Budget 2011 and environmental taxes - Environmental Audit Committee Contents


Written evidence submitted by the British Metals Recycling Association

INTRODUCTION

1. Metals recycling is the largest and most successful recycling sector in the UK. Every year this £5 billion industry recovers around 15 million tonnes of metal per annum, including two million end-of-life vehicles (more than any other EU country), five billion food and drinks cans, three-and-a-half million white goods, and around eight million automotive batteries. Metals recycling not only brings huge environmental benefits by reducing the UK's dependence on dwindling natural resources and landfill but also lowers greenhouse gas emissions and water usage when producing new metals (compared to using virgin ores): the industry does more than any other to ensure that the UK meets its targets under the various EU producer responsibility directives.

2. Metals recyclers also use advanced shredder and media separation techniques to recover other materials. For example, besides 1.5 million tonnes of metal, 100,000 tonnes of other secondary raw materials, such as glass and plastics, are recovered from end-of-life vehicles each year. This contribution means that, as well as playing an important role in fostering green growth and jobs, the metals recycling sector—because it processes far more metal than domestic manufacturing needs—is one of the world's largest exporters of recovered metal, accounting for 45% of Europe's 10 million tonne global trade.

3. However, with the appropriate fiscal and regulatory support, the industry could be making an even bigger contribution. This submission sets out the British Metals Recycling Association's position on the role of the landfill tax regime in promoting innovation and improved recycling rates, which will become necessary as EU recycling targets increase.

4. The BMRA is the trade body for the metals recycling industry, serving a membership ranging from small family-owned enterprises to large multi-national companies. It represents around 85% of the industry, by volume.

LANDFILL TAX

5. The metals recycling industry has invested heavily in developing the advanced media separation techniques and solutions for residual wastes required to not only meet but exceed recycling targets under the various EU producer responsibility directives but also to divert materials from landfill and realise the "zero waste" agenda. Examples include new technologies to allow the recovery of non-ferrous metals using dense media and advanced downstream systems, employing copper analysers, and investing in mega-shredders. BMRA members are also leading the way on plastics recovery and in adopting advanced thermal processes such as gasification and pyrolysis for end-stage recovery of non-recyclable materials.

6. With producer responsibility targets set to increase over the next decade - for example, the targets for the recovery of end-of-life vehicles will increase from 85% to 95% in 2015—further capacity needs to be put in place urgently if these targets are to be met and infringement proceedings from the EU avoided.

7. However, the requirement to pay landfill tax on current activity whilst also being expected to fund investment in new technologies to reduce landfill acts as a significant inhibition to developing these solutions. Support in the form of a landfill tax credit or holiday—whereby waste would be landfilled free of landfill tax whilst approved investment programmes in new technology are in development—would be a welcome step.

8. Such support could also extend to a "holiday" from the escalator—for example, in the event that material is stored now until it could be treated using a new process, but should the development of that process ultimately prove unsuccessful, the rate of landfill tax would be backdated to the year in which the waste would otherwise have been landfilled rather than the prevailing rate.

9. With metals recycling not currently able to benefit from the framework of incentives aimed at developing renewable and other technologies, support for investment in research and development through the landfill tax regime represents an obvious means by which HM Treasury can support the sector in enabling the Government to meet its own public policy objectives around sustainable development and environmental protection.

20 April 2011


 
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Prepared 7 July 2011