Memorandum submitted by the CBI
EXECUTIVE SUMMARY
Business is a key player as a producer, converter
and manager of waste and shares the recognition that something
needs to be done to address the challenge of waste.
We support the fundamental objective of the
current waste strategy and find the concept of 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).
Despite the poor quality of data on waste arisings
and recovery/recycling rates, there is evidence that business,
for a variety of reasons, is taking positive steps to address
the challenges of waste.
Whilst the Strategy Unit report contains a number
of recommendations that the CBI can support, others require more
careful consideration. Government now needs to work with key stakeholders
to ensure that both municipal and industrial/commercial waste
is managed in a sustainable manner.
Priority areas for action, as previously recommended
by the CBI include:
— create a national waste database;
— develop a national strategy for industrial/commercial
waste;
— provide strong leadership from Government
and relevant agencies to back all elements of waste hierarchy;
— give greater attention to implementation,
oversight and enforcement of waste regulation;
— review the definition of waste where
it prevents or restricts business from optimising waste minimisation
and resource efficiency;
— reform the land use planning system;
— join up with other policy regimes
eg energy, water, resource efficiency;
— ensure increased waste management
capacity can be funded;
— consider carefully any options regarding
taxation of business; and
— continue to support and expand recycled
materials market.
INTRODUCTION
The Confederation of British Industry (CBI)—with
a direct company membership employing over four million and a
trade association membership representing over six million of
the workforce—is the premier organisation speaking for business
in the UK. Our membership is drawn from businesses which have
a key role to play in addressing the challenge of waste as:
— producers of waste in meeting customer
demands for goods and services;
— organisations in direct contact with
the public as individual consumers;
— managers of waste and waste treatment
facilities; and
— organisations involved in recycled
product markets.
The activities of our membership extend across
the entire spectrum of the resource management cycle, from primary
extraction of raw materials, to product manufacture, product use,
waste recovery and recycling, and finally to disposal of residual
waste.
The CBI welcomes the House of Commons Environment,
Food and Rural Affairs Committee Inquiry and the opportunity to
provide input to this study. This inquiry, together with the Environment
Audit Committee inquiry "Winning the War on Waste" and
the recent Strategy Unit report "Waste Not, Want Not",
provides an essential opportunity to evaluate the future challenges
governing sustainable waste management. Waste is one of the most
pressing environmental challenges facing the UK and its overall
management is critical for sustainable development.
2. REACTION TO
THE STRATEGY
UNIT "WASTE
NOT, WANT
NOT" REPORT
The CBI welcomes a variety of recommendations
made by the Strategy Unit. Although the study understandably focuses
on municipal waste and the targets under the Landfill Directive,
it also makes recommendations on "wider" or industrial/commercial
waste. Some of these recommendations represent a way forward in
addressing business concerns over future waste management, others
require more careful consideration.
2.1 "Waste not, Want Not"—CBI
areas of support.
2.1.1 Voluntary agreements
Broadly speaking, the CBI supports the key principles
and strategic elements of the study. We also support the proposal
to extend voluntary agreements amongst industry. Voluntary agreements
have already proved effective in this area and there is potential
to extend these further for other waste streams. For example,
the Newspaper Publishers Association voluntary initiative (started
in 1990) has succeeded in increasing the recycled content of newspapers
from 28% to its current rate of 63.4%. The scheme is likely to
reach its target for 2003 which puts the recycled content at 65%.
Other examples include the Automotive Consortium on Recycling
and Disposal and the Direct Marketing Association who have set
up recycling schemes for motor vehicles and paper respectively.
2.1.2 Industrial Forum
We are pleased to see the Strategy Unit has
taken forward the CBI recommendation to establish an industrial
forum on waste. This forum should be composed of all key stakeholders
representing the major waste streams. The forum should address
the Waste Strategy 2005 target to divert industrial/commercial
waste from landfill. It could also focus on improving the data
for specific streams, such as construction and demolition waste.
In addition, it could consider how government can remove current
barriers to waste minimisation, increased recycling, re-use etc.
This is a key recommendation that should be taken forward by DEFRA.
2.1.3 DEFRA
The proposals to increase DEFRA resourcing and
to establish a steering group to oversee work are critical if
real progress is going to be achieved. Responsibility for waste
is currently split between a number of government departments.
Whilst DEFRA deals with implementation of the Landfill Directive,
the DTI has responsibility for the End of Life Vehicle, Waste
Electrical and Electronic Equipment and the Packaging Directive.
This has caused confusion and has made it difficult for government
to develop coherent waste policy. We therefore welcome the Strategy
Unit recommendation for one government department, to help strengthen
the coherence of waste policy. Whichever department assumes lead
responsibility, it is important that it maximises the contribution
of waste policy to all three dimensions of sustainable development—economic
and social, as well as environmental.
2.1.4 WRAP and Envirowise
The proposal for Envirowise to be extended to
cover 20% of UK companies within the next two years is to be applauded.
Waste minimisation is key and if the success of Envirowise can
be applied more widely to industry then there is potential for
significant reductions in waste to be made. The extension of WRAP
to take forward four measures to reduce waste volumes (eg for
retailers and reusable nappies) is also supported, although this
needs to be taken forward with care to avoid duplication of effort.
2.1.5 Reform of planning guidance
The CBI's concerns about the impact on business
generally over the quality and speed of decision making in land
use planning are also relevant specifically to the Waste Strategy.
Due to both the length of time to get permission and the inconsistency
of decisions, planning is a significant risk and cost to business.
The proposal to review the planning guidance represents a step
in the right direction. The proposed Planning and Compulsory Purchase
Bill (2002) addresses the planning process in general but does
not significantly change matters regarding waste applications.
Governance of waste and minerals have, to a large extent, been
left untouched as under the proposed Bill local county councils
have retained power in approving/rejecting planning applications.
We believe that in the longer term, when effective regional planning
arrangements are in place and have proved themselves, then there
may be a case for greater regional or subregional involvement
in minerals, waste and transport planning. There is also a need
for more flexible interpretation of planning developments on existing
sites. Leadership will be required to make changes to the planning
procedure and to ensure that regional waste plans allow for all
waste streams.
2.1.6 Review of hazardous waste capacity
The CBI has consistently highlighted to government
the concern over future capacity and treatment for hazardous waste.
Under the Landfill Directive, co-disposal will cease in 2004,
yet it strongly appears that too few landfill sites accepting
hazardous waste will be available. The Environment Agency estimate
that the number of landfill sites accepting hazardous waste post-2004
will decline from 200 to about 50. This not only raises concern
about future capacity to treat hazardous waste, but it could lead
to substantial quantities of hazardous material being transported
across the country. This will increase business costs in vehicle
movements, is detrimental to the environment and goes against
the proximity principle. We therefore welcome the Strategy Unit's
proposal to assess existing and planned capacity for hazardous
waste, hopefully with a view to putting in place additional infrastructure
to treat hazardous waste where needed.
2.2 "Waste Not, Want Not"—areas
of concern.
In addition to the above recommendations that
the CBI can broadly support, the report also contains proposals
which need to be considered more carefully.
2.2.1 Landfill Tax
When considering any increases to the landfill
tax, government must consider the broader fiscal and regulatory
context within which business operates. Recent EU figures show
that UK environmental tax revenues accounted for a higher proportion
of total government tax revenue than the EU average (8% compared
with 6.7% in 1997-98). Generally, business has seen its contribution
to environmental taxation revenue rise by 15% since 1997-98, roughly
in line with the growth in the overall burden of business taxation.
This combined with the significant regulatory regime on waste
means that business is sensitive to potential substantial increases
in tax.
Industry has and continues to reduce waste to
landfill. In 1996 industrial/commercial waste to landfill amounted
to 80%, the Environment Agency estimate that this was further
reduced to 47% in 1998-99. This demonstrates the downward trend
of industrial/commercial waste to landfill. In comparison, municipal
waste to landfill remains high, with 83% being disposed in 1998-1999.
The CBI has consistently maintained that any
change to the current tax rate must first be justified by proper
assessment of the costs and benefits of such action. An increase
in the tax may have major business implications that need exploring.
For a variety of waste streams there are insufficient technically
viable alternatives to landfill available. For these waste types,
an increase in the tax will have little impact on their ability
to divert waste from landfill. An increase in the tax could also
lead to perverse consequences such as an increase in fly tipping.
In principle, proposals to take forward landfill
tax increases in a revenue neutral manner sound reasonable, however
in practice this can be difficult and the benefits to business
remain unclear.
2.2.2 Landfill Tax Credit Scheme (LTCS)
HM Treasury announced in the Pre-Budget Report,
that as of April 2003 two thirds of the revenue raised from the
landfill tax would be diverted away from the LTCS to funding sustainable
waste management in general. This will mean that a variety of
existing proactive programmes will be disrupted and there is likely
to be a loss of funds for local community projects. The CBI is
therefore urging the government to grant a one-year derogation
to ensure that at least some of the projects can be brought to
a sensible conclusion.
The new recycling of revenue must be transparent
to all key stakeholders to ensure that money is not simply absorbed
into general public expenditure. Approximately £150million
is to be diverted away from the LTCS, yet there are currently
few details on precisely what this revenue will fund.
2.2.3 Economic instruments to encourage
eco-friendly products
Two recommendations have been made to use economic
instruments to encourage eco-friendly products: the use of VAT
discounts on recycled products and product levies for goods that
are deemed to cause environmental harm. We urge government to
act with caution. Fundamental questions such as how to determine
which goods are deemed to cause environmental harm, and who should
be involved in the process of making such decisions, need to be
addressed before levies are imposed on business.
2.2.4 Use of targets
Current UK waste strategy, largely driven by
EU policy, has a particular focus on targets aimed at reducing
both municipal and industrial/commercial waste to landfill. Targets
governing the reduction of waste to landfill and increased re-use
and recovery have also been set for a number of product streams.
(See regulations such as the End of Life Vehicle Directive, the
Waste from Electrical and Electronic Equipment Directive, the
Landfill Directive and the Packaging Directive). The Strategy
Unit report suggested government consider setting statutory targets
for both industrial and municipal waste. While we support the
principle of using targets, there is currently a lack of accurate
baseline data from which realistic industrial/commercial waste
can be set. This information is urgently needed before any statutory
targets can be set governing industrial/commercial waste.
2.3 Waste Not, Want Not—areas omitted.
2.3.1 Definition of waste
The CBI was disappointed that business concerns
over the definition of waste was omitted from the Strategy Unit
report. The current definition, as specified under the 1975 Waste
Framework Directive, is unclear and confusing. It is seen by many
to hinder waste minimisation and resource efficiency initiatives
such as reuse, recycling and recovery as classification of a material
as waste reduces the options available for transport and processsing/treatment,
and increases costs.
The Environment Agency interpretation of the
"intention to discard" element of the definition is
key. Useful and established products such as blast furnace slag
and pulverised fuel ash may, in the future, be labelled as wastes.
This threatens existing and future markets/usage. In addition,
the application of the definition of waste has also been shown
to vary depending on the region operators are situated in. We
continue to ask government to address this issue and to provide
business with clarity on the definition of what is a waste and
what is not a waste.
3. MOVING UP
THE WASTE
HIERARCHY
3.1 Resource efficiency.
Promoting improved resource efficiency is critical
to the success of any waste strategy. The CBI notes the current
initiative by the DTI to develop a strategy on this issue. However,
more work is needed to establish a common understanding about
what is meant by the concept, how it can be measured and the extent
to which improvement is realistically possible, in order to provide
some degree of clarity of long-term policy direction for business.
3.2 Consumer Behaviour.
In addition to targeting industry, all stakeholders
must be encouraged to contribute towards the Waste Strategy. Individual
consumers and households have a vital role in achieving sustainable
waste management. The general public needs to be educated on waste
reduction methods and encouraged to use recycling facilities that
are available. Industry has taken a proactive stance in attempting
to influence consumer behaviour. For example, retailers are taking
part in a national initiative ("Rethink Rubbish") campaign
to encourage the public to think twice about throwing away their
everyday rubbish. A society that is more inclined to re-use, rather
than replace, will generate less waste overall (the first point
in the waste hierarchy). The potential use of economic instruments
to influence individuals behaviour should be fully considered,
such as direct charging of individuals for municipal waste management
as a way both of achieving changes in behaviour and of providing
the necessary increase in funds to improve municipal waste management
standards.
3.3. The Waste Hierarchy.
The fundamental objective is to manage waste
and resources better, not least through a waste hierarchy of reduce,
reuse, recovery and disposal. The CBI supports this objective,
and the hierarchy represents a valuable tool in prioritisation.
The need for a mix of waste treatment options is key as landfill,
incineration, composting and recycling all have a vital part to
play in an integrated strategy based on the Best Practical Environmental
Option (BPEO). The BPEO principles should be the first and foremost
consideration for waste management decisions.
3.4 Reliance on home composting.
"Waste Not, Want Not" proposes a three
year programme to help households start home composting. The aim
is to raise household participation in home composing by 10% in
urban areas and 15% in rural districts. This proposal needs careful
consideration, as home composting is not required to meet the
same standards as centrally controlled facilities. There is potential
for home composting facilities to act as vectors for diseases
or other forms of contamination as they may attract vermin, foxes
etc. In addition, a variety of households may not have the room
for a compost container, especially newer properties which have
a tendency to have smaller gardens or flats where home composting
will not be an option.
3.5 Government steer on waste hierarchy—Energy
from Waste (EfW).
Although the Strategy Unit commented on the
role of incineration, the report does not provide a clear steer
on the use of EfW facilities in future waste management. On the
one hand the report acknowledges that the risks associated with
EfW facilities are very low and difficult to measure and that
"incineration should be treated like any other waste treatment
facility". However, it appears as if the Strategy Unit view
on recycling and incineration as mutually exclusive. This is despite
evidence from other countries that the two processes can co-exist.
This unclear and contradictory discussion over the role of incineration
needs to be clarified. The waste management industry needs a clear
endorsement over the varying waste treatment options before they
can start investing in the relevant technology. Especially considering
that implementation of the Waste Incineration Directive has made
this treatment option more expensive to operate.
4. FUTURE SUSTAINABLE
MANAGEMENT OF
WASTE—RECOMMENDATIONS
It is now critical that Government carefully
consider recommendations made in the "Waste Not, Want Not"
report and moves quickly to work with key stakeholders if municipal
and industrial/commercial waste streams are to be managed in a
sustainable manner. Priority areas for action, previously recommended
made by the CBI (eg to the Strategy Unit) include:
1. Establish a national industrial/commercial
waste database.
The Environment Agency should establish a database
containing the types, quantities and geographical distribution
of industrial waste. The scope to increase recovery of waste from
industry could be co-ordinated through a system of waste exchange.
This would provide an opportunity to maximise cost benefit and
to reduce waste disposed to landfill. Such waste exchange systems
do exist on a limited, local basis but these could be extended
nationally.
2. Establish a national industrial/commercial
waste strategy.
The establishment of the database (see recommendation
one) should inform the creation of the national industrial/commercial
strategy. This should be brought forward via a National Industrial
Waste Task Force that consists of all key stakeholders. This forum
should: address the six million tonnes of industrial/commercial
waste to be diverted from landfill by 2005; start to work on longer
term targets and consider other factors affecting sectors and
specific waste streams.
3. Strong leadership from Government and
relevant agencies to 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.
4. Review the definition of useful products
and by-products as wastes.
The effects of the current approach needs to
be evaluated and, where appropriate, action taken to remove barriers
to waste minimisation and resource efficiency.
5. Reform the land use planning process.
It is vital that this system is now revised
so that it is more responsive to the significant demand for increased
waste treatment and recycling facilities. The Strategy Unit recommendation
to review the planning guidance is essential and needs to be taken
forward within the near future.
6. Government should develop a supportive
and consistent approach to other policy regimes which have links
with waste
Policies on energy (currently the subject of
a DTI review), water and resource efficiency will all have a bearing
on waste policies, for example.
7. Ensure relevant taxes paid by business
are appropriate.
Any change to existing ones or plans for new
ones should be thoroughly considered. Specific regard should be
given to the following:
— consider the impact of existing commitments
on business due to other policy regimes (eg regulation) and in
the context of general business tax;
— accurate cost benefit analysis in
general and by key sectors;
— use the Landfill Tax Credit Scheme
to benefit the local community, deliver recycling obligations
and to develop greener product design and manufacturing processes;
and
— revenue raised from the tax should
not be used to finance municipal waste management or other such
initiatives.
8. Give greater attention to implementation,
oversight and enforcement of waste regulation.
Government departments and agencies, under scrutiny
of the Better Regulation Task Force, need to learn the lessons
of past failure in shaping regulations. 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 regulation.
9. Expand recycled materials market.
It is essential that this market be expanded
so we can make use of our recycled products. Business and government
will have to work together:
— to review product standard specifications
in relation to their performance as well as their content;
— provide funding for research and
innovation in product development; and
— provide information and education
to manufacturers and consumers to justify, in terms of sustainable
development, a positive image and desirability of using recycled
products.
10. Provide funds for waste recovery capacity.
It is important to allow flexibility on producer
responsibility. Only a limited amount of costs can be absorbed
by business before their ability to survive in a global competitive
market is undermined. Government should provide sufficient funds
to finance the sustainable management of municipal waste management—this
should not fall on industry.
CBI
21 January 2003
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