Inside Track

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.

Defra has today published its review of waste policies.  Announcing the publication at a CIWM event this afternoon, Secretary of State for Defra, Caroline Spelman, said:

“For too long, we’ve lagged behind the rest of Europe, although we are catching up fast. Communities and businesses can help us become a first-class zero-waste economy and unlock the real value in the goods that people no longer want.”

Although mainly focussed on domestic waste policy, there are particular aspects relating to business that EEF welcome – such as supporting energy from waste where appropriate, and for waste which cannot be recycled, and a greater focus on how business can benefit from improved resource efficiency. Of course, Defra could have been bolder in trying to address C&I waste. For too long it has been in the shadows.

I would say that on the whole this is a welcome step forward in the government’s approach to business waste. Many of the issues which have concerned business, especially smaller companies have been addressed and measures to aid collection of their waste and reduce regulation and costs are welcome. The proposals to support waste from energy that cannot be recycled is an especially bold move, although the issue of costs compared to landfill and access new capacity may remain an issue and therefore regional planning will be paramount.

We look forward to working with government to make these proposals happen.

British business can expect to save a staggering £23 billion a year through low-cost/no-cost methods simply by improving the way they use energy and water and by reducing waste, according to a new report which emerged from the environment department on Friday.

It’s a huge number. And it’s significantly higher than the £6.4 billion estimated by consultants Oakdene Hollins and Grant Thornton when they initially conducted the study in 2006. Yet the numbers keep on growing. On top of the £23bn low-cost savings, those opportunities with a payback greater than one year have been estimated at an additional £33 billion.  

We must be careful about interpreting the report literally. It was not based on any site-audit data. Nor did it use any case studies. The figures were developed by using existing data from a variety of sources. But they do serve a useful reminder that lean manufacturing and resource efficiency can potentially have a profound impact on competitiveness.

But over £55 billion worth of savings? You would have thought manufacturing, of all sectors, would be alert to those kinds of savings. But of course there are a range of factors that prevent businesses from realising the fruits of resource efficiency. The researchers in fact have created four lists of reasons. These range from access to finance to difficulties implementing changes because of the need of specialist advice to the prevalence of behavioural barriers, or because businesses simply are not aware of (or have access to) information about the costs and benefits of particular measures. 

Either way, it smarts to be told all this at the same time as the government is stripping away many of the business support schemes it had developed in an attempt to overcome these entrenched barriers. While our training on resource efficiency effectively deals with the information gaps the researchers referred to, last week, the Carbon Trust, in an address to EEF's Climate and Environment Policy Committee, confirmed it would no longer be offering its free on-site energy audits, would be discontinuing the well-received Industrial Energy Efficiency Accelerator and scrapping its 0% interest-free loans*. In short, the Carbon Trust is now offering very little (bar its frequently excellent publications) to business.

While it is true the Trust has its funding cut by £50m, it is also true that this brings its funding in line with what it received three years ago. Yes, some of the Carbon Trust’s offerings to business needed reform – but to scrap (what seems like) everything? I can’t help feel that if the Carbon Trust vacated its plush offices in central London it could a better start to address the funding “shortage” without cutting services to business. Sure this would prove to deliver greater levels of resource efficiency?

* A new “green finance deal” worth £550m has been announced over the next three years, to businesses of all sizes, from 4 April 2011 following a deal between the Carbon Trust and Siemens Financial Services Ltd. Interest rate levels have not been confirmed. See here for more information.  

It appears the government is trying to make good on its manifesto pledge to increase the proportion of tax revenues accounted for by environmental taxes.

This week Treasury commenced a unique consultation exercise on environmental taxation. It held one of a number of workshops looking at how fiscal instruments can help shape behaviour change to meet environmental policy objectives. I say unique because Treasury rarely organise events of this ilk, which are commonplace in other departments. It is, to be honest, a breath of fresh air.

We were asked what would be a “fair” environmental tax. How effective are existing environmental taxes in changing behaviour? What existing taxes could be made “greener”? And what new “green taxes were introduced?

And we were treated to not one, but two government ministers:  Economic Secretary to the Treasury Justine Greening and Chief Secretary to the Treasury, Danny Alexander. The results, we were told, are to feed into a programme of work on environmental taxes which will influence the budget and policy making beyond.

Environmental taxes have proven to be effective provided they are visible, well-targeted and with a clear trajectory which provide time to plan and adapt. If designed correctly they could prove to be a powerful incentive for change, as argued in our climate report which calls for a carbon tax to replace layers and layers of poorly connected and over-designed and costly climate change policies.

But the government must be wise to growing cynicism amongst manufacturers. Before being elected in, the Conservatives promised that any additional revenue generated from new green taxes would be used to reduce the burden of taxation elsewhere. Yet anyone in the Carbon Reduction Commitment will roll their eyes at the latter. The decision not to recycle revenues generated from the scheme means an extra £1 billion for the Chancellor’s coffers. Not a bad haul for a scheme that was originally sold to us as being revenue neutral to business.

In light of this u-turn, it is therefore not surprising that there is a healthy degree of scepticism that this exercise is just a means for additional revenue-raising. So if government genuinely wants business buy-in on this agenda it must ensure – now more than ever – that it stays true to its promise to reduce the burden elsewhere. 

Let me know what you think.

Data estimates for commercial and industrial (C&I) waste arisings in England show a 29% reduction over the last six years.  These results, released as part of a DEFRA survey, demonstrate the efforts taken by businesses to improve resource efficiency despite a floundering national waste policy.

In 2009 48 million tonnes of C&I waste was produced in England.  This compares to 68 million tonnes in 2002/03, the last time the survey was carried out.  The results also show greater levels of recycling of C&I waste (up 10% over period) and a reduction (12%) in volume of waste sent to landfill.

Whilst DEFRA is keen to show evidence that its policies are decoupling economic growth from waste production it has remained tight-lipped on C&I performance.  This is, in part, due to the fact that the method for data collection is reliant on a number of estimates, and with changes to waste classifications the results are not entirely comparable with earlier surveys in 1998/99 and 2002/03.  Equally, DEFRA remains unclear over the effect the recession has had on waste arisings. 

There is, however, common acceptance that waste is reducing and that this trend is reflected across all waste types with the exception of “discarded equipment” (i.e. waste electrical and electronic equipment).  Yet without confidence in the data it remains difficult to judge overall performance and to ensure that policies are delivering on their objectives and to time.

The survey data will undoubtedly be used to shape the government’s Waste Review which is expected in April.  However, to get a full understanding of waste trends in England the Government must get a proper grip on waste data to ensure its policies facilitate further reductions which help not hinder business.  Until this is achieved the goal of a ‘zero waste economy’ seems a long way off.

After years of the same from the Department that deals with waste within government, we may now be seeing a real shake up of this ‘stuck in the mud’ area, for the benefit of the environment and business.

One of the first things that Caroline Spelman (Environment Secretary) did in her new post within Defra, was to call for a full review of waste policy. This is welcome, as for too long government has listened too much to the waste industry and been too afraid of Brussels to really be bold on how the UK views resource use and waste.

Waste policy affects all manufacturers and is still seen by EEF members as a biggest environmental issue to their businesses. Ahead of the election in May, the Tories were committing themselves to simplifying waste policy, to enable businesses to see value in materials that are discarded. With the focus more on resource use, rather than on waste at the end of the line.

The Defra Waste Review is due to be published within the next week and will really give EEF a chance to influence future UK resource management policy. Yes I said resource management policy and not waste, as waste is the wrong word here. EEF believe that government must now develop a Resource Management Strategy.

I believe that the politicians wish this to happen, but I am less convinced that Defra Officials are willing to ‘break the mould’. At a BIS meeting yesterday (26 July 2010) on the Waste Review, I challenged a senior Defra Official for the narrow focus of only thinking about waste within the review, rather than looking wider, namely, resource use. His reply was that he sees the Waste Review as only looking at waste and anything wider than that would be too much. My clear message to Defra is that it needs to think much wider.

This may be all academic, as I believe we saw a struggle for power at this BIS meeting, between Defra and BIS, as to which department is driving the debate on waste. There was much discussion in the corridors of the meeting, that waste policy should be moved from Defra to BIS. I can see the merit in this view and certainly believe that the two departments must work closer together here, with new blood bringing in a fresh view of what could be achieved if government has the will.

In a paper published in November 2009, EEF called for the following (link below):

1. A clear and long-term resource management strategy.
2. Waste legislation and guidance must be simplified to allow business to fully contribute to sustainable waste and resource management
3. Facilitate speedy delivery of the necessary infrastructure and services to facilitate the recovery of useful resources from all waste streams.
4. Provide targeted advice and support to encourage business resource efficiency through eco-design, process re-engineering and R&D funding.
5. Encourage resource use optimisation across product/material life-cycles by the government’s ability to stimulate demand for resource efficient products.

The findings of the government review will be published in Spring 2011.

WasteStrategy2007twoyearsonFINAL_pdf_.pdf (76.50 kb)