Memorandum submitted by Sims Metal Management,
Sims Recycling Solutions
Exporting issues affecting the UK metals recycling
sector
BACKGROUND:
The UK metal recycling sector directly employs
over 8,000 people. The sector is a major export success story,
accounting for 45% of Europe's 10 million tonne global trade.
The UK exports recycled metals to markets across the world, using
detailed raw material specifications agreed with consumers. It
is also home to the main commodities market, the London Metal
Exchange.
UK metal recyclers don't just recover metals.
Because the industry has taken the lead in meeting ELV and WEEE
targets, it is also at the forefront of developing new separation
techniques and markets for other materials, such as recovered
glass and plastics.
ISSUES:
1. In the export of recycled materials,
it is the area of regulated flows (those flows having cost imposed
by recent legislation—notably ELV and WEEE) that suffer
at times of extreme market conditions.
2. This is particularly notable in the area
of newer recyclates driven by legislation; for example plastics
from both ELV and WEEE treatment.
3. Markets for these materials are predominantly
in the Far East.
4. The recycling of polymer materials from
such streams is a highly complex process. It is also a necessary
process if the UK is to meet its recycling obligations for these
streams under EU Directives. Such recycling initiatives are therefore
deserving of complete support from regulators.
5. We find that there are inadequate resources
(or will) by Government Regulatory Agencies to address the "illegal
operators" who take advantage of these market conditions
by cutting environmental corners to the detriment of responsible
treatment operators. Poor audit standards by regulators are failing
to drive out illegal export of wastes (for example inoperative
electronic goods—the subject of press attention recently).
Such export deprives responsible treatment operators of materials
for processes which produce recyclables that are genuine substitutes
for virgin materials (for example, polymers and glass from TVs
and monitors). This impacts on the sector's ability to achieve
genuine sustainability through export of recyclable materials.
6. Transfrontier shipment constraints on
such materials need to be massively simplified to facilitate easier
export. Such constraints manifest themselves in several ways:
(a) The UK is one of only two EU Member States
whose regulators insist on the concept of proof of equivalent
standard of recycling in non-EU countries. This means that UK
exporters are forced to request that potential non-EU customers
provide detailed evidence in order that they can be approved as
customers for UK exporters by UK regulators. In these constrained
times the majority of these customers have more supply on offer
than their demand. Quite simply they therefore choose to purchase
materials from other areas of the world where they do not have
to jump through regulatory hoops in order to do so (for example
the USA and the Member States who do not subscribe to the "equivalent
standard" requirement). This unfortunately leads to UK exporters
being severely disadvantaged and significantly missing out on
sales of such materials.
(b) EU legislation is often conflicting. The
WEEE Directive prescribes recycling levels for WEEE goods that
require the recycling of plastics from these goods (generally
by export). Further legislation in the area of brominated flame
retardants in these plastics could prevent such export. Austrian
regulators are currently agitating in the EU for such crippling
legislation which is unfounded in science. Representations and
evidence in this area have been made strongly to DEFRA but industry
still has much legislative uncertainty which leads to lack of
process development for the export of polymers.
(c) In the UK such recycled materials are designated
as waste. Some overseas customers are based in countries where
the import of waste is prohibited. But often such countries regard
such material as product, or at the very least secondary raw materials.
It is therefore the description of such materials rather than
any environmental risk from such materials that prevents export
sales into such countries. The UK and EU remain inflexible and
insist that such materials must be described as wastes.
(d) The EU's "note verbale" system
is ridiculous. It operates by asking all non-OECD countries which
"wastes" they wish to receive from the EU. But if they
don't buy "wastes" as above then they respond in the
negative so the market becomes closed to UK operators. If they
choose not to respond to the EU then the system defaults to the
negative and that market becomes closed also.
7. The net result of all these issues is
that UK exporters of newer recyclate streams find themselves disadvantaged
at the hands of unregulated exporters of illegal waste materials,
have markets severely restricted by poor EU regulation subsequently
"gold-plated" in the UK and struggle in those markets
they do have access to due to less regulated competition from
other countries (when such regulation has little grounding in
science or environmental risk). In these constrained times, the
regulatory snowball continues to grow at the same pace as always
and such regulations are genuinely causing severe difficulties
for exporters of new recyclates from the UK in the face of severe
competition for market share from the rest of the western world.
16 April 2009
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