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Waste and recycling markets could crash
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The waste and recycling industry has been warned that its current economic model could crash as it did in 2008, and that it needs to look to energy-generation to secure its future, a strategy condemned by some resource-efficiency experts as conflicting with the zero waste principle by creating a market for waste. Yet this was the message from WRAP chief executive Liz Goodwin at the Recycling & Waste Management (RWM) Exhibition last week.
Waste and recycling markets could crash

In 2008, prices for materials such as paper and plastic fell by half, and steel became almost worthless, slashing the profits of waste processing firms and reducing recycling rates.

Goodwin said that the problem is increased by financial shortages which have stalled anaerobic treatment facilities, and are creating obstacles to local authorities in their efforts to get people to recycle more.

Local authorities need to build more Materials Recycling Facilities if they are to do this and begin collecting the harder-to-recycle materials such as foils, plastic films, carrier bags and textiles.

“The current economic uncertainty may also feed into volatility in the recyclate markets," she told delegates. But she predicted emerging new markets for the new recycled materials, especially textiles.

Earlier in the week, energy minister Charles Hendry had told delegates that waste remains an “integral part” of the government's environment and energy policy. He said the industry needed "better access to residual waste" in order to drive development of energy-to-waste and confirmed that ministers were seeing how the Waste Review might create the right conditions for this through finance, planning and public co-operation.

Hendry also said the government was considering whether the Renewable Heat Incentive should be extended to include mixed waste and larger biomass plants from 2012.

There is widespread grass-roots opposition to energy-from-waste plants, but Hendry said that changes to the planning system would create a "transparent, robust and evidence-based approach" to applications for new plants and that the Localism Bill would not be a problem for their developers.

"[Localism] will drive us towards smaller, more sustainable waste facilities - it will focus people's attention on what is the right way to deal with our waste. We want to see local communities and individuals take a stake in this process," he said.

However, last year Tory MP George Osborne supported his Northwich constituents in fighting plans by TATA/E-ON for a 600,000 tonne incinerator. And Eric Pickles, the minister pushing through planning changes, campaigned against a composting site at Stondon Massey in his Essex constituency.

Peter Jones of the Resource Efficiency Knowledge Transfer Network warned that many plants built over the past decade could become redundant in the future due to a reduction in the expected feedstock or the loss of a market for their waste outputs.

As a member of the Zero Waste Scotland Think Tank and the Mayor of London’s special adviser on waste on the London Waste Advisory Board, Jones believes as many as 2,000 composting plants, 600 materials recycling facilities (MRFs), 40 anaerobic digestion (AD) facilities and 23 non-CHP thermal plants could be at risk.

"The industry is moving so fast, as is the investment base around it ... the current drift we are facing is an ad-hoc piecemeal approach, with no coherent planning so we have disaggregated sites. We are building the wrong facilities in the wrong places - they will become stranded," he warned.

Contrasting Hendry's message with Goodwin's, he called the "traditional" waste industry revenue streams of gate fees, recyclable materials (£1bn for 15-20m tonnes) and composting soils (£0.1bn for 4m tonnes) "peanuts" compared to renewable gas and electricity (worth £108bn).

"Waste management companies who don't move into this space will find that energy and heating firms will," Jones, who is also chairman of Waste2Tricity, said. "Bankers and investors want to see the sorts of figures coming from the energy side," he added. From his perspective, "local authorities and operators should also be looking at feedstocks like crop residues, sewage sludges, wood residues, gas and coal" in order to create synergies, economies of scale, and be more flexible, for the future security of plants.



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