FDBusiness.com

Fixing the UK’s broken economy may take some time. However, there’s one sector that’s growing: waste management. As Simeon Goldstein finds, the UK has been home to some multi-million pound investments

Recession: it’s the word that’s been looming over the UK (and the world) for the best part of five years. And just when we thought things might get better, Britain dipped into recession again this year. Unless there’s been some kind of economic miracle, at the time you’re reading this then not much has changed.

But there’s one area that has been a success story for the UK in the past decade and it’s another ‘r’ word – recycling. And it’s an area where massive investments are being made, resulting in collection and reprocessing improvements. There are several driving factors in going greener but could this sector actually give the UK’s flagging economy a much needed shot in the arm? And could further growth face obstacles?

While each packaging material faces different challenges, there are some common themes, with the search for quality being at the top of the list. Waste regulations and steadily increasing recycling targets have clearly been a major impetus for increased recycling and there has also been a wealth of brands and retailers looking to increase the recycled content of their packaging. As well as the green argument, there is also, then, a strong business case for investing in recycling.

“With the UK economy in a continuing state of difficulty, more traditional investment routes have become less attractive as they do not offer the returns investors have come to expect,” says Bernard Chase, purchasing director at Regain Polymers. “Increasingly, investors are seeking alternative, growing and emerging markets in which to invest and recycling is one of these.”

Creating jobs

Plastics have been one area seeing a significant investment in recycling operations, through names such as Regain, Eco Plastics, and Closed Loop. Closed Loop non-executive director Paul Levett says: “There are big benefits from investing in recycling. The facilities create jobs and, if we are reprocessing in the UK, we reduce the amount of virgin plastics that we have to import.”

The potential for UK manufacturing is highlighted by Spanish corrugated firm SAICA, which has also spent heavily on reprocessing, investing £300m in a recycled paper mill near Manchester as well as buying a series of waste management firms to supply the material to the mill. “Investment in the green economy is set to become a major factor in UK economic growth,” says a spokesperson for waste management arm SAICA Natur. “The UK currently exports up to 50% of paper that is recovered, which means there is an excellent source for our materials – paper fibres. Much of this recovered paper is segregated at source meaning that UK businesses are producing some of the best quality material anywhere in Europe.”

Reducing the dependence on imported materials and overseas reprocessing is clearly a strong argument in favour of investing in UK facilities and there are concerns that the current packaging waste system, through the use of packaging recovery notes (PRNs), does not promote local reprocessing. Closed Loop’s Levett says:

“Greater transparency in terms of exporting materials would be welcomed so that the public can see where materials are sent. The PRN system gives a financial incentive to export and it would be good if there was more incentive for recycling in the UK.”

Being able to recover material locally has also been an issue for beverage cartons. In June, the Alliance for Beverage Cartons and the Environment (ACE) UK signed an agreement with Sonoco to establish the country’s first carton reprocessing plant, which helps build on its recent success in pushing up collection rates. ACE UK chief executive Richard Hands says: “We can create better market value because we are not exporting the material to mainland Europe. If we can create better value for the material, it means local authorities and waste disposal authorities can avoid landfill.”

But there are still concerns surrounding the material that is collected for reprocessing and the effect that has on the ability to increase the recycled content of packaging. Jonathan Short, managing director of recycler Eco Plastics, suggests that part of the problem is that some packages are not made to be recyclable. “A PET bottle with a PVC sleeve is, for us, the worst kind of contamination,” he says. “There’s no reason why a PET bottle can’t have a PP or LDPE sleeve.” Contamination is similarly an issue for glass packaging manufacturers. While green glass packaging has an average of 76% recycled content, when it comes to amber glass, the figure falls to 20%.

“Customers demand glass of ever higher quality for their products, yet the fragmented nature of the UK’s collection infrastructure works against the supply of quality cullet, particularly when comingled systems are used,” says Tim Neal, environmental regulatory, policy and audit manager at O-I Europe.

The varying nature of collection systems by UK local authorities is an issue that is often raised when it comes to identifying factors hindering UK recycling. There are concerns that consumers might put the wrong sort of packaging in the recycling bin or not recycle something that should be recycled. “We do need a level of consistency to collections, a general direction that local authorities can then adapt to suit their agenda,” says Bryan Glasper, group sustainability manager at RPC. “Packaging has been positively active when it comes to recycling, but it is a challenge with the government’s policy of localism.”

While consistency would undoubtedly help, no change to the current political situation seems likely. Educating consumers to make sure they are recycling correctly is, therefore, crucial. “We have to work with the different systems and we’ve seen it can work. There are ways and means to get the message across,” says Rick Hindley, executive director of recycling body Alupro.

Changing behaviour

While much of metal packaging is consumed at home, Alupro has worked in recent years on recovering drinks cans from offices and other public places. “There’s increased demand for scrap and while campaigns such as Every Can Counts are encouraging on-the-go recycling, it’s also reinforcing the message for recycling at home. It’s all about behaviour change,” says Hindley.

Tim Price, national commercial director at DS Smith Recycling, echoes this view. “It’s perhaps easier to recycle big volumes from supermarkets, for example, but more challenging when it comes to smaller businesses and households. The quality of the material that we recover is key in terms of what we can feed into the production process and better communications to households will help improve that.”

Marcus Gover, director of closed loop economy at Wrap, continues that, in terms of getting the recycling system right, it’s important to think about the entire supply chain. “What’s important is the outcome. If you can get a plastic bottle collected and presented to the reprocessor, it doesn’t really matter how it’s done,” he says.

Gover points to plastic film waste trials with retailers as an example of doing things differently. “Retailers collected films at the front of the store and handled them using their infrastructure. They then made products with them so that customers could see how the material was being used,” he says. Finding new ways to do things, while respecting the waste hierarchy, is crucial to boost recycling.
“We have to be practical and the fact is that we are recovering more material than can be recovered in the UK,” says DS Smith’s Price. “Energy from Waste (EfW) has its part to play and it can feed into the energy supply.”

DS Smith has operated an EfW facility at its Kemsley mill for more than a decade and has recently obtained planning permission for a sustainable energy plant that will help reduce its dependence on fossil fuels. At the same time, it will also create employment opportunities and supply energy to the National Grid. EfW could also be a good alternative stream for plastics that cannot be handled by existing infrastructure. “There could be plastics that are not economical to recycle and EfW will play a part in avoiding landfill,” says RPC’s Glasper.

A final ingredient in the UK’s recycling recipe is the brand owners and retailers. Through corporate social responsibility and environment plans, they have helped raise awareness of the need to recycle. Charlie Devine, head of resource management at Zero Waste Scotland, says: “People respect what big brands do and the brands are also good at telling consumers what they are doing, which can help change behaviour. They also create a market for the material to come back through the system.”

Brands have also lent their weight to investments in infrastructure such as Coca-Cola’s joint-venture with Eco Plastics. “At the moment, it’s difficult to raise money and having a brand owner on board has helped the investment,” says Eco Plastics’ Short.
Investments in recycling seem set to continue. But there is still a need to iron out a few issues, which, for the most part, means striving for quality. “Quality is key,” continues Short. “It’s not easy to bring in rubbish and turn it into a quality result and yet we are doing it on a consistent basis. We’re also adding value, creating jobs and, ultimately, wealth by investing in manufacturing.”

Recycling, then, is not just good for the environment; it’s good for the economy, too.

————————————————————————

Coca -Cola’s recycling revolution

One of the more eye-catching developments in recycling this year came from the soft drinks behemoth Coca-Cola. The multinational linked up with Eco Plastics to create Continuum Recycling, a joint venture that has created a £15m plastic bottle recycling facility.
Officially launched in May, the plant is based in Lincolnshire and has been billed as a “game changer” in the plastics recycling sector. Used plastic packaging is sorted and reprocessed domestically and returns to UK stores as part of another bottle.

The plant has already been very busy. This summer it recycled 10.5m clear plastic bottles collected from the London 2012 Olympic and Paralympic Games. Coca-Cola says that it will result in 42m bottles going back on the shelves, each containing 25% recycled PET. The company also estimates that it has saved some 310 tonnes of carbon emissions.

Simon Baldry, managing director of Coca-Cola Enterprises in GB, explains: “We always saw the Games as an important catalyst for our ongoing efforts to build a low carbon, zero waste business here in the UK. I’m delighted that through Continuum Recycling we have been able to recycle enough material from Olympic venues to use in 42m new PET bottles within just six weeks of people throwing them away. This is an important milestone and shows we are serious about setting the industry standard for sustainable packaging in this country.”

———————————————————————————–

Montreal’s recycling scheme

Homeless people searching in bins are, unfortunately, a fairly common sight in most cities around the world. In areas where there is a packaging deposit scheme in place, this is perhaps also fuelled by used containers being a source of income.

The Canadian province of Quebec runs such a scheme to encourage packaging recycling, but estimates that more than 400m refundable containers do not make it back into the recovery system. Rather, they end up in the bin.

In July this year, though, Montreal-based Boissons Gazeuses Environment (BGE), a nonprofit organisation set up by the Quebec soft drinks industry to support the deposit system, launched a new project to help address both these issues: Action Vélo Cité. The project involves supplying bicycles with carts to homeless people, who will then pedal around the city centre collecting containers for recycling. As well as boosting collection rates, the project helps the “cycling collectors” who receive a fixed salary.

“We are very proud of this collection project,” says Normand Bisson, BGE director of finance and operations. “By adding a social element to our activities, we are helping people in difficulty get back onto their feet while we pursue our environmental goals.”

BGE is also planning to put extra bins on Montreal’s busiest streets and to open a container depot in the city centre to make it easy for consumers to drop off used packaging.