Chris Jonas, FCIWM, analyses the impact of the Middle East conflict on the resources and waste sector and local authorities.
Over the past few years, the UK waste management and recycling sector has absorbed a sequence of compounding cost shocks.
Unfortunately, other impacts are already in the UK legislative pipeline, including the Deposit Return Scheme (DRS) and Emission Trading Scheme (ETS) expansion for starters.
Many operators were already under pressure before the conflict in the Middle East, but the war now risks tipping that pressure into genuine service-delivery and, in some cases, insolvency risk – with consequences that we cannot afford to ignore.
This is not about a lack of efficiency or inadequate preparations. It’s about structural exposure to costs that UK market participants do not control and cannot easily pass on under fixed or constrained contracting arrangements.
Energy and fuel: A familiar vulnerability resurfaces
The conflict in the Middle East has already disrupted global oil, gas and petrochemical markets. Analysts warn that prolonged disruption through the Strait of Hormuz would further tighten supply and push prices even higher.
For the waste industry, this affects them directly. Waste collection and treatment are energy-intensive. Energy is central not only to transport fleets but also to materials recovery facilities, transfer stations, balers and processors. Even where companies have hedged part of their exposure, rising forward prices feed through to renewals.
We have seen this before. Similar dynamics played out after Russia invaded Ukraine, when energy prices and national inflation escalated to unseen levels. This Middle East conflict risks reviving these same pressures at a time when the sector has only just recovered from the last shock.
Input costs are rising across the board – not just fuel
Fuel and energy are only one part of the picture. Operators report sharp increases in everyday consumables required simply to keep waste moving safely and compliantly.
Plastic wrap, protective equipment, tyres, chemicals and maintenance materials are all linked to energy-intensive and petrochemical supply chains. In some cases, operators have reported that the cost of core consumables, such as plastic wrap, has increased by close to 90% over a short period, with little prospect of this trend reversing if global energy markets remain unstable.
At the same time, outlet costs are rising. In the UK, the Landfill Tax has continued to increase annually. In Europe, carbon prices peaked in February 2026 at over €90/t, impacting some RDF Exports.
Recycled materials revenues have fortunately remained quite flat recently, even with small uplifts for mixed plastic bottle grades; most of the additional shipping costs have so far been borne by the reprocessors, but it is far from clear how long this will remain the case.
Labour costs: Multiple structural increases
Layered on top of these pressures are labour costs that have risen well ahead of general inflation. The National Living Wage has increased repeatedly in recent years, with large uplifts from April 2024 onwards and further rises now baked in.
In operational, shift-based industries, such as waste, these ripple through entire pay structures, compress differentials and trigger justified expectations of increases among experienced staff, drivers, engineers and supervisors.
A sector facing stacked, compounding cost shocks
Individually, each of these cost drivers can be managed. Collectively, and arriving in quick succession, they create a different risk profile.
Waste management companies and local authorities provide essential public services. They are energy-intensive, highly regulated and bound by contractual frameworks that often lag real-world cost movements.
Unlike other sectors, they cannot simply reprice goods and services weekly or pause delivery while markets settle.
The longer-term impacts include erosion of resilience and constraints on investment capacity in a sector desperately in need of further investment in key recycling infrastructure.
Pragmatic interventions required — earlier rather than later
Neither operators nor local authorities are responsible for global geopolitics. But they are both responsible for the continuity of essential services.
Waiting until service providers are in crisis is the most expensive option. Emergency re-procurement, short-term contracts, or service failure carry higher financial and operational risk than structured, early intervention.
There are tools available for parties to implement, such as temporary cost relief mechanisms, targeted contract variations tied to verifiable external cost indices, short-term risk-sharing arrangements, or structured discussions about financial sustainability before problems become too acute.
None of these removes the need for efficiency or accountability. But they recognise reality: essential services delivered on long-term contracts cannot absorb repeated systemic shocks indefinitely without compromising resilience.
Time for action
The waste industry and its customers are again exposed to global events far beyond their control, at a point when their financial headroom has already been heavily depleted.
We all hope the Middle East conflict de-escalates, but prudent public-sector service planning cannot be based on hope.
Parties that engage early, pragmatically and transparently with each other will be better placed to protect continuity of service, value for money and long-term capacity. Those who ignore the warning signs may find themselves dealing with far costlier consequences later on.
