Examination of Witnesses (Questions 640-659)
Mr Christopher Murphy, Mr Peter Jones, Mr Martin
Wheatley and Dr Andrew Craig
18 MARCH 2008
Q640 Lord Crickhowell: You will have
heard my last question in the previous session about the definition
of waste, the role of government and so on. Defra and the Environment
Agency are currently working on a series of Quality Protocols
to specify when certain products are no longer classified as waste
and can be re-used as secondary raw materials. How effective have
these protocols been and how have the waste processing companies
worked with industry to consider which materials might be reprocessed?
Mr Jones: Perhaps I might lead off there. I
would certainly connect with the responses to your question from
the earlier witnesses, Lord Crickhowell, and if we look at this
holistically the word "waste" is really about the semantics
of the economics. Wool was valuable in medieval times but it is
almost a waste now because of changed market circumstances; coal
might be valuable now but it was possibly regarded as a waste
in Norman times. If you stand back from where our economy is now,
globally as well as nationally, you will see a dramatic change
in expectations or perceptions of waste, driven first by the substantial
increases in population that are taking place in China and India
as they move to a consumption economy. We are now in a climate
where supply chains are aware of the carbon agenda and we have
a lot of technological redundancy that we are going to have to
replace with low carbon technologies. We are moving into a framework
of commodity scarcity in terms of the absolute availability of
virgin materials, so I think we are going to see a revolution
in the volumetric reduction of waste because all of those drivers
are expanding the demand side of the equation and pushing up the
value for material that historically was thrown away, discarded
and seen to have no economic value. Specifically (in relation
to the protocols) I would say that that sort of more macro approach
has not impacted on the choice of priorities; the early debate
about protocols was really around lobby groups which were scientifically
well-founded in the metals industry around the use of iron oxides,
the use of plastics as a coal substitute in the steel industry,
which was under economic pressure, the construction industry around
gypsum and the issues around aggregates. Timber also figured in
the issue around waste-derived fuels in response to the hardening
prices for energy and the opportunities there. Out of that we
have done pretty well because WRAP has now grabbed some of these
initiatives and they have come up with a framework, but if asked
what could we do further to push this debate, it is going to be
about saying more about the path of landfill taxes after 2011.
It is going to be about gripping and integrating issues around
public procurement in the health service (in relation to energy,)
in the Department for Transport (in relation to re-use of aggregates
and specifications and housing stock renewal. It is going to be
about tackling the issues over an on-line database because this
debate is still in an utter vacuum about the material flow of
resources. We talk about resource efficiency but we still have
no integrated framework that is as accurate as that which, say,
the Bank of England and the Prime Minister have in relation it
flows of credit in the economy—which I am sure they will
be extremely interested in this week if not for the next few weeks.
As far as money flows are concerned we need that sort of knowledge
for flows of carbon, silicates, aggregates, nitrogen, etc in the
economy. Finally, we need that which you touched upon earlier—a
valuation system that takes this multiplicity of protocols around
material streams or products in specific supply chains and then
put that into some sort of common yardstick. Carbon looks as if
it is going to be the common denominator because the "great
British public" do not understand "apples and oranges"
but if they are equated back to a common yardstick of measurement
in terms of carbon potential, and then we go to the following
stage of valuing that carbon (which probably will be done once
the cap and trade system starts to bite) then we will have all
the beans in a row, we will know where specific materials are
flowing, and the protocols attached to them which will provide
a funding and investment framework for industry. We will be able
to transpose that on the basis of academic and scientific research
on the threat or opportunity in terms of carbon reduction or avoidance
in terms of CO2 and then finally we will value it. That creates
the loop back to the front end of the system which then enables
businesses to make much more rational decisions about the externality
as well as the internality cost of the economic framework to which
they have operated for the last 200 years.
Q641 Lord Crickhowell: You have given
a very helpful briefing on the whole question of general policy
perhaps compared to the answer I got at the end of the last session,
but one specific thing you have not really made clear to me and
that is where we are on the legal redefinition of waste and how
much further we have to go. This has been the central point in
almost every bit of evidence we have had.
Mr Jones: I sense that the Environment Agency
are taking a more pragmatic and practical line. In the early stages,
at grassroots level in the Agency, there tended to be a multiplicity
of different regional interpretations of waste definitions, and
there was incredible variability. From our perspective we have
seen a sea-change in the sense of direction in the Agency; they
have appointed internal specialists who have the power to override
local technically-sound interpretations maybe, but which are practically
stupid otherwise.
Q642 Chairman: Mr Murphy, you wanted
to come in and you want to come in as well, Dr Craig.
Mr Murphy: I might add that this links to the
discussion earlier about by-products. It would be ambitious to
think that the framework directive will be redefining waste as
such, although it is considering by-products and waste. The protocols
work that has been undertaken by WRAP and the Environment Agency
was looking at that point where waste can be taken out of the
waste stream and can be considered as a product or as a utilisable
resource, and they have done some extremely good work on industrial
and commercial wastes so that they are not defined as waste, they
fall outside of the regulatory regime and then are put back into
use. We are talking about significant amounts here, of the eight
protocols which are underway the thoughts are that they could
avoid nine million tonnes of waste and about six million tonnes
of potential capital to UK Plc, so they are big numbers here.
It is a redefinition, to take it out of the regulatory regime
for waste.
Dr Craig: This work is going on and the Environment
Agency and the Government are in many cases a bit cautious because
the emphasis is still on reducing pollution locally, the emphasis
has not really gone onto the large macro-economical carbon agenda
which Mr Jones was referring to. It might help if I give a couple
of specific examples of what is going on here, and one is to do
with waste oil, a question about whether it should be recycled
as a fuel or the more expensive option which is to have it reprocessed
into a lubricant again. The question here which is being tested
in High Court is whether it can be used as a fuel in a way that
does not increase pollution, whereas the raw materials which are
used to make most products are pretty dirty materials and they
have to go through a process to make them clean. In a sense actually
can what have been wastes be redefined as products and then at
some stage put into the processes so that they are processed and
used with no overall increase in pollution and certainly considerable
environmental gains, if you think of the carbon agenda, for example.
The other example is compost; the biodegradable material that
is recyclable into compost at the moment has to be made from source-separated
bio-waste and then mechanical biological treatment produces material
that is a stabilised bio-waste but is actually only fit to be
landfilled, so the benefit of that compost material on the land
is lost. The adverse effect on the environment is reduced because
it emits carbon dioxide and not methane but it is nonetheless
wasted. I have a feeling that we need to speed things up so that
these MBT (mechanical biological processes) can be designed to
produce material that is fit for purpose, for something else apart
from just putting into landfill, and certainly most processes
at the moment are only designed to make material that should be
landfilled and there are now some more sophisticated processes
that produce material that is very difficult to distinguish from
compost made from source-separated waste. They are just two examples
to think about.
Q643 Earl of Selborne: There are
a number of interventions available and indeed used to increase
the ratio of waste diverted such as tax, statutory and voluntary
agreements, information and advice, regulation, planning, public
procurement and funding. Which of all these needs to be reinforced
or, indeed, what new interventions might deliver a better ratio?
Dr Craig: The Government with the Environment
Agency can speed up the process of considering waste materials
and I am not sure a new intervention is needed. The provision
of the waste framework directive is looking at the end of waste
and encouraging different countries to come up with protocols,
which is indeed happening. I am not sure that new interventions
at this stage are needed, just a speeding up of the overall process.
Mr Wheatley: If I might add, My Lord Chairman,
in the previous session there was some discussion about the UK's
position in relation to other European countries, and it is maybe
no coincidence that we have so far failed to adopt a couple of
policy approaches which do apply in many other European countries
that have much lower rates of waste to landfill. One of those
is about producer responsibility for packaging; for example in
Germany there is something called the Green Dot Scheme which makes
producers very responsible for meeting the costs of disposing
of packaging waste and they fund local authorities to do that,
and that sets up a much clearer financial incentive to minimise
waste. The other area is that in many parts of Europe householders
have financial incentives to minimise the amount of landfill waste
that they put out and, again, the LGA has been calling for councils
that think this is a good approach to have the power to introduce
financial incentives for householders, and we support the recommendations
of the Commons CLG Select Committee that rather than the five
very circumscribed pilots that are in the current Climate Change
Bill, also councils should have a more widely-drawn power to introduce
financial incentives in a way that they think would affect consumer
behaviour.
Q644 Earl of Selborne: One of the
initiatives which has been mentioned already which other countries
seem to be ahead of us on or have chosen to be ahead of us on,
perhaps rightly or wrongly, is energy from waste. Is this something
that planning is holding back, or is it undesirable to try to
make more energy from waste?
Mr Jones: I would suggest that in terms of remaining
blockages I have identified three that I would suggest to you.
The first is around the interaction and positioning of the waste
debate in the context of the agricultural debate. Biofuels and
our agricultural strategies produce a tonne of waste by-product
for every tonne of fuel, regardless of the issues around the carbon
footprint and benefits or disbenefits of that approach. But we
are moving into the carbon economy and we are handling that carbon
economy through different government departments. BERR is responsible
for large energy schemes and we are disposing of waste which is
in fact around 30 to 40 million tonnes of carbon as coal equivalent
to landfill each year and there are tremendous interactions between
these sectors. Therefore, the first block is a cultural one around
the whole carbon debate. Recent revisions upwards to the UK carbon
dioxide emission to 750 million tonnes is ten times more than
the tonnage we put to landfill in total and about 20 times more
than the tonnage of carbon going to landfill, so we have to move
carbon management from the back end of the system right to the
front end. The way we accelerate that, I suggest, is that we shift
from a fairly pedestrian pace around the carbon reduction commitment
and the way that carbon pricing is entering the thinking of main
board directors, via fairly complicated systems. Secondly, we
have a ragged and disparate approach on producer responsibility.
As you may know, I have been a scathing critic over the last ten
years experience in this area where it is reaching a climactic
fiasco with the WEEE regulations. The whole thing is on the verge
of breakdown because we have lost the simplicity of placing responsibility
for the end-life management of products on to the manufacturers,
and that message is still not going out unequivocally. In fact,
in the electronics industry some of the manufacturers have now
realised that they have lost control and ownership of those back
end resources in a world where the price of steel has rocketed;
copper, aluminium and some of the rare earth metals have changed
that economic equation. The third issue I would posit is is around
the practicalities of the planning system. There is an immense
variability, as I go round local authorities—and Martin
and Andrew may care to comment—in the extent of their responsibilities.
Some think that their planning responsibility extends to just
management of domestic refuse and that industrial and commercial
is going to look after itself. At the other extreme you have places
like Somerset where they see the waste industry no longer as the
waste industry, but as a normal industrial process, part of the
resource efficiency agenda. They envisage provision for co-locating
waste to energy plants alongside the gaps that are emerging in
the big heat and electrical load users as we face the prospect
of 30 per cent of our electrical capacity coming off stream with
the closure of dirty coal and ageing nuclear capacity. It is in
the planning system and the way that the local authorities really
do understand that waste is not a problem around domestic dustbins,
it is an opportunity around job creation, employment and new industrial
activities for the low carbon industrial revolution that we are
now moving into.
Q645 Earl of Selborne: If I can just
take you back to what Lord Crickhowell mentioned in the earlier
session, you are pretty scathing about the lack of connectivity
which designers and engineers show to the end-life impacts and
you call for transparent economic producer responsibility. Could
you just tell us what that in practice means, for example, to
resolve the WEEE dilemma?
Mr Jones: There seems to be about a million
tonnes of domestic WEEE in the UK and it falls into three different
segments in terms of electronics, brown goods and white goods,
but the industry fought tooth and nail through its various trade
associations to refuse financial liability for that waste material
eight to ten years ago. I guess because in those days they realised
that those additional costs might not be recoverable from the
very powerful negotiating stances taken by the big retailers who
were themselves anyway moving into manufacturing, so producers
resisted it. In the waste industry I was suggesting to them that
they could accept that cost liability and what they needed to
do was to persuade government to address not whether they should
or should not be given cost liability, but what government should
do to provide cost transparency and move the debate to green tariffs
and transparency of audit systems. That would have enabled them
to pass on much of these costs, much like VAT, subject to independent
audit by government. Then they would have retained ownership of
a million tonnes worth of assorted plastics, ferrous and non-ferrous
materials which would have economic value. The industry put forward
cost claims of around £360 million, or £360 a tonne
when the waste industry collects material for about £40 a
tonne and takes it to large centralised networks. The other opportunity
for the waste industry, which we and Biffa predicted, was that
if they bid competitively for big regional contracts, probably
based around regional development agency regions, they would have
had the economic incentive and economies of scale to offer the
lowest costs possible for collection. They would have created
critical mass for the reprocessing of these materials through
large-scale systems. Against that opportunity what we have actually
ended up with is the industry being held to ransom because local
authorities have sold on their rights to tradable permits to intermediaries
who are now demanding very excessive amounts of money for those
proofs of recycling. Nobody can find out where half the material
is going because others are effectively stripping the valuable
white goods out of the system because scrap prices are so high.
Again, if you look at the case of fridges, which was the subject
of a select committee inquiry in the other place some years ago,
even now Defra can only find around about 25 to 35 per cent of
the global warming gases used as refrigerants in an area where
there is supposed to be producer responsibility. Unfortunately—and
there are many people who share my view in the industry—we
ought to be revisiting this whole concept and integrating producer
responsibility in the material efficiency and minimisation debate.
Q646 Lord Haskel: Would you then
add corporate social responsibility to the range of interventions
which are made? After all, many firms make declarations about
sustainability in their CSR statements; is this kind of thing
enough and would this kind of thing overcome a lot of the problems
that we have with government interventions?
Mr Jones: There is a recent development where
you are seeing partnerships between NGOs (people like Greenpeace,
Friends of the Earth and so on) and the major corporates, because
the market—the great British public—is now responding
to these signals and clearly that is most advanced in the food
retailing sector where they are driving new initiatives now. I
recently chaired and released a report last week of distributed
energy opportunities in the food chain, and CSR is a big driver
that will come through the Carbon Reduction Commitment, but again
it is going to be probably 2011-12 before there are going to be
meaningful, sectorally-driven league tables identifying against
the PAS2050 standard for carbon measurement. Only in 2012-13 might
we be able to say definitively whether a Marks & Spencer's
yoghurt produces less grammes of CO2 per pack than a Tesco one;
at the moment CSR is being used but it is being used in strange
ways with different standards. Freeloaders are exploiting gaps,
so the blue chips are then consolidating into coalitions to make
sure that we drive standards to try and stop these freeloaders
taking advantage of a process that is under way.
Mr Murphy: Just to support what Peter said and
without sounding too cynical, corporate social responsibility
was used as a marketing tool in the past and I think now because
of public awareness and because of pressures from environmental
groups these commitments will be a voluntary commitment, policed
by the public and by environmental groups, so corporate responsibility
is actually meaning an awful lot more and is developing into voluntary
commitments.
Q647 Lord Methuen: Based on current
data and predictions when might UK landfill capacity be reached,
and I guess this is very variable across the country.
Mr Murphy: I have some data from the Environment
Agency and albeit that it is about two years old they claim that
there is nearly 700 million cubic metres of landfill capacity
remaining, which does not mean an awful lot in itself. The important
thing is that in the previous year the capacity did not fall significantly
in that the amount of capacity used to dispose of waste was similar
to or replaced by the additional permitted void space so we are
in balance for that 12 months. I have not got the information
since then and of course it is regionally very different: in the
North East and North West—outside London basically—it
is between six and nine years capacity, but significantly lower
than that in the South East, something between three and four
years in the South East, but of course that very much depends
on the permitted void space, whether we can get through the planning
permissions and whether we can be effective in reducing waste.
It might be that that tails off or balances out over future years.
Q648 Lord Lewis of Newnham: Can I
be clear, are you saying that that is the amount of landfill that
is registered for landfill or are you saying that that is the
potential for landfill?
Mr Murphy: That is permitted landfill, not potential,
that which has a licence or permit as they will become.
Q649 Lord Lewis of Newnham: So it
is possible that there will be an extra amount available in seven
years time.
Mr Murphy: Yes, there are many holes in the
ground; they might be inappropriately placed or they might be
inappropriate for other reasons.
Q650 Lord Lewis of Newnham: It is
just unfortunate, when you said seven years it rather suggested
that in seven years time doomsday was here and landfill had gone
as it were, but I do not think that is what you are saying.
Mr Murphy: That is not what I am saying, no.
Mr Jones: Historically most waste companies
operate to a seven-year cycle on landfill in the back pocket.
That seven-year cycle is driven by a five-year planning process
plus two years to just make sure that one is not trying to run
a waste company and there is nowhere to take the waste (in which
case you would never pick it up). In terms of the EA data there
is a distinction that needs to be drawn between what has achieved
planning consent and, of that total, how much is permitted. What
companies like us have tended to do recently is not to purchase
and procure landfills, but enter into royalty agreements. Economically
by 2012 landfill will have to charge around £80/£90
per tonne gate fees and that is 20 to 30 per cent above the alternative
costs or gate fees that could be charged by new technologies,
whether they are thermal, biological, mechanical or whatever.
What we have seen is a reduction of the active licensed landfills
for municipal household-type waste from around 700 in the late
nineties; the latest EA data that I saw reported for the "wide
licence" sites was 267 and that would suggest that there
has been a net closure rate of around one a week. Nevertheless,
the ones that remain tend to be increasing in size because the
fixed overhead costs at one or two million pounds for a planning
consent mean that you start looking for larger and larger sites
so that you are defraying the cost over a bigger and bigger cubic
capacity that you have available for disposal. Generally I would
suspect—and this is again something that you might care
to recommend to Defra, that they actually start drawing out these
distinctions and put some research into it, because the last information
was three years old. What is happening is that biologically active
inputs of waste are declining so you have a reduction in supply
because companies like us are not reinvesting—we are assuming
that in three years time we will be buying these new technologies—but
the demand is also declining as local authorities adopt recycling
initiatives and composting initiatives. You have a moving target
really. Generally capacity has probably gone from seven years
back to five years, Lord Lewis.
Lord Howie of Troon: Very briefly, how far do
your predictions take into account reclamation from the sea? We
have a very large coastline, much of which could not be used for
that purpose but the rest could perhaps.
Q651 Chairman: Mr Murphy, does your
organisation take account of these kinds of considerations in
waste management?
Mr Murphy: We have this information from the
Environment Agency but I am unclear about the question.
Q652 Lord Howie of Troon: You can
dump waste in the sea; for example, a good deal of the waste material
from the Channel Tunnel was dumped in the sea adjacent to the
tunnel. There are a great many places where things of that nature
can conveniently be done and I am wondering how far these predictions
have taken that into account.
Mr Murphy: The predictions are for landfill
only, not any other sort of disposal.
Lord Howie of Troon: It would make the figures
look rather more reassuring—to me at any rate.
Chairman: It depends how often we are digging
Channel Tunnels I suppose. Baroness Sharp, if we can move on.
Q653 Baroness Sharp of Guildford:
Waste reduction is only one of the many environmental considerations
and obviously has sometimes to be compromised to take account
of other factors: for example, it may be more environmentally
friendly to dispose of an old product and thereby create waste
if a newer product uses energy more efficiently. Who, if anyone,
is responsible for examining such trade-offs and disseminating
the information to businesses, local authorities and members of
the public?
Mr Wheatley: If I might start, My Lord Chairman,
the question is into an important issue which we pick up from
our member councils and they pick up from their public and we
are very grateful for the keenness on the part of the public to
do things that are positive environmentally, but there is a great
deal of confusion about some of the trade-offs that are in the
question. For example, people are confused about whether they
will do more environmental damage by buying a new product and
throwing away an old one than carrying on running an energy-inefficient
boiler or something of that kind. Much information that the public
has access to is derived from commercial organisations who are
obviously trying to sell a product, and they will be stating their
case as they are perfectly entitled to but it may not be the most
objective. The Government, in its action plan on sustainable procurement,
talks about setting up a national centre that would put out information
of that kind. I have not seen any update recently on how that
is going, but if there were that sort of standard source of information
available our member councils would be very willing to play a
part in explaining it to their public and encouraging them to
make the right decisions about carrying on with inefficient old
products versus buying new efficient ones.
Q654 Baroness Sharp of Guildford:
Should the UK meet its targets to increase its use of renewable
sources of energy, do you think this would shift the balance of
decisions in favour of waste reduction?
Mr Murphy: You have caught me on the hop somewhat.
It could do, yes, if we are generating more energy from the use
of renewables then it has to make certain consumable products
that much more efficient to produce and that much more valuable
to the user. I suppose it is a factor, but whether it will be
a significant factor in the short term is another matter.
Q655 Baroness Sharp of Guildford:
What about the BREW-funded projects? We have heard that some of
those may not receive further funding until after this year; what
impact would the cessation of this funding have on waste reduction
in the UK?
Mr Murphy: As far as the waste protocols are
concerned, we are assured that the work will continue despite
the fact that the BREW funding will cease, but there are other
funding pots from other agencies. If that had happened and then
that amount of waste material and that potential financial benefit
to the UK was lost because the investment was lost from BREW it
would have been devastating, I think it is a real shame. As mentioned
earlier, the loss of the environmental body research fund was
devastating as well.
Q656 Chairman: Dr Craig, do you want
to come in on this point?
Dr Craig: Yes, if I may. The background to this
is, of course, the Government's undertaking to recycle extra money
it raises through the landfill tax in the business sector through
the BREW fund and also in the local authority sector back to local
authorities, and I believe there is some doubt about whether this
is actually happening as the Government is keeping more of this
money to itself for the Treasury generally. The focus of the BREW
fund has had to shift from giving help to individual companies
for waste reduction and better use of resources to providing some
general information and advice to companies about how they should
do it.
Mr Jones: You may care to recommend, My Lord
Chairman, that there could be a body that actually marshals all
this because in the area of carbon accounting you have got the
Climate Change Commission under Adair Turner, you have got the
Carbon Reduction Group under Paul Ekins, you have got the national
accounts in the NAO and the ONS looking at CO2 footprints. We
are members of the Aldersgate Group which is campaigning for common
metrics for carbon and standards. The second big area is product
integrity and the introductions of new products. These tend to
be an area dominated by the NGOs—the Green Alliance have
done a lot of work with bio-plastics in the food retail chain
and concluded that if you put bio-plastics in bottles you may
be creating more problems than solutions. In the advisory area
like NISP, the National Industrial Symbiosis Programme and the
Knowledge Transfer Networks, and it does need a map because not
all these organisations share their evidential processes before
they shooting them out on an unsuspecting public. They are using
different standards.
Q657 Lord Methuen: Should it be the
role of waste processing companies and materials suppliers to
work with designers and manufacturers to ensure that the disposal
or use of products at the end of their lives are considered at
the design stage?
Mr Jones: Yes, very much so. I suggest that
if we had a single point manufacturer/producer responsible for
physical products, then they would be letting major contracts
and there would be a commercial relationship where there would
be feedback. The costs of waste management would be much like
a cost of production, and therefore they would look at the cost
of waste management in the same way that they look at energy efficiency
or materials efficiency or product functionality on the inbound
chain. We have lost that connectivity because it is diametrically
opposite to that at the moment. The waste industry goes its own
way—not just conventional waste companies but these other
end process technologies, almost regardless of information or
co-operation of the manufacturers.
Mr Wheatley: If I may add, My Lord Chairman,
it is also very important that there is a dialogue with people
responsible for recycling and disposal in local authorities, and
indeed we in the association have been promoting a discussion
with trade bodies on the manufacturer and retailer side so that
there is more of a dialogue between people who are thinking about
new products and people who are responsible for their disposal.
There have been instances where, for the best of intentions, people
have introduced for example new packaging materials not aware
that they are extremely difficult for authorities to collect and
recycle, so things actually end up in landfill when they were
intended to be recyclable; we need to avoid that sort of outcome
and we will avoid it by having a lot of dialogue upstream with
everybody agreeing to play their part in a process that corresponds
to the waste hierarchy.
Mr Murphy: Lord Crickhowell mentioned in the
previous evidence session that there are questions which seem
to be segregated between educationalists and the industry so perhaps
I will take the opportunity to launch into an answer which my
colleagues might have made. We would like to see that sort of
education system pick up on designs so that those undergraduates
and postgraduates who are looking at design, architecture and
manufacture are aware of the opportunities and the innovation
in the secondary product industry so that they can design, not
for obsolescence but for recycling, they can design for remanufacture,
put products into the system which can be then re-used again and
again.
Q658 Lord Methuen: I would like to
mention this vexed product of coloured glass. We all segregate
our glass into the different colours and we understand that when
it then leaves the collection point it all gets bundled in together
and hence becomes totally useless. Can you comment on that because
it strikes me that this is an area where particularly people like
Biffa and your associate companies and the other companies in
the same business have a problem.
Mr Jones: Much of that material is mixed because
the economics of the process favour its reintegration back into
road surfaces, and effectively what we are doing is using incredibly
carbon-intensive silicates in the form of scrap glass, to compete
against sandpits so we have lost the benefit of all that carbon
energy we put in. The reason for that is that the distances to
take that material back to the centralised processing centres
are too great and the carbon cost is not included in the equation.
The rising costs of energy are now creating shifts in the demand
pull from the glass industry and we as a company—and indeed
other of our competitors—are rolling out large-scale glass
reclamation programmes for commercial disposers in brewing, the
entertainments industry, hotels and those sorts of areas. Ultimately,
where you have carbon intensive products like glass you can use
a regulatory approach or just introduce a glass ban to landfill;
if you had those sorts of signals then you would get quite large
material shifts.
Q659 Chairman: Does anyone from local
government want to say anything about that because it is not wholly
the responsibility of commercial firms, that type of issue, is
it?
Dr Craig: Local authorities are to a large extent
governed by the economics of this and as it is a lot less expensive
just to collect mixed glass, if there is an outlet for that, that
is what the local authorities will tend to do. We try to work
with local authorities, making the case that even though it costs
local authorities more to get colour separation and although there
is more green glass than the country is able to recycle, the brown
and the colourless glass are in demand but the price premium that
they are able to get for those two is not sufficient to make it
economically advantageous to local authorities to do that because,
as you know, local authorities have got many choices and many
priorities about where they put their funds.
Mr Wheatley: In that answer and his previous
one Dr Craig alludes to a very important point about the extreme
financial pressures on local authorities, a very, very constrained
financial settlement, and as Dr Craig mentioned the Government
has shifted its policy on the recycling of landfill tax revenues
so that in the CSR period we are just entering, £1.5 billion
of landfill tax funding which would, under the Government's previous
policy, have come back to local government is not going into local
government. That will almost inevitably force local authorities
to take a very hardnosed economic attitude to the sorts of services
they undertake, they will not be able to afford to do things that
are not the minimum cost solution to securing recycling and disposal.
That is a great pity and we would very much welcome this Committee's
support and other people's support in pressing the Government
to rethink that going back on its earlier undertakings.
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