Introducing circular principles to industrial strategy could add billions to UK economy – SUEZ

More than £9 billion could be added to the UK economy through the integration of circular economy principles into industrial strategy, says waste management company SUEZ.

Though the company’s CEO David Palmer-Jones was a staunch opponent to Brexit in the lead up to June’s referendum, he says, following a SUEZ assessment of the long-term future for the waste industry, that the UK’s impending departure from the EU presents the opportunity for a “home-grown, forward-looking strategic framework for the UK waste and resource management industry”.

The findings come part of the ‘A Resourceful Future – Expanding the UK Economy’ report, commissioned by the company and carried out by Eunomia Research & Consulting. It estimates that should the government adopt an ‘ambitious plan of policy and legislative measures’ focused on integrating resource conservation into its industrial strategy then more than £9 billion could be added to the economy by 2030.

The report says that such a policy would underpin investment in recycling and reuse activities and generate improved profits for companies that take steps to improve their resource efficiency.

It is therefore calling on the newly-formed Department of Business, Energy and Industrial Strategy (BEIS) to encourage greater use of secondary raw materials in products manufactured in the UK, which in suggests would stimulate a domestic recycling and reprocessing industry focussed on high delivering quality secondary materials to UK-based manufacturers.

Palmer-Jones said: “Our sector currently recovers about £15 billion worth of value from waste, in the form of secondary materials and energy, but because of a disjoint between waste policy and industrial policy, some 50 percent of recyclates and 90 percent of waste derived fuel is exported to overseas markets, even though the UK is a net importer of primary raw materials and of energy.

“Re-shoring and re-integrating these streams back into the UK economy will not only help future-proof the UK against resource supply risks, but also create employment in new waste-related activities.

The report focuses on the importance of creating a coherent strategy and policies to allow for the greater recycling, reuse and repair of primary materials, looking at the textiles, furniture and electrical sectors in particular. It states that the greatest level of economic uplift would arise from a positive transition towards a 70 per cent recycling level achieved across the UK by 2030, which in turn would also result in significant reductions in UK carbon emissions, falls of up to four million tonnes in green-house gas emissions per year - 27 million tonnes by 2030 - equivalent to 3.4 per cent of the UK’s 1990 emissions.

Calls on BEIS

The report calls on BEIS to work with the Treasury and Defra to bring about a system of incentives and taxation to stimulate industrial behavioural change towards the use and reuse of materials, including:

• Legislation on extended warranties – obligating manufacturers to offer longer term warranties and thereby influencing the durability or repairability of goods;
• Obligations on public procurement to include percentages of reused or recycled materials in specific goods supplied to public sector organisations;
• Enhanced producer responsibility where producers of a wider range of goods are obliged to pay the cost of recovering and recycling products and product packaging;
• Differentiation on tax regimes e.g. VAT for recycled materials v primary, with more flexibility on tax differentiation if the UK leaves the EU; and
• R&D tax breaks for novel processing techniques.

Setting the UK up for an independent future

Jaguar Land Rover has been working with Novelis to recover off-cut aluminium from the manufacturing process

Palmer-Jones continued: “We asked Eunomia to report back on how, and to what extent, the UK might benefit if we used the waste and resources industry as a source of renewed economic prosperity. Our report offers a vision of an industrial strategy informed by circular economy principles that will be suitable both for the UK’s current membership of the EU and, importantly, one that is sustainable both through any Brexit negotiation period and beyond for an independent UK.

“SUEZ is already working with companies in key sectors of the economy, such as Jaguar Land Rover, which can see the economic benefit from incorporating UK-generated secondary raw materials, such as recycled aluminium into its UK vehicle production.

“It would be a wasted opportunity for the wider UK economy if BEIS did not look to seize the opportunity and create a strategic framework to allow a greater range of industries to work with the waste and resource management industry and ensure that a far greater share of the value from key waste streams go back into the domestic economy as we look today towards the future of an independent UK.”

Word waste ‘should become redundant’

Dominic Hogg, Founder and Chairman of Eunomia Research & Consulting, said: “As we extract more valuable materials from the waste stream, then the obvious question arises as to how we make best use of those materials here in the UK.

“An environmentally-informed industrial strategy would not only look at how we might use these materials within industry, but would look to the waste and resources sector to see how industries could be supplied with the materials they need. There’s a real opportunity to develop a symbiotic relationship between the waste and resources sector, and other industrial sectors, and in doing so, to support the growth of the economy. The word ‘waste’ should become a redundant one in our vocabulary.”

The ‘A Resourceful Future – Expanding the UK Economy’ report can be downloaded from the SUEZ website.