EU Action Plan for the Circular Economy

Alex Cunningham Excerpts

Monday 7th March 2016 General Committees

[Alex Cunningham (Stockton North) (Lab)]

It is a pleasure to serve under your chairmanship, Mr Stringer. I am pleased at the opportunity to speak about the documents before us today.

The documents appear to move in the right general direction and offer no real controversy for any decision in Committee, but that is not to undermine or undervalue their importance. As has been said, the European Commission has long been looking at the efficient use of resources and the central means of achieving the aims of the Europe 2020 strategy. A number of steps have been taken in recent years.

As outlined by the Minister, the Commission’s thinking is that a transition to a more circular economy, where the value of products, materials and resources is maintained as long as possible and the generation of waste is minimised, is an essential element of EU efforts to develop a sustainable, low-carbon and resource-efficient economy throughout Europe. I do not think that any of us would disagree with that ambition of the EU. Indeed, the fact that the Commission withdrew the previous circular economy package in December 2014 to present a more ambitious strategy in late 2015 would appear to confirm that goal.

The new circular economy package that we are considering, adopted by the Commission in December 2015, looks like a candid effort to stimulate Europe’s transition towards the circular economy. Consisting of an action plan, timetables for completion, and various legislative proposals and revisions in a number of areas to achieve those goals, the package examines steps that may be taken at each stage of the value chain, looking specifically at both product design and efficiency of the production process, as well as such factors as the impact of consumer choice, waste management and the reuse of secondary raw materials.

The Minister has already talked about such considerations, but they are often not at the forefront of the minds of consumers or producers. With a new package in place, however, I very much hope that they soon will be and that many more organisations and individuals will recognise what we see to be the duty of us all. Given the increase in waste per UK person from 402 kg in 2013 to 413 kg in 2014, we face more waste going to landfill rather than recycling.

EU analysis suggests that further progress on resource efficiency is possible and identifies major environmental, economic and social benefits to greater efficiency. To that end, the Commission has identified net savings of as much as €600 billion for businesses in the EU, or 8% of annual turnover. That is quite a lot of money. Furthermore, the new package could reduce total annual greenhouse gas emissions by as much as 4%, which would be a major contribution to climate change measures.

Putting in place stronger measures to close the loop and create a circular economy by transforming waste into a resource is an essential part of necessary increases in resource efficiency if the European Union is to achieve its ambitious goals. Moves in that direction are certainly to be welcomed. However, that is not to say that the revised package is perfect. For example, in 2013 total waste generation in the EU was estimated at 2.5 billion tonnes, of which 1.6 billion tonnes were not reused or recycled. That amounts to a loss to the European economy, and a significant missed opportunity to improve resource efficiency.

I have already made clear my belief that making the transition to a more circular economy offers a key opportunity to generate new and sustainable competitive advantages for a stronger Europe. I am sure that the Minister and other Government Members will concur. We know, however, that only 43% of municipal waste generated in the Union is being recycled, leaving 57% to be dumped in landfill or incinerated. I wonder whether reducing the target for reuse and recycling of municipal waste—down from the previous goal of 70% to 65% by 2030 now—sends the right message.

Moves to limit the landfilling of municipal waste to 10% by 2030 identify a clear and tangible target, but 18 member states in 2013 sent more than half their waste to landfill. Some actually exceeded 90% landfill rates, highlighting perfectly the need to strike the intricate balance between ambition and achievability. The EU has set a 50% recycling target for household waste by 2020. I am sure that the Minister will agree that that is positive, but does he believe it to be ambitious enough? Even so, we need to be clear about our own ambitions, not just because we feel the need to satisfy EU targets, but because we believe in the benefit of that circular economy and value the impact on our environment and economy. To understand that, I have a few questions for the Minister.

How will the Government ensure that the plan is implemented in the UK? While some authorities—particularly those in Conservative areas—are getting some respite from the Government’s cuts agenda, many are not, so their resources to drive their part of the plan are extremely limited. Business has also been hard hit in many areas—none more so than the north, where the floods of the past few months were at their worst.

How will the Government ensure that all local authorities have the resources to play their part in the circular economy? Some make a small profit from recycling—Stockton, my authority, is one of them—but many do not. The Minister has said how he favours a more consistent approach across authorities, so will he talk a little more about how he believes that can be achieved, so that we can have more streamlined systems?

What provisions will be put in place to ensure new responsibilities placed on business do not become a burden rather than help them to benefit? What will the Minister do at a European level—he will be Minister for Europe, next—to ensure that our neighbours, some of whom have a comparatively poor record in such areas, play their part in delivering the action plan? What plans does he have to report progress against the plan to Parliament?

All that said, no doubt the process is not straightforward, so much future tweaking will be needed around the edges of any future regulations and directives, as we learn collectively what works and what does not. That learning and the building of institutional knowledge across all member states will put us in a strong positon to make positive steps towards building a Union-wide green economy that is both sustainable and efficient. I look forward to hearing the Minister’s answers and to learning how he plans to ensure not only that the measures are properly adhered to and enforced, but that the all-important ambition for such a transition remains very much alive throughout the EU, with every state playing its part.

[Rory Stewart]

I thank the hon. Gentleman for his speech. Of the numerous issues he raised, I think there were three central ones. The first is resources for local authorities to ensure that they can achieve their objectives, which is an important point. The second is businesses and in particular how we ensure that we get things right for them. The third is what we can do to ensure that we engage with other countries through the European Union’s framework.

The hon. Gentleman was absolutely right to raise the resources challenge. As he pointed out, councils such as Stockton have managed to extract a profit from recycling. In ideal circumstances, things can be done. Huge savings can be made from reducing the amount councils send to landfill because they will not have to pay landfill tax and, if they get separation right, it is possible to generate income from the different components being recycled. However, that is not always easy, particularly in remote rural areas and sometimes in certain urban contexts: some people living in apartments are reluctant to separate waste because they simply do not have the room to do it.

The answer is to work more closely on harmonisation. Our initial work in London has led us to believe that if we could have a harmonised recycling system in London, local councils could save between £19 million and £20 million a year. In the case of London, increasing recycling rates would not just be good for the economy but save councils money.

Furthermore, if we are sufficiently imaginative and reach out to the industry by getting the economies of scale, we should be able to drop the charges imposed by companies, who should be able to use a standard fleet to collect waste. At the moment, any number of different trucks are driving around and there are any number of different bins. Some trucks are able to collect only commingled waste while others attempt to separate, but there are problems with crushing plastic as opposed to preserving glass. If we can sort that out through a more harmonised system, that should deliver savings and not impose costs on individual councils.

[Alex Cunningham]

The Minister has already talked about the challenges in different parts of the country. London is a close, tight-knit part of the world, which makes things easier, but there is a real issue in rural areas. What will happen to targets for rural as opposed to city local authorities? Will they be different?

[Rory Stewart]

Our objective is to deliver the EU target of 50% by 2020 and then to move on to the targets for 2030. To provide a real challenge to rural areas and to show that it can be done, Wales is showing an extraordinary improvement. The Welsh approach to recycling has very quickly driven recycling rates from the mid-40s per cent. up to the mid-50s per cent., and that is despite working in some of the most challenging geography in Britain. My gut instinct, therefore, is that if Wales can pull it off, we can do better in other rural areas in Britain.

The second issue raised by the hon. Gentleman was to do with businesses and how much they pay. We have to get the balance right there, too. In Germany, for example, the equivalent of Tesco pays to collect the packaging of its own products, which can cost a great deal of money. Some estimates of what businesses collecting their own packaging are spending total billions of euros a year. In Britain, instead, we have adopted a producer responsibility, or PR, system of tradeable credits in recycling in which the collecting is done by the local authority, but the businesses pay for the credits. At the moment, we believe that to be a more cost-efficient and economical system. We continue to focus on that model, although it might need to be tweaked to deal with some of the volatility of prices.

The third question was about what we can do to reach out to other countries. That is a two-way street. Sometimes, it is a matter of us learning from other countries. As the hon. Member for Aberavon knows, Denmark leads us by a long way on this. On Friday, the Danish Environment Minister told me at the Environment Council that the Danes had got their landfilling down to 1.3%. I can hardly believe that to be true, but if it is, we have an enormous amount to learn from Denmark—that is an impressive figure. I was just congratulating Hampshire on 7%, but 1.3% is really going some. As the hon. Member for Stockton North pointed out, however, other member states—often those that have joined the European Union relatively recently—have landfill rates up at the 70% or 80% mark. Clearly, things can be done to share best practice with those states.

To conclude, the areas that we probably want to focus on include food waste—an issue on which the hon. Member for Bristol East (Kerry McCarthy), the shadow Secretary of State, has led a great deal. It is becoming more and more urgent for the public. People care more about food waste, and the days, 10 years ago, when people complained about slop buckets are going: people feel a moral obligation to deal with food waste, and councils that offer separate food waste collection are popular. We need to get better at that.

As far as the second thing that we need to focus on is concerned, we can take some satisfaction in where we have got to: Britain has taken household recycling rates from 11% to 45% since 2000. Getting to the point where we are recycling almost half our waste is relatively impressive. It is striking how attitudes are changing through all generations; people seem to be more comfortable and at ease with recycling.

Finally, we need to be practical. On Thursday, I was talking to the Dutch Government about something called the North sea resource roundabout, which is a new, voluntary initiative of the sort that we should be pursuing more—it is not the EU regulating, but a voluntary approach.

We have fantastic agreements going with Holland on moving bottom ash from Britain to Holland, where there is a much more sophisticated recycling process to extract metals, and on moving compost from Holland. The Dutch have a lot of manure coming out of their animals, but do not have much use for it, so we are moving it to Northumberland, where we can process it into fertiliser. Finally, we are also working with Flanders on the issue of chemicals in plastics.

In every case, concrete issues of shipping routes, costs, definition of waste—how waste is defined affects whether we are allowed to transport it across international bodies—and the way in which waste is counted are involved. As my right hon. Friend the Member for Basingstoke pointed out, how waste is counted affects whether people are incentivised to collect bottom ash.

If we can get such things right, we will see a revolutionary change moving towards what we want: a natural capital approach, making sure that things that are not counted, that the market does not recognise, are properly captured—the value in not only the primary products, but the secondary products coming out of the bottom of incineration. We will then protect our environment for the future and create an economy that is sustainable, low carbon, efficient and impervious to shocks from the global volatility of commodity prices. Such an economy will achieve what we want, which is a more prosperous and a more environmentally friendly future.

Question put and agreed to.