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Engineering for Profit from Waste VI International Conference
London
Integrating Management of Wastes
Dirk Hazell, Chief Executive, ESA
13 November 2001
Mr Chairman, ladies and gentlemen, I am delighted to have the opportunity to speak to this distinguished and learned audience on behalf of ESA.
Most of you know vastly more than do I about the technical aspects of this Conference. To a greater extent even than I do, therefore, you perhaps feel an intense level of frustration with what is too often the low calibre of debate in this Country about waste and secondary resource management and its lack of relationship between this debate and sound science.
To give just one example, ESA staff have been present when political leaders making decisions about waste management have been told that pyrolysis of mixed municipal waste leaves no residue. ESA is responding positively to the emerging applications of pyrolysis and gasification and we are setting up a new Committee to focus on these technologies. However, if there is to be public confidence in such technologies, it is important that the marketing itself honestly reflects sound science.
Organisations like ESA will be much better placed to help if we are reliably advised about matters such as the likely composition of the residues arising from pyrolysis of particular waste streams. I believe that conferences such as yours today make an important contribution to improving the quality of debate and to creating a climate in which ESA's Members can invest in more sustainable infrastructure to manage waste and secondary resources.
ESA, is the UK's sectoral trade association for managers of waste and secondary resources, activity accounting for about £5 billion a year. A range of experts within and outside the industry believes the turnover of this industry needs to double by 2010 if the UK is to comply with its international obligations and the ambitions in the National Waste Strategies are to be realised.
In September, the Energy from Waste Association (EWA) merged its activities with ESA's. This merger has significantly enhanced our credibility as the sectoral trade association. It is also symbolic of the principle of integrated waste management which we believe is key to the sustainable management of the UK's waste stream.
I return to this later, but ESA strongly agrees with the comment of the Secretary of State, The Rt Hon Margaret Beckett MP, when she said in her keynote speech to the Green Alliance, that as a Country "we cannot allow ourselves the luxury of too easily closing down our options" for waste management solutions.
All waste treatment technologies have a legitimate role to play. Although some assert that incineration crowds out recycling, in fact extraction of energy from waste, as part of a integrated resource management policy, can enable the UK both to rise up the waste hierarchy and also to increase recycling and composting rates.
One important aspect of integrating management of wastes is developing partnerships with all levels of government and with regulators, waste producers and mainstream NGOs. All these partners overwhelmingly share a common interest and substantially similar perspectives.
Indeed, in some respects ESA "outgreens" the Government. For example, we believe that if hazardous waste cannot appropriately be restored to the productive economy, then it must be pre-treated to a permanently safe and stable state, Final Storage Quality, before final management in landfill. In contrast, DEFRA's current position appears to be based not on environmental considerations but on the cheapest regime permitted by the Landfill Directive for the longest possible time.
ESA's Members want to be enabled to restore to the productive economy much more of the material and energy contained in waste. It is clear that, ultimately, the commercial future of a waste and secondary resource management industry must depend not on ever increasing quantities of waste but on adding more value to more stable and in some cases diminishing quantities of waste.
Our Members are more than willing to invest in infrastructure. For most of 2000, ours was the only industry to have raised capital on the London Stock Exchange. Given the right conditions, the UK's waste management industry is more ready, willing and able than it has ever before been to invest to become less a low added value linear waste management industry and more a higher added value closed-loop resource management industry. Our Members would be delighted to do in the UK what they already achieve overseas, particularly within the European Union.
To achieve greater sustainability and closer integration in the management of wastes, we need a much more mature relationship with our regulators. Ours is an unusual industry in that we fully recognise the importance of rigorous environmental regulation. In a context where waste producers typically choose the cheapest management solution allowed by law, our industry recognises that regulation is an essential driver to enhanced sustainability.
Our Members increasingly maintain externally verified environmental audit systems and we welcome the Environment Agency's plans, notably through BRITE, to move to more sophisticated and smarter methods of regulation. It is fortuitous that, as the Agency is preparing to introduce smarter regulation, our industry has evolved to the extent where it can respond to this framework. Smarter regulation will be more appropriate for an industry utilising a wider range of technologies, adding higher value in its processes and placing more emphasis on closed loop systems.
In an industry such as ours driven by regulation, the Government's policy must facilitate steady progress towards achievements of targets.
As you know, the targets themselves generally have their origin in the European Union which now has sovereignty over relevant areas of law. In the UK, the targets are interpreted through the National Waste Strategies.
We do not believe adequate progress has been made in the last two years towards implementing the National Waste Strategies. We also believe the Government will now need to invest considerable political effort if its National Waste Strategies are to move from unfulfilled wish to accomplished deed.
Indeed, current official policy arguably undermines the National Waste Strategies and prejudices our Members' ability to deliver resource efficiency. To give just one example, the Government's recent decision to exclude energy from waste from the Renewables Obligation is effectively a stealth incineration tax equivalent to £9 per tonne of waste. This compounds difficulties the energy from waste sector already faces and is not obviously consistent with the commitment to energy from waste in the National Waste Strategy.
In this Country, only one completely new energy from waste facility, SELCHP, has become operational in the last ten years. Although an energy from waste facility was approved two weeks ago in Hampshire two years after the application was made, this followed ten years of preparatory work.
It cannot be claimed that official hostility to energy from waste has delivered a good recycling performance.
ESA is delighted to be a founder Member of the Government's Waste & Resources Action Programme and we actively support WRAP. However, and although ESA's Members are achieving very high rates of recycling in other Member States, the position within the UK is not as positive. There are instances where our Members are achieving recycling rates in excess of 50% for the municipal waste stream, and doing so on a highly competitive basis, but in the UK high recycling rates of municipal waste are the exception rather than the rule.
The public perception about energy from waste and the shift in public policy have been driven by misinformed media sensationalism rather than sound science. As I have already suggested, this is not an encouraging signal to anyone thinking of investing in new infrastructure.
The available precedents suggest that at precisely the point that each renewable technology starts to become commercially viable, public policy will shift in response to media sensationalism.
Energy from waste is not alone in facing difficulty. Compost's fortunes have changed over the last year. If our Members are to provide compost for the public, we want the public to have justifiable confidence in the product and we fully recognise the essential contribution of rigorous regulation.
But over the last year public policy seems to have shifted from a "post-incineration" position of "the future is compost" to much greater "post foot and mouth" restriction in the Animal By-Products Order which perhaps owes more to turf wars within DEFRA than to scientific wisdom.
The current and future regulatory climate surrounding composting will drive this technology towards greater levels of control. This will require a substantially higher level of engineering to ensure that the highest level of protection is afforded to both human and animal health, and of the environment.
In order to achieve compliance with the Landfill Directive and to meet the targets set out in the National Waste Strategies, in-vessel composting of certain wastes will become the accepted norm, rather than the exception.
Time will tell whether compost is to face the same media treatment as energy from waste. In the meantime, ESA seeks to reinforce the principle that there is a role for all treatment technologies in the integrated waste management system we seek.
ESA's Members find the current planning system to be a very serious obstacle in the way of investment in the more sustainable and integrated infrastructure, which will be needed if the UK is to comply with EU Directives.
Inability to obtain planning permission for sustainable infrastructure is, we hope, a matter which the DTLR is addressing in its Green Paper on modernising the planning process. ESA welcomed the Labour Party's commitment in its business manifesto to liberalise the planning process and we hope we can look forward to dramatic improvements.
As matters currently stand, a composting or recycling facility is at least as likely to be refused consent as a landfill so it cannot even be said that the current system is favouring the next generation of infrastructure. As matters currently stand, the planning system will preclude the UK's compliance with the Landfill Directive. We need a much more efficient planning process if the National Waste Strategies stand any chance of being delivered.
Greater integration is also required between the act of generating waste and the process of managing it.
Business is already incentivised to minimise waste but householders are insulated from the true cost of waste management and most householders are not currently subject to the principle that the polluter should pay. Without a direct link between production of waste by a householder and payment by that householder for collection and management of waste, mere exhortation by political leaders is not likely to have an overwhelming practical impact.
In a context where the Government says it wants to transform attitudes to waste creation, we see merit in direct charging and our Members are technically capable of working with direct charging of householders for waste management services. We believe direct charging can be constructed in a way that is not regressive and ESA has suggested that there should in the current Parliament be a pilot of direct charging.
France is an EU country broadly comparable to the UK in terms of its population and economy. France has about £15 billion more than the UK invested in infrastructure for the industry represented in the UK. France spends £3.1 billion on municipal waste services per year compared to the UK's £1.5 billion.
This clearly highlights the obvious fact that the Landfill Tax Credit Scheme, running at about £100 million, is far too small to be regarded as funding any significant part of the National Waste Strategies. However, every time one hears sources within Whitehall mention the Landfill Tax Credit Scheme and funding of the National Waste Strategies in the same context, the message we receive is that the Government is simply not serious about delivering the Strategies.
ESA's Members are, for all practical purposes, already complying with indicative guidelines for the Scheme set by the Government immediately before the General Election. Mischief making with an essentially sound Scheme might win awards for journalists on The Guardian but in purely practical terms it does nothing to help local authorities or ESA's Members to deliver compliance with the Landfill Directive.
The issue on funding is simple: there must either be direct charging or local authorities and the Devolved Administrations must have more resources to help to convert more of municipal waste disposal into resource management.
While we oppose formal hypothecation, ESA has for some time recognised that, to reduce the cost of recycling relative to landfill and to provide an additional stream of revenue, the Government may wish to raise Landfill Tax to levels seen elsewhere in the European Union. It may again be attractive to raise the tax on landfill and cut the tax on jobs.
Our only request is that the Government clearly signals increases in Landfill Tax in advance so our Members have adequate time to build recycling infrastructure with justifiable confidence. Our request is entirely consistent with the Government's own timetable for a comprehensive public spending review.
Some have also suggested that a tax be introduced for incineration. ESA sees no useful purpose in such a tax in circumstances currently prevailing within the UK.
The financial viability of the energy from waste industry is in any case questionable after the introduction of NETA. The proposed exclusion from support under the Renewables Obligation of the incineration of mixed wastes is equivalent to a stealth incineration tax of £9 per tonne.
In order to achieve the necessary landfill diversion targets, maximum reliance will need to be placed on all other available treatment options. Further to penalise incineration would be to create a rod for the Government's own back. If it is official policy to endorse the Waste Hierarchy, logic would point to deferring a tax on options higher up the Waste Hierarchy until the required reduction had first been achieved in the volume of waste sent to landfill.
To the extent that ESA's Members are enabled to restore energy and material in waste to the productive economy, they are not simply contributing to environmental sustainability. They are also potentially contributing to national security by enhancing industry's security of supply of resources.
Four per cent of world oil production is used to make plastics. If we can, on an environmentally justifiable basis, bring more of the material flow associated with plastics into a closed loop system, and indeed if we can extract more energy from biogenic waste, that is a perceptible contribution to enhance industry's security of supply.
Increasing use of renewable technologies to replace electricity generated by conventional fossil fuel fired power stations can also mitigate the effects of climate change. However, in order to accelerate the rate of progress, official encouragement should be given to all proven and evolving renewable technologies be provided, and the temptation to pick winners or a discriminatory basis should be resisted.
The Government's selective approach in the proposed Renewables Obligation (RO) and various capital grants is, in our view, too prescriptive about benefiting technologies.
As you know, there has been significant controversy over the recycling of incinerator bottom ash (IBA) in recent months. The Environment Agency is currently investigating this matter. Industry practitioners believe health and environmental effects of IBA recycling will be proved to be negligible. This would be a success for sustainability as primary resources are preserved through the use of secondary aggregates.
I turn now to DEFRA.
DEFRA's Consultation Paper about its Aim and Objectives, contained nothing in DEFRA's draft aim about waste management and not one of DEFRA's proposed seven High-Level Objectives refers to waste or secondary resource management.
DEFRA's document lists seven Objectives and contains 38 notes to the Objectives. Waste management, 0.5% GDP, is covered by 29 words in one note to one Objective. There is no reference to implementing the Landfill Directive.
There is no reference to the Government's own National Waste Strategy which DEFRA inherits from DETR. Incredible as it may be, DEFRA's proposed definition of sustainable development makes no reference to developing use of secondary resources.
Unlike the Department of Trade & Industry, DEFRA makes no reference to resource efficiency, a concept difficult to measure but which ESA has acknowledged in positive terms and which is directly relevant to sustainable progress in achieving large markets in recylates.
The failings in DEFRA's proposed aim and objectives matter not only because they suggest a low political priority for developing awareness of secondary resource management.
The omission of our industry from DEFRA's document also matters because DEFRA's Consultation Document makes it clear that DEFRA's money will follow DEFRA's aim and objectives.
This is particularly serious when Government Departments are preparing their bids to the Treasury for the forthcoming negotiations on the three year Public Spending Round.
Happily, and I am trying hard to end on a positive note, the Secretary of State has recently been much more realistic.
We agree with her that re-use, recycling and composting must be increased and we also agreed with her that the UK cannot allow itself the luxury of too easily closing down our disposal options.
Perhaps, you will know better than I how feasible this is likely to be, her comments on Combined Heat & Power may lead the way to imaginative solutions for integrating waste and secondary resource management into new housing developments.
We can only hope that her imminent Waste Summit will indeed mark tangible progress towards achievement of the National Waste Strategies and the start of the positive and sustained political leadership which will be an essential ingredient if all of us are to be enabled to achieve integrated management of waste and secondary resources. 
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