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22 Apr 2008 : Column 361WH—continued

The industry faces several challenges, and I shall raise five issues of concern—fairly briskly, I hope. First, as the hon. Member for Southampton, Test (Dr. Whitehead) made clear, there is the problem—resulting, rather bizarrely, from a European Court judgment on the EU packaging directive—that recovered metal is classified as waste under European law. That approach means that the industry has been subjected to an increasing burden of waste regulation, which applies even when metal has been fully separated and prepared as secondary raw material. The need for redefinition has become urgent with the introduction of the new 2007 regulations on trans-frontier shipment of waste, because they are creating
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trade barriers, shipment delays and advantages for non-European competitors. It is somewhat bizarre to provide opportunities for non-EU states. Given the UK’s leading position in export trade, the situation is particularly damaging to UK metal recycling.

The revised EU waste framework directive, which is currently having its Second Reading in the European Parliament, creates an opportunity for long-term change. The directive will enable reconsideration of the point at which certain materials cease to be waste. Reclassification is urgently needed, and the European Commission has carried out a metals case study in anticipation that metals will be one of the first materials to be considered. However, I understand that there are attempts, to do with steel interests in Italy, to make last-minute amendments to the draft waste framework directive. The amendments threaten to introduce new administrative hurdles, and could prevent the “end of waste” outcome. An interesting point for the House to consider is how better to interact with the European Parliament, because our only locus in this issue is for us to lobby or make submissions to the Minister, who has a locus through membership of the Council of Ministers. However, there is no forum in which we get alongside Members of the European Parliament and say to our colleagues there that this issue is of significance to the UK and to UK industry.

Reclassification is urgent. I therefore hope that the Government will seek to impress that upon other members of the Council of Ministers, and will press colleagues at the European Parliament to agree the directive swiftly to ensure that the mechanism for determining the end of waste is comitology. My Front-Bench colleague, my hon. Friend the Member for Vale of York (Miss McIntosh), who is a former Member of the European Parliament, will be able to explain lucidly and clearly to the House the distinction between comitology and co-decision. However, the basic fact is that co-decision would simply take several years longer. If comitology can be the mechanism for determining end of waste, it would just be speedier.

Materials deemed to have reached “end of waste” under this procedure are also deemed to be “recycled” for the purpose of meeting the directives for end-of-life vehicles, the waste electrical and electronic equipment directive, and the directives relating to packaging and batteries. We also need to ensure that a simple definition of “recycling”, as proposed by the Council of Ministers, is maintained.

Secondly, trade in recovered metals takes place in a well-established global commodity market, which often relies on a chain of brokers and traders between source and reprocessor. Prices may be several thousand pounds per tonne. The value of the material means that there is little doubt that the metal will, at the end of the chain, be melted into equally high-value new metals, using established reprocessing methods. Furthermore, the UK is a world leader in this market.

However, because recycled metals are classified as “waste”, the industry is subject to the European trans-frontier shipment of waste regulations. These regulations were revised in July 2007 to address growing concerns about the dumping of problem wastes, but today we are discussing not such wastes but recycled metals of high value. These waste regulations now require that
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commercially confidential information be publicly stated and that advance certification be obtained from overseas recipients to confirm that reprocessing will be “broadly equivalent” to EU standards. So material can only be shipped to countries outside the OECD where the Government of the country in question has confirmed that it will accept this “waste”. In addition, Europe has imposed additional pre-notification requirements on shipments to the 120 non-OECD countries that have sent no reply.

Applying these controls to metal shipments provides no additional environmental benefit. The new waste regulations are designed for problem wastes such as complex products where materials are not yet separated, or materials for which there is no clear market. However, recycled metal does not get fly-tipped or dumped. Indeed, high market values mean that theft is by far the greatest risk.

The new waste regulations are therefore wholly inappropriate to recycled metals, but such metals get caught up in them because they are currently classified as “waste”. The metal recycling trade will suffer if these barriers are not lifted. The situation is very straightforward: recovered metals should be reclassified as non-waste, which would remove recycled metals from these regulations entirely, and we should also seek revision to the EC annex VII form in order to remove the requirement to state commercially confidential information about suppliers and customers. Of course, if one is dealing with complex waste, one can see that there is a need to discover where it has come from and where it is going to, so that it does not end up being dumped in a hole in a developing country. However, in the case of metals of high value, all that we are doing in giving our commercial competitors information about the value of the waste, who the customers are and where it is going is giving them a commercial advantage. That is crazy.

Generally, we should ensure a light touch in implementation of the regulations to minimize the costs, delays and administrative burdens that fall on metal recyclers, particularly in relation to obtaining “evidence” of overseas reprocessing.

Thirdly, as with every other matter, regulation should be proportionate. Metal recycling is very different from the waste sector. The UK has been recycling for generations; it sells a valuable product all over the world in an established market, and the industry has a mature structure. However, a one-size-fits-all approach designed for the waste sector means that the average metal recycling company must comply with some 15 different sets of environmental regulations, as well as the Scrap Metal Dealers Act 1964. Each set has its own procedures, costs and paperwork, which obviously amounts to a substantial red tape burden, particularly for small businesses. That degree of regulation is neither proportionate nor risk-based.

I submit that we need a more proportionate approach to regulation that takes into account the needs of the industry as well as the environmental needs. There should be a full review of regulation affecting metal recyclers—involving the industry, the Department for Environment, Food and Rural Affairs, the Department for Business, Enterprise and Regulatory Reform, and the regulators—that considers the needs of both industry and the environment. There should be some risk-based training requirements, and sites with waste management
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licences must demonstrate that their managers are competent. Nearly three quarters of metal recyclers now do so by deemed competence—in other words, by showing proven experience or by completing a simple assessment process.

The environmental permitting programme will introduce new certificates of technical competence for licensed sites, and these certificates must be designed to meet metal recycling needs, not the needs of the waste industry, with adequate time allowed for their introduction. As the hon. Member for Southampton, Test said at the start of this debate, industrial off-cuts need to be recognised as by-products and not as waste. In short, the Government collectively must try to ensure that this industry is not regulated out of competitive existence.

Fourthly, illegal operators must be got rid of. I suspect that one reason why this industry does not have the public recognition that it deserves, given its turnover and value, is that there is still something of the Steptoe image about it—the image of the scrap metal yard. In reality, most scrap metal yards are run very efficiently. They are, of course, subject to statutory controls, they must be licensed by the local authority and there is specific legislation relating to them. However, there are illegal operators out there and they need to be stamped out, because freeloaders operating outside the regulated system threaten to undermine those within the industry who are behaving responsibly. Tackling those freeloaders requires adequate resources to be provided to aid regulators in closing down illegal operators and in imposing appropriate fines. There needs to be a joined-up certificate of destruction system for end-of-life vehicles, so that the vehicle’s last registered owner must obtain a certificate of destruction when it is scrapped. An incentive for, or penalty on, the last owner, together with a robust Driver and Vehicle Licensing Agency monitoring system, would make that happen, driving out illegal end-of-life vehicle operators completely.

In addition, there should be a requirement for a waste carriers licence disc to be displayed in trade vehicle windscreens, to ensure that they can be properly identified on sites. There must also be recognition that more regulation in itself will not necessarily solve metal thefts. Legitimate operators are not the problem; it is those who are acting illegally.

Finally, as well as driving out freeloaders, the Government need to get together with the industry to examine how the UK can improve its recycling performance. If the UK is to meet its future recycling targets under the end-of-life vehicles directive and other directives, there needs to be more joined-up thinking involving the recycling industry. That is a challenge, because this issue straddles a number of Government Departments. A recycling taskforce therefore seems sensible—a partnership between Government and the recycling industry to plan for achieving future EU product recovery targets and landfill reduction. That taskforce must take into account all the relevant factors, such as post-shredder technology developments, landfill targets, landfill tax, research and development assistance, and generating industrial energy from waste capacity. What we are talking about here is a raft of new European directives, not just on recycling metals but on developing advanced separation techniques and new solutions for residual wastes.

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We need to ensure that the UK remains at the forefront of such developments, and that recycling continues to be a success story. That will require everyone working together, but the Government taking a lead. There are issues that we need to consider seriously if the industry is to continue to make a considerable amount of money, to contribute to a positive UK balance of payments, and to export large amounts of recovered metals overseas. There are issues that the Government need to address.

10.10 am

Mr. Roger Williams (Brecon and Radnorshire) (LD): It is a pleasure to serve under your chairmanship, Mr. Chope. I pay tribute to the hon. Member for Southampton, Test (Dr. Whitehead), who introduced the debate. His commitment to the environment and to waste issues is well known. Indeed, he made such a comprehensive contribution at the beginning of the debate that it is difficult to know what to add to it.

Certainly, the way in which this country, the European Union and, indeed, the whole planet deal with waste will be fundamental to the lives of future generations, their access to materials and the quality of life that they enjoy, because so much about dealing with waste affects the climate and climate change. It is encouraging that, as far as waste is concerned, the economic and environmental drivers are now coming together. It is not only good environmental practice to deal properly with waste but good economics. It is good for the profitability of individual companies and, indeed, the work force as a whole.

The principles of reducing, reusing and recycling apply to metals as well as to other commodities. Reducing the use of materials or using them more smartly is as important as the increase in the prices of metals and other commodities such as timber and chemicals. Because everybody wants to make good use of materials, there is, in fact, less waste.

Reuse is important as well. I spoke to a local haulage contractor who told me that most of the people who maintain his vehicles are eastern Europeans. They have come over with really good skills, but, in a way, their skills are slightly different from ours: instead of taking a component out of a vehicle and simply replacing it with a new one, they attempt to mend or repair the component and put it back. Perhaps we have lost that skill because we have been relatively affluent and have been able to take components off the shelf instead of reusing old ones. The word “mend” has gone out of fashion, but it may have to be revisited in the future.

Mr. Drew: Does the hon. Gentleman agree that, as much as we want to encourage the Chinese economic revolution, the amount of metal waste that we still send to China is somewhat shocking? If we had an industry that recycled and reused, we might be able to keep down the cost of metal in this country.

Mr. Williams: The hon. Gentleman makes a good point, which I shall probably come to a little later.

How ever much we reduce and make more efficient our manufacturing processes, and how ever much we reuse, there will always be some material to be recycled.
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The British scrap metal industry has proved to be a leader in the European Union and the world in dealing with waste.

It is not surprising that metal has a prominent part in recycling, as it has always been a valuable commodity. Some recycling streams have not been quite as profitable in the past, mainly because the natural resources from which the commodities are derived have been cheap. It has cost less to produce commodities from virgin materials than to recycle materials that have already been produced. But metals have always been a valuable commodity, and therefore there has always been a trade in recycling them.

It has been said that metal recycling probably contributes about £6 billion to our national economy, and that 60 per cent. of the metal is exported. However, the global price of scrap metal has risen and is expected to rise further. Lead is now thought to be worth between £700 and £1,000 a tonne, compared with £400 a tonne previously. The price of copper has risen by about 500 per cent. since 2001 and is now between £2,500 and £3,000 a tonne, compared with about £1,000 a tonne a few years ago.

Of course, there is more to consider than just the value of the metal itself. The cost of extracting and quarrying the ore and then refining the metal must also be considered. Part of that cost is the use of energy. For instance, the cost of producing 1 tonne of aluminium is about 10 tonnes of carbon dioxide. We can see that not only is the cost per tonne of producing aluminium affected but carbon emissions and, possibly, global warming are also affected.

Of the 15 million tonnes of metal that are recycled in Britain, just over 8 million come from cars, fridges and other such equipment. The new EU regulations have boosted the industry and now 3 million cars are recycled each year. The target is that 85 per cent. must be recycled. The hon. Member for Southampton, Test touched on the problem of dealing with materials in cars other than metals—rubber, fabric, glass and possibly wood—and whether an incentive could be given to use some of them for co-firing in combined heat and power processes.

British cars are more likely to be recycled because they are right-hand drive and, therefore, not easily exported to eastern European countries. On the continent, many cars are sent east for a time of retirement in other countries as they come towards the end of their life.

There is some concern that the certificate of destruction required by the end-of-life vehicles regulations is sometimes circumvented so that some cars are not properly recycled but are sidelined, so to speak, and that only the most readily available materials are recycled while the other materials are dumped or sent to landfill. Mention has been made in the European Parliament of regulations under the revised waste framework directive, which proposes a mechanism to reclassify non-waste recycled materials. It would significantly drive down the industry’s regulatory burden. There has been a discussion about comitology, or co-decision making. We desperately need to take that forward quickly if the industry is to get the benefit of being able to deal with such material in the most efficient and effective way.

Quite clearly, a lot of the offcuts are definitely not waste: they are almost virgin material and should not be described as waste. Much of the waste material has
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been treated within the recycling industry in this country to make it perfectly safe to transport. There are regulations to prevent the illegal dumping of waste in third countries and to protect those countries from being exploited. We understand the need for regulation, but there must be an ability to discriminate between waste and an important raw material.

Hon. Members have mentioned that, because of the increased value of waste metal, theft has developed, too. The Government have addressed some aspects of that issue. A productive surgery in a little village called Cwmdu in my constituency was slightly enlivened when the message came through that there had been a theft in the village and somebody had run off with some scrap metal that was being turned into a sculpture by a local artist. The village rallied round and we apprehended the person who had attempted to steal material. So it was a productive surgery in the end. But people out there are looking to take advantage of the fact that the price of scrap metal has increased.

As I look around the countryside—I have a very rural constituency—I notice a great improvement in its appearance, because a lot of the machines that used to be left where they had died are now being brought back into the recycling stream. Genuine people out there are looking for such opportunities and they are to be encouraged. However, there is an illegal aspect to this and although regulation is needed to ensure that theft and other illegal activities are not encouraged, it must be risk-based regulation bearing down on the people who are paying less attention to its legal niceties. People running proper, legitimate businesses should not be subject to legislation that inhibits their efficiency and effectiveness.

This has been a good debate. It has drawn out a number of issues. This is a most effective industry, both in terms of the economy and the environment, but the Government could do a number of things to ensure that it can operate more effectively. The recycling of certain materials does not operate to the same extent in this country as it does in others. Norway recycles 93 per cent. of its aluminium and Switzerland and Finland recycle 88 per cent., while in the United Kingdom the figure is just 48 per cent. What can the Government do to encourage increased recycling, particularly of non-ferrous metals that are valuable in terms of commodity prices but take a huge amount of energy to produce from the virgin state? What are they doing to ensure that the criminal justice system bears down on metal thefts? What are they doing to ensure that travellers on railway lines are not put at risk and churches and other community buildings do not suffer when their roofs are stripped of lead, leading to costs for the insurance industry and, always, costs to the community? Is there any way in which the UK can bring its recycling levels up to some of those in the European Union? Will the Minister strengthen the end-of-life vehicles directive and the certificate of destruction to ensure that the loopholes are closed and that as many of our vehicles as possible are recycled?

This is a successful industry, but I feel that the Government can and should do more to encourage it, lighten the regulation where they can and bear down on those who want to make a cheap buck and do not go through the proper processes.

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