Memorandum submitted by SITA UK
1. INTRODUCTION
SITA is Europe's leading waste service operator
and the third largest in the world. The Group's activities span
the waste management chain, including collection, sorting, recovery,
treatment and ultimate disposal of hazardous, domestic, commercial
and industrial wastes.
SITA has provided waste management services
in the UK since 1989. The Company has grown to become the country's
largest service provider, operating more than 100 municipal service
contracts, 103 landfill sites, several recycling and recovery
facilities along with energy from waste facilities at Edmonton
in North London, Cleveland on Teesside and at Kirklees. In the
UK we are involved in recycling 1.5 million tonnes of waste annually,
which represents 15% of the waste that we control. Further, SITA
is also one of Europe's largest waste management operators with
a presence in 13 European Union countries. In waste management
terms many of these countries are more advanced than the UK, having
successfully achieved and maintained higher levels of materials
recovery and recycling. We are therefore in a unique position
to comment on the strengths and weaknesses of various policy and
regulatory regimes, and how these might be tailored to suit UK
conditions.
While the EFRA Committee's terms of reference
for the present Inquiry are broader than those adopted by the
Strategy Unit in their recent report Waste Not, Want Not,
the latter inevitably provides a focal point in any current discussion
on waste management and the waste hierarchy in that it purports
to be a "strategy for tackling the [municipal solid] waste
problem in England." We therefore wish to comment generally
on the report's strategic framework for managing and sustaining
change. Funding this change is also a challenge we will discuss.
2. COMMENTS ON
THE STRATEGY
UNIT REPORT
WASTE NOT,
WANT NOT
SITA welcomes the Strategy Unit's report, as
have most other commentators with an interest in waste management.
The report brings a number of contentious and divisive issues
out into the open—principally, the problem of direct charging,
and the importance of kerbside segregation as a prerequisite for
improved recycling performance. The report:
— recognises the importance of decoupling
waste growth from economic activity, placing greater emphasis
on waste reduction as a policy imperative than did Waste Strategy
2000;
— resists the temptation to advocate
ever higher recycling rates when current targets are in themselves
sufficiently daunting, or to indulge in fads such as "zero
waste";
— accepts that direct charging can
be a potent lever for change, and opens the door for Local Authorities
to adopt such schemes;
— highlights the importance of appropriate
building design and domestic waste collection infrastructure in
order to improve the kerbside segregation of wastes;
— addresses the disparity between landfill
prices and the cost of recycling by advocating a landfill tax
of £35 in the medium term;
— advocates consolidation of responsibility
for waste policy in one Government Department.
However, while the report has undoubted value
as a discussion document, it fails to deliver a clear strategy
for waste management in the UK. There are three imperatives which
a waste strategy for the UK should address at this point in time:
— The fast approaching deadline of
2005, by which Local Authorities have to deliver on the first
of their Best Value performance indicators. A number of Local
Authorities will, by their own admission, fail to meet their respective
targets. By a later deadline of 2010, the UK will be required
to demonstrate a 25% reduction of landfilled biodegradable waste
relative to the quantum produced in 1995.
— The continuing softness of the recycling
agenda, affected upstream by the lack of segregation facilities
required to develop quality products, and downstream by the lack
of committed markets and market acceptance.
— The financing of new waste management
facilities and infrastructure.
The target dates of 2005 and 2010 are recognised
in the report, but the majority of the Strategy Unit's 34 recommendations
summarised in its action plan (Figure 19) lack sharpness or a
sense of urgency. The Best Value target date of 2005 is absent
from Figure 19, while a review of progress is only considered
in 2010, after which time the UK could well be faced with infraction
proceedings and the prospect of significant daily fines from the
EU. Recommendations 20 and 21 continue this longer term mindset
by seeming to rely on R&D and the promotion of innovative
technologies in order to deliver on Local Authority and UK targets,
despite the fact that other countries are managing to achieve
better recycling rates than the UK, with existing technologies.
The fora and steering committees noted in Recommendations 28,
30 and 31 will not in themselves deliver change; indeed they may
inhibit change through the difficulty of reaching consensus on
key issues (such as the role of incineration). The majority of
the Strategy Unit's levers for change rely on voluntary measures
(Recommendation 8) or economic instruments, neither of which deliver
change consistently or in the short term. Recommendation 11 (calling
for an increase in landfill tax for active waste to £35 "in
the medium term") had the potential to rapidly accelerate
the diversion of waste from landfill, but even this has been neutered
by the Treasury's decision to ramp in the increase via a relatively
sedate £3 annual escalator from April 2005.
The Strategy Unit avowedly focuses on so-called
"municipal waste", defined in UK terms as comprising
household waste and other waste under the control of Local Authorities,
and has therefore in effect developed a household waste strategy
for England. However, the definition of municipal waste in Article
2(b) of the Landfill Directive can arguably be interpreted as
including both Local Authority controlled waste and that element
of commercial/industrial waste which is "similar to waste
from households ... because of its nature or composition."
This definition has been accepted by the UK in the transposition
of recent EU Directives (for example, in the Landfill Regulations)
and has also been adopted in Section 20 of the Waste and Emissions
trading Bill with respect to the definition of biodegradable municipal
waste. This interpretation, if supported in legal judgements,
will significantly increase the quantum of "municipal waste"
arisings. Addressing municipal waste as seemingly defined by the
EU will require a broader mix of strategic measures than is currently
discussed in the report.
In the sections below we discuss three issues
central to the successful delivery of a household waste strategy:
source segregation, the role of incineration and BPEO, and financing
change.
3. SOURCE SEPARATION
AND SEGREGATION
The Strategy Unit report rightly identifies
source separation and segregation as a key supply side ingredient
in the waste resources value chain. If recovered and recycled
materials are to gain broader market acceptance, product consistency
and quality should be the foremost consideration of resource managers,
as for any conventional consumer product. Dirty or contaminated
"raw materials" in unsorted black bag waste generally
convert to dirty or contaminated products that have very limited
market applications or may even have a negative commercial value.
Save for thermal treatment of unsorted waste (see below), segregation
at source offers the only other means of delivering, after appropriate
processing, a cleaner quality assured product. Measures to develop
the appropriate infrastructure are therefore critical to the achievement
of Government recycling targets.
However, the report's recommendations with respect
to the expansion of kerbside recycling falls not on Local Authorities
as Waste Collection Authorities, but on an advisory body, WRAP
(Recommendation 17), and only obliquely on Local Authorities through
the Strategy Unit's support for incentive schemes (Recommendation
one). The report's first recommended action is for WRAP to convene
a "kerbside taskforce", a recipe for delay and procrastination
when a wealth of experience in setting up and operating these
schemes is available worldwide. Furthermore, each scheme will
in all probability have to be tailored to the circumstances and
budget of each individual Local Authority, hardly a committee
activity.
The cudgel for kerbside recycling has been take
up in Joan Ruddock MP's sponsorship of the Recycling Bill, scheduled
to have its second reading in March 2003. The Bill will impose
a requirement on each Local Authority to provide kerbside recycling
infrastructure and composting facilities to every household by
2010.
Will the Recycling Bill improve recycling rates
across the UK ? Two issues are of relevance here: completing the
link across the value chain between supply and demand, and the
emphasis placed both by the Strategy Unit and by the Bill, on
home composting. On the first issue, the Bill takes a necessary
step on the supply side (as discussed above), but this in itself
is not sufficient to guarantee an adequate return by way of improved
recycling rates or added product value. In this respect the Bill
differs from other Recycling Bills, for example that of the State
of Texas. Recognising the purchasing power and dominance of the
state procurement apparatus, Texas recycling bills 1340 and 1051
require state agencies and local governments to direct a minimum
of 8% of their consumable procurement budgets to the purchase
of recycled, remanufactured, or environmentally sensitive products
and to report those purchases annually to the Legislative Board
and the House of Representatives. Where a comparable virgin product
costs less than the recycled product, purchase of the latter will
be allowed within the purchasing guidelines. Parallel legislation
also requires all state agencies and state agency employees to
purchase oils and lubricants that contain at least 25% recycled
oil for state-owned vehicles.
The "demand" aspect of the value chain
is not addressed by the Recycling Bill, nor indeed with any forcefulness
by the Strategy Unit, the latter preferring to rely on vague voluntary
commitments (for example, Recommendations seven and eight) at
least up to 2010, after which time "more producer responsibility
regulation" of an unspecified nature could be forthcoming
(Figure 19). The Green Procurement credentials of the UK government
apparatus has been held up to scrutiny and found wanting. Attaching
a procurement requirement to the existing Bill will balance the
"push" of a kerbside recycling scheme with the considerable
weight and "pull" of a public sector market for recycled
products.
The second issue concerns the emphasis on home
composting as a means of reducing waste arisings and improving
recycling rates, both in the Strategy Unit report and in the Recycling
Bill. In SITA's view, the case for home composting has not been
made by the Strategy Unit. Neither the provenance nor the practicability
of its key indicator of 50% of households carrying out home composting
by 2006 are discussed in the report. The advice of Dr Stuart McLanaghan
in Section 4.8.2 of his commissioned report, that "[home
composting's] contribution to BMW diversion is currently not measurable
due to inconsistencies surrounding data" appears not to have
dampened the Strategy Unit's enthusiasm for this route—its
advocacy of home composting appears to derive from the theoretical
modelling exercise described in the report of Dr Julian Parfitt
of WRAP.
Apart from the questionable performance of home
composting units, the questionable quality of home compost and
the fact that applying compost is not a year-round operation,
home composting is a less controlled activity than composting
at a central facility, for example in the enforcement of the Animal
By-products Order, and in the management of environmental releases
and nuisances such as odours. The presence of urban foxes, vermin
and cats in domestic gardens makes them potential vectors for
disease or other forms of contamination. A more fundamental objection
is that waste that is allegedly "not produced" in the
sense that it remains within the household is inherently less
traceable, leaving calculations of waste reduction and diversion
rates open to abuse. The distribution of composting units cannot
be used as a proxy for the success or otherwise of home composting
(ie the genuine application of this compost on the domestic garden,
replacing virgin soil improvers), as implied in the WRAP study.
In the absence of robust indicators and performance metrics, SITA
advocates the continued support of centralised facilities relying
for their input on segregated kerbside collections and civic amenity
sites.
4. THE ROLE
OF INCINERATION
AND BPEO
In keeping with the eclectic mix of its advisory
panels, the Strategy Unit report takes a predictably schizophrenic
view of incineration and its role within the waste hierarchy.
On the one hand, the report acknowledges that incineration is
one of the most widely studied waste management technologies in
terms of its health impacts, that the "risks are very low
and difficult to measure", and that "incineration should
be treated like any other waste management approach." Rather
than drawing the rational conclusion from these observations that
properly regulated incineration with energy/heat recovery should
therefore be actively supported as Government policy, the Strategy
Unit instead seeks to apply the "logic of the waste hierarchy"
by considering the case for an incineration tax. Paradoxically,
if an incineration tax is meant to reflect the externalities of
the technology (as was the landfill tax), then life cycle assessments
(advocated by the Strategy Unit) comparing waste-to-energy against
the environmental performance of the marginal power generators
(coal and oil) predict displaced environmental benefits in favour
of incineration.
The Strategy Unit espouses the application of
the Best Practicable Environmental Option (BPEO), and acknowledges
that the BPEO may, in some circumstances, not be recycling but
even landfill. At the same time, the Strategy Unit appears to
have drawn a mental line across its depiction of the waste hierarchy
in Figure 7, separating waste reduction, reuse and recycling/composting
from energy recovery and landfill, and treating incineration and
materials recycling as mutually exclusive despite evidence from
countries achieving higher recycling rates than the UK that the
two processes can co-exist. Technologies above this line are to
be encouraged and incentivised, while technologies below this
line (ie the "bottom half of the SU waste hierarchy",
according to the report) are to be discouraged and costed out
of contention. With the two principles of BPEO and the waste hierarchy
on a potential collision course, the Strategy Unit fails to follow
through with reasoned discussion and guidance as to how they might
be reconciled and applied in a strategic context together with
the proximity principle. It might even be argued that BPEO is
relegated to a secondary role in strategic planning when meeting
statutory percentage targets for materials recovery and recycling
is the primary strategic objective, typically interpreted within
an extremely confined interpretation of the proximity principle.
The Strategy Unit's unquestioning acceptance
of the received wisdom of the waste hierarchy fails, for example,
to credit the recovery of materials from bottom ash, or the beneficial
use of this material as a contribution towards recycling and recovery
targets, despite the fact that processed bottom ash meets substantially
the same quality specifications as virgin material used in the
construction of road bases and other similar civil works. Recommendation
12, considering the case for a ban on incinerating "recyclable
products" will have the perverse effect of discouraging the
extraction of value from bottom ash, or from incinerating materials
such as plastic waste to recover energy when this route may well
represent the BPEO. The logical extension of applying Recommendations
4, 5 and 7 on secondary aggregate resources and product quality
to bottom ash is to then accept that suitably processed bottom
ash contributes to the overall recycling target.
Mechanical Biological Treatment (MBT) processes,
while ostensibly an alternative to thermal treatment, produce
a significant quantity of residue that can only be landfilled,
or combusted to extract energy. By failing to recognise the importance
of incineration or co-incineration in a fully integrated waste
management strategy, the Strategy Unit has emasculated the true
potential of MBT, putting further pressure on current MBT schemes
that are attempting to gain planning permission. Indeed, the Strategy
Unit elects to draw a false distinction between "reduce/reuse/recycle"
and lower tier "pretreatment options" in Figure 8, whereas
in fact up-front waste processing (including incineration) is
a prerequisite to achieve the former.
5. FINANCING
CHANGE
The Strategy Unit has taken a bold step in recognising
and stating the value of charging households according to the
waste they generate as a means of moderating behaviour, and rightly
gives this pride of place in its list of recommendations. However,
Recommendation one does not address the broader question of how
the setting-up of an enhanced waste management infrastructure
should be financed in the short term. The waste industry estimates
that a year on year investment of 0.3-0.5 billion over 10 years
will be necessary to build additional capacity in waste collection
and non-landfill waste and resource management options. These
are up-front costs, with cost recovery rolling out over the contract
period, typically 15-20 years. In SITA's submission to the Strategy
Unit, we argued that attitudinal studies showed the lack of a
culture of social responsibility: societal attitudes to resource
and waste management were not sufficiently developed to deliver
effective change through the wholesale adoption of a pay as you
throw policy. This is also borne out by MORI's study for the Strategy
Unit.
In any event Recommendation 1 does not take
the debate on financing sufficiently further forward in that it
asks 30% of collection authorities to do no more than "try"
the scheme by 2006. While the report's support for such schemes
is to be applauded, the Strategy Unit does not appear to have
a contingency plan in the event, for example, that differential
charging became a party political issue at local government elections,
jeopardising its introduction in even the most sympathetic of
local authorities.
The average householder contributes approximately
£50 per year through Council tax for a service dominated
by landfill. Recent studies indicate that the current average
annual cost per household would rise to £65 for a waste management
system that achieves 19% materials recycling, and to £68
for a system that achieves 50% recycling. These figures include
direct operating and financing costs, but do not include externalities
and other environmental and social costs. Making allowance for
these, it would appear that a rate in the region of £100
per household per year (a rise from £1 per household per
week to £2 per household per week) would sustain a significant
programme of change.
Because of the need to protect and maintain
the integrity of waste management contracts and allow sensible
long term planning, SITA advocated a staged approach to cost recovery:
— Stage one: Building full cost recovery
into the existing Council tax framework.
— Stage two: A transitional phase,
introducing a "reward" pay as you throw system.
— Stage three: Introducing a volume
based variable rate system.
Our proposal was initially to build into the
existing Council tax framework a complete system of cost recovery,
phasing in a variable charge system when the supporting infrastructure,
technology and public outreach programmes were in place. The rationale
behind Stage one was that the process of change could be commenced
through the existing cost recovery structure, thereby causing
the least disruption to the provision of services. The aim of
the second stage was to prepare the ground for a variable rate
cost recovery system, to be fully introduced in Stage three, developing
a system of offsets whereby the householder could earn a rebate
or credit against the waste management element of the Council
tax charge, depending on the degree to which the householder was
successful in cutting back on wastage.
In essence, we advocated a base Council tax
to recover the full costs associated with the future waste management
requirements (Stage 1), onto which can be superimposed the converse
of pay as you throw—Earn as you Save—through which
the monetary benefits from waste reduction and revenue from the
sale of recyclables could be passed back to the householder. We
advocated use of the polluter pays principle to overlay the base
charge so as not to jeopardise through various avoidance mechanisms,
the funding necessary to effect change. Earn as you save rebates
are targeted by household, and have to be earned through altered
behaviour.
6. MOVING UP
THE WASTE
HIERARCHY
A strategy should be an enabling document, clarifying
key issues, removing pinch points and providing a route map for
a more detailed blueprint for action. While the Strategy Unit
report is a considerable advance on Waste Strategy 2000,
it still falls short of providing clear strategic guidance to
Local Authorities and service providers. The majority of its recommendations
play an important but supporting role on the periphery of the
core issue—how to deliver the Government's targets in the
short term. A strategy for the latter is hinted at, but the subtext
of the report is that the deadline of 2005 has been conceded.
In the main, fleshing out the strategic details is charged to
WRAP and a host of other committees, taskforces, inter-departmental
reviews and voluntary agreements, a process that will certainly
not effect change in the short term. The UK appears to be in for
a further period of strategic drift on several key issues, at
least until the review of progress in 2010.
SITA offers specific recommendations as follows:
(1) Without first providing the supporting
infrastructure such as source segregation and readily accessible
bring systems, change cannot be expected nor sustained. In turn,
this requires "up-front" financing, an issue not appreciated
by the Strategy Unit in Recommendation 1. We recommend a graduated
approach to cost recovery, commencing immediately with full cost
recovery through the existing Council tax system by raising the
waste management element of the charge by £1 per household
per week. We then recommend designing a reward based variable
rate system introduced in step with the technological, operational
and administrative support structures and after public outreach
programmes have laid the necessary foundations.
(2) We support the Recycling Bill and its
requirement for Local Authorities to install facilities for separate
collection (both kerbside and bring systems). Apart from providing
the quality of infrastructure necessary for appropriate downstream
processing, this will allow service providers to bid on a level
basis and for Local Authorities to more readily evaluate the merits
of different bids. Capture rates of materials such as glass, paper
and putrescibles have been found to increase dramatically when
kerbside separation facilities are provided. However, we also
advocate extending the Bill to include statutory government procurement
targets, rather than relying on voluntary measures which have
hitherto proved largely unsuccessful.
(3) The Strategy Unit report fails to appreciate
that meeting a 45% materials recycling target by 2015 using non-thermal
mechanical and biological treatment processes still leaves 55%
of residual waste to be dealt with, and that incineration with
energy/heat recovery must be nurtured and encouraged to extract
the maximum benefit from the waste resource. We urge Government
to rethink the role of incineration, the extraction of materials
from bottom ash and the beneficial use of processed bottom ash
as legitimate contributors to meeting recycling targets, and to
develop a truly integrated materials and energy management strategy.
(4) We caution against over-reliance on home
composting to achieve Government targets. It is a soft option
that can be all too easily manipulated to achieve a desired target.
We advocate greater emphasis on centralised facilities using kerbside
collection and bring systems.
(5) Finally, we note the potential anomaly
in the definition of municipal waste as interpreted by the Strategy
Unit and by the Landfill Directive (and indeed the UK's Waste
and Emissions Trading Bill), and the profound effect that a broader
definition will have on the delivery of the Strategy Unit's aspirations
and recycling targets. At best, the Strategy Unit's report is
incomplete without a consideration of this issue, offering only
a partial solution to the problem of municipal waste management
in England. We recommend that Government undertake an urgent review
of the adequacy of the report's strategic recommendations and
the attainability of the Strategy Unit's recycling targets were
household waste to be combined with a significant quantum of "similar"
waste from commercial and industrial premises.
SITA UK
16 January 2003
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