Inside Track

A review of the availability risks to resources in the UK first highlighted, by Defra in late 2010, the increasing need to be more resource efficient is gaining momentum.

This is something that has been on the horizon for a while and I have been anticipating would become more and more of an issue for businesses as they face increasing costs and supply chain shocks due to ever constraining resources.

An EU consultation on resource efficiency policy found the majority believe that price of resources will increase by 2020; and in the long term Europe is likely to face shortages.

Just this week, the Commission announced, in its draft roadmap “to a resource efficient Europe”, the possibility of introducing resource efficiency targets in response to this growing concern.  However this roadmap has been criticised for its vagueness.

So is this something that we really need to be concerned about or is this something the market itself will respond to without regulatory intervention?

Defra’s report certainly paints a bleak picture of the future of resource availability and the risk to UK business.  Not only are there shortages of some vital resources in the pipeline, but there are political risks as well, with China currently holding 97% of the world’s rare earths, and continuing to stockpile.

However, with every risk, there is an opportunity to be sought.  Political risk aside, increasing demand for goods and services coupled with harder-to-reach resources will always lead to demand exceeding supply.  There is an opportunity to innovate to use alternative materials and resources that are more readily available and cheaper.

This is certainly an opportunity when innovation in the materials used in production give a company competitive advantage over another because they have more stable supply chains and cheaper costs.

And the sooner this is started the less painful any potential forthcoming legislation will be.

EEF welcome the revised Impact Assessment estimates provided by the Aldersgate Group in conjunction with WWF, The Co-operative Group and Christian Aid, published today, as providing more evidence about the costs and benefits of reporting.  EEF are not against reporting GHG emissions and agree that there are significant benefits to be gained by reporting in company reports.

EEF represents the manufacturing industry in the UK, which is already significantly burdened with other climate change policies – CRC Energy Efficiency Scheme, CCL and CCAs, and EU ETS.  This is a lot of regulatory pressure for companies to comply with; without the addition of mandatory reporting.

Indeed, some EEF members do already report their GHG emissions in company reports, and not just in the UK, but for their global operations too – and they see the benefit in doing so.  EEF agree with many of the revised costs and benefits, such as the better scope for which costs and benefits are included, but at the same time, do not see why this means that GHG reporting should be made mandatory.   

As we have already argued in our response to the Defra GHG reporting consultation earlier this year, Government has taken little to no steps towards promoting the current guidance for GHG reporting.  The up-take in GHG reporting may have only increased by 4% since 2009, but instead of immediately jumping on the regulatory bandwagon, why not sit back and think about what the barriers to up-take have been?

To me, a logical step is to make sure that the current policy instrument is working to its full potential before introducing a new approach.  Surely this is much lower cost than introducing new regulation?  It will sit better with the Government objective to reduce the regulatory burden for business.

The commitment in the Climate Change Act – to make GHG reporting mandatory by April 2012 or present evidence as to why not - is less relevant today than when it was first published.  At that time, we did not have the crowded and confusing climate change policy landscape we have today.  It was also a commitment

It should also be remembered that UK manufacturing differs from other sectors as they are more likely to be caught under these other policies.  Discounting the person-day input doesn’t really make much difference to a lot of EEF members, who already have this many person-days through CRC so additional burden is seen by them as just that, a burden with no additional benefit.

The revised benefits assumes that, year-on-year, there are savings to be made; and for a company new to energy efficiencies this is true.  Many EEF members are already working to make their sites more efficient and for some there is no possibility to go any lower – it is just the nature of what they are producing.

Yes, EEF agree there are merits in reporting on your GHG emissions and as today’s publication shows, quantifiable benefits, but I just don’t see why it needs to be made mandatory before the voluntary approach has been taken seriously.  In order to push through with mandatory reporting there needs to be stronger evidence that the current approach is not working and a policy ‘out’ will also need to be found.

First an introduction, I’m Fergus McReynolds and I have recently joined the Climate & Environment Policy Team at EEF. I have been working in the dairy sector for the last three years as the industry’s environment manager, but joined EEF half way through July. I’m looking forward to working in a dynamic industry building on the strong environmental performance of our many members.
One of my key priorities at EEF will be working on the Waste Electrical and Electronic Equipment (WEEE) Directive, where the fun starts this autumn with the second reading of the recast of the directive in the European Parliament.
I will be heading to Brussels in September to present our position to key MEPs in an effort to ensure that the directive develops in a sensible and manageable way and that producers of EEE are given the tools they need to continue to recover, reuse and recycle WEEE.
The recast has been called because despite the rules on collection and recycling set out in the current WEEE directive only one third of electrical and electronic waste in the European Union is reported as separately collected and appropriately treated.
During the first reading of the recast directive the European Parliament and the Council came to considerably different conclusions on a number of issues, which means that there is ground to be made up by both. The EU’s standard decision-making procedure, known as 'codecision', means that the European Parliament will have to agree with the Council on any new EU legislation.
The second reading will take place under the watchful eye of the Polish presidency who have already indicated the WEEE recast as a priority. It is clear that the key sticking points will be around the national requirements verses EU wide requirements and setting targets.
There are currently discrepancies between the definitions of a “producer” and their responsibilities nationally and across Europe, including whether registration happens at a national level or pan European level.  I also expect one of chief battle grounds to be whether to extend the scope of the directive to more product categories and the development of targets. Targets for WEEE collections are currently based on the amount of WEEE generated, but it has been proposed that the targets should be based on EEE (Electrical and Electronic Equipment) placed on the market. We support a target based on WEEE generated.