Need for new economic realism

As one of the leading recycling, renewable energy and waste management companies, Viridor has welcomed the publication of DEFRA’s report: ‘Resource Management: A catalyst for growth and productivity ’(published on February 2015).

With the general election fast approaching, it is encouraging that the Government is again recognising the opportunities a modern resource sector can bring, and the key role it will play in underpinning Britain’s economic resilience.

Ongoing multi-billion pound investment by our sector in world-class infrastructure is already providing valuable resources for UK manufacturing, enhancing resource and energy security and skilling a new generation of engineers and scientists. At the same time it provides critical support to Britain’s small businesses and global exports.

We welcome the recognition of the value that ongoing investment in critical ‘next generation’ recycling and energy recovery infrastructure can bring. Viridor for example is delivering a £1.5bn pipeline of Energy Recovery Facilities and advanced glass and polymer recycling plants.  These are vital elements in helping our local authority and business customers translate zero waste policy into practice and ensure the social infrastructure required for the future is delivered to the quality standards required.

At the same time however it is important to recognise that the resources “sector” is in a nascent state.

We welcome the strengthened resolve to prosecute to eliminate waste crime which threatens the sectors development and Britain’s economic and environmental interests.  The new partnerships established between government, police and regulators, if properly resourced, will yield positive results quickly raising quality standards and helping legitimate operators to compete effectively.

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The success of the sector is also increasingly being compromised by a “double whammy” of austerity and a prolonged decline in the value of commodities on global markets.  This is a real and significant threat to sustaining progress made to date and to the achievement of 2020 sector targets. Now is therefore the right time to reassess the opportunities and economics of a circular economy.  Put simply we need a new economic realism.

Standards

We must institutionalise and connect quality standards and costs throughout the lifecycle of products.  Many sector players have invested significantly in high-tech infrastructure solutions to meet the increasingly stringent demands of manufacturers who purchase recyclate.  However we need a renewed focus on quality at all stages and in particular in front end collections.  Poor input material caused by cuts to recycling education, awareness and enforcement is significantly impacting subsequent production costs and quality, thus increasingly undermining the economics of the industry. Furthermore it undermines the potential to achieve recycling targets.

We need to join up the value chain and create an economic model that encourages the next wave of investment in recycling technologies, perhaps via a reformed PRN system and new fiscal incentives for growth.  Without this action, we risk stepping back, not forward.

Success and ongoing development of the resources sector will come quickest from doing the things we currently do well even more efficiently and effectively. We welcome the positive emphasis of this report.”