SUMMARY OF REPORT CONTENTS

The UK produces approximately 330 million tonnes of solid waste, comprising both controlled and uncontrolled waste. The major producers of waste are the construction and demolition, mining and quarrying and agricultural sectors.  These sectors are also the most difficult from which to gather accurate data.

The major difference with the previous year’s figures occurs in the agricultural sector where uncontrolled waste has effectively disappeared (a reduction of 86 million tonnes).  This development is due to the exclusion of manure and slurry which are spread at the place of production for the benefit of agriculture.  There have also been major changes in sewage and sludge (down by 4 million tonnes) and dredged material (down by 17 million tonnes).  This reduction in the uncontrolled waste sector is partially offset by a significant rise in commercial waste (up by 10 million tonnes).

Controlled waste arisings totalled some 220 million tonnes in 2002/3 as opposed to 216m tonnes in 2001/2, an increase in levels seen in previous years.  Controlled waste has historically been the focus of EU Directives and UK legislation.  Within this sector, municipal/household waste typically receives the most attention from the UK Government and environmental groups, despite accounting for less than 10% of total waste arisings

The growing volume of municipal waste is pushing up the costs of waste management. At current rates, the amount of municipal waste produced in England will more than double by 2020, since the target of 30 million tonnes was already exceeded in 2002/3.  The costs of managing this waste stream, assuming no policy change, are likely to prove in excess of the £3.2 billion per annum previously projected.

Waste quantities in England are rising faster than growth in GDP and faster than in most other European countries.  A range of economic and social factors lies behind this growth, for example, rising household incomes, changing lifestyles, advertising and the growth in sales of pre-packaged goods.  Recent indications, such as the Review of England’s Waste Strategy, 2006, are that policy will be directed towards prevention (i.e. a reduction in packaging) although so far there is no agreement on targets to be achieved.

The waste management services market is currently valued at around £6bn, but is projected to nearly double by 2015.  In actual fact, even when current policies are maintained and not expanded, the value of the market should increase by more than 80% without factoring in additional costs associated with investment, new technology and labour shortages.    The development of recycling and recovery activities will also increase the value of the market over and above these amounts.

If current estimates are realistic, the waste management industry will grow a dramatic 73% by value between 2005 and 2015. 

The key piece of EU legislation to have a major impact on the UK’s waste management industry has been the Landfill (England and Wales) Regulations, which came into force on 15 June 2002.  Landfill had long been the preferred waste disposal option for waste management authorities and contractors due to its comparatively low cost relative to alternative routes, e.g. incineration and recovery. The introduction and increases in landfill tax/charges therefore are the major contribution to this market’s growth in terms of value.  Government targets for the reduction of landfill, as set out in Waste Strategy 2000 are for:

• Commercial/industrial waste entering landfill to be reduced to 85% of the volumes landfilled in 1995 by 2005, which will equate to around 36m tonnes.

• The recovery of value of municipal waste by at least 40% in 2005, 45% in 2010 and 67% in 2015. This equates to a maximum of 60% of waste being landfilled in 2005, 55% by 2010 and 33% by 2015.

In tonnage terms this translates as 13,700,000 tonnes in 2010; 9,130,000 in 2013; and 6,390,000 by 2020.

The 2004/05 DEFRA survey shows a decrease in the proportion of municipal waste disposed of to landfill, from 77% in 2001/02 to 75% in 2002/03 and to 72% in 2003/04.  The actual volume of waste being managed this way has also decreased, from 22.0 million tonnes to 20.9 million tonnes.

Although historically the burden of legislation has been borne by the waste disposal industry, recent years have seen two developments.  The first is the introduction of the notion of the “polluter pays”, or producer responsibility.  The second is the increasing attention being directed towards design improvements to reduce the amount of waste generated and improve recycling capabilities.  The key Directives increasing producer responsibility are the Packaging and Packaging Waste Directive; the End-of-Life Vehicles (ELV) Directive; and the directive on Waste Electrical and Electrical Equipment (WEEE).

Biffa overtook SITA as the market leader with a 9% share of the UK waste management market in 2005, with SITA is in second place, followed by Cleanaway, Onyx, and the Waste Recycling Group.  However, in mid 2006 Veolia acquired Cleanaway giving it a market leading position currently.  Over the last decade there has been considerable consolidation within the waste management industry, and this is continuing.  Recent moves within the industry have seen Biffa acquire Hales Waste Control and RMC Environmental Services; Viridor Waste acquire Churngold Holdings and Thames Waste Management Limited; and Terra Firma Capital Partners Limited acquire Waste Recycling Group Plc and the Shanks Group’s UK landfill and related power operations.

Over the next few years, it is anticipated that there will be further consolidation, underpinned by the need for further integration of services and the high levels of investment needed to meet the various targets set out in the many EU Waste Directives.  There is also likely to be an increase in the number of strategic partnerships seen in the industry.

Increased recycling and composting capacity is urgently required to cope with the anticipated additional waste passing though these disposal routes over the next decade, as well as investment in more advanced conversion technologies.  However, these disposal and recycling facilities are only slowly coming on stream.  Waste authorities are already complaining that their options for supporting advanced conversion technologies are limited because waste contractors are not yet offering these technologies as options within waste contract negotiations. 

The UK’s current waste recovery and recycling rates are amongst the lowest in Northern Europe. However, Government initiatives and funding are encouraging local authorities to increase recycling and composting capacity in order to meet imminent targets.   DEFRA have provided grant aid to various local authorities to motivate and support the introduction of new waste collection systems and greater levels of recycling.  Levels of support from DEFRA have been significant with £114 million made available in 2003/04, £90m in 2004/05, and a further £45m in 2005/06. 

The Government’s 2004 Spending Review promised:

• More resources to enable businesses to improve their energy efficiency and to minimise waste; and

• Increased investment for waste recycling.

Looking towards the future there are a number of new developments to note.  Firstly, the enlargement of the EU has led to a reluctance to continue the expansion of EU legislation and is likely to see more flexibility in the application of policy at the national level.  In addition, overall policy appears to be influenced more by reduction in greenhouse gases rather than resource conservation at the present time. 

Secondly, the UK government will shortly publish its Waste Strategy Review 2006, which will lay more stress on waste prevention and on voluntary cooperation.  Nonetheless, in order to meet its existing obligations the UK waste treatment industry will need to continue to expand its operations which will require clear thinking on policy with regard to planning.