CIWM President, Professor David Wilson, says that we in “the West” have a problem with sustainable recycling and that we need to rethink recycling to make it a “sustainable foundation” for our future circular economy…
It is clear that we in “the West” have a problem with sustainable recycling. China’s National Sword has thrown the problem into sharp focus: where are the markets for the materials we are collecting for recycling to meet the targets? And how do local authorities balance their already curtailed budgets as prices for recycled materials plummet?
The problem of volatile market prices is not new. When I started in the sector in the 70s, local scout groups collected newspapers for recycling when the market was buoyant, and stopped when prices collapsed. My 1981 textbook, which grew out of my doctorate research, pointed out that recycling was used as a buffer against short-term fluctuations in demand.
So, long-term contracts for virgin materials accounted for, perhaps, 90 percent of supply. If overall demand dropped by say five percent, the demand for recycled materials (the expendable “top-slice” of supply) would be cut by 50 percent; the price of virgin materials might dip slightly, while that for recycled materials would plunge. So, recycling rates fluctuated, with a range perhaps two- to six percent; price volatility was a nuisance, but not such a big deal for municipal solid waste management as a whole.
As people became aware of the costs to society of pollution from waste disposal, regulatory standards were introduced in the 1974 Control of Pollution Act and gradually ramped up over the next 30 years.
Our policy measures have focused mostly on increasing supply, on “pushing” recycled materials onto the market.
The rising costs of using state-of-the-art landfill and waste-to-energy led to an increase in interest in recycling, both as an alternative “sink” and also as a social “good” in its own right, by reducing resource use and energy consumption in the production of virgin materials. In other words, it was recognised that the value of recycled materials was greater than simply the market price, including “embedded” social and environmental values as well.
This “market failure” was addressed through policy measures – primarily a gradually escalating rate of landfill tax, to make the net cost of recycling more competitive; and targets – both for recycling and for diversion from landfill. Accompanying measures aimed to change people’s behaviour, to separate materials for recycling prior to collection. The results have been dramatic, with UK recycling rates increasing from around six percent to 46 percent, and those in Wales from four percent to 64 percent, over just 20 years.
But recent events suggest that we have been lucky. Our policy measures have focused mostly on increasing supply, on “pushing” recycled materials onto the market. Fortunately for us, over the same period the market has expanded and become increasingly international, thanks in large part to the rapid growth in both paper and plastics production in China since 2000 (see April 2018 Journal, page 12). Yes, prices have fluctuated over the last 20 years, but we had (until recently) managed to muddle through.
Complex Value
So where do we go from here? We are separating huge quantities of our municipal solid wastes as materials for recycling. And we aim to increase those quantities further, depending on the ambition of future recycling targets. Those materials have considerable embodied social and environmental value. They also have “technical” value: the Chinese import restrictions impose a threshold technical value in the form of a maximum acceptable level for contamination. But those social, environmental and technical values are not quantified and largely not considered in the real world, where the market price is king. Prices have taken a short-term hit in the wake of the Chinese restrictions.
Underlying prices for virgin plastics are also likely to fall in the medium-term, as two factors reinforce each other. Significant new production capacity is coming online in the US (using cheap fracked and shale gas), in response to earlier forecasts of a continuing long-term increase in demand. However, that increase appears likely to be much less than previously forecast, as European countries in particular seek to reduce the use of single-use plastics for packaging in response to public anger about plastics in the oceans.
What sort of solutions should we be analysing? One current theme is to increase the technical value of the recycled materials, for example through separation at source of individual streams rather than commingled materials. Our current model places the risk of fluctuating prices squarely on local authorities and their contractors.
To address this question, we need new ways to analyse complex value, considering not just financial but also embedded social, environmental and technical value. Help may be on the way: for the last three years, I have chaired (and many CIWM members have sat on) the Steering Committee for an interdisciplinary research project at the University of Leeds, funded jointly by the Natural Environment and Economic and Social Research Councils.
The aim has been to develop a new analytical framework, which considers all of these dimensions – Complex Value Optimisation for Resource Recovery or CVORR (see September 2017 Journal, page 66). This column had its origin in a brainstorming session with the co-project leader Costas Velis over a bottle of wine before the last Steering Committee meeting!
What sort of solutions should we be analysing? One current theme is to increase the technical value of the recycled materials, for example through separation at source of individual streams rather than commingled materials. Our current model places the risk of fluctuating prices squarely on local authorities and their contractors. We need to find ways to share that risk: on my trips around CIWM Centres and indeed in the pages of this Journal, the current recycling crisis is a hot topic.
I often hear calls for Government to take action, for example by supporting new recycling capacity within the UK. But even with support, such facilities have to compete in a global market, and many UK reprocessing companies have failed over the last decade.
The obvious place to look for answers is the companies that place on the market the products which become waste, particularly single trip packaging. It is commonly accepted that the UK’s interpretation of extended producer responsibility (EPR) for packaging is not fit for purpose (particularly for plastics), and the new Circular Economy Package is extending the scope and ambition of EPR. The complex value framework would suggest that a fundamental rethink is needed.
Producers need to meet all of the costs for collection, sorting and recycling of their products when they become wastes. They also need to ensure that markets for the recycled materials exist: that could include taking an ownership stake in the reprocessing facilities, and using a minimum percentage of those recycled materials in their products.
We need to rethink recycling to make it a sustainable foundation for our future circular economy. A good starting point is to ensure that the embodied social, environmental and technical values are considered explicitly, alongside the market price
