The circular economy: securing the supply of recycled materials

Artificially maintaining supply can be tricky. You need to provide incentives for companies to recycle in the face of a market where oversupply is preferred by policy makers. In the current recycling market, you could do this by targeting your policy to address specific problem areas such as there being no incentive for reuse, reconditioning or remanufacturing over recycling, for example.

Currently the legislation provides either no added incentive to reuse rather than recycle products, even though reuse would reduce the resources required to bring that product to market compared with recycling.

Individual targets

In the past, separating out categories with their own individual targets has helped to increase the proportion of recycling in a particular category. In 2013 the Environment Agency separated glass PRNs into Glass Remelt and Glass Aggregate, directly channelling investment into recyclers who produced remelt glass. A similar policy could also be introduced into the WEEE or batteries markets to drive reuse over recycling.

An alternative to this would be to pass control to industry and incentivise buyers of recycling evidence to procure from reuse sources, or sources with higher environmental benefits. Compliance schemes witness first-hand the tremendous good the revenue generated from Extended Producer Responsibility (EPR) regimes achieve, however consumers are often completely unaware of the contributions made by producers to the recycling system.

A giant leap forward has just been made with the launch of our Circularety platform that puts transparency into the PRN system, and we hope this will go a long way to enable producers to not only choose where they invest their PRN money, but to also communicate about it to their stakeholders. What else can be done?

Recycling targets and EPR investment

Our future targets for recycling no longer have to be set to the European standards. We could identify and target materials that either our manufactures require in the long run or are underfunded at the moment. An example of this could be a split in the plastic targets in the PRN market, with funding going towards a specific type of plastic that is currently under-recycled.

Again, there is an industry option here. Producers generally know what materials they require in the short and long run. Connecting the recycling industry with producers to create local closed loop material supply chains can achieve these aims. By allowing producers to direct their PRN, WEEE or batteries evidence revenue to a facility of their choice would allow them to directly invest in their own supply chain. Again, Circularety is helping to lead the way here.

Incentivise UK based recycling

Currently within the packaging PRN system, an unofficial incentive exists to export the waste for recycling rather than send it to a UK treatment plant and therefore for the recycled material to stay in the UK. This arises due to the way PRN’s and PERNs (Packaging waste Export Recovery Note) are issued.

PRN’s are issued on the tonnage of material that finishes the recycling process, so naturally you lose process waste. For example, if 100 tonnes go in, 95 tonnes may complete the process so 95 PRNs are generated.

PERNs are issued on the tonnage that is exported, including any contaminated and potential process waste. This means you can issue PERNs against all of the unprocessed weight – a higher number than PRNs can achieve.

This difference in regulations has led to UK recyclers arguing that the system is unfairly rigged towards exporters, with specific problems experienced in plastic.

There are two ways to solve this;

1. Government Legislation – change the legislation to remove this incentive. However, this would be really problematic for exporters. Protocols would have to be used, which are also open to individual judgement.
2. Change the market incentive so the producers (the buyers of PRNs) favour UK recycling. In the climate of environmentally aware consumers, marketing the choice of UK recycling over exported recycling could increase brand loyalty and recognition.

Incentivise consumers to engage in the process

You and I at home have no added incentive to sort our recycling and place it outside on bin day other than the social pressure to do so. It can also be irritatingly complicated and each local authority does it differently. A long term, Government led resource plan for the UK could look to set out what resources our manufacturers need so we can incentive the collection of them, harmonising collections across all local authorities and subsidise the infrastructure required to recover these resources.

How can we incentivise consumers? This is generally through fines for incorrect behaviour or rewards for the correct behaviour. We tend to favour the latter and in practice, deposit schemes that run across Europe seem to have achieved high levels of recycling. However, looking at the results of the recent plastic carrier bag ban, it seems the British public do react quite strongly to very small financial penalties. However, fines on the general population tend to be a nightmare to administer and can be political poison.

Opportunity to change

All in all, we would need to reduce or maintain the price of recycled materials to the level where they are always a better option than virgin materials for manufactures, and ensure that they are always available.

The UK now has the opportunity to change and advance its recycling industry. We need to build on the successful infrastructure that has been developed during our time as members of the EU and set our stall out and commit to helping this industry grow. Only with a strong, stable and established recycling industry can we commit to and take the next steps towards the Circular Economy.

Producer responsibility has helped us along this journey and has shown us a policy framework that has provided incentives to the recycling industry led by producer contributions. However, it’s not been perfect. Changes need to come to the Producer Responsibility regime. We believe these can be implemented through legislation and/or by industry leading the way. Whilst new legislation will surely be introduced, we want to ensure industry leads the way as solutions created by industry tend to be more productive and better at achieving their initial goals.

Over the coming years Ecosurety will be working with industry to help produce changes to our Extended Producer Responsibility regimes. To find out more about our Circularety platform and help us take the first steps towards the circular economy, please visit www.circularety.com.

---

---