Circular economy could boost economy by £3bn

Going for Growth

Increasing investment and better practice of recycling and bringing about a circular economy could see net exports of more than £20 billion and the creation of 50,000 new jobs in the recycling sector by 2020, the Environmental Services Association (ESA) has found. 

The ‘Going for Growth’ report, released yesterday (10 June), found that by encouraging resource efficiency and promoting design with end-of-life recycling in mind, the UK could unlock £10 billion of new investment, create 50,000 new jobs and provide the economy with an extra £3 billion. 

Writing in the foreword to the report, ESA Chairman David Palmer-Jones said: ‘A circular economy, where the UK increasingly reuses and recycles the resources it already has, could help generate 50,000 new jobs with £10 billion investment, boosting GDP [gross domestic product] by £3 billion. The circular economy is the best long-run approach to return the UK to sustainable growth.’ 

In order to bring about a circular economy, the ESA recommends ‘action’ to be taken in five areas: 

1. Design of products 

According to the report, designing products with end-of-life recyclability in mind would help create less waste and potentially capture the 140 million tonnes of unused recyclable resources on the market and earn the UK economy an extra £1.4 billion. 

The report also states that by seeing manufacturers become more resource efficient by utilising more recycled materials in goods and packaging, sending recyclable waste materials for reprocessing and utilising any residual waste for energy, the demand for raw materials could be reduced by over 28 million tonnes by 2020. 

To bring these occurrences about, The ESA suggests embedding circularity in the design education system, reviewing regulations that ‘hinder reuse or repair’, and make manufacturing processes more transparent. 

2. Optimisation of collection systems 

Improving work between local authorities and waste management contractors to improve recycling both from householders and businesses would help drive a circular economy. 

The ESA suggests that the improved procurement of services and better risk transfer between the public and private sectors ‘would deliver improved long term value for money’. Further, the ESA encourages the improved take-up of separate food waste (for digestion) to divert material from landfill. 

3. Incentivising the uptake of recyclate 

The ESA suggests reforming the packaging recovery note (PRN) and packaging export recovery note (PERN) systems to ensure a ‘level playing field’, stronger enforcement of transfrontier shipment regulations ‘to eliminate illegal exports of waste’ which undermines legitimate business, and implementation of a robust regulatory approach for MRFs in which a ‘high bar’ approach to monitoring, sampling and data release drives out poor practice in the industry. Further, the ESA suggests the EU should consider adding products with high-recycled content to the list of VAT reduced goods to boost demand for recyclate. 

4. Creating resilient markets for recyclates 

The ESA supports a suggestion from the Local Government Association that landfill tax receipts from local authorities should be redistributed to local taxpayers. 

The ESA welcomes exploration of the suggestion that the proportion raised from the commercial sector should be used provide underpinning capital for ‘forward thinking waste infrastructure projects’. 

Further, the ESA supports increasing sampling sizes in the MRF Code of Practice to ‘enable price differentiation to drive higher quality’ recyclates. 

5. Providing a stable policy framework to remove the political risk of investing in processing infrastructure 

The ESA suggests that in order ‘mitigate the problem of waste and resources being a second-tier issue for multiple government departments’, a BIS Ministerial post should be created to lead on Resource Efficiency across government, ‘linking the current emphasis on industrial policy with the material resources agenda’. It also suggests the Green Investment Bank should consider developing ‘insurance products’ that would underwrite elements of waste volume/recyclate price risk, making it easier to raise private finance for investment in waste treatment and recycling facilities. 

Resource management sector and government have parts to play 

Speaking at the launch of the report, CEO of the Waste & Resources Action Programme (WRAP) Dr Liz Goodwin, said: “There continues to be most definitely a role for the resource management sector to play - to be at the heart of the circular economy debate, by showing real leadership, and to extract the multitude of benefits on offer. 

“The sector has made some progress here, and together we need to work to ensure the good work is built upon.” 

One suggestion was to see municipal mixed plastic waste, used to manufacture food grade plastic for use by the UK food packaging industry instead of sending it for export. 

Goodwin went on to outline that by increasing domestic growth in the sector, by 2020 there could be 10,000 new jobs in the recycling sector alone. 

To do this, she added, there needed to be more government support for bringing about a circular economy: “It is clear that there is a role for government here. So to policy makers, I say this. We need a business environment where production of quality-recycled materials in the UK makes sense.” 

She concluded: “I welcome ESA’s report, and urge everyone to think about the role they can play in making a circular economy a reality and how we can work together to maximise its potential. 

“If we don’t, the UK will be weaker, less resilient, less competitive both at home and internationally, and any growth will be slower than might otherwise be the case.”

Read the ESA’s ‘Going for Growth’ report.

First circular economy MBA 

The report forms part of an increasing focus on brining about a circular economy, with Bradford University announcing last month that from July, it will offer the ‘world’s first’ circular economy Master’s in Business Administration (MBA) degree.

It is hoped that the ’Innovation, Enterprise and Circular Economy MBA’ will ‘give the next generation of leaders a first-mover advantage, by tackling subjects such as regenerative product design, new business models, reverse logistics or enabling communication technologies, to name but a few elements.” 

Read more about the circular economy MBA.