What is the potential impact of Brexit on the UK’s trade in waste?

Every year the UK exports around 15 million tonnes of recycled materials overseas. Of this, around 3-4 million tonnes goes across the Channel to the EU.

Additionally, we send a further 3.5 million tonnes of waste to the EU which has been processed into a fuel and which can be used to generate energy. Does Brexit put these material flows at risk?

UK households and businesses have improved their recycling rates dramatically in the past 15 years. Vast quantities of paper and card, plastics, glass and metals are now collected so that they can be turned back into goods and packaging.

But little manufacturing industry remains in the UK, so to find a home for these materials the recycling sector is forced to look into overseas markets, principally in Asia, but also in the EU.

Our waste-derived fuel exports to the EU are the result of the UK’s historic reliance on landfill for disposing of our waste. Our combination of extractive industries and natural geology led to the development of a strong and efficient landfill sector.

But as we have come to realise the full environmental consequences of landfill (in the form of greenhouse gas emissions which arise from disposed organic wastes), we have now tried to move as far as we can into alternative treatment processes.

The UK gains almost £1 billion in value from the sales of our recyclables to the EU. For our waste-derived fuels the dynamic is a bit different: we actually pay around £400 million to Dutch, German, and Scandinavian energy-from-waste plants to receive the material which would otherwise end up in domestic landfills.

We rely on these treatment facilities as we have not yet managed to develop all of the treatment capacity we need, and we continue to landfill millions of tonnes of waste potentially suitable for recycling or use as a fuel. In fact, ESA research suggests that the UK will still face a waste treatment capacity shortfall of up to 6 million tonnes in 2030.

We are therefore heavily reliant on the EU to help us manage and treat our waste in an environmentally sustainable manner. A form of Brexit which disrupted our trade in waste would lead to higher costs for waste producers (councils and businesses), more waste landfilled than otherwise, and the increased risk of illegal dumping, which is already a significant blight on our local communities with around 2 million tonnes of household and commercial waste leaking into the criminal sector every year.

The direct impacts of a hard Brexit, where we leave the customs union and single market, on trade in waste would be in the form of both tariff and non-tariff barriers. Tariffs of up to 6.5% on some materials would increase costs, which have already been driven up for fuel exports by sterling’s slide.

A bigger concern though comes from the potential for additional border controls to create delays at ports. Waste does not keep well for prolonged periods of time and offensive smells pervading storage areas is the last thing anyone wants. The extra time of course also adds to exporting costs.

One solution to our current reliance on EU (and other) markets would be for the UK to develop more domestic waste treatment infrastructure. Such infrastructure, for both recycling and energy recovery, relies on strong regulatory support.

In the case of recycling this would necessitate stronger measures to encourage more use of recycled materials within the UK, while for energy from waste plants we need greater long-term certainty to give investors the confidence to make substantial up-front capital investments.

The UK is currently bound by the EU’s legislative framework for waste. This sets the overall strategic direction for the waste and recycling sector, in the form of targets for recycling levels and for diverting waste away from landfill. And it also sets the technical standards at regulated waste treatment facilities.

Brexit may offer some opportunities for the UK to diverge from an EU approach and to capture even more value from our waste. For example, a move away from weight-based targets and towards a carbon or value-based alternative could enable the UK to leapfrog above the EU’s best recyclers in terms of environmental outcomes.

But there is little doubt that, whatever form it takes, Brexit will increase the risk of disruption to at least some of our current trade in waste. This will raise costs, increase the likelihood of more material ending up in landfill, and increase opportunities for criminals to move into the waste sector. As with other sectors, the best Brexit for waste and recycling is one in which trade impacts are minimised.

By Jacob Hayler, Executive Director at Environmental Services Association.

Disclaimer:
The views expressed in this analysis post are those of the authors and not necessarily those of the UK in a Changing Europe initiative.

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