Consultation on draft Materials Recovery Facility (MRF) Regulations for insertion into Environmental Permitting (England and Wales) (Amendment) Regulations 2013

Friday, April 26, 2013

The Resource Association's submission to the Consultation on draft Materials Recovery Facility (MRF) Regulations for insertion into Environmental Permitting (England and Wales) (Amendment) Regulations 2013  

Introduction 

The Resource Association is pleased to be able to respond to Defra and the Welsh Government’s consultation on the draft MRF Regulations and has appreciated the opportunity to engage with Defra during the course of the consultation process. 

The Resource Association was formally launched in November 2011 as a trade association for the reprocessing and recycling industries, supported by the wider supply chain.  Our vision is for a UK resource efficient materials economy for the 21st century which realises value, prizes quality and seeks to maintain the integrity of the secondary materials which are still too commonly treated as waste.  

Today, we have 25 members representing a broad spread of major reprocessors with UK operations, local authority waste partnerships representing over 30 councils and a range of major brands, collection companies, and equipment and service suppliers in the recycling supply chain.  Our members activities in recycling and reprocessing and related economic activity account for over 7 million tonnes of material recovered and recycled, at least 7,000 jobs in the UK economy and a contribution to UK GDP of over £2.7 bn.  A full list of our Members is appended for the record. 

Overview of our position 

The Resource Association welcomes and supports the increased attention being paid to recyclate quality, manifested in the draft MRF Regulations and the Quality Action Plan.  As part of Defra and the Welsh Government’s general drive towards greater resource efficiency, we note that improving the quality of recyclate generated from households (and businesses) is now recognised as an essential element of the resource efficient economy. 

In that spirit, we welcome the draft MRF Regulations and in particular commend Defra and the Welsh Government for committing to deliver these as a mandatory requirement not a voluntary scheme.  Our concerns surround a number of technical details of the proposed Regulations, but they strike at the heart of whether or not the Regulations will have the desired effects the Governments wish them to have.  They focus on sampling, audit and reporting arrangements and we make proposals in all these areas.   It is our view that, without some significant changes to the proposals in these areas, the Regulations run the risk of not achieving the outcomes desired by the Governments and the mainstream MRF operators as well as reprocessors.  A weak regulatory regime that has the ability to be easily circumvented by rogue operators undermines the respectable and higher standard position of the mainstream waste industry MRF operators.  We believe it is in the interest of all that seek high quality recyclate (and recycling) to strive for a higher regulatory bar that, in this particular industry, will have a beneficial effect on the prospects for the UK resources economy. 

It will also, in our view, be an essential ingredient in the UK Government’s package of measures to ensure compliance with the revised Waste Framework Directive.  Compliance around the requirement for separate collection of glass, metals, paper and plastics and the position taken by Defra and the Welsh Government now confirmed by the recent Judicial Review will still require a level of robustness and transparency in the MRF Regulations not seen in the consultation draft.  Improvements to the MRF Regulations will in our view be needed in order to clearly demonstrate that output from MRFs can be considered equivalent to that from source separated collections of those materials. 

Responses to consultation questions 

Question 1: a) Do you agree that the Government should intervene to correct the information asymmetry to improve the transparency of information on material quality? b) Do you agree with this proposal to mandate MRFs above a certain size threshold to measure, sample and report on their input, output and residual? c) If not, what other interventions (including voluntary schemes) could be used to achieve an improvement both in the provision of transparent information and an improvement in the quality of MRF material outputs? 

a)     Yes, we agree.

b)    Yes, we agree that a mandatory approach is correct although there may still be room for a debate about the threshold (see Question 3). 

c)     We believe the time is right, if not overdue, for regulation.  Voluntary schemes have been in operation for a number of years and even by the admission of the waste management industry that initiated them they have not received strong support and have had little impact.  In addition to this, we consider that strengthened enforcement of Trans Frontier Shipment Regulations could also have the effect of improving the quality of MRF material outputs.  While we readily acknowledge the recent efforts by the Environment Agency in respect of cracking down on illegal exports of waste, there is more that could be done and proper enforcement would have a significant impact and drive Defra’s quality agenda forward as we believe the export route is where much of the low quality material is heading.  We note again that we fully support legal and compliant export of properly sorted recyclables for reprocessing overseas and we consider that dubious quality exports are having a detrimental effect on quality across the board – impacting on UK reprocessors and the overall reputation of the UK in overseas markets in general.  We note that Defra raises the issue of TFS enforcement in more detail in the Quality Action Plan and we will also respond in detail to the current consultation on aspects of the TFS Regulations. 

Other interventions that could improve quality are in theory more complex to deliver and involve a whole supply chain approach to quality recyclate.  On the basis that the old adage ‘rubbish in – rubbish out’ can often still apply, we consider that Defra and WRAP still have a major role to play in encouraging greater collaboration across the recyclate supply chain from consumer to end user which encompasses better household communications, tighter enforcement of requirements in collection systems, and a culture of learning and improving on collection and sorting systems.  This, combined with better regulation of MRFs could give the industry the consistent and improving supply of recyclate it cries out for.  Collaboration should include better sharing of recyclate income between councils and contractors or reprocessors to encourage local authorities and incentivise them to improve quality at the point of collection. 

Question 2: a) Are the assumptions in the draft Impact Assessment correct? b) Do you have any further information to improve our assumptions? c) Could the proposals have any impacts other than those intended? 

a)     Yes, we believe so in most instances. One area that we would like greater clarity on is the cost assumptions made in Annex 2 (for sampling equipment and labour costs). Costs are asserted here and yet the proposed Regulations are not accompanied by any clear guidance on methodology and standards for sampling.  This strikes us as an inconsistency that needs some clarification, and preferably with a more directive approach from Defra on ensuring all operators use standardised methodology and are given clear guidance at the same time. 

b)    Yes.  Since the Impact Assessment was published, the Resource Association has produced an analysis of the cost impact on UK reprocessors of poor and inconsistent quality recyclate.  This report, Costs of Contamination Report 2012 was published (see note 1) in December 2012. It analysed data provided by all nine of the Association’s reprocessor member companies, representing more than half of UK reprocessing capacity (just over 3 million tonnes of manufacturing capacity).  It concluded that, as a conservative estimate, those businesses were incurring additional cost in the order of £51 million per annum in managing the consequences for their manufacturing operations of the poor and inconsistent quality of recyclate received largely from the UK MRF system. Clearly this new information was not available to Defra at the time of producing the Impact Assessment, although we note that no attempt appears to have been made in the IA to estimate this impact of the present situation and it has been left to the reprocessing industry to present this data.  We have appended the report to this submission (Appendix 2) and wish it to be considered as part of the consultation process. 

c)     Yes, this is possible.  The proposals could result in a regulatory regime that is weaker than is needed, thereby failing to adequately address the market failures and other problems the Government has rightly highlighted in its Impacts Assessment.  Lack of robustness and transparency in the Regulations might also not tackle the risks of successful legal challenges against local authorities in relation to determining clear compliance with the separate collection requirement of the revised Waste Framework Directive.  Beyond this, it still might not practically improve the delivery of the quality materials reprocessors need and in turn diminish support for the delivery of the Government’s green economy.  It also might not improve or provide public confidence in the quality and end destinations of recyclates; nor support the UK’s global economic position comparable to countries that are tackling ‘materials security’ and recyclate quality issues more effectively.  In essence, the weaknesses in the proposed Regulations might simply lead to a lack of positive impact and effective preservation of the present and unsatisfactory situation. 

A further specific potential impact might be an increase in the volume of material produced by MRFs being diverted into the market for RDF.  This has the potential to seriously diminish the supply of valuable recyclable material.  While this market is evolving rapidly, it would seem sensible to have a better understanding of the development of this resource stream in the context of the MRF Regulations and their implementation. 

Question 3: Is 1000 tonnes per annum a fair threshold or do you believe a different minimum threshold level should be applied? 

We understand the rationale from Defra for the 1000 tonnes per annum threshold proposed in terms of a de minimis designed to ensure micro businesses are not impacted by what may seem excessive regulation.  However, we are concerned that there is potential for very poor MRF material from larger MRFs to move to smaller MRFs without any need to check the material quality output and no requirement for the smaller MRF to test the material at all. We feel this leaves the potential for abuse within the system and for unregulated flows of low quality recyclables.  Even though presently the tonnage under consideration is small, nevertheless the scope for abuse is there and the exemption could provide an unwanted loophole. 

If a high level of transparency of data related to the movement of material from MRF to MRF is not delivered or is indeed resisted by some MRF operators, then the fairer and more robust approach would be to remove the threshold and leave no room for doubt by including all MRFs (including those under 1000 tpa) in the regulatory regime.  On balance, we therefore support the removal of the threshold as a precautionary measure to avoid abuse and to provide a level playing field for all MRF operators. 

Question 4: a) Do you agree with the proposed scope and exclusions? b) Is six months a sufficient transition time for MRFs to comply with the sampling requirements? 

a)              We do not agree with the scope and exclusions in two key areas.  Firstly, we oppose the exclusion of MRFs with a throughput of 1000 tonnes or less, as noted in Question 3 above.  We are also opposed to the exclusion from the regime of MRF to MRF movement of materials, as we consider this also reduces the robustness of the regulatory regime and provides opportunities for some operators to explore loopholes and avoid sampling. 

b)              Yes.  Given that quality management should be an integral part of any manufacturing process anyway six months should be a sufficient transitional period especially if MRFs are exporting material without knowing what they are actually shipping.  Furthermore, given the length of time and extensive discussions that has surrounded consultation on these issues we believe the industry should be well aware of impending changes and have the ability to respond properly within six months. 

Question 5: We welcome views on the approach taken to sampling. Do you agree that the input, residual and main output streams should be sampled? 

We are disappointed in the approach taken to sampling, and remain concerned that the proposals contained in the draft Regulations have remained unchanged throughout a long period of discussion and tabling of concerns about their inadequacy. 

Fundamental to our concerns is the absence in the proposals of any set of standards and proposals for guidance on the sampling and sorting regimes.  We believe it is not sufficiently robust to leave this to individual MRF operators – there should be clear standards and guidance on the required sampling regime so that everyone knows what is expected of them.  In this instance, everyone includes: 

  • the MRF operators either carrying out in-house or procuring the testing resource;
  • independent auditors, so they actually know what they are auditing against, and
  • the Environment Agency charged with managing the regulations and conducting unannounced inspections, which we believe are essential to the credibility of the Regulations. 

We believe the approach remains inadequate to deliver the robustness of data and transparency of operations needed to ensure that the improvement in market intelligence desired by the Governments is actually delivered.  The proposals are presently set at such low levels of frequency and in some instances size of sample that there is a strong risk that they will be easily circumvented by rogue operators.  This ability for the system to be open to abuse is strong, as a system for sample selection is not evident (leaving the possibility of selective sampling of higher quality material). 

We agree that input, residual and main output streams should be sampled.  However, for some there may be legitimate questions about the extent to which incurring much cost on sampling of the residual stream is needed other than for reconciliation with WasteDataFlow and perhaps seeking to identify the extent to which residual streams can be further reduced by improving material sorting. However, for us the issues of transparency of end destination of material and the tracking of the flow of materials into the evolving RDF market are crucially important here, and therefore in our view maintaining residual sampling would be good practice we should encourage and support. 

Question 6: Do you agree that material transferred from one MRF to another, should not be sampled? 

No, we do not agree.  We do not support this proposal as MRF to MRF movements are an integral part of any mass balance flow of a MRFs performance and could be a way of masking the movement of poor quality recyclate, particularly if onward movements are made to a non-regulated smaller MRF as highlighted in our answer to Question 3 above. 

Question 7: a) Do you agree with the proposals, including sampling weights and testing frequencies? b) Do you agree with the possibility of sampling reductions where a high degree of consistency is demonstrated? c) For MRF operators: do you intend to make use of the opportunity to reduce the prescribed sampling frequency by demonstrating a high degree of consistency in the composition of output? 

a)     No, we do not agree.  The proposed sampling regime and suggested testing weights and frequencies do not appear to be fully evidenced from the existing research projects in this area.  On several occasions we have asked Defra and WRAP to provide the justification for the sampling regime proposed and only received a reply very late in the consultation period.   Our concern is that the proposals appear arbitrary and consequently very weak – they require sampling at such low frequencies and in some instances weights that they will be easily circumvented by rogue operators and effectively be seen by the rest of the supply chain – members of the public, local authorities and reprocessors as a ‘lowest common denominator’ approach to the Regulations rather than the robust and transparent regime needed. 

We have drawn on the experience of several of our members who have been involved in various MRF-related projects managed by WRAP in the last few years of discussion on these issues.  Using this experience we suggest that the research done previously would support a more intense approach to sample frequency and size for several of the key materials.  We have summarised our assembly of the evidence in Appendix 3. 

Without adequate justification from Defra for the proposals made, it is hard for external consultees to make suggestions that might in themselves be seen as arbitrary – for example, to increase frequency size and sample weight by two fold, three fold or four fold, or more.  We have drawn your attention to the practice at the Shotton MRF of UPM, which samples at approximately TEN TIMES the size and frequency proposed in the MRF Regulations.  Some of the major MRF operators say they are also sampling at much higher levels, but have not placed data in the public domain on this yet.  If this is the case, we believe makes the case even more strongly for the regulatory base for sampling to be set at a significantly higher level – to drive better compliance and raise standards.

However, based on the evidence assembled of previous WRAP research on MRF sampling and frequency, we believe for some materials that a FOURFOLD increase in sampling size and a similar level of increase in frequency is a benchmark to strive for and we recommend this to Defra for a revision of the MRF Regulations post-consultation.  There may be a little more detailed work to do on ensuring that sample sizes for different materials are nuanced in the spirit of keeping regulation as simple as possible, but this should be done as part of producing a standardised sampling regime and methodology, as noted in our answer to Question 2a.  

Based on our understanding of previous WRAP research conducted over a number of years using different consultancies, we would suggest an alternative approach would be to:

 QUADRUPLE sample sizes for input and paper to 100kg and 80kg respectively

  • DOUBLE sample sizes for metals to 40kg
  • DOUBLE sample sizes for plastics to 40kg
  • RETAIN sample sizes for glass at 10kg

This would address concerns about sample sizes for input and output testing being too small and leading to contamination levels being overstated because of the presence of single heavy items. For instance, the presence of a wet textile item (such as a t-shirt) in a 20kg sample of input material would give a very high contamination result for a single sample but may not be reflective of the presence of multiple items of this nature in the overall load. 

The draft Regulations suggest quarterly reporting points and as such the sampling frequency should be designed around a level of testing that produces results for all major input sources and output streams within that timeframe that result in robust data sets.  Annex 3 sets out the level of testing of various size MRFs based on the COP frequencies (with an assumed output material composition).  For a 45,000 tonne MRF only 4 x 20kg (80kg) samples a week would be tested over a 13 week period this equates to 52 samples or 1,040 kg.  Assuming that the sample weights from previous research were implemented at this frequency then the amount of material tested would be 3,900kg. 

In regards to sampling frequency and size we note the lack of an agreed standard on how the sampling and sorting should be carried out and would argue that this is a critical omission and if left to the individual operator has the potential to undermine the credibility of the COP. It will be important that the operator, independent auditor and regulator are all clear on what is considered good practice in regards to carrying out sampling that is representative of the material in question and is taken in a consistent and safe methodology across the industry so that there is a clear level playing field in what is required.  Without this, there is a potential for unscrupulous operators to undermine the value of the testing by skewing the results through unrepresentative sampling and poor inaccurate sorting methodologies. Sampling frequency clearly needs to be sufficiently robust that it covers the broad range of inputs received at a MRF by time and by supplier – this now needs to be addressed in more detail to balance the need for robustness and confidence with the need to keep the regulatory burden to an essential minimum. 

b)    We agree in principle with the notion that reduced sampling arrangements could apply where clear and a high degree consistency is demonstrated. However, this has to be linked to the frequency of testing as the more intense the initial testing then potentially the quicker the point of obtaining a dataset to make an informed decision on will be obtained – assuming seasonality and/or changes in MRF operations have been accounted for.  This point of reviewing the potential to reduce the level of sampling should also be informed by the audit results and unannounced inspections from the regulators.  However, we feel that this is some way off and should be the subject of further discussion after a minimum of two years operation of the Regulations.  A first review period after two years could also look again at the sampling regime in the round, but give the basis from where the Regulations commence and the market failures they seek to address, reducing the sampling regime too quickly may not ensure that the Governments’ objectives are realised. 

c)     We have no comment here.

Question 8: Which option do you support on transparency of information from the options below, or do you have an alternative suggestion, and how often do you think results should be sent to the EA? 

                                    a) Only have the information retained by the Regulator;

                                    b) MRFs to make information available to customers on request;

c) EA publish the information in some manual/electronic form and regulate the access (e.g. local authorities and reprocessors would need to register for access); or

d) EA publish the information in some manual/electronic form with unrestricted access. 

We support Option d) and are fully in support of the Governments’ intentions on greater transparency of information.  Full information should be easily accessible to all interested parties, but it should come with high quality interpretation to aid the laypersons understanding of the raw data.  This can be agreed by all interested stakeholders if necessary.  The risks of misinterpretation of data by some parties (for example, certain sections of the media) are outweighed in our view by the need for robustness and full transparency to address the confidence issues and market failures they Government have identified. 

The Resource Association has supported the general thrust of Coalition Government policy on transparency and open data, especially with the launch last year of our voluntary initiative on reporting of end destination of recycling.  The End Destination of Recycling Charter was supported by the then Defra Minister Lord Taylor upon its launch, and now has 47 local authority signatories, who are now presently working towards publishing more information on end destinations through Registers of End Destination of Recycling as well as better and more accessible public information.  This is backed up by public opinion market research (see note 2) and is part of the response needed from the industry to maintain and improve public confidence in the recycling process.  We will detail more information in our response to the Quality Action Plan. 

Question 9: a) Do you agree with proposed audit requirements? b) If not, do you have alternative suggestions? 

a)     We do not agree that the proposed audit requirements are sufficient.  We agree that everything stated in the proposed audit requirements is needed, but there are additions that we believe are essential for the credibility of the Regulations and to deliver the stated intentions of the Government – noted below in b).  Further to this, we suggest that any auditing enforcement should inspect the material quality management system, not just checking of sample records.  Details of visual inspections, non-conforming loads, rejections, downgrades and the actions taken will demonstrate whether a facility is actually managing the quality of its inputs and outputs or just ticking a box. 

b)    We consider that the audit requirement should include a minimum of twice yearly permitting enforcement visits from the regulator.  It is essential that these visits are unannounced and not subject to any notice period requirement. Unannounced must mean just that – unannounced. The regulator in these unannounced enforcement visits should also have the capacity to take physical samples (and not just rely on a compliance study of previously reported data) and have the right to interview any operative at the MRF, not just site and company management.  The credibility of the enforcement regime is dependent on this capacity, and visits must be unannounced in order to ensure MRFs cannot simply make short term process adjustments to ensure better quality material is evident during visits.

Question 10: Do you think that minimum standards should be included in this proposal? If yes, what would your proposed maximum contamination percentage be for paper, plastics, metals and glass, and how should they be developed for the supply chain? In this instance we are assuming that contamination levels equate to non-target and non-recyclable material. 

Our preference throughout the lengthy process of development of these MRF Regulations was for minimum standards and we still believe they would add considerable strength to the Regulations, although we appreciate the concern raised by Defra that setting this ‘in stone’ in Regulations means that changes require continual amendment to Regulations in Parliament, which is seen as an administrative burden. 

We have not made any further representations on this issue and wonder why it has been included in the consultation, given that the Defra Director of Climate, Waste and Atmosphere Dr Colin Church made it expressly clear in an unequivocal statement (see note 3) to a conference of the Associate Parliamentary Sustainable Waste Group last Autumn, that minimum standards were not on the agenda and not going to happen. 

It should be noted though, that at least for the paper industry there are recognised standards. For the paper recycling industry there is already an agreed European Standard for paper for recycling (EN643) which is likely to contain maximum tolerances for non-paper components and unwanted materials from the summer of 2013 by paper for recycling grade. This standard clearly sets out the requirements for high quality paper recycling and has been developed by the supply chain including the European paper recycling industry (CEPI), the European waste management industry (FEAD) and the European recovered paper industry (ERPA). Once adopted this standard should set out the minimum requirements for MRF paper outputs and be adopted as such in these MRF Regulations.  This would be a good starting point while further work is done and agreed on minimum standards for the other key materials – glass, plastics and metals in particular but recognising this should extend to textiles and others. 

Question 11: If you have any other comments or observations on what is proposed here, please provide full details. 

We have one specific further comment to make, namely to support colleagues in local government seeking empowerment from Defra to deliver strong enforcement on participation in recycling schemes especially in relation to prevention of contamination of the recyclate supply chain.  

Beyond this, we have no further comments to make, other than to record again our willingness to work with Defra, the Welsh Government and all appropriate stakeholders in these issues to find workable approaches that deliver the stated objectives of Government and supporting the improvements in recyclate quality that are needed by reprocessors and demanded in terms of maintaining public confidence in the recycling process.


(1) Resource Association (2012) Costs of Contamination Report 2012 at http://resourceassociation.com/sites/default/files/Costs%20of%20Contamination%20Report%202012.pdf

(2) Resource Association (2012), Where Does the Recycling Go? Research conducted by YouGov in May 2012, at http://resourceassociation.com/node/14380

(3) 24 October 2012 reported in www.letsrecycle.com - http://www.letsrecycle.com/news/latest-news/waste-management/mrf-code-mandatory-but-no-thresholds

  

ANNEX 1

Resource Association – membership at April 2013 

ACE-UK (Alliance for Beverage Cartons and Environment)
Alloa Community Enterprises
arc21
Aylesford Newsprint
Bryson Recycling
Closed Loop Recycling
Coca-Cola Enterprises
Dentons
ECO Plastics
Enviroparks
Nick Francis
Huhtamaki (Lurgan)
Peter Jones OBE (Ecolateral)
Kent Waste Partnership
May Gurney
Novelis Recycling
Palm Recycling
Resource Futures
Romaquip
DS Smith Recycling
Smurfit Kappa Recycling
Somerset Waste Partnership
Straight
UPM
Wood Recyclers Association 

ANNEX 2

Costs of Contamination Report 2012 – Resource Association 

COSTS OF CONTAMINATION REPORT 2012

Resource Association survey of reprocessor members’ assessment of the impact of poor and inconsistent quality recyclate on manufacturing costs – December 2012 

Introduction 

This report summarises the results of a survey of all the Resource Association reprocessor members.  It seeks to identify the costs to UK reprocessors of recycling products using recovered materials and dealing with inconsistent and poor quality recyclate received by them from the UK municipal resource stream. 

We commissioned this survey in order to further inform the debate about high quality recycling and how to achieve it.  In the climate in which claims are made about the efficiencies and reduced costs associated with co-mingled and MRF sorting systems in the UK, we thought it time to understand better how costs that were perhaps incurred in collection systems appear to have shifted and become cost burdens for our manufacturing base. 

Methodology 

All reprocessor members of the Resource Association were asked to submit detailed data on costs associated with input of recyclate to their manufacturing processes, and relate this to operational contamination levels. 

All nine reprocessor members[1] participated in the survey, and the survey covers over 3 million tonnes of UK reprocessing capacity.  It is therefore a good sample of UK reprocessing, but clearly not fully comprehensive as it covers members only, and for some members it covers some but not all of their manufacturing operations.  

Participants were asked to provide data following a template, to cover a range of costs associated with the management of poor and inconsistent quality material.  The template is attached as Appendix 1. 

Given the requirement to manage the individual commercial confidentiality of each reprocessor, the received data was handled only by the Association’s Chief Executive and independent analysts at Resource Futures under a non-disclosure agreement in compliance with competition law.  The data from all participants was analysed to produce an overall level of costs associated with poor and inconsistent recyclate without identifying the individual company data.  While this includes data from a differing range of businesses (across metals, paper and card and plastics reprocessing) the overall and average figures highlighted provide a valuable snapshot view into the cost burden. 

Based on tonnage data we have used the current operational contamination rates reported by reprocessors calculated at 5.85% (this rate is based on a wide range of reported operational contamination rates and cannot be related to any specific material product market specifications). We have used the data to calculate the impact of an additional 1% contamination, and also provided estimates based on the use of the mean and maximum contamination figures reported by WRAP in their 2009 MRF study - MRF Quality Assessment Study tables 12 to 14

http://www.wrap.org.uk/sites/files/wrap/MRF%20Quality%20Assessment%20Study.pdf summarised below as Table 1: 

The reasoning behind using this data reference point is that it is real data from MRFs and so demonstrates what levels of contamination can be experienced from sourcing recyclate from this market.   In Table 2, an average of these figures is taken to provide a mean and maximum contamination % figure for these materials of 9.8% and 21.8% respectively.  This is based on tonnage proportions, and reflects that paper dominates this analysis at 60% in terms of tonnage.  

Summary of findings

It is clear from the data received that all nine reprocessors surveyed report real cost burdens associated with the management of poor and inconsistent quality of recyclate for their manufacturing processes.  Our summary findings are listed below as Table 2:

 Table 2







Commentary

The cost impact of poor and inconsistent quality of recyclate for this group of UK reprocessors is significant - at a conservative estimate of at least £51 million annually, representing an average cost per tonne of £15.67. 

 It should be noted that steps have been taken in this analysis to err on the side of caution and not to overstate the cost burdens.  Nevertheless, these figures represent a significant material cost for UK manufacturing. 

It should also be noted that we haven’t tried to extrapolate these costs onto the whole UK reprocessing sector.  We have concentrated on reporting real data from the membership of the Resource Association.  It would be reasonable to conclude however, that other reprocessors may face a similar burden and so the real cost of poor and inconsistent quality recyclate to UK manufacturing will be much higher.  Although we have accounted for just over 3 million tonnes of UK reprocessing capacity for which we have data available, this represents around half of the UK reprocessing capacity for paper and card, plastics, aluminium and glass. 

What is clear from the analysis is the impact of poor and inconsistent recyclate quality on UK manufacturers and reprocessors.  While the burden of these costs is being absorbed by the reprocessing sector, it acts as a real barrier to future investments and is also costing jobs in the UK economy, by limiting expansion opportunities for UK reprocessors.  While further detailed research is needed on the job creation potential of higher recycling targets and expanding UK reprocessing, indicative figures from our plastics reprocessors[2] suggest that investment equivalent to a year’s costs of contamination (£51m min) could create up to 700 direct and supply chain jobs and significantly support the Government’s ambitious plastics packaging recycling targets. 

Our view is that research shows starkly how notional cost savings in changes to municipal recycling collection systems have simply shifted costs significantly towards manufacturers in the drive for quantity over quality.  We do not consider this to be a sustainable burden for UK reprocessors to carry.  Several actions are needed to address this serious issue for the UK green economy, and to deliver both quality and quantity of recycling, including:

  • a fresh look at the whole municipal recycling supply chain, including action to better regulate the output of MRFs
  • this must include a mandatory MRF Code of Practice that demonstrably improves the quality of UK MRF output through a robust system of monitoring, material sampling and unannounced inspections
  • further robust action by regulators to enforce TFS Regulations and ensure that all recyclate exported meets legal quality requirements – doing this would undoubtedly lead to quality improvements in the recyclate also destined for UK reprocessors
  • more research by Government and its agencies to understand better the relationship between collection systems, public behaviour and contamination of recyclate - with the purpose of improving communications and operational practice to deliver better quality.  

 Conclusion

 We hope that the provision of this information will add an extra dimension to the debate about the need for high quality recycling, how it is to be achieved, and how improving the quality of materials made available to UK manufacturing will help to sustain and expand our manufacturing base in the forthcoming age of material insecurity.

 Acknowledgements

 The Resource Association acknowledges the assistance provided by all nine of its reprocessor members in the production of the data for this report. 

Appendix 1 of Costs of Contamination Report – template for data capture 

Direct Costs from Non-Target Material in Recyclable Supply

  1. Cost of extra recyclable supply to replace non-target material
  2. Additional transport costs
  3. Cost of disposal of non-target material

Variables

Tonnage requirement

Market price for recyclable supply

Load capacity of transport delivery

Cost of transport delivery

Non-target material disposal cost – Landfill, incineration, MBT, further recycling etc. (include transport cost if applicable)

Supplier quality rebate 

Example:

No contamination:

1000 tonnes requirement @ a market price of £100 per tonne = £100,000

Transport cost @ 20 tonnes per delivery = 50 deliveries @ £200 per delivery = £10,000

No disposal costs

Total cost to fulfil recyclable supply requirement = £110,000 

Non-target material contamination of 5%[3] (no rebate agreement)

1053 tonnes requirement at a market price of £100 per tonne = £105,300

Transport cost @ 20 tonnes per delivery = 53 deliveries at £200 per delivery = £10,600

Landfill disposal cost of 53 tonnes @ £100 per tonne = £5,300

Total cost to fulfil recyclable supply requirement = £121,200 

5% contamination has a direct cost impact of 10% in this scenario. 

Indirect and Reprocessing Costs – other factors to be taken into account where possible

  1. Fuel and emissions from transport to site of extra recyclable supply to replace non-target material
  2. Fuel and emissions from handling extra recyclable supply on site
  3. Fuel and emissions from transport of non-target material to disposal
  4. Impact of non-target material on process efficiency
  5. Loss of target recyclables alongside non-target material
  6. Impact on reprocessor output quality
  7. Extra energy or chemicals required to manage and extract non-target material
  8. Impact on equipment wear/failure due to exposure to non-target material
  9. Loss of recycling opportunity of non-target material in the correct reprocessing sector
  10. On exports; fuel and emissions impacts would be much higher and potential impacts from non-target material disposal are unknown. 

Appendix 2 of Costs of Contamination Report – notes on the methodology from independent data analysts 

These additional notes from Resource Futures provide background and commentary on the data provided and analysis carried out: 

  • The accuracy of the data has not been audited; it has been used as provided by the reprocessors. 
  • This is indicative data based on the nine reprocessors surveyed. It is not a full picture of the whole of UK reprocessing. 
  • The respondents provided data in a number of different formats, with differing degrees of transparency. 
  • The data strongly suggests that some reprocessors have taken a more in-depth look at costs than others, so that a more complete set of data is likely to show higher costs. 
  • We have been conservative in the evaluation of the data provided whilst making reasonable assumptions where necessary. For instance where respondents showed additional mechanical and maintenance costs resulting from contamination, we have assumed change is proportional to contamination levels, although further detailed work would be needed to fully establish this. 
  • The contamination data is for all material throughputs for each plant. Of course this will be a mix of co-mingled and separately sourced materials.

 

ANNEX 3

Summary of evidence from previous research to support higher frequency and size of samples in MRF Regulations

Previous MRF testing work has produced the following sample weights:

WRAP research project MRF001.  While it is not clear to us whether this research was ever published by WRAP, it was presented during at least one of the various meetings held to discuss MRF material quality in recent years and therefore has been in the public domain in some form.   This is the initial research undertook for WRAP by Resource Futures sometime around 2007.  It was based around trialling sampling and sorting techniques in order to produce some guidelines.    











WRAP research project MRF011 – This study was conducted by SKF Enviros and is the material composition study of English MRFs.  We understand it included around 18 MRFs, a significant sample size of the total English MRF capacity.  The primary aim was not to update the guidance on sampling but as they sorted so many samples they did include a table updating/supplementing the above.  Summarised below:

 

The sample weights and frequencies suggested and summarised above in these two significant WRAP projects raise the question about where the proposals in the draft MRF Regulations have come from, as they appear to bear no resemblance to the evidence previously generated. 

 

 

 

 

 

 

 

 

 

The sample frequencies proposed in the draft MRF regulations would offer the following weekly and annual testing numbers and weights based on the following output proportions:

 

 

 

Per week:

 

Based on a 50 week operational year the annual figures are as follows: 

Based on the above proportions the amount of material that is proposed in the MRF Regulations to be tested as a % is:


By means of comparison we offer some real time data from one of our members UPM.  UPM operate a major newsprint manufacturing operation in Shotton, North Wales together with a MRF from which sorted recovered newspapers and magazines are supplied directly to the newsprint mill.  They are sourced from local authority recycling collections as well as from other suppliers.
Our contention in this submission is that 0.01% of material tested is clearly insufficient to provide a robust and transparent dataset from which to determine compliance with the requirements of the separate collection provisions in the revised Waste Framework Directive, or provide the degree of confidence needed by the reprocessing sector to meet the market confidence objectives that the Government have stated in the consultation.

Shotton MRF input data from a few randomly selected local authorities is summarised as follows:


In juxtaposition, it can be seen that the total sorted weight of material per local authority sampled is equal to or greater than the combined input sampling weight that the draft MRF Regulations’ sampling sets (12,500).  This is a stark illustration of the gap between the proposals and good industry practice. This evidences the position taken by UPM to sample at much more intense levels than suggested by the MRF Regulations, in order to effectively manage the variable material input to the MRF and ultimately to the mill.  Their average sample weight is ~250kg. 

[1] Aylesford Newsprint, Closed Loop Recycling, ECO Plastics, Huhtamaki (Lurgan), Novelis Recycling, Palm Recycling, DS Smith Recycling, Smurfit Kappa Recycling, UPM

[2] A £30m investment at ECO Plastics has created 165 direct jobs.  Expansion of plastics reprocessing with £51m investment could create a further 275 direct jobs and 412 indirect jobs (based on a multiplier of 1.5 additional indirect jobs in the supply chain for each direct manufacturing job).

[3] Tonnage requirements assume that the additional material also contains 5% contamination.