Chris Dow, chief executive of Dagenham- based plastics recycling firm Closed Loop looks ahead to the challenges faced in the coming year.
2015 looks set to be the most challenging year in the history of the UK plastics recycling industry thanks to outdated regulations continuing to burden the industry and world oil prices falling and, as a result, reducing virgin resin prices to below those of recycled material. Many in our industry are naturally facing 2015 with pessimism and negativity. But thankfully, I’m an optimist and with great faith my view is that yes, there are huge challenges to overcome but they are not insurmountable if you are able to adopt a strong, positive vision for the future.
So what are the challenges? Thanks to outdated regulations that come from the dark ages, which provide no economic incentive for UK businesses to choose recycled material over virgin material other than a tick in the CSR box, UKresource.com has no real value. Currently low priced fossil fuels are pushing down the price of virgin plastic leaving recycled material languishing behind.
Unfortunately, in these times of austerity, economics threatens to take over from the well being of our environment and the current situation is truly testing the moral compass of Britain’s big brands. Do they do the right thing and plump for maximising the country’s existing resources and with it grow Britain’s circular economy? Or do they choose their materials based on price alone – with virgin plastic winning in the cost stakes?
Currently mentioning carbon footprint puts less than a 10th of a penny on a bottle of drink but that won’t always be the case. Because our world is changing and the long term view in terms of oil and gas supply doesn’t look great. The sun might be shining today, but the storm is coming and we do all need to get on the ark.
Thankfully, there are visionaries out there who understand that whilst oil prices are low now, in the not to distant future – five years, one year even – prices will rise again and it is worth the gamble on oil prices now to reap the rewards later. The UK dairy industry is one such visionary body. Their Dairy Roadmap is driving the demand for recycled material and companies in this sector recognise this and are prepared to stay the course now in order to benefit in the long term.
But not everyone feels the same way and that means that quite simply, our inability to put environment over economics means we are simply pushing the problem down a generation. Never more has the nurturing of the green economy been necessary. So if our government politicians and fellow business leaders are serious about wanting a circular economy, they really need to earn it.
All of our hopes of course are pinned on the outcome of the May 2015 General Election. Whilst the current government has made a small number of concessions in the right direction, the bulk of the work is still to do. But the bottom line is that true green measures still scare many policy makers and the circular economy is seen as a cost not a benefit.
Setting aside environmental concerns, the economic success or failure of plastics recycling relies on two variables as we know: the cost of the raw materials used to make virgin plastic, petroleum and natural gas, and the cost of recycling versus the cost of disposal, which fluctuates. Natural resources, gas and oil are at an all time low at the moment and it is testing government and big brand environmental credentials.
More than ever, in a period of low priced fossil fuel, we as an industry and the government that leads us need to support and intervene in the circular economy. Indeed, ‘Resource management’ and ‘circular economy’ are terms that regularly trip off the tongue of politicians from all parties. Despite this, having announced their priorities ahead of the next general election, none of the main political parties seem to have given them the priority they rightly deserve. If industry bodies and ministers continue to sit on the fence and don’t maintain a level playing field, billions of pounds of investment will literally be wasted and the green economy will be laid waste with a flood of cheap natural resources.
If the current and future policy makers are serious about managing our world’s finite resource they need to put in place measures which incentivise the use of current resource. Our industry needs to be incubated correctly and the policy needs to be modernised to support future generations.
We understand that British businesses don’t run on good will, they need to be incentivised to drive the green economy. Who will stand up and be counted? What is happening now is only pushing the problem into the next generation and not solving issues that long term – even mid-term – will not go away.
What we need going forward then is the political will – across all parties and whatever the outcome of the next general election – to continue laying the foundations for the future of our industry.
After all, one day we will certainly have a green economy but it is a decision by our leaders as to whether we choose it or it is inflicted on us at a hideous environmental cost.
So looking ahead to 2015, top of our New Year wish list are:
- Stop CSR box-ticking by providing real economic incentives for packaging producers and brand owners to use recycled content instead of virgin material – PRN reform is one answer
- Increase funding to the Environment Agency to ensure greater enforcement of existing regulations that are designed to stamp out illegal waste exports
- Encourage consumers to recycle and local authorities to collect more plastic bottles in order to provide enough feedstock for the UK’s circular economy