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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

The DEFRA’s Resource and Waste Strategy sets out to reduce waste, get businesses to place sustainability higher up the priority list

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.

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