Demand Recycled: New report provides fresh thinking on increasing demand for recycled materials

Wednesday, November 21, 2018

Policy measures to deliver increased use of post-consumer recycled materials (PCR) in the UK economy are outlined in a new report from Eunomia Research and Consulting, released today.

The report, 'Demand Recycled: Policy Options for Increasing the Demand for Post-Consumer Recycled Materials', commissioned by the Resource Association and WWF-UK, analyses a range of policy options and sets out fresh thinking on the likely effectiveness of various policy interventions.  It responds to the growing need for detail on potential policy options in the implementation phase of the forthcoming Resources and Waste Strategy for England.

It reviews the approaches used to date to increase recycling, investigates the causes of market failure and considers a wide range of potential policy measures to enhance the market for recycled material.  It then investigates in detail a short-list of four types of policy measures to increase demand: materials taxation; a fee-rebate (or ‘feebate’) system; tradable credits and the establishment of a single Producer Responsibility organisation.

It recommends further consideration of a ‘feebate’ system as the most attractive policy option.  It rejects materials taxation based on the complexity of delivery. The report suggests that a single compliance scheme and single organisation for producer responsibility would be complementary to any policy option used to increase demand for PCR.

The feebate scheme would comprise a levy on all packaging which is refunded to organisations demonstrating their use of PCR through the number of certified credits they hold. The system is favoured due to its versatility in design, the reduced administrative complexity relative to the tax-based measure, and the stability of the incentive it gives.

Ray Georgeson, Chief Executive of the Resource Association said:

“All parts of the resources supply chain for too long have talked in general terms about the need to boost demand for recycled material and use demand-pull measures to develop the markets to assist in reaching higher recycling targets.  This report now adds a real level of detail to this discussion with some much-needed fresh thinking. The Resource Association was delighted to collaborate with WWF-UK in commissioning this work from Eunomia as a contribution to the wider, detailed debate that is now needed.”

Dr Lyndsey Dodd, Head of Marine Policy at WWF-UK, said:

“Our oceans are choking on plastic, 90 per cent of the world’s sea birds have fragments of plastic in their stomach. Despite the public outcry, more products are being made with virgin, or new, plastic than with recycled plastic.

“A new system is needed – where a levy on all packaging is used to reward those using the most recycled material - to incentivise the use of recycled material and support the target announced in the budget for a minimum of 30 per cent recycled plastic in products. Nature is on life support, and we must act now to save it. “

Dr Dominic Hogg, Chairman of Eunomia Research and Consulting, the primary author of the report, concluded:

“New challenges on resource use require new thinking and new collaborations.  I was delighted to be commissioned by WWF-UK and the Resource Association to conduct this analysis and it is good to see productive NGO and industry co-operation on shared concerns.  As the Treasury considers its proposal for a tax on plastics, with consideration of exemptions for materials with high recycled content, we believe this type of mechanism should be a strong candidate for consideration as it combines a fee with an incentive to use PCR.”

The report was launched at the Resource Association’s Parliamentary Reception on 20 November, sponsored by DS Smith Recycling.  The event was hosted by Alex Sobel, Member of Parliament for Leeds North West, who addressed the meeting alongside Jochen Behr, Head of Recycling at DS Smith.

The full report can be read and downloaded here: Demand Recycled: Policy options for PCR