West Midlands Commercial and Industrial Waste - Opportunities Midlands Commercial and... · West...

Final Report

West Midlands Commercial and Industrial Waste - Opportunities for Recycling and Recovery

This report presents a summary of research carried out between January – February 2010 into the current and likely future status of waste arisings and waste treatment from the West Midlands Commercial and Industrial (C&I) sectors.

Project code: AWM500 ISBN: Research date: Jan-Feb 2010 Date: May 2010

WRAP’s vision is a world without waste, where resources are used sustainably. We work with businesses and individuals to help them reap the benefits of reducing waste, develop sustainable products and use resources in an efficient way. Find out more at www.wrap.org.uk

Written by: Duncan Yellen, Bob Bailey, Quantum Strategy & Technology

Front cover photography: Forge Recycling – Lawrence Recycling and Waste Management’s materials recycling facility WRAP and Quantum Strategy & Technology believe the content of this report to be correct as at the date of writing. However, factors such as prices, levels of recycled content and regulatory requirements are subject to change and users of the report should check with their suppliers to confirm the current situation. In addition, care should be taken in using any of the cost information provided as it is based upon numerous project-specific assumptions (such as scale, location, tender context, etc.). The report does not claim to be exhaustive, nor does it claim to cover all relevant products and specifications available on the market. While steps have been taken to ensure accuracy, WRAP cannot accept responsibility or be held liable to any person for any loss or damage arising out of or in connection with this information being inaccurate, incomplete or misleading. It is the responsibility of the potential user of a material or product to consult with the supplier or manufacturer and ascertain whether a particular product will satisfy their specific requirements. The listing or featuring of a particular product or company does not constitute an endorsement by WRAP and WRAP cannot guarantee the performance of individual products or materials. This material is copyrighted. It may be reproduced free of charge subject to the material being accurate and not used in a misleading context. The source of the material must be identified and the copyright status acknowledged. This material must not be used to endorse or used to suggest WRAP’s endorsement of a commercial product or service. For more detail, please refer to WRAP’s Terms & Conditions on its web site: www.wrap.org.uk

West Midlands Commercial and Industrial Waste - Opportunities for Recycling and Recovery 1

Executive summary A waste capacity study carried out jointly by Advantage West Midlands (AWM) and the Regional Technical Advisory Body on Waste (RTAB) forecasts that by 2020/21 the West Midlands (WM) will have a significant waste infrastructure capacity gap. AWM is particularly concerned about commercial and industrial waste (C&I), which can cost a business 4% of turnover in terms of disposal costs. If waste infrastructure is not in place to tackle the waste coming from business, then the increasing expense of disposal could have a serious effect on business profitability for the region. In 2009, AWM therefore developed a Waste Infrastructure Development Initiative which was designed to contribute 320,000 tonnes of C&I waste diversion by 2011/12 at an overall cost of £5.4 million. As part of this Initiative, WRAP (Waste & Resources Action Programme) received funding from AWM to deliver a Programme of support to recycling businesses in the West Midlands. The focus is on increasing collections of waste material, developing recycling infrastructure and promoting the use of recycled materials in manufacturing with the overall aim of helping to close the capacity gap referred to above. The WRAP/AWM Programme, which is a package of support, including grants, practical advice and business development services has now been running for a year and this research and subsequent workshop review how the C&I waste sector in the West Midlands (WM) has changed during that period and what the major opportunities and barriers are to increasing collection, recycling and recovery of C&I waste in the region. This report presents a summary of research carried out between January – February 2010 into the current and likely future status of waste arisings and waste treatment from the West Midlands Commercial and Industrial (C&I) sectors. To research the waste flows from these sectors, three approaches have been employed:

A desk review of available literature on waste both from a regional perspective and where information is

lacking, from a national perspective

Telephone interviews with representatives from the private sector reprocessors, waste collectors and

waste operatives plus representatives from the public sector

Correlation with our own in-house experience of the current status of C&I waste reprocessing both in

the West Midlands and in England

Following on from the desk research over 100 organisations were contacted, including 94 companies operating in the W Midlands waste sector to identify whether the desk research correctly reflected the position being seen by the waste operators. The findings are reviewed in the following sections and some initial conclusions are drawn as to the current “gap” in waste handling in the region, the likely trend in this gap over the next four years for some of the main waste streams and suggestions for some initiatives which might help reduce this gap. This information was reported to a group of senior waste operatives drawn predominantly from the private sector at a presentation and discussion session on 23rd March 2010 and the results of this session along with this report have been used to help inform the direction of further support to reduce the waste gap in the West Midlands. The results of the workshop are presented in section 4.


The research shows that by the end of March 2014, the WRAP/AWM Programme will have contributed to closing the gap by around 11% (or more depending on growth) of waste arising but that waste arising in these material streams may have grown from 3,610,000 to 4,000,000 (growth accounts for ~10% of waste arising tonnage in 2014). Thus the efforts already made by WRAP may reduce the gap in 2014 for the materials analysed to between 1.1 and 1.45 M tonnes from 1.55 M tonnes today. Clearly the food gap will have been significantly eroded and may not even exist at all. It is clear that many factors will affect the actual future gap, including UK economic growth, export growth and changes in production techniques. These have not been estimated here. Key materials still being sent to landfill are mixed plastic, low grade wood waste, paper and card and food waste. The other real area of concern was shown to be collection of waste from small businesses and the segregation of that waste. Feedback from the workshops covered a range of barriers and opportunities and what support was required to address them. The main points raised focused on businesses wanting to remove, as far as possible, the volatility of the markets for reprocessed materials. There is strong support for the idea of brokering relationships between collectors, further processors and end markets to encourage more stable supply chains. There was support for the idea of co-location and resource recovery parks facilitated by AWM / WRAP intervention in planning and permitting strategy. Businesses reported a major issue with contamination of recyclable materials on collection. This was mainly due to food waste but also other types of mixed material contamination. They were concerns about the difficulties of securing commercial finance for new technology as it is not recognised by lenders. Skills in the industry were also seen as a potential barrier.


Contents 1.0 Waste Arisings and Treatment from West Midlands C & I ....................................................... 4

1.1 C & I Waste Arisings in the West Midlands ..............................................................................4 1.1.1 Plastics.....................................................................................................................7 1.1.2 Food Waste ..............................................................................................................7 1.1.3 Glass........................................................................................................................7 1.1.4 Paper and Card.........................................................................................................7 1.1.5 Wood .......................................................................................................................8 1.1.6 WEEE.......................................................................................................................8 1.1.7 Textiles ....................................................................................................................8 1.1.8 Niche Waste Streams: ...............................................................................................8

1.2 Current Treatment Gap..........................................................................................................9 2.0 Research Results.................................................................................................................... 13

2.1 Private Sector Views ............................................................................................................13 2.1.1 Waste transfer and skip hire operators:....................................................................13 2.1.2 Recyclers & reprocessors:........................................................................................14

2.2 Pricing and Future Investment .............................................................................................15 2.2.1 Current Developments.............................................................................................15 2.2.2 Possible Future Developments .................................................................................15 2.2.3 Plastic ....................................................................................................................15 2.2.4 WEEE.....................................................................................................................16 2.2.5 Food (and RDF) ......................................................................................................16 2.2.6 Paper, Card, Wood and Glass ..................................................................................16 2.2.7 Analysis..................................................................................................................17

2.3 Implications for RDF ............................................................................................................19 2.4 Public Sector Views..............................................................................................................20

3.0 Notes from the Workshop ...................................................................................................... 20 3.1 Key Issues & Initiatives........................................................................................................20

4.0 Conclusions ............................................................................................................................ 25


1.0 Waste Arisings and Treatment from West Midlands C & I In this section we attempt to identify the treatment gap by material for C and I waste streams in the West Midlands. In doing this we try to look specifically at the key material wastes identified during our research, namely plastics, food, paper and card, glass, WEEE, Wood and Textiles. First we look at the waste arising from commerce and industry, from this we deduct how much is landfilled, the remainder is assumed to be how much is treated, recycled, or exported either to another region or internationally. Then we look at trends in waste arising and the projected increased treatment likely to come on stream to identify whether this gap is likely to grow or shrink. 1.1 C & I Waste Arisings in the West Midlands Data on Commercial and Industrial waste arisings is currently likely to be an estimate rather than an accurate figure. Data is not consistently gathered and is generally old and obscured with cross over data from municipal waste streams1. In addition, some waste is recycled without ever appearing in a waste data assessment (e.g. re-used off cuts, food waste spread on land etc). With this caveat we have researched the best available estimates for the West Midlands region. The following data sources have been identified:

Environment Agency C&I survey 2002/3 broken down by regional data

West Midlands Regional Spatial Strategy (WMRSS) (2004) and subsequent updates

ADAS National Study into Waste Arisings

SLR survey into C&I waste in the West Midlands (using both the EA and WMRSS data to perform further

analysis)

Enviros Report (In preparation)

WRAP Material Reports

The best data available for waste in the West Midlands comes from the SLR work for Advantage West Midlands. This gives excellent data for material going to landfill in 2008. However this covers both the municipal and C and I waste stream. Taking a very approximate 50% split2 between C and I and municipal waste this gives waste going to landfill from C and I as follows:

Material Landfilled Plastic 240,000 tonnes Glass 85,000 tonnes WEEE 25,000 tonnes Organics 390,000 tonnes Aggregates 150,000 tonnes Paper & Card 560,000 tonnes Textiles 35,000 tonnes

The data has been extrapolated for aggregates based on the miscellaneous non combustible sector shown below. 1 DEFRA have announced a new contract to look at C & I waste arisings and the results should be in at the end of the year

2 An exact split is difficult. We estimate that MSW waste arisings are 2.6 M tonnes based on a population of 5.26 million and average household waste of 500kg per person (waste watch). Of this 2.6M 31% (DEFRA 2007) is recycled giving 1.8 M tonnes to landfill. SLR estimate 3.9 M tonnes of MSW and C and I landfill per annum – thus approx a 50/50 split between the two.


Unfortunately, whilst the data for landfill can be relied on at source (with the caveat of not knowing whether it is municipal or C and I) as we have seen above there is little solid data for material-specific waste arisings with estimates for only around 1/3 of the total waste stream. The EA data from 2002/3 categorises the waste into broad categories such as ‘non-metallic’ and ‘mixed waste’ thus making it difficult to identify the quantities of specific materials such as plastics, glass, food, ‘small WEEE’ and ‘plasterboard’ etc which are the main focus of this study. Below we provide our own estimates of waste streams by material based on best available data. The following table summarises the key findings of the ADAS report which gives the most comprehensive data available for waste arising. Note that this data represents an underestimate as it excludes data from SMEs with 1-5 employees. The largest categories are mixed waste, Non metallic waste and Mineral Waste:


food drink tobacco

chemical

sludge

WEEE

Healthcare

Metal

Mineral

Mixed

Non Metallic

Taking together all the varying estimates the average waste arising is around 7 Million Tonnes of C and I waste with the Environment Agency estimating a split of between 4.25 million tonnes of industrial waste and 3 million tonnes of commercial waste. Unfortunately, as in the ADAS data, the waste is not split by material. For industrial waste, the E.A provide waste content analysis based on a production survey from 2000. This gives some information on waste flow but only separates out paper and card (4.5% implies 190,000 tonnes) and food (4% implies 175,000 tonnes) as individual material streams. Thus as a first estimate for some of the key waste materials we have:


Material Tonnage Source Plastic 490,000 tonnes SLR Glass 250,000 tonnes Quantum WEEE 180,000 tonnes SLR Food 393,000 tonnes ADAS Paper & Card 1,420,000 WRAP Wood 300,000 tonnes WRAP Textiles 70,000 tonnes Quantum Aggregates **

We have not attempted to estimate the aggregates waste arising as this was not seen as a major focus for the study. 1.1.1 Plastics SLR estimate total waste arisings of 491,000. In previous studies (in Yorkshire and the North West) we have found that up to 80% of the non metallic waste stream is recycled although this figure is higher than it will be for plastic as it includes paper and card waste. Anecdotally, working with reprocessors in all three regions, the availability of plastic waste in the waste stream heading to landfill is much higher in the W Midlands than in Yorkshire or the North West. We would estimate that as much as 50% may still be available for recycling in the West Midlands giving a total available of up to 250,000 tonnes per annum. Giving 490,000 tonnes arising – with around half currently being recycled and there being a treatment gap of around 250,000 tonnes. 1.1.2 Food Waste ADAS estimated 393,000 tonnes of animal and vegetable waste arisings in the West Midlands. It is clear both from the data above and from our own work with waste transfer stations and landfill sites that much of this waste is destined for landfill. The treatment gap for the West Midlands is currently estimated to be 434,000 tonnes (including domestic waste). It is sensible to look at splitting out C and I waste from domestic waste in this area since collection costs can be high and the need is to identify concentrated waste sources if the aim is to cost effectively collect and treat the waste. However, much of the waste produced by food processing plants and breweries is already sold for animal food or spread on the land. The SLR data suggests 390,000 tonnes for C and I waste which is probably an over estimate so we will use a conservative estimate of 300,000 tonnes. We would urge particular caution in relying on data in this area and encourage further on the ground research to gain a truer picture. 1.1.3 Glass We have received some anecdotal evidence that significant tonnages of glass are heading to landfill in the West Midlands. This appears to be due to the large distance involved in getting glass to recycling centres at present. Accurate figures for C and I arisings are not available but there appears to be around 4 million tones of container and flat glass used in the UK annually with around 1.5 million tones currently recycled. Thus there may be around 250,000 tonnes going to landfill. Much of this will be domestic waste, with perhaps 90,000 tonnes coming from C and I. 1.1.4 Paper and Card According to WRAP, nationally around 12.5 million tones of paper are consumed annually in the UK (which equates well with the 1,420,000 tonne estimate for the W Midlands3) and 8 million tones recovered. Of the 4.5 Million tones remaining, a large amount will go to EfW and the remainder is often commingled to the extent that MBT is required to remove it from the waste-stream prior to landfill. Some paper and card is clearly still going to landfill and this is now mostly from SMEs who have either no space or no inclination to separate from their general waste. Additionally some waste is heavily food contaminated.

3 Estimated from ADAS and EA data for commercial and industrial waste in the W.Mids


Visits to skip hire, MRFs and other waste operator sites do not highlight any great opportunity in this area and we estimate that the available tonnage in this area whilst quite large is very diffuse. We would estimate around 25-50,000 tonnes in the region but split equally between the regions SME community. The SLR data suggests a much higher quantity ending up in landfill – this may be either from the municipal stream or being hard to separate from the C and I waste stream. 1.1.5 Wood In 2005 WRAP estimated wood waste from the C and I sector to be around 4.5 M tonnes, of which 1.1 M tones is panel board manufacturing waste which is burnt on site to generate heat. Thus there may be around 3.4 M tones throughout the country suggesting perhaps 300,000 tonnes in the W Midlands. How much of this is ending up in landfill is unclear but discussions with landfill operators suggest that significant tonnages remain to be separated out. Without better data we assume 50% recovery at present. 1.1.6 WEEE SLR estimate 182,000 tonnes of WEEE for the West Midlands. However this market appears to be well served by reprocessors. Items such as electric cookers have significant scrap value and these can be catered for by traditional metal recyclers. More complicated items such as fridges and electronic games need specialist attentions but these are also often treated either within the region or in other regions as they still hold significant value once separated into metal and plastic. Evidence from our research suggests that perhaps 20% heads for landfill representing around 25 - 35,000 tonnes per annum. 1.1.7 Textiles There are no good reports on accurate C and I waste arising data for textiles. The Market Transformation Programme summarized the available research in 2005 and concluded that municipal textile waste is around 700,000 tonnes. Waste online estimated total textile waste as over 1 million tones. As an overestimate we assume here 700,000 tonnes for the UK and rounding down 70,000 tonnes for the West Midlands. This is probably an overestimate but no better data is available. It should be noted that, whatever the figure, good quality textile waste is sought after, with door step theft of charity textile bags becoming increasingly common. 1.1.8 Niche Waste Streams: Only two niche waste streams have arisen during our research: Nappies – Nurseries and hospitals can generate significant tonnages of nappies and adult sanitation waste. 3 billion nappies (up to 1 million tonnes) are thrown away each year, although most of this will be in the domestic waste stream. Up to 50,000 tonnes could be in the commercial waste stream with perhaps 5,000 tonnes in the West Midlands. Plasterboard – WRAP estimate 300,000 tonnes of waste plasterboard is generated each year. However most of this will be in the C and D waste stream. Some interviewees are still landfilling plasterboard under the old “10%” rule and thus it is possible that plasterboard may arise as an issue in the future.


1.2 Current Treatment Gap Given the data identified above our estimates for the current treatment Gap purely for the material streams of interest in the West Midlands Commercial and Industrial waste stream is as follows:

Material Waste Arising Landfilled (The Gap)

Treated/Exported

Plastic 490,000 240,000 250,000

Glass 250,000 90,000 160,000

WEEE 180,000 30,000 150,000

Food 400,000 300,000 100,000

Paper & Card 1,420,000 560,000 882,000

Wood 300,000 150,000 150,000

Textiles 70,000 35,000 35,000

Aggregates ot estimated 150,000 Not calculated

1.3 Trends Taking all the study information together, the C and I waste arising appears to have been steady at around 7 million tonnes over the past decade. The WMRSS data provides the best available estimates of C&I wastes produced in the West midlands to date, and forecasts an increase of 3.5 million tonnes in the C&I sector between 2007-2008 and 2020-2021. Some of the studies have looked at growth scenarios but these were done before the current financial downturn and now look to overestimate growth, certainly in the short term. To examine the potential growth to the end of the support programme we have therefore developed a more modest growth scenario, with no growth until the end of 2010 followed by 3% growth per annum in waste arising as per the RSS from 2011 onwards. To take these growth estimates and look at whether the gap in dealing with these materials is growing or shrinking we need to look at the likely changes in treatment over the next 5 years. This will encompass change already generated by WRAP, change likely to happen without WRAP's direct input and finally change still to be generated by WRAP’s input. Firstly we look at change already generated by the WRAP programme. WRAP has already had some success in securing extra diversion from landfill and this initial success is shown in the charts on the following pages. It is to be expected that WRAP will have further success in securing waste diversion but it should be noted that at present, even with no growth there will still be a significant gap in the West Midlands as follows:


Material 2014 Arising Treated /

Exported WRAP Support in 2014

Gap in 2014 2014 gap no growth

Plastic 550,000 250,000 47,633 252,367 202,367

Glass 280,000 160,000 375 119,625 89,625

WEEE 200,000 150,000 5,154 44,846 24,846

Food 450,000 100,000 242000 108,000 58,000

Paper & Card 1,600,000 882,000 23,730 694,270 514,270

Wood 340,000 150,000 8,400 181,600 141,600

Textiles 80,000 35,000 1000 44,000 34,000

Aggregates 500,0004 150,000 127135 22,865 22,865

Total 4,000,000 1,877,000 455,427 1,467,573 1,087,573

% 47% 11%

Thus by the end of the programme we expect that the WRAP programme will have contributed to closing the gap by around 11% (or more depending on growth) of waste arising but that waste arising in these material streams may have grown from 3,610,000 to 4,000,000 (growth accounts for ~10% of waste arising tonnage in 2014). Thus the efforts already made by WRAP may reduce the gap in 2014 for the materials analysed to between 1.1 and 1.45 M tonnes from 1.55 M tonnes today. Clearly the food gap will have been significantly eroded and may not even exist at all. It is clear that many factors will affect the actual future gap, including UK economic growth, export growth and changes in production techniques. These have not been estimated here. Looking at some of the other individual waste streams: Wood

0

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2008 2009 2010 2011 2012 2013 2014

Year

WRAP Support

Arising

Base Treatment

Total Treatment

Gap

For wood – even with 3% growth from 2011 the gap should narrow

4 Value for illustration only – not actually researched.


Plastics

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200000

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400000

500000

600000

2008 2009 2010 2011 2012 2013 2014

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Arising

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Total Treatment

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The gap will narrow for plastic if growth is less than 2% p.a. from 2011 onwards Paper & Card

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2008 2009 2010 2011 2012 2013 2014

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Arising

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The gap will narrow for paper if growth is less than 0.5% p.a. from 2011 onwards


WEEE

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2008 2009 2010 2011 2012 2013 2014

Year

WRAP Support

Arising

Base Treatment

Total Treatment

Gap

We can see that, of these materials, the treatment gap significantly reduced under this growth scenario for food, wood and aggregates. However, even if the waste arising does grow at this rate there are two other factors also to consider, that is the likely trends we might see not attributable to WRAP intervention and then what else WRAP might achieve. Starting from this base position that the desk research suggests there are significant gaps in processing capabilities for waste plastic, paper and card, and possibly glass we then interviewed the private and public sector key players to determine whether this picture fitted with the waste flows they are seeing on a day to day basis.


2.0 Research Results During the course of the research we contacted 94 companies operating in the waste sector and also 8 senior figures from the public sector. All of the contacts were told at the start of the interviews that participation would help WRAP and AWM formulate their support strategy and this generally helped in gaining good participation. We expect around 20 of the private sector companies to attend the workshop on 23rd March to add further input. Their views are summarised below: 2.1 Private Sector Views A total of 94 companies were contacted from the private sector, with 40 in depth interviews completed in total. The sample consisted of:

56 waste transfer and skip hire operators;

38 recyclers & reprocessors

A snapshot of their views is provided below and data is analysed from the comments they have supplied. 2.1.1 Waste transfer and skip hire operators: On average, the respondents estimated that ~25% of materials were reported as being sent to landfill generally but this varies with type of facility. Some companies simply had better sorting facilities/systems whereas others were targeting specific wastes to achieve better recovery rates. The main problem materials identified were mixed plastics and dirty plastics (both mixed and single polymer) and food wastes with the explanations as to the difficulties being presented by these streams being:

Plastics:

o Make up a large proportion of the landfilled wastes

o “Difficult to separate mixed plastics cost effectively”

o Lack of sorting equipment/infrastructure within the region

o Finding markets for plastics in mixed form is difficult (except export)

o Need further processing/sorting to find end markets e.g. sort & wash

o Predominantly the problem materials are dirty waste plastic (both packaging and rigid)

and some mixed plastics. No good information on types of plastic was obtained

Food wastes:

o All interviewees landfilled food wastes – none reported composting/AD

o “Food wastes contaminate other materials rendering them un-recyclable”

o Some report not accepting/avoiding food wastes due to above

o Some said they knew of no outlets in the region for segregated food wastes to send

materials to even if they separated them

Wood wastes posed comparatively few issues, with respondents saying the prices obtained for their wood had dropped due to a lack of local reprocessors (Staffordshire) and difficulty in disposing of lower grade wood wastes (costs around £20 per tonne).


Plasterboard was not seen as problem waste material as such, although some respondents claimed that the cost of sending their plasterboard to an appropriate reprocessor was expensive. Generally, plasterboard is separated and bulked in a container before being disposed of via the cheapest outlet once a significant proportion of material has been collected. Many interviewees seemed unaware that the 10% rule no longer applied and so were sending plasterboard materials “mixed in”. This issue will need to be addressed in due course and may result in plasterboard emerging as more of a problem material. No issues were highlighted regarding textiles or glass and no respondents reported problems with WEEE disposal. 2.1.2 Recyclers & reprocessors: No specific problem waste streams identified as the recyclers and reprocessors are selective with what materials they accept, buy or collect:

Many companies encourage clients to source-segregate waste materials to reduce contamination of the

incoming recyclables

Others source largely from industry/office schemes where materials are more homogenous and clean

Those who operate the above source segregated system of collection or purchase also report few problems with finding end markets for their bulked or processed materials, with many reporting that they sell into the UK market. The reasons for such were attributed to the fact that the materials are clean, and separated into single streams, thus ideal for reprocessors. Specific notable responses regarding plastics include:

Reports that competition from export markets was affecting the amount of materials they could source

for processing

That mixed plastics from municipal sources are cheaper and easier to source than single polymer sorted

plastics from C&I sources

That it is still possible to charge a gate fee for some plastic but the fee is less than landfill at £35 per

tonne

Lots of recovered plastic is sold to the UK moulding market. Higher value materials are picked from

mixed streams and lower baled for export to China

Comments that companies "Could process lots more if supply of good quality materials was better - the

problem is getting good clean material supplies not processing capacity"

It is worth noting that the quality of collected materials is key as to whether they are reprocessed in UK or exported, with higher quality sorted materials being processed in the UK and lower quality mixed wastes generally exported to the Far East, India & China. Businesses involved with the collection of paper card said that much of the materials are exported due to the “lack of UK mills” and paper product producers within the UK. A textile collector who sells materials on to the export market identified branded corporate uniforms as a problem material as they cannot be sold for reuse (around 25 tonnes per month). Some material is sold to a carpet underlay manufacturers for “flocking material”, though they do not have the capacity to accept it all. They would like to send the material to be used for Energy from Waste purposes.


2.2 Pricing and Future Investment Looking to likely future trends in the region we have considered firstly what plants are currently under planning or construction and then looked at the economic drivers by material stream which might encourage future investment. This is based on our research programme above and also on our experience working across all the English regions: 2.2.1 Current Developments Looking by material stream, the region is expecting quite a lot of activity in Anaerobic Digestion. Lower Reule Bioenergy: >30,000 tonne food waste AD plant is being built in Stafford and will be operational in late 2010. The plant will process food waste from local authority recycling schemes, food producers and supermarkets, as well as the farm’s pig slurry.5 Biffa food waste AD plant: An 80,000 tpa AD plant to be located at Biffa’s waste management facility at Poplars, Cannock. It will treat food and vegetable waste from households and businesses in the West Midlands. Construction commenced in January 2010 and the plant will be fully operational by the end of 2010. Ros Roca Envirotec will be the technology provider for the plant.6 WELtec BioPower 500-kW biogas plant in Gnossall, Stafford. The investor and farmer will first operate the plant with pig manure and 2,000 tonnes of maize silage a year. Later on, they plan to ferment food leftovers, for which an extension to the plant is already being planned. Based on discussions with W Midlands companies we believe Severn Trent are believed to be looking at opening up their AD plant to C&I waste. In addition to the above, Biffa is to build a 200,000 tpa "super MRF" (Planned to be operational by Sept 2010) located at the Midpoint Distribution Centre, just 10 miles away from the Greenstar Aldridge MRF. There is also a Joint venture with Cemex and WRG to build a 300 ktpa capacity MBT plant to produce their own-brand RDF (Climafuel) using C&I waste at one of two sites near Rugby. This is due to be built and operational by the end of 2010. See the section on RDF at the end of Chapter 3. From our research we have not identified any other planned installations at present although we are aware of some confidential plans under consideration for plastics and for wood. It should be noted that this list can never be comprehensive in this dynamic sector as business plans are modified continually. 2.2.2 Possible Future Developments From our consultation with current recyclers and reprocessors both within and outside the region we have analysed the economics and technical difficulties of these major waste streams and these are shown graphically below. The economics dictate that it is likely that the regions should see some progress in plastics (wash plants to handle dirty waste and or sorting of mixed waste. The region already has good WEEE facilities which can increase throughput through shift working and we are now seeing good progress in development of some food waste facilities although these are based primarily on municipal waste. It therefore seems possible that these three waste streams could be reduced by 2014, perhaps as follows: 2.2.3 Plastic The market for waste plastic has transformed in the last few years. Relatively recently it was still possible to find clean offcut plastic and recover this “free of charge” from the customers premises. Now the economics of plastic recycling are well known and this type of material can command up to £300 per tonne. Even dirty waste plastic is beginning to command a price for collection. Prices for processed recovered

5 Materials Recycling Week, 2nd Oct 09

6 Biffa website, 13th July 09


plastic are also good. Prices quoted by UK manufacturers taking in plastic are: black HDPE, PP £600/t; natural HDPE, PP £680/t; PVC £450-500/t; LDPE £525/t; ABS around £700/t, whilst export often offers good prices for lower quality material. However, currently the region is underperforming on plastics reprocessing compared to the National picture. We have identified 6 washplants for taking in dirty waste plastic in the Yorkshire region with another four washplants potentially to be built. These wash plants give the region the capacity to handle perhaps 150,000 kt p.a. and we are now seeing real competition for dirty waste plastic. By comparison, we can find no wash plants at all in the West Midlands and little sign of any interest in building one. This is despite the excellent economics presented. A fully operation 10,000 tonne washplant might cost £300k7 to build and be capable of paying back in a year. We would therefore expect to see this situation change in the coming years, possibly by inward investment from an experienced player from outside the region. The next step is to cope with mixed plastic and the first automated sites for these are now being commissioned. 2.2.4 WEEE Again, the market for WEEE has changed in the last few years. Whilst old cookers etc have always commanded a reasonable return, more difficult items such as fridges have commanded quite high collection prices until relatively recently. It is now normal to see these recovered essentially “free of charge” from the customers premises. In addition, the region is well served with WEEE recyclers who have additional capacity and we would expect to see any increased waste arising handled by the existing reprocessors. 2.2.5 Food (and RDF) Current practices on food waste and intake of refuse derived fuel are difficult to research. We have seen business models where gate fees of £60 per tonne are expected. Our experience is that the prices achieved are negotiated on an individual basis but clearly need to beat landfill costs to make sense. A gate fee of £20-£50 per tonne therefore seems most likely. Future trends in food waste is a particularly difficult area to predict. There are a number of planned sites for handling food waste but these are predicated on handling municipal food waste. It seems likely that some of this capacity will be used for C & I waste but there may still be a gap. Our research in the next section suggests that demand for both food waste and RDF will increase substantially driven by the climate change agenda and competition for this fuel is therefore likely to increase. This may well drive the gate fee down. The economics of food waste collection are generally predicated on getting a good gate fee (up to £60/ tonne,) whilst waste treated and ready to use as RDF is also still expecting to demand a gate fee of between £25-£35 /tonne. Both of these areas should see pressure to reduce the gate fees as more plants come on stream. 2.2.6 Paper, Card, Wood and Glass For paper and card, wood and glass the prices are much less volatile. Glass prices in particular held up well during the recent downturn. However all of these materials have relatively low tonnage values and the challenge is to provide economic local outlets for these relatively low value materials. In addition the main barrier to decreasing the gap is removing it from the waste stream before it becomes co mingled. For paper we are seeing an increasing number of customers demanding payment (up to £10 /tonne) for collection whilst achievable prices are up to £100/tonne8. For glass the price achievable varies from a few £/tonne (for aggregate use) up to £35/tonne for good quality clear glass. However some glass is still landfilled at significant cost.

7 Excluding land costs and utility connection.

8 Up to £142 per tonne for white office paper according to MRW


For wood, reprocessors are complaining that prices are as low as £5 tonne and £30/tonne is an absolute maximum. We would expect to see this increase as the RHI increases demand. 2.2.7 Analysis Based on the above information from the research and our knowledge of current pricing behaviour we have attempted to show the relative attractions of moving into reprocessing each of these waste streams, first by the premium that can be achieved between collection costs and sale of bulked up and processed final material and then secondly by looking at the attractiveness of the market in economic terms versus the technical difficulties and volumes available. The diagram below shows our experience of the general price paid by material stream at present for collection from customers’ premises and the price that can be achieved for selling the final processed material by tonne. The chart shows the prices being paid for collection versus the growth operating profit being achieved. The prices paid clearly depend on the size and regularity of the contract and the state of the waste, whilst the gross profit does not factor in operational and investment costs:

PlasticColln

Processed

WoodColln

Processed

Pap/CardColln

Processed

FoodColln

Processed

RDFColln

Processed

GlassColln

Processed

WEEEColln

Processed

Economics of Recycling

0-£60 £600Per Tonne


WEEE can still command a collection charge of up to £40/tonne from some customers whilst others are

demanding payment (of up to £30 / tonne), this is then processed and sold on by the reprocessor,

dependent on quality at around £400 - £700 per tonne (allowing for costs of cleaning and disposal of

residue etc

For plastic we are seeing plastic can be collected free of charge from some customers whilst others are

demanding payment (of up to £300 / tonne) in the most extreme cases, this is then processed and sold

on by the reprocessor, dependent on quality at around £200 - £600 per tonne (allowing for costs of

cleaning and disposal of residue etc

Glass, Wood and Paper/Card are all much lower priced commodities and the premium between

collection and reprocessed material is small allowing for much less investment

Food and RDF consistently demand a gate fee which mirrors landfill costs with a discount to incentivise

traveling to the user rather than the landfill site. Food waste generally results in a saleable product (e.g.

heat and energy from AD) whilst RDF still has a gate fee, albeit reduced from landfill prices

Looking at the relative merits of each of these materials for new investment we have assessed them as

follows:

Ease of Recycling

Value

Of

Waste

Stream

Plastic

WEEE

Food

Wood

Glass

Paper

Nappies

West Midlands C&I Waste Recycling Opportunities

High

Straight Forward

Low

Challenging

Thus plastic looks the most attractive waste stream for investment. It is relatively straight forward to do, the premiums are good and the availability of large volumes of waste is also good. The size of the food waste opportunity is shown as solid and dashed since a lot of MSW food waste also exists which should influence the economics for an investor and the actual size of the food waste element is somewhat uncertain.


Looking to the future we would therefore expect to see the “gap” for plastics reduced as new investors move in and also the gap for food waste reduced as the new plants identified earlier come on stream. However, we still expect to see a significant gap for WRAP to fill in all of these materials except WEEE (where available volumes are already low) over the next 4 years. 2.3 Implications for RDF It is an inevitable conclusion of increased recycling that the availability of Refuse Derived Fuel (RDF) can become scarce. This trend has been seen in some European countries leading to some plants closing or operating infrequently. From the analysis above it looks unlikely to be a concern for the West Midlands in the next 5 years. In terms of use of RDF/SRF (Solid Recovered Fuel) we have identified the following: La Farge operate the Cauldon Works Cement works and have a permit to use 12,500 tonnes SRF in addition to traditional fossil fuels. They also operate a subsidiary Resource Recovery Business – Glacier ARM (alternative recovery business); which sources alternative raw materials and waste derived fuels. In addition, coal fired power stations can take some RDF to mix with their fuel. The coal fired Power Stations in the West Midlands are:

Ironbridge, Telford, Shropshire, TF8 7BL - operated by E’ON (UK) - 970 MW

Rugeley, Rugeley WS15 1PR – operated by International Power – 976 MW

Neither plant is reported to be substituting alternative fuels in co-firing at present. Incineration capacity - West Midlands:

Tyseley Waste Disposal (Veolia for Birmingham CC) 350+ ktpa EfW incinerator

MES Environmental:

o Dudley EfW plant 105 ktpa capacity

o Wolverhampton EfW plant for Wolverhampton MBC 110 ktpa capacity

o Stoke EfW plant 210 ktpa capacity

Coventry & Solihull Waste Disposal Company 315 ktpa EfW facility

In total there is therefore a demand for up to 1.1 million tones per annum at present. In addition there are the following planned/potential facilities:

Possible expansion of existing Tyseley EfW plant being considered

Veolia submitted planning in Jan 09 for a 90 ktpa site at Battlefields, Shrewsbury

Veolia or Viridor possible 305 ktpa EfW facility under discussion - dependant on outcome of PFI for

Warwickshire, Coventry and Solihull’s waste

Mercia Waste Management/Severn Waste Services investigating building a 200 ktpa EfW plant at

Hartlebury Trading Estate, Hartlebury, Kidderminster under 25 year PFI with Worcestershire CC

Marsdon Vale Ltd submitted planning to Staffordshire CC for a 300 ktpa facility at Four Ashes near

Cannock - planning under consideration as of July 2009

This could give a demand for another 1 million tones of RDF p.a.


2.4 Public Sector Views In addition to the private sector we talked to representatives from each of the counties plus Birmingham and found a very consistent view in terms of the need for action. It should be noted that Local Authorities are very concerned with Municipal waste and this is often evident in their views. The main issues identified were:

1. A lack of Plastic Mixed waste facilities leading to landfilling or export of waste to other regions. 2. Food Waste a current shortage of facilities, but also a concern that collection costs have been

found to be expensive, leading to suggestions that mixed waste collections of food and green waste will be required to make collection financially sound. Some concern was also expressed that the economics of food waste are strongly based on gate fee and this could be barrier to investment, or lead to financial problems if too many players enter the market, leading to boom and bust problems. Specifically here the suggestion is that C & I and municipal waste collections can be mixed to help reduce costs.

3. A widespread problem with finding good outlets for Glass. The relatively low value of market

prices compared to plastic means that local outlets are needed as the economics don’t justify transporting large distances such as to South Yorkshire. It should be noted that we did not find any support for this view from the private sector.

4. A general view that there are no particular issues with minor waste streams, although nappies

from nurseries was mentioned by one respondent.

5. Waste segregation was highlighted as a problem. Specific areas of concern were SMEs who often don’t have the time, space or inclination to segregate and also refurbishment activities where the urgent need to dispose of waste quickly often leads to unnecessary land filling.

6. Strong support for recycled market development to bolster UK waste outlets as there is a lot of

dissatisfaction with relying on export markets.

7. Some comments that good quality wood is still being landfilled. 3.0 Notes from the Workshop At the workshop, representatives were asked to discuss the key issues relating to the C&I waste sector in the W. Midlands and then to discuss possible initiatives to help overcome these issues. The outputs are detailed below: 3.1 Key Issues & Initiatives Eleven key issues were identified as follows:

1. Need for Sustainable UK Markets a. Export competition (PERNS)

2. Investment needed for recycling equipment (few UK suppliers) 3. Contamination (especially food) 4. Policing / Enforcement / Legislation 5. Mixed plastics processing

b. Which routes? c. Cost?

6. Long term contracts for C&I waste d. Supply e. Markets

7. Collection costs for small quantities of waste


8. Education / Attitudes / Ever changing collection systems 9. Planning / Utilities 10. Skills Gap / Operational issues 11. Plasterboard

Due to time constraints these issues were then split between the four groups present at the discussion and the following initiatives were suggested: (1) Sustainable Markets A couple of contributors suggested help to create an “Online market” – particularly to shift difficult materials. There was considerable disagreement, however, as the majority of reprocessors in the group were fed up with the volatility of the market and the spot price nature of trading. They would prefer a different approach, outlined below. In preference to the above there was general support for help to identify and broker partnerships between businesses. The majority favoured help to identify supply chains and help broker relationships to allow collector / processor / further processor / manufacturer to agree supply chain principals. A couple of contributors asked whether we could investigate whether Resource Recovery Parks could help. This was actually suggested by a collector and plastics processor who thought that help to co-locate would be great. Some raised concerns that only the big boys would be able to take advantage of this but Peter Jones countered with the history of skip hire where the big boys acquired smaller operators in key locations. This was well received by the operators. (2) Investment for recycling kit (UK Supply) There was a suggestion of more ‘Soft Loans’ (especially from Government controlled banks) in addition to grants. However, no one suggested larger grants they were all very realistic about this. To assist with the selections of provide knowledge / due diligence on new technology. There was a perception that recyclers were vulnerable to sales tactics that resulted in purchase of expensive kit that is not fit for purpose. Suggestions that we share knowledge of tried and tested kit or undertook some kind of testing on behalf of the industry. There was a lot of support for facilitating partnerships including a question as to whether we could help with legal support, planning support etc to help construct supply chains and partnerships. Support for the development of supply chains was raised again. This was the number one request from the group – help to set up supply chains and relationships to remove some of the issues they have with the industry at the moment. It was asked whether we could work with manufacturers to take more recycled content and to share technical reqs of manufacturers with recyclers to help them produce more high quality materials. It was raised that during the market collapse, high quality material going straight into manufacturing was not affected. (3) Contamination (especially food) It was commented that we need to educate further up the supply chain source segregation. It was seen as key to split material streams and encourage source segregation. A comment about publicising to agriculture the advantages of using waste derived compost over peat, or banning peat based compost use Lead to a general point that we should encourage the use of recycled products to secure UK outlets for recyclers.


(4) Policing / Enforcement / Legislation There was a general consensus that more materials would be available and recycling rates would improve if there was better enforcement of legislation such as the requirement to pre-treat waste before it is sent to landfill. It was recognised that the Environment Agency is short of resources to do this and in the past had perhaps not done so because of a lack of reprocessing capacity. This is no longer the case so AWM should engage with the EA to highlight the issue and explore what could be done. The point was made that some high profile prosecutions would help the recycling cause! (5) Mixed plastics One participant claimed to have a process for treating mixed plastic waste with a guaranteed supply of material and large potential markets for kerbs, flood defence systems etc. However, WRAP’s priority is to fund enhanced segregation techniques which is expensive and unnecessary. There is therefore a need to identify the ‘best’ processes and fund these. (Note: this claim needs to be investigated further as it is not borne out by work in other regions). Another idea was to ‘cluster’ plastics reprocesssors around MRFs which would provide a guaranteed supply of materials and so give confidence to potential investors (i.e. a Resource Recovery Park for plastics). (6) Long term contracts for C&I waste One problem for recyclers is the difficulty in obtaining long term contracts both for incoming waste and for supply of materials. They are therefore subject to spot market prices and carry a significant commodity risk. One way to alleviate this would be for AWM to offer a ‘marriage broking’ service between waste producers, segregators and processors/manufacturers so that confidence in the supply chain would improve and price fluctuations would be smoothed out. This would also help to build local supply chains for different materials streams. It was also felt that there is a need for a regional Resource Efficiency programme to address waste producers to improve waste segregation at source. This would help the recyclers and also reduce costs for the waste producers. (7) Collection costs / Small quantities of waste To help overcome the issue of small quantities of materials could we help stimulate partnership working/trading across public and private sectors such as:

Companies e.g. business parks/estates

Local authorities

NISP approach

Working across administrative boundaries

There was general support for encouraging onsite pre-treatment where waste is based to maximise collection capacity and for helping companies with ‘space’ issues. (8) Education/Attitudes Delegates felt that they would benefit from any activity to extend positive PR/advertising messages about recycling through such things as talks at schools & visits to recycling facilities and giving more advice to businesses on how to recycle. The issue of tackling manufactures’ attitudes to using recycled material in place of virgin raw material was raised again.


(9) Planning / Utilities We were asked if we could provide help in dealing with large monopolies e.g. Severn Trent, Eon, etc. On planning, we were asked to lobby on behalf of the industry to get government to prioritise recycling and give clear guidelines for consent, identify areas within region where more capacity is required and then target planners and give clear guidance to the government on planning issues. (10) Skills Gap / Operational Issues Skills Gap The general agreement around the table was that, especially in the current climate, there is no skills gap at “ground level”. It is straight forward to get good quality staff for picking lines, waste handling, drivers etc. It was however noted that there may be a general need in the environmental sector for an NVQ environmental qualification to help introduce these levels of staff to the general issues of sustainability and bring them all up to the same level of knowledge. The more noticeable skills gap is at the top end of the spectrum. Specifically it was noted that there can be a shortage of “experts” at degree level, true of most rapidly growing areas and there is probably a need to educate Universities as to future needs and specifically for the sector to start targeting of graduates to bring them into the industry. Operational issues: The main operational issues noted was a need to support UK equipment manufacturers as the sales of equipment are coming predominantly from overseas. It was recognised that it will be difficult to create a market leader quickly in the UK but there are opportunities for lots of UK manufacturers to enter the supply chain, providing equipment at all stages of project development and that the RDA and others could help encourage this by identifying possible supply chain companies, educating them as to the range of opportunities and critically by passing on contract opportunities to them as they occur. (11) Plasterboard The main concern at the moment is that many people still seem to be landfilling under the old “10% rule” despite the fact that this is now illegal. There was a general call for greater policing for this sector and some high profile enforcement activity to help get the message across that the landfilling of plasterboard is no longer acceptable. In the longer term it was thought that little help would be needed to identify plasterboard tonnages for recyclers once the landfill message has been got across but that significant support would be required to help develop new end markets for the output material (gypsum). Finally, it was generally agreed that refurbishment is a big problem area for plasterboard where waste quickly becomes co-mingled due to the urgency of waste disposal and that any projects which could help look at new ways of handling this would be particularly welcomed. Overall, there was a lot of support for many collaborative actions including:

Broking partnerships

Developing on line resources (waste brokering etc)

Lobbying (Government, EA, Planning, Banks etc)

Feasibility studies (e.g. Resource Recovery Parks)

Supply Chain promotion


Education

Creating Clusters or hubs

Working with other support agencies e.g. NISP, Envirowise etc

Promoting the sector to graduate level recruits

Together with some individual specific support actions:

Segregation activities

Capex support for specific new activities e.g. plastic washing/segregation and food sector initiatives

New collection initiatives

Identifying end markets for problem streams e.g. plasterboard


4.0 Conclusions Based on our desk research, discussions with, major stakeholders in the region and on our own in-house experience our estimates for the current treatment Gap purely for the material streams of interest in the West Midlands is as follows:

Material Waste Arising Landfilled (The Gap)

Treated/Exported

Plastic 490000 240,000 250,000

Glass 250000 90,000 160,000

WEEE 180000 30,000 150,000

Food 400000 300,000 100,000

Paper & Card 1420000 560,000 882,000

Wood 300,000 150,000 150,000

Attitudes from the private sector strongly correlate with the desk research view that there is still a significant opportunity to increase recovery rates for plastic and food and that with increased segregation at source there is significant scope for further recovery of glass and paper and card. Looking to the future we expect the treatment gap for each of these materials (with the exception of wood) to increase unless there is low growth to 2014 or there is new investment beyond what is already in planning. For plastics and food waste we see the major issues as being to encourage investment in new plant as the economics are relatively good, whilst for the other materials noted above there are significant supply chain issues to overcome. Significant new developments in food waste and rdf plants are expected in the region and this should reduce both food and combustible waste to landfill from both the C&I and municipal waste streams. It is not clear yet how much of this reduction will come from the C & I waste stream, nor is it yet clear how this will affect the economics of food waste and rdf. Looking to the future support programme, sample initiatives based on the possible gap are presented below:

Plastics – attracting investment into washplants and eventually plastic segregation

Food – encouraging new plants to take C & I through support in collection services

Paper & Card, Textiles – encouraging segregation at source

Wood, Glass – identifying and disseminating information on outlets

Niche sectors – encouraging opportunities (e.g. nappies, or confidential textile shredding) as they arise

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