Current Issues

Regular Industry Development Updates, Opinions and Talking Points relating to Manufacturing, the Supply Chain and Logistics.

How the Resource and Waste Strategy Can Empower Industry

10-Apr-2019
How the Resource and Waste Strategy Can Empower Industry
The DEFRA’s Resource and Waste Strategy sets out to reduce waste, get businesses to place sustainability higher up the priority list and move industries towards a circular economy. It also aims to ensure that the production of materials that cannot be reused or recycled is limited.

Of course, with all change comes some fear and a lack of understanding from industry. While the changes, namely the Deposit Return Scheme, Extended Producer Responsibility and Plastics Tax, will require significant investment and transformation of processes, there are many benefits to the initiatives, as Stephen Cameron, Business Development Director at SWRnewstar explores.

Deposit Return Scheme
The primary idea behind a deposit-return scheme is that a value is placed on a returnable item such as plastic and glass bottles. This is a fantastic system used widely across the globe with great success. The challenge of us in the UK is that there needs to be a disruptive solution to facilitate it.

Right now, most people put their waste into a bin, which a waste company collects. That company takes the waste away and will try to recycle it. However, the reality is that unless it is kept separate, there is going to be some wastage and loss of ability to recycle some products.

This is a disjointed distribution and waste collection system. The deposit return scheme, will move away from these conventional waste collection solutions. The idea is you keep the bottles separate, bulk up the material and, potentially, create a cleaner product that can be recycled.

Take a distribution company that is distributing product to a group of small corner shops. A truck will, at present, do its rounds and by the time it is finished it is empty. The opportunity here Is that the business could implement the deposit return scheme, whereby for each shop it goes to it deposits the new product, but also picks up a clean recyclable product. The vehicle then returns to its distribution centre with a volume that can be bulked up. The bottle manufacturer, who is delivering into the distribution centre, can then take that material back so it is reused or recycled.

Having a completely different returns system, that utilises the distributor, as opposed to the waste collector, is a significant shift that can dramatically help cut down on the waste of materials, which could have otherwise been recycled.

Extended Producer Responsibility (EPR)
With EPR, the likely outcome will be that there will be more onus on the producer to manage their waste. This may affect packaging return notes (PRNs).

At the moment, producers of recyclable material - paper, cardboard and glass - pay a 10 per cent fine to the government through their PRN schemes, for the material to be recovered, reprocessed or exported.

The change in legislation would see manufacturers and retailers (if it's their own brand) pay 100 per cent of the cost, making them more interested in what's happening to that material. This will apply pressure on the recycling industry to be more transparent about what they're doing with these materials.

It may sound worrying news for industry - perhaps all that many have taken in is "increased costs", however, the critical thing to understand is that the material being produced is not waste. This is product that companies put out into the market which we buy as consumers, that is then disposed of by us. This product has value to industry, but it doesn't currently control the process.

The opportunity for companies actually links back to the deposit return schemes. If you're the manufacturer or the retailer, you will want to do a deposit-return scheme on something that you're having to pay a tax on, because with this scheme you can control the process more, thus better managing your costs.

Plastics Tax
In this scheme, anyone producing a plastic product that is made from less than 30 per cent recyclable material, will pay a tax. The plastic tax is approved and planned to come into effect in April 2022. What the actual fees will be and what products will be covered is currently being consulted.

While 2022 may sound far away, this is not actually that long for retailers and manufacturers to change their packaging production and internal processes. This is going to include bio-plastics and compostable plastics, not just the petroleum-, polymer-based plastics; everything will be covered.

While changing product materials sounds like a frustrating undertaking, the positive is that this is going to increase demand for the recycled plastic materials that go into new products. It is going to fuel the plastics recycling infrastructure in the UK, thanks to a stronger market for recyclable plastics. This will have a knock-on effect for the rest of the supply chain.

Creating a Circular Economy
The UK currently relies heavily on other countries, to manage and recycle our waste. In light of news that a number of them, including China and India are placing restrictions on the volume of waste they are willing to import, the UK is urgently looking at ways to be able to recycle more ‘at home’.

The drive is to create a circular economy to keep the value of material within our economy. Instead of having a linear system where products come in and disappear.

If you have a tax system where you penalise those who are producing plastic products from non-recycled material, there is going to be a market pop-up for people to come and collect recyclable material to reprocess it and put it into a format where others can make new products.

Let's Change History
About 15 years ago, the Government introduced an escalating landfill tax. The purpose of this was to discourage landfill and promote recycling of waste. Unfortunately, the penalty went to the wrong place, and little change occurred.

While recycling levels did increase a little, they have plateaued at around 43 per cent. The hope is that the new initiatives will get it to the next stage.

While there are costs to industry associated with the government’s changes, it’s important that the short and long-term opportunities are fully understood. The combination of efforts holds great promise for the country. The power of both stick and carrot, encouraging consumers to return products, may have the desired effect of stimulating the economy around the circular use of material.

The mantra for the industry must be: Waste is not rubbish. Waste is a resource.

Sam Ireland
International Marketing Manager, Loftware
Are You Navigating Global UDI Compliance?
Georgia Leybourne
Senior Director International Marketing, Manhattan Associates
Are we embracing the profit potential of the over 50s?
Jon Moody
Chief Executive Officer, SSG Insight
The Future of Supply Chain Management
David Luttenberger
Global Packaging Director, Mintel
Mintel announces top global packaging trends for 2019 and beyond
Andrew Tavener
Head of Marketing, Descartes UK
Compliance Management – it’s time for joined up thinking
Stephen Cameron
Business Development Director, SWRnewstar
Primark's move to 100 per cent sustainably sourced cotton should be commended
Marc Corriveau
Account Manager, Loftware
Changes in packaging result in ROI for F&B products
John Perry
Managing Director, SCALA
Why an extension is best for British businesses
David Jinks MILT
Head of Consumer Research, ParcelHero
Booking a courier? No printer required, says ParcelCompare
Graham Parker
CEO, Gravity Supply Chain Solutions
Mitigating The Risks Of Trade Wars And Tariffs
Sam Ireland
International Marketing Manager, Loftware
How Brexit Will Impact Supply Chain Labeling?
Sid Holian
Managing Director, Bis Henderson Consulting
Three critical steps to a hi-tech, agile supply chain
Manu Tyagi
Associate Partner, Retail and Consumer Goods, Infosys Consulting
M&S and Ocado have signed a £750 million deal to take M&S groceries into the home delivery market
Olivier Frère
Serialisaton Expert, Zetes
Understanding the Tobacco Products Directive
Paul Heiden
Senior Vice President of Product Management, Ultimaker
6 overlooked benefits of 3D printing for your supply chain
Dave Locke
EMEA Chief Technology Officer, WWT
Merged pharmaceutical firms seek fast-track route to savings
Johannes Panzer
Head of Industry Strategy for Ecommerce, Descartes
How to make international ecommerce transparent, efficient and cost-effective
Craig Summers
UK Managing Director, Manhattan Associates
Putting the WOW in the checkout experience
Richard Parfect
Fund Manager, Seneca Investment Managers
The cessation of Airbus A380 production
John Perry
Managing Director, SCALA
What next for British business?
Chris Jones
EVP Marketing & Services, Descartes
5 Key Logistics Trends and Technology Implications for 2019
Craig Summers
UK Managing Director, Manhattan Associates
What is the Checkout of the Future?
Andres Richter
CEO, Priority Software
UK Manufacturing: The Productivity Conundrum
Martin Meacock
Director, Product Management, Descartes
Brexit: only 10 weeks to implement if changes are ultimately needed
John Perry
Managing Director, SCALA
What does May's defeat mean for the supply chain?
Martin Meacock
Director, Product Management, Descartes
Get Ready for CDS
Don Brenchley
Director Industry Strategy, LLamasoft EMEA
Don't Let Soft Skills Be Forgotten In Your Supply Chain
Robert Broström
Director Of Service And Support, Handheld Group
Handheld Promotes Robert Broström To Director Of Service And Support
Dan Willmer
Professional Services Leader, MercuryGate
MercuryGate Hires Dan Willmer as New Professional Services Leader
Bob Brown
Manufacturing Industry Specialist, Loftware
Ideal Enterprise Labeling Systems Include Support and Service
Jason Chester
Director of Channel Programs, InfinityQS
2019 will see half of manufacturers invest in data collection technologies
Craig Summers
UK Managing Director, Manhattan Associates
Integrating Man And Machine: A Fresh Approach For Modern Grocery Warehouses
Dustin Maxey
Director of Product Marketing, Ping Identity
Security from the web to the loading bay
David Jinks MILT
Head of Consumer Research, Parcelhero
Parcel Senders Must Face Up to Their Christmas Duties
David Jonker
Vice President, Thought Leadership, SAP
Your Customer, the AI