Memorandum submitted by the British Metals
Recycling Association (BMRA) (Waste 38)
EXECUTIVE SUMMARY
1. This response is from the British Metals
Recycling Association (BMRA). The UK metals recycling industry
has a turnover of £4 billion and recovers 15 million tonnes
of metal every year. Metals can be recovered time and time again
to make high quality new metals and 40% of the steel and aluminium
used in the UK is made from recovered metal. Today the industry
recycles two million cars a year, more than any other EU country,
five billion food and drink cans and three and a half million
white goods. The industry thus makes a greater contribution to
UK obligations to meet EU "producer responsibility"
Directive targets than any other industry.
2. The industry is a UK recycling success story,
but faces excesses regulatory costs and burdens which do not improve
the environment but rather the reverse. The regulations are hampering
the ability of the industry to grow and remain competitive and
so are reducing its capability to increase further levels of recycling,
reduce greenhouse gas emissions and reduce landfill.
3. The Waste Strategy specifically mentions the
importance of targeting action on specific materials. We strongly
support this kind of approach and would recommend that government
develops a specific strategy for metals. Aluminium is specifically
mentioned in the Waste Strategy, which is welcome, but we feel
that this should be broadened to cover all metals. As part of
a strategy for metals, we would recommend sector specific guidance
for the metals sector.
4. The Waste Strategy also mentions the
need to simplify the regulatory system, making it more proportionate
and risk based partly through the permitting and exemption systems.
For the metals industry, however, it is essential that government
realises that at present it is likely that the new Environment
Permitting Programme (EPP) will result in an increase in costs
and regulation for our industry—the opposite of what is
intended. To avoid this, it is essential that our current licensing
exemptions under paragraph 45 are retained for smaller metal recycling
sites.
5. Overall the Waste Strategy should be
developed in a way that offers some integrated strategies that
look at how the mix of government policies can work together to
meet the targets on end of life products, while protecting the
environment and supporting the industries that are required to
deliver this. This integrated approach needs to include landfill
tax, energy from waste, research and development and BREW funding.
6. Recycled metal is classified as "waste"
when it is in fact an extremely valuable secondary raw material.
Metal scrap does not get fly-tipped as it is so economically valuable.
Scrap metal is sold and traded as a commodity in a sophisticated
national and international market. Environmental regulation has
often served little or no purpose when the industry was successfully
trading and operating long before the relevant Directives and
regulations were conceived. The regulation is generally aimed
at problem wastes or wastes for which there is no established
market. Scrap metal is totally different and should be reclassified
as non-waste as far as possible in the UK and under the EU's Waste
Framework Directive.
7. In summary there are a number of specific
areas in which regulation and legislation can be improved that
would benefit the industry and increase its capacity to recycle
more. These include:
— Reclassifying metal as non-waste
under the Waste Framework Directive and removing waste metal from
the materials covered by the Transfrontier Shipment Regulations
— Developing a new metals strategy
and introducing sector specific guidance for the metals recycling
industry as it is such a different sector to other "waste"
streams
— Retaining exemption from licensing
under paragraph 45 for smaller metal recycling sites
— Encouraging local authorities to
set aside a percentage of their energy from waste capacity to
be for the use of materials from merchants and businesses rather
than as at present solely using it for municipal waste
— Allowing companies an offset against
landfill tax for investment in research and development for new
technologies and processes to reduce landfill and increase recycling
INTRODUCTION AND
BACKGROUND
8. The UK metals recycling industry has
a turnover of £4 billion and recovers 15 million tonnes of
metal every year. Metals can be recovered time and time again
to make high quality new metals. 40% of the steel and aluminium
used in the UK is made from recovered metal. Recycling metals
reduces the pressure on landfill, reduces the demand for new raw
materials, reduces greenhouse gas emissions and helps the UK to
meet EU recycling and environmental targets.
9. The industry has been recycling since the
industrial revolution, long before the UK and the EU started to
focus on recovering waste materials. Sources include industrial
by-products, construction demolition materials and small traders,
as well as household waste. Today the industry recycles two million
cars a year, more than any other EU country, five billion food
and drink cans and three and a half million white goods. The industry
thus makes a greater contribution to UK obligations to meet EU
"producer responsibility" Directive targets than any
other industry.
10. Because the industry recovers more metal
than UK manufacturing needs, it also makes a significant contribution
to UK exports. Sixty per cent of recovered metals are exported,
with markets throughout the world. The UK is Europe's largest
exporter, accounting for 44% of Europe's global trade in recovered
metals and is home to the industry's own commodity market, the
London Metal Exchange. The international market for recovered
metals is growing steadily, at around 5% each year.
11. BMRA is the trade body for the industry,
representing over 95% of the industry, by volume. Its 300 members
range from multi-national companies to a large number of small
family owned enterprises, many of which have inter-dependent trading
links.
12. But the industry is affected by an ever
increasing range of complex legislation and regulation. Too often,
this is "one size fits all" regulation that is designed
for household waste businesses, for problem wastes or for recovered
materials where the end market is uncertain. For metal recyclers,
where the material is highly valuable and environmentally "low
risk" and the market is established and efficient, this adds
significant cost and bureaucracy with no public benefit.
13. These problems are compounded by Europe's
definition of recovered metal as "waste". This encourages
a negative public image for a highly successful industry, places
unnecessary controls on transportation and severely inhibits international
trade. The industry believes that recycled metals should not be
classified as waste but more accurately as valuable secondary
raw material.
RESPONSE TO
SPECIFIC POINTS
IN THE
WASTE STRATEGY
The role for and implementation of regulations,
and their enforcement
International Trade Issues
14. The current EU definition of recovered
metal (scrap) as "waste" means that the industry is
subject to Transfrontier Shipment and other regulations designed
to prevent the dumping of problem wastes.
15. This poses particular problems for a sophisticated
market in valuable secondary raw materials—where prices
may be several thousand pounds (sterling) per tonne. Trade in
recovered metals takes place in an international commodity market,
which often relies on a chain of brokers and traders between source
and reprocessor. The value of the material means that there can
be little doubt that the metal will, at the end of the chain,
be melted into equally high value new metals, using established
reprocessing methods.
16. The European Commission's revised Transfrontier
Shipment Regulations, introduced on 12 July 2007, include the
requirement that:
— Commercially confidential information
should be publicly divulged;
— Advance certification must be obtained
from overseas facilities to which the material is being sent,
confirming that processes are "broadly equivalent" to
EU facilities;
— Material can only be shipped to countries
outside the OECD where the local government has confirmed it will
accept this "waste"; such countries have also been invited
by the European Commission to indicate if they would like pre-notification.
17. This kind of regulation may be useful
for problem wastes, such as complex products from which materials
have not yet been separated or materials for which there is not
clear market. But for a high-price material that has been traded
across the world successfully for years, this is costly, bureaucratic,
impractical and unnecessary. It is regulation that is attempting
to solve a problem that does not exist for recovered metals.
18. The regulation affects the UK more than
other European metal recyclers. For example, of the 9.9 million
tonnes of recovered steel which Europe recovers every year, 4.4
million tonnes comes from the UK (1.7 million tonnes from the
Netherlands; 1.2 million tonnes from Belgium; 0.8 million tonnes
from Germany). Already, certain UK shipments have been held up
for many months.
19. Moreover, such regulation is not applied
by non European countries, such as the USA, which are the UK's
direct competitors in this international market. We already know
of overseas customers who are turning to suppliers outside Europe.
UK metal recyclers are thus placed at a commercial disadvantage
in relation to both their European and international competitors.
20. BMRA position: Short term, this
regulation needs to be implemented with an extremely light touch
to avoid damage to businesses and to trade. Meanwhile,
the industry needs urgent, high level support from the UK Government
and from UK Members of the European Parliament in seeking amended
regulations which recognize legitimate trade. We believe this
may best be achieved by lobbying the European Parliament, Council
and Commission for exemption of the metal recycling industry.
Licensing
21. Around 66% of metal recycling sites
hold Waste Management Licenses. The remaining third are registered
as exempt from such licensing under "paragraph 45".
The former are required to demonstrate that sites are run by competent
managers. Three quarters of these are able to do so by "grandfather
rights"—ie showing they have an experienced manager
(often the owner) who has been in situ for well over 10
years. A further 11% prove their competence by undertaking an
on-site assessment by Environment Agency staff. Thus, at present,
only 14% incur training course costs. This system has worked well
and, as far as we are aware, without risks arising.
22. Waste Management Licensing for England and
Wales is currently being revised by Defra/Environment Agency as
part of the Environmental Permitting Programme (EPP). Notwithstanding
that this programme is promoted as simplifying regulation, it
is clear that for metal recyclers regulation will become less
sympathetic to particular sector needs, and operators will need
to meet more requirements. In particular:
— There are no plans to continue sector
specific guidance (see below)
— New technical competence requirements
propose the removal of "grandfather rights" (also known
as "deemed competence"), introduction of two-yearly
training updates, and generic training content
23. At the same time, a Review of Exemptions
is underway. It has been suggested that some of our currently
exempt sites may be required to move to "standard" waste
management licenses, which would require them to take on additional
requirements including technical competence (above), obtaining
planning permission and new surrender conditions. The reason offered
is the volumes handled. But we do not accept that the volume of
metal in any way increases environmental risk, nor do we know
of problems caused by the current exemptions regime. We fear that
this is a further "one size fits all" approach that
is not risk based and could result in unnecessary regulation.
BMRA position
24. As noted above, the industry needs its
own sector specific guidance. This is even more the case as EPP
is tending towards generic regulation.
25. Current technical competence requirements
work well. There is no risk-based reason for changing them. If,
however, change is inevitable the industry must be allowed to
develop and administer its own scheme as an external scheme for
the broader waste industry cannot reflect the very different technical
needs of the metal recycling industry.
26. There is no risk-based reason for changing
current exemptions arrangements, which have worked well to-date.
In particular, volume of metal handled does not increase environmental
risk.
27. Although we welcome Defra and the Environment
Agency's increased openness in consulting at every stage, there
are problems for industry in responding to consultations on parts
of the system without the overall plan being set out. An industry-government
"task force" to review the plethora of regulation affecting
the metals recycling industry, which can take action to relieve
the burden on companies, is urgently needed—similar to that
which was arranged for the agricultural sector.
Sector specific strategy and guidance
28. Metal recycling is very different from
the "waste sector". We sell a valuable product all over
the world in an established market, often through international
commodity exchanges. Other materials recycling industries rarely
have this mature structure.
29. Metal recyclers play a leading role in helping
government meet EU targets for recovering end of life vehicles,
WEEE, packaging and batteries. This is not only in recycling metals
but also in developing advanced media separation techniques and
new solutions for residual wastes. Because of the prevalence of
metal in products, this role is more extensive than that of other
recycling industries, such as glass, plastics, oil or paper. Administrative
systems for implementing these Directives are increasingly onerous,
particularly since they are designed in isolation from one another
with limited industry "road testing". Moreover, there
is a need for more joined-up strategic thinking, involving industry,
if longer term EU targets are to be met.
30. As a result of these Directives, and
burgeoning environmental controls, the average UK metals recycling
company now need to take account of nearly 20 different sets of
environmental regulations, each with its own costs and paperwork.
These include, for example, waste management licensing or exemption,
hazardous waste regulations, WEEE and ELV treatment regulations
and duty of care controls. This is in addition to the Scrap Metal
Dealers Act, administered by local authorities, and other regulation
such as health and safety and employment law.
31. Environmental regulation is generally
produced on a "one size fits all" basis (for example,
it is not possible to have a customized hazardous waste consignment
system for batteries); and rarely has an industry like ours in
mind.
BMRA position
32. We need sector specific legal and technical
guidance for our industry. Such guidance used to exist, but now
needs updating and, we understand, will be discontinued under
the new Environmental Permitting Programme (below). This guidance
is essential, both to help operators through the maze of regulation
and to ensure that regulators properly understand the different
context of our industry.
33. In order to ensure future EU targets are
met, and to enable operators to make investment decisions (sometimes
involving many £m and requiring several years commissioning),
a joined-up strategy is now urgently needed. This needs to encompass
post shredder technology, landfill targets, taxation, BREW funding
and industrial Energy from Waste capacity. Government and metal
recyclers (through BMRA) need to work together to develop such
a strategy.
Classification of Waste
34. One of the fundamental problems is that
European law currently classifies recovered metal as "waste".
This means that since the 1990s the industry has been subject
to an increasing burden of UK waste regulation, notwithstanding
that it produces a valuable secondary raw material that has been
successfully traded internationally for many years.
35. The current classification results from an
ECJ judgment relating to the EU Packaging Directive. There is
now an opportunity to reclassify recycled metals under the EU's
Draft Waste Framework Directive (WFD) which is due to have Second
Reading in the European Parliament in the new year. This will,
inter alia, enable the point at which certain materials cease
to be waste to be re-considered.
36. In preparation for the new Directive,
the Commission's research body IPTS in Seville is working on a
methodology that might be used for metals (steel and aluminium)
as well as aggregates and compost. This is expected to define
the metal which the industry sells on to its customers as secondary
raw material, or product (ie not "waste"). This would
free the metal recycling industry of regulations relating to the
transportation and shipment of waste, and perhaps other regulations.
For the industry this would significantly improve public image,
reduce costs and bureaucracy, and remove barriers to trade. There
would be no negative impact on the environment; rather, by freeing
up trade routes, more material is likely to be recycled.
37. The IPTS Working Paper II makes
a clear case for re-classification:
"It seems what differs scrap metal . . .
from other waste streams is the fact that due to the high economic
value and unquestionable environmental benefit of recycling, there
is little risk in terms of failing the two over-arching principles
required by end of waste definition, ie the existence of a market
and the no-additional risks to health and the environment. Furthermore,
the metal scrap industry as an integrated part of the metal industry,
is well organised. From scrap collector to remelter/refiner, metal
scrap is traded under either national or industry standards or
specifications . . . such a system implicitly serves
as a quality assurance system between companies along the supply
chain."
BMRA position
38. It is essential that the new Waste Framework
Directive continues to include the draft paragraphs which enable
waste/product re-classification and that metal is selected for
consideration as soon as possible once the Directive is agreed.
This includes ensuring that other materials (where, perhaps, the
position is less clear) do not "jump the queue". As
the current "waste" definition poses particular problems
for UK international trade (see above), UK government, MPs and
MEPs are asked to speak loudly on this issue.
39. Meanwhile, UK government is urged to reduce
the regulatory burden by:
— Agreeing that industrial off-cuts
(also known as factory arisings or "new scrap") are
by-products, as defined in recent European guidance, and should
not be considered waste.
— Recognising that exported metals
recovered from WEEE and packaging will be reprocessed to broadly
equivalent standards, by replacing the current burdensome (and
often inoperable) paper evidence requirements with a protocol
agreement similar to that which already exists for metal recovered
from vehicles.
The adequacy of existing infrastructure, such
as energy from waste facilities with heat recovery; the UK's capacity
to process materials collected for recycling; and the potential
for Government action to encourage the most efficient technologies
40. The BMRA strongly supports the need
for improvements in the UK's infrastructure to make it possible
to increase further levels of recycling and reduce still further
the amount of material going to landfill.
41. In the UK, recycling for ELV, WEEE and other
complex products is done on a commercial basis. Under the End
of Life Vehicles Directive, for example, the current target is
that 85% of each car should be recycled/recovered. This target
is being increased to 95% in 2015. But at some point it becomes
non-commercially viable to separate the residual non-metallic
part of the car. As a result, approximately one million tonnes
of non-metallic shredder waste has to go to landfill. In order
to meet the targets, therefore, a more strategic solution is required.
At the moment, energy from waste facilities are only for household
waste. It is essential that a proportion of this capability is
devoted to industrial residues in a number of regions. Industry,
the CBI and the BMRA believe that a percentage of the use of incinerators
should be reserved for merchant materials. This would enable businesses,
like the BMRA's members, to recover more materials and divert
more from landfill.
42. BMRA has a specific proposal which may
help to encourage the development of new approaches and new technologies
in this area. This is that offsets should be allowed against landfill
tax for investment made into research and development on how best
to reduce landfill further. This would encourage companies to
focus more on future ways and future technologies for reducing
landfill rather than simply penalizing them for landfill as at
present. This approach would be a carrot as well as a stick and
therefore should be more effective.
British Metals Recycling Association (BMRA)
November 2007
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