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On the way to a circular economy

UK WASTE SECTOR REPORT

OFFICIAL PROGRAM

COOPERATION PARTNER


ON THE WAY TO A CIRCULAR ECONOMY The UK has made considerable progress in setting out waste management infrastructure in the form of collection, recycling and recovery of waste to move wastes up the waste hierarchy and avoid landfill disposal. But it is still behind most European countries in reaching its 2020 targets and achieving a low carbon circular economy; thus presenting significant business opportunity for international companies with proven concepts and operational performance. This report provides detailed insights and intelligence on UK specific issues, challenges and opportunities; all of which are vital considerations for businesses aiming to enter this market. Language: English Number of pages: 110 Author: LRS Consultancy Other Reports: Are you interested in other Waste Reports for other sectors and countries? Please find more Reports here: www.s-ge.com/reports

DISCLAIMER The information in this report were gathered and researched from sources believed to be reliable and are written in good faith. Switzerland Global Enterprise (S-GE) and its network partners cannot be held reliable for data, which might not be complete, accurate or up-to-date, nor for data which are from internet pages/sources on which S-GE or its network partners do not have any influence. The information in this report does not have a legal or judicial character, unless specified noted.


Foreword

Dear reader, In a world of growing populations, urban concentration and a persistent ‘throw away culture’, waste management has become one of the most important areas for private and public sector development. It is the key to solving the conundrum of less space and more waste and a key market area where business and government must work together to implement innovative and sustainable solutions. Many countries are looking for role models and solutions that can be implemented quickly and efficiently and Switzerland is a clear leader in this sector, enjoying a reputation of advanced and pioneering solutions to the ‘waste problems’. The following Report on the UK's Waste Management Market was commissioned by the Swiss Business Hub United Kingdom and Switzerland Global Enterprise, as part of ongoing trend spotting efforts. Trend spotting is an integral part of the services provided by the Swiss Business Hub and Switzerland Global Enterprise and we endeavour to identify and assess industry sectors in the UK that would be of interest to Swiss SME’s due to strong growth or a need for expertise and skills. The report has been prepared by Claudia Amos, Principal Consultant at LRS Consultancy, a specialist consultancy firm focussing on sustainable resource recovery with a number of years of experience and significant expertise in the area of waste infrastructure throughout the waste hierarchy, including traditional and novel waste recovery and recycling technologies. The Swiss Business Hub UK and Switzerland Global Enterprise would like to thank Claudia and her team for the excellent work and collaboration throughout the conceptualisation and delivery of this report. It is thus with great pleasure that we present this report to you and we hope that you will enjoy reading the report and benefit from its content. We remain, wishing you every success in the global markets. Thorsten Terweiden

Head of Swiss Business Hub


Foreword

Dear reader, Waste management and recycling is one of the key subjects when we talk about clean technologies. The demand for Cleantech products and services is rising constantly. The underlying reasons can be found in the accelerating pace of climate change, increased environmental awareness in all parts of the world and major investments in sustainable solutions by the public sector. The Swiss are world-class when it comes to recycling a range of goods. Significant levels of glass, aluminum cans, PET bottles, paper, organic waste, and even electrical and electronic appliances are separated for waste disposal, collected and recycled. Recycling rates for glass bottles, PET bottles and aluminum cans are particularly high with over 90%. Cleantech Switzerland is the official export platform for the Swiss Cleantech businesses and was developed as one part of economic stabilization measures (2009) by Switzerland Global Enterprise, the national export promotion agency on behalf of the Federal Government. The export platform is a powerful interface between Swiss companies and foreign project and business partners. Cleantech Switzerland’s work is supported by a central database (Cleantech Cube) containing detailed profiles of around 400 Swiss companies, a key resource in ensuring easy access to Swiss technologies. Cleantech Switzerland offers different services, e.g. information about projects, tenders and events; marketing support as well as market development and consulting services in cooperation with selected service partners. Additionally, Cleantech Switzerland utilizes its network of 16 Cleantech associations as well as the official Swiss network abroad, comprising around 100 Embassies, 50 General Consulates and 20 Swiss Business Hubs. As the official body for the Swiss Cleantech sector, we help you to grow your export sales and to increase your visibility in the global marketplace. Cleantech Switzerland is convinced that you will find a lot of meaningful insights in the UK waste report at hand!

Carina Steiner

Managing Director Cleantech Switzerland


Contents

2.3.2.

1.

Criteria for biodegradable materials _________ 63

OVERVIEW OF THE UK’S WASTE MANAGEMENT SECTOR ________________13

1.1.

Introduction to Waste Management in the uK __ 13

1.1.1.

Regional differences ___________________ 14

1.2.

Waste Arisings _______________________ 15

1.2.1.

Construction, Demolition & Excavation Waste __ 18

1.2.2.

Commercial & Industrial Waste ____________ 20

1.2.3.

Local Authority Collected Waste ___________ 22

1.2.4.

Other waste streams ___________________ 24

1.3.

Waste Management ____________________ 26

1.3.1.

UK Overview ________________________ 26

1.3.2.

Collection___________________________ 28

1.3.3.

Re-use _____________________________ 32

1.3.4.

Recycling, Composting & Anaerobic Digestion __ 34

1.3.5.

Residual Waste Treatment – Mechanical Biological Treatment (MBT) and Energy from Waste (EfW) 39

Product Labels, Specifications and End of Waste

3.

THE UK WASTE MANAGEMENT SECTOR __ 65

3.1.

Introduction _________________________ 65

3.2.

Profile of leading waste Management companies and main private stakeholders________________ 65

3.2.1.

Veolia Environmental Services (VES) ________ 68

3.2.2.

Biffa Group _________________________ 68

3.2.3.

SITA UK (Suez)_______________________ 68

3.2.4.

Viridor (Pennon Group) _________________ 68

3.2.5.

FCC Environment (FCC) ________________ 69

3.3.

Current Market structure & Segmentation _____ 69

3.3.1.

Reprocessing ________________________ 69

3.3.2.

Material Sorting & Separation of Dry Recyclables 70

3.3.3.

Organic Waste Treatment ________________ 78

3.3.4.

Residual Waste Processing _______________ 82

3.4.

UK market share and future trends _________ 85

4.

MARKET ENTRY INTO THE UK ___________ 87

1.3.6.

Landfill ____________________________ 40

1.4.

Summary and Future trends ______________ 41

4.1.

Introduction _________________________ 87

2.

REGULATORY DRIVERS FOR WASTE &

4.2.

Opportunities & Challenges within the UK market 88

RENEWABLE ENERGY__________________43

4.2.1.

Challenges & Threats ___________________ 88

4.2.2.

Opportunities and potential market niches ____ 89

4.3.

Project structures, investment and Available grants90

4.4.

Key Issue for a Market Entry & routes to market

4.4.1.

Key issues and requirements for a market entry in

2.1.

Regulatory framework and legislative requirements43

2.1.1.

European & UK Waste Policy & Legislation ____ 43

2.2.

Main regulatory stakeholders _____________ 54

2.2.1.

UK Government Departments _____________ 54

2.3.

Product labels and UK end of waste standards __ 60

2.3.1.

Product Labels, Specifications and End of Waste Criteria for dry recyclables _______________ 61

94

the UK _____________________________ 94 4.4.2.

Routes to Market & Market Entry Strategies ___ 96


Contents

4.4.3.

Engaging with UK Market Opportunities _____ 97

4.4.4.

Events and other marketing opportunities _____ 98

5.

CONCLUSIONS AND RECOMMENDATIONS100

6.

APPENDIX ___________________________102

6.1.

Regulatory requirements; A detailed timeline _ 102

6.2.

Examples of Swiss Companies working in the UK 106


List of figures

Figure 1: Map of the United Kingdom – England, Wales, Scotland and Northern Ireland ............................................................. 14 Figure 2: Map of the geographical regions in England ...................................................................................................................... 15 Figure 3: Total UK Waste Generation by Sector (2010) .................................................................................................................... 16 Figure 4: Distribution of Waste Streams in the UK Regions ............................................................................................................. 17 Figure 5: CD&E Arisings in the UK (tonnes) ..................................................................................................................................18 Figure 6: Composition of Construction & Demolition Waste ........................................................................................................... 19 Figure 7: Recycled Aggregate End User Markets ............................................................................................................................... 19 Figure 8 : Commercial Industrial Waste Sectors .............................................................................................................................. 20 Figure 9: Total C&I Waste in England by Sector, Waste type, and Management Method ............................................................. 20 Figure 10: C&I Waste Arisings in Regions of the UK ...................................................................................................................... 21 Figure 11: Composition of overall Household Waste arisings .......................................................................................................... 22 Figure 12: LACW in Geographic Regions of the UK ......................................................................................................................... 23 Figure 13: Yearly UK ELV Recovery Rates ........................................................................................................................................ 24 Figure 14: Waste Management of LACW in the UK 2005 - 2011 ..................................................................................................... 26 Figure 15: LACW Management in the UK 2006/07-2010/11 ........................................................................................................... 27 Figure 16: Waste streams in the UK by management type (LRS, 2013) .......................................................................................... 27 Figure 17: The waste hierarchy .......................................................................................................................................................... 28 Figure 18 : Collection & Waste Management .................................................................................................................................... 29 Figure 19: Waste Authorities in the UK............................................................................................................................................. 30 Figure 20: Re-use Policies and Strategies in the UK ........................................................................................................................ 32 Figure 21 : Overview of UK Waste Policies in the UK ....................................................................................................................... 35 Figure 22: UK Packaging Waste 2010 ............................................................................................................................................... 36 Figure 23: Household Waste Recycling Performance of English Regions 2001/2002 – 2011/2012 ............................................. 36 Figure 24: Material Recycling in England 2011/2012 .......................................................................................................................37 Figure 25: Organic Recycling - total UK input volumes from 2000 to 2010 (excluding MBT) ...................................................... 38 Figure 26: UK Organic Recycling 2010 (input in tonnes) ................................................................................................................. 38 Figure 27: Maximum Biodegradable municipal waste to landfill targets for the UK (EA, 2012) ................................................... 40 Figure 28 outlines the transposition of Directives by country in the UK ........................................................................................ 44 Figure 29 : Regulatoary Timeline 2005 - present ............................................................................................................................. 46 Figure 30: UK Implementation of EU Waste Framework Directive ................................................................................................ 47 Figure 31: UK regional government legislation affecting waste management. ............................................................................... 49 Figure 32: UK national government legislation affecting waste management. ............................................................................... 49 Figure 33: UK national government legislation regarding low-carbon energy. ............................................................................... 51 Figure 34: Legislation for England regarding low carbon energy ..................................................................................................... 51 Figure 35: UK national government policies affecting the waste sector. ......................................................................................... 52 Figure 36 UK regional government policies affecting the waste sector. .......................................................................................... 53 Figure 37: UK Government Departments, ministerial and non-ministerial. .................................................................................. 54 Figure 38: Executive agencies and other public bodies. ................................................................................................................... 56 Figure 39: Other Interested Stakehoders . ........................................................................................................................................ 58 Figure 40: Types of product labels and UK End of Waste standards. ............................................................................................. 60 Figure 41: Common types of plastic and their application. .............................................................................................................. 63 Figure 42: Waste Management Facilities in the UK (2012) ............................................................................................................. 65 Figure 43: Leading waste management companies operating on the UK market. ......................................................................... 66 Figure 44: Regional and medium sized waste management companies operating on the UK market. ......................................... 66


List of figures

Figure 45: Waste Industry Capital Expenditure 2007-2011 ............................................................................................................. 67 Figure 46 : Reprocessing / Recyclate Supply Chain ......................................................................................................................... 69 Figure 47: Recycling Collection vs Reprocessing Capacity in the UK (2013) - (ESA Practical Guide to the Circular Economy).. 70 Figure 48: Classification of sites in England and Wales by size and number .................................................................................. 71 Figure 49: Leading MRF Operators ................................................................................................................................................... 71 Figure 50: Common Types of Plastic Polymer, Their Applications and Ease of Recycling ............................................................ 72 Figure 51: U.K. Market Size and Dynamics (2009) .......................................................................................................................... 74 Figure 52: U.K. Market Size (2010) and Dynamics (2011) ..............................................................................................................75 Figure 53: U.K. Market Size (2009) and Dynamics ...........................................................................................................................75 Figure 54: U.K. Market Size and Dynamics ....................................................................................................................................... 77 Figure 55: U.K. Market Size and Dynamics ...................................................................................................................................... 77 Figure 56: UK Composting Supply Chain Flow ................................................................................................................................ 79 Figure 57: Composting Gate Fees ...................................................................................................................................................... 80 Figure 58 : Pipeline of AD Facilities in the UK ..................................................................................................................................81 Figure 59: Overview of AD Technology Suppliers .............................................................................................................................81 Figure 60: Anaerobic Digestion Gate Fees ........................................................................................................................................ 82 Figure 61: MBT Gate Fees .................................................................................................................................................................. 83 Figure 62: Leading EfW Operators.................................................................................................................................................... 84 Figure 63: EfW Gate Fees .................................................................................................................................................................. 85 Figure 64: UK Investment Need ........................................................................................................................................................ 86 Figure 6566: Swiss Recycling Rates for Dry Recyclables ................................................................................................................. 87 Figure 67 : Overview of Key Issues and Risks by Company Type .................................................................................................... 96 Figure 68 : Overview of Market Entry Strategies for Turnkey Suppliers and Equipment/Machinery firms entering the UK Market................................................................................................................................................................................................. 96 Figure 69 : List of Industry Sector Events ......................................................................................................................................... 98


Executive Summary

Waste is defined as “…any substance or object which the holder discards or intends or is required to discard…”. In the UK the majority of wastes arise from the three main ‘controlled’ waste sectors i.e. municipal/household waste, industrial and commercial waste, and construction and demolition waste (including hazardous wastes). In 2010 (the last recorded year of data), a total of 203 million tonnes2 of waste were generated in the UK by households, commercial and industrial businesses, and the construction sector. This is a decrease from 320 million tonnes in 2004, 305 million tonnes in 2006, and 289 million tonnes in 2010; and this decrease is thought to be primarily as a result of the downturn in the UK economy coupled with the impact of waste prevention activities. While municipal waste is expected to continue declining or levelling out in coming years as the amount of waste produced per person is reducing, it is expected that the UK will see an increase in C&I and C&D waste arisings with the recovery of the economy. The UK operates as a single country internationally, but domestically, it is split into four distinct devolved regions England, Wales, Scotland and Northern Ireland; each with their own environmental policies, strategies and regulations. All four devolved governments have adopted waste management policies that are built around, and driven by, the application of the waste hierarchy which prioritises waste management practices that recover value and minimise environmental impacts. As a result of the adoption of the waste hierarchy principles, the UK waste sector has been undergoing significant change in recent years, shifting from a landfill disposal industry, to one of resource recovery through re-use, recycling and reprocessing. While this was initially driven by regulatory targets set out in the European Landfill Directive and the relevant UK regulations, the waste management sector has been steadily evolving; new players from the retail, packaging, manufacturing and facilities management sectors are entering the market, driven by concerns not only about waste management budgets of their own operations, but also to the wider supply chain risks to their future business models, such as volatility in secondary commodity material prices linked to availability of quality materials, and energy security to sustain their core business. Demand for closed loop resource efficiency concepts, waste management services and associated technologies, notably for the recovery of value from materials for reprocessing and energy, is forecast to continue to grow over coming decades. This will create new business opportunities for companies able to supply viable and effective solutions particularly in more advanced technologies because, while increasing amounts of material are being collected, the lack of suitable reprocessing infrastructure in the UK is currently leading to large amounts of exports of materials to Europe and the Far East, where dry recyclates in particular can be recycled and recovered economically. The UK has made considerable progress in setting out waste management infrastructure in the form of collection and treatment of waste, but it is still behind most European countries in reaching its envisaged target rates for recycling, recovery and landfill diversion by 2020. The UK market, therefore, offers significant potential at this point in time; international companies, with proven concepts and operational track records are moving into the UK to realise this potential. A third of trade deals in the last 12 months involved an overseas firm. The waste management sector in the UK currently consists of over 1,200 licensed facilities operating across the waste hierarchy, with many more small scale local plants operating under an exemption which are processing very small quantities or very specific non-hazardous waste streams. However, there are approximately 5 key players that dominate the market place, including several that are global companies. Businesses looking to invest and develop within the UK will find opportunities in sorting (Materials Recovery Facilities), bulking of steel, waste management of glass, reprocessing of rigid mixed plastics, and aluminium packaging, and treatment of organic waste as well as within the EfW sector.


Executive Summary

Development of new business in the waste management sector in the UK is impacted by a number of factors including: regional differences, regulation complexities and uncertainties; land use issues and planning and permitting delays; carbon reduction and renewable energy policies related to waste derived electricity, heat and gas; availability of investment; and a diversity of stakeholders.

This report starts with a short introduction and provides an overview of the UK waste sector on it‘ way to meeting the ambitions for closed loop recycling and a low carbon, circular economy providing an insight in   

UK waste definitions and arisings in Chapter 1.2 providing information on the UK as a whole as well as the four devolved regions of England, Wales, Scotland and Northern Ireland, followed by a review of the level of waste collection, recycling, composting, anaerobic digestin and thernal recovery activities to show the current status of the waste sector as well as future developments Before detailing the relevant regulatory framework with policies, legislation and requirements in Chapter 2 detailing UK regulatory stakeholders, product standards and labels as well as the developing End of Waste criteria relevant for businesses recovering value from waste. Chapter 3 provides an overview of the UK waste sector, describing major players, the relevant competition in the reprocessing, composting, digestion, pre-treatment and energy recovery sector with information on existing and future facilities in the UK, leading technology options and players as well as gate fee information. All this information has been analysed in Chapter 4 to provide a view on how Swiss companies can access the UK market, where opportunities can be found, how challenges could be mitigated and how routes into the UK market can be developed, including a list of major events and information sources

The major opportunities in the UK market for Swiss companies are aligned to the private waste management sector as the majority of waste infrastructure is built, owned and operated by private companies on service contracts to Local Authorities. Similarly the increasing number of merchant facilities for short to medium term commercial industrial waste contracts are also operated by private companies with differing levels of involvement by waste majors, as the top five are currently controlling the market. Success depends on understanding the UK market and potential risks, assessing and realising unique selling points (USPs), identify market barriers and market potential, recognising the right opportunity, finding the right partner or agent, accessing the private sector supply chain and delivering a marketing and business plan which will secure investment and demonstrate a strong business model.

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The UK has made considerable progress in setting out waste management infrastructure in the form of collection, recycling and recovery of wa...

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