21 February 2019

Filling the gap: Impact of the Resources and Waste Strategy

OPINION: Chris Jonas, director of consultancy firm Tolvik, looks at some of the potential implications of policies set out in the Resources and Waste Strategy.

Chris Jonas, Tolvik

When Defra issued the Resources and Waste Strategy last December (see letsrecycle.com story), a week after it also issued the rather flat 2017 local authority recycling data (see letsrecycle.com story), Tolvik, like many others, got to work with our calculators to assess the quantum and the timing of the government’s ambitions and goals.

Most of us agree that many aspects of the sector require further investment funding. New infrastructure commitments for both recycling and residual waste have been pretty quiet in the past year or so as it seems many are waiting for a bit more clarity on how the commercial drivers for investment will pan out, and if more stable cash flows will be established.

Residual waste

We decided it was time to refresh our residual waste projections in light of the strategy, recent recycling performance and what it would take for England’s recycling rates to align with the best of the best elsewhere in Europe.

We have estimated that the existing tonnage of Residual Waste in England could be reduced by 3.3Mt when the full effects of food waste reductions, consistent Household Waste collections and the Extended Producer Responsibility and Deposit Return schemes are implemented.  This is some way short of the 10Mt reduction which is set out as a goal in the Annex to the Strategy.

Impact of strategy actions on DEFRA Residual Waste forecast for England Source: Strategy annex, Tolvik analysis

By meeting the packaging recycling targets of 75% by 2030, and assuming a DRS scheme collects all containers not currently recycled, an additional 1Mt of recycling could be collected in England (1.2Mt in all UK). Food waste reductions could remove another 1.2Mt out of the English Residual Waste stream (1.4Mt for the UK) and applying consistent collection of food waste and other recyclables across all districts/boroughs, assuming a like for like property coverage as present, could yield another 1.1Mt.

“This certainly isn’t nudge theory, but if implemented as planned, is going to be exciting.”

Chris Jonas

The effects of the strategy are unlikely to be felt until at least 2023 at the earliest, judging by the depth and complexity of the consultation documents released this week, and the fundamental changes to many aspects of our collection systems. What also struck us was the quantum of costs involved and the enormous task ahead in firstly agreeing the system, then establishing the governance arrangements and then implementation of the different schemes on the ground. This certainly isn’t nudge theory (defined as small changes in environment that are easy and inexpensive to implement), but if implemented as planned, is going to be exciting.

Capacity and regionality

In the light of these updated projections we revisited the “gap” between Residual Waste tonnages and the capacity to treat it in the UK over the next 10–15 years. Based on updated projections, excluding RDF exports, in 2025 the median scenario the gap is projected to be 7.2Mt. With a much greater understanding of the future strategy direction in England the range, under different scenarios of 5.9 – 8.6Mt – is much narrower than in our previous projections.

We have also projected capacity gaps across the four identified regions and comparing this gap with the EfW capacity currently in development.

As the figure shows, whilst 30% of the UK’s capacity gap is in South England, only 15% of EfW development projects are located in South England. On the other hand, just 10% of UK capacity gap is located in North England, but it accounts for 37% of EfW capacity under development.

Filing the Gap

Later this month we are publishing our analysis and further thoughts in a new report called ‘Filling the Gap‘. Also included in the report is an assessment of the impact of declining landfill capacity in some regions and the correspondingly greater haulage distances that waste will be travelling, around the UK, to reach disposal and treatment sites.

Tolvik Consulting is a specialist provider of independent, market analysis and commercial advisory services across the waste sector. Clients include waste management companies, project finance lenders, independent developers and equity finance providers. 


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