
a number of elements:
— Risk allocation/commercial terms.
The key factor is how to turn the general BPEO
criteria into quantitative or qualitative assessment criteria
for actual waste management proposals. The assessment should not
unfairly exclude bidders who may well have the BPEO solution,
but are excluded because the scoring mechanism is unduly skewed
towards certain principles (eg proximity) without taking account
of the detail in the final proposal (eg overall emissions).
Another issue to resolve is how to reconcile
the desire to implement the BPEO solution with prescriptive EU
Regulations about the award of public service contracts.
There are stringent objective criteria which
selectors are legally bound to use when assessing tenders. Contracting
Authorities cannot use other criteria to eliminate or compare
tenders. The requirement that award is made to the "economically
most advantageous tender" makes is difficult to include many
environmental and socio-economic assessment criteria which cannot
easily be assigned monetary value.
In recognition of this difficult the European
Commission has published two interpretative communications on
the possibilities of integrating environmental, and social, considerations
into public procurement (COM (2001) 274 and 566). This supports
the notion that public procurement should support sustainable
development. However the document brings out a number of difficulties
in achieving this within the current framework (which is under
review).
Information about the respondent
Babtie Group Ltd is a multi-disciplinary consultancy
with a strong engineering and environmental team working in all
aspects of waste management. We have centres of waste management
in Glasgow, Cardiff, Belfast, Sale and Reading.
Babtie Group Ltd
6 January 2003
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