Recycling Market: Time For Government Intervention?

Rebecca-Watkins.JPGShould the UK Government step in to support the market for recyclates? Rebecca Watkins, waste resource management specialist at Wardell Armstrong, makes the case for positive legislation – and looks at some of the options.

Government-InterventionWith the 2020 targets for recycling looming ever larger, and the publication last December of the Circular Economy Package setting further targets for recycling beyond 2020, it seems clear that the drive to increase recycling rates will only intensify over the coming years.

But how do we square these targets with the current woes within the recycling market? It’s all well and good recovering materials from the waste stream for recycling, but where does that leave us if there’s no end market for them? Instead of filling a hole in the ground with a mix of unsorted waste, we could end up expending energy and money separating this waste into its component materials, only for it to sit in huge stockpiles for want of anything to do with it. In fact this is reportedly already happening as some recycling facilities stockpile material in the hope of an uplift in commodity prices.

“If the UK Government is really committed to promoting resource efficiency and minimising the environmental burden on society, some form of legislative intervention is needed to support the market for recyclates – and soon”

It seems generally accepted that legislative drivers are needed in the first place to encourage the recovery of materials for recycling. So why is it then assumed that viable end markets will just appear for these recyclates? The reality is that recyclers and reprocessors operate in the open market. They’re therefore subject to economic pressures that can be detrimental to their business, and in turn to the efforts of governments to promote recycling. If we really want to develop a closed loop recycling sector and promote the principles of the circular economy, it may be time to accept that further legislative support is needed. But if so, what form should it take?

Minimum Recycled Content Targets

One answer could be to introduce “minimum recycled content” (MRC) targets for appropriate products. The idea of setting MRCs is that requiring manufacturers to use a proportion of recycled material creates a new or at least a less volatile market for recyclates. This added market certainty could also give recyclers the necessary confidence to invest in plants to deliver improvements in the quality of the recyclates they recover. And this in turn could have beneficial impacts on the marketability of all their recyclates, not just those subject to MRCs.

But as always there are some potential downsides. Product selection in setting MRC targets is critical. Not all are suitable for inclusion of recycled material – or at least of certain grades or sources of recycled material. There’s the potential impact on industry of any additional manufacturing costs of imposing MRC levels. There’s the question of whether using recycled content always confers an environmental benefit over using virgin materials. And there’s even the issue of whether setting MRCs is legally possible under our current position within the EU. So while there appears to be a sound basis for the concept, the idea of introducing MRCs would need very careful consideration and implementation to deliver the desired benefits.

Extended Producer Responsibility

Another alternative could be to push the burden of financing recycling back up the chain through “extended producer responsibility” legislation. EPR is the idea that those who manufacture products should bear the responsibility for dealing with them at the end of their useful lives. EPR legislation can impose various obligations on producers including responsibility for the “take back” of end-of-life products for recycling, setting targets for recovering and recycling a minimum proportion of end-of-life products, and requirements on product design to improve recyclability.

With EPR policies already in force in the UK – the WEEE Regulations, Producer Responsibility Obligations (Packaging Waste) Regulations, Waste Batteries and Accumulators Regulations and ELV Regulations – could introducing further EPR legislation across a far wider range of products and materials offer much needed support to recyclates markets? While it wouldn’t directly guarantee a market for recycled products it could certainly improve its prospects. For instance, if producers were more widely obligated to take back and recycle products at end-of-life, they might be more likely to include recycled content in the original products as a means of closing the loop and avoiding paying twice – once for disposal and then again for virgin materials. Alternatively, setting recycling quotas for producers and imposing recyclate quality specifications could ensure a more stable and high quality supply that would be better able to compete with virgin materials.

Although neither of these options might be the complete answer on its own, one thing seems clear. If the UK Government is really committed to promoting resource efficiency and minimising the environmental burden on society, some form of legislative intervention is needed to support the market for recyclates – and soon.

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