Commercial waste service “zoning” - report identifies areas of concern

Phil Conran OBE, Mar 15, 2023

Phil Conran OBE, looks at the recent ESA Zoning report, and the concerns that it raises with regards to the viability, costs and environmental impact of the governments proposal as a possible route to reducing environmental emissions and costs to businesses

The Circular Economy Route Map Consultation issued by the Scottish Government in May 2022 identified zoning as a possible route to reduce environmental emissions and reduce costs to businesses through collaborative procurement. To consider whether these benefits could be achieved, the ESA commissioned a study by consultants 360 Environmental Ltd to investigate existing examples in other countries and the potential implications of application in the UK, through engagement with a range of stakeholders and the modelling of costs and impacts.

The modelling for this paper focussed on Glasgow as being a typical urban area under one local authority that both the Scottish consultation and the Defra EPR and Consistency consultations indicated to be the primary type of area to which zoning might be applied. The outcomes of the research are therefore considered to be applicable to any urban areas that might consider zoning for the future.

The modelling indicated that whilst a single operator in a franchise zone area could lead to a reduced environmental impact through fewer HGVs operating in the same area, the potential savings were limited due to the demand by business for flexibility in their collection arrangements. As the collection vehicles would also fill up more quickly, there would be the need for more disposal movements which in itself, would be heavily dependent on disposal point availability. This highlighted the potential impact on local waste companies that were unsuccessful in bidding for a zone and that would be likely to have to close down not only their collection service, but also any local facilities they operated.

Examples of franchise zoning in the USA indicated some key concerns. In Los Angeles, where zones exclusive to single operators have been operating since 2017, costs for all business waste producers have risen significantly. Implementation took 10 years with huge disruption to waste producers for the first 6 months as the system settled down. New York has seen a similar period of implementation with multi-operator franchises due to commence in 2022, but the bidding process has led to several delays and the city is now re-considering its application.

The UK has a mature waste market which allows both national and local waste operators to invest and innovate in a competitive environment to ensure that waste producers have access to the type of service they require. This is especially important for companies that operate on a national level and that look for a one-stop solution to their needs. The investigation identified strong concerns from businesses about local monopolies that would result from zoning and about being forced to use a single operator. Business surveys have indicated that service levels are a higher priority than cost for many companies and strong fears were expressed about the inability to control service where a single operator was imposed under a zoning agreement.

The report identifies many other areas of concern over the implementation of zoning but also considered opportunities to move towards a more efficient market place such as improved national regulatory requirements and enforcement and setting of local efficiency standards such as the introduction of low-emission vehicles.

Overall, the report concluded that the implementation of zoning would lead to severe disruption and increased costs for businesses, the demise of a large proportion of the local waste industry - with the subsequent loss of options for future a- nd little evidence of any benefit either for reduced waste charges or environmental impact.