Waste sector growing faster than the wider economy, report finds

5th February 2015


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  • Business & Industry ,
  • Waste ,
  • Generation ,
  • Renewable

Author

William Connally

The economic value from managing waste has risen by a third over the past eight years, according to a government report published today.

Analysis of the recent and potential future contribution of the waste and resource management sector to UK economic growth by the environment department (Defra), finds that the "gross value added" (GVA) of a tonne of waste increased from £32 in 2004 to £43 in 2012, after inflation had been taken into account. GVA is the value of goods and services produced in one sector of the economy.

The UK gains considerable value from recovered materials, the report says. In 2012, dry recovered material from households, such as glass, paper and plastics, was estimated by Defra to have been worth up to £500 million. The environment department estimates that the value of recovered materials from commercial, industrial and construction waste over the same period was likely to be several billion pounds.

The waste industry adds more value than other extractive industries in the UK, Defra reports. In 2012, the waste industry added almost £41 of GVA for each tonne it treated compared £16 per tonne produced by the mining and quarrying sector.

The waste industry is also contributing to the economy through energy recovery, Defra says. In 2013, £447.4 million of electricity (9005 GWh) was generated from waste. Of this, £155.5 million (3130 GWh) was generated through residential waste treatment; £35.1 million (707 GWh) from anaerobic digestion; and £256.8 million (5169 GWh) from the capture of landfill gas.

Such activity reduces the cost to the public sector of managing waste, the report states. Between 2008/09 and 2012/13, the total cost to councils for managing waste, excluding landfill tax, fell by 3.5%, Defra reports.

The environment department outlines in the report how domestic reprocessing of waste can add further value to the economy and support jobs and growth, while also reducing import of raw and recovered materials from overseas. Defra is collecting data for the volume of material recovered in the UK to calculate the extent to which the domestic use of recovered material has changed over time.

The UK's reprocessing sector is not large enough to use up all the materials recovered domestically, leading to exports worth £4.35 billion in 2013, or 8% of all UK exports by weight, the report reveals.

Resource efficiency has improved and there has been some decoupling of resource use and income generation across the economy, Defra believes. The department is hoping that more businesses will earn revenue from their waste following the launch of the Environment Agency's new "end of waste quality criteria". This will allow businesses to reuse some waste they would have otherwise been required to dispose of.

Businesses could save £139 million a year through reduced waste management costs by 2020, and generate a further £355 million through the sale of new products manufactured from such material, Defra says.

The Environmental Services Association (ESA), which represents the waste industry, welcomed the report, but warned of tough times ahead for the recycling industry.

Executive director Jacob Hayler said: "Recyclers are struggling as local authority cost pressures are leading to more contaminated material being pushed on to the market, which has little, if any, value.

"The resource sector's true potential - as recognised in the report - will not be realised unless we can fix a broken supply chain, which, at the moment, is not producing the valuable outputs the market demands."

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