Biffa CEO Michael Topham: “delivering change requires the right policy levers”
As we enter the final countdown to the new Government’s inaugural budget this coming Wednesday, the mood music from Westminster is manifesting apprehension across many UK businesses and consumers. The UK urgently needs a clear roadmap for economic recovery but as frequently documented many are increasingly concerned about the direction of economic policy and taxation, with business confidence widely reported to be faltering ahead of 30 October.
In the waste sector there is arguably grounds for optimism. Whilst the implementation of the Resources and Waste Strategy from 2018 has, quite frankly, been shambolic, the new Government has been quick to position the UK’s transition to net zero at the forefront of its agenda. Can the encouraging number of ‘green reforms’ in the first few months of office (albeit primarily with a focus on pollution and renewable energy) be seen as a clear statement of intent that the Government will be prepared to move much more quickly in order to stimulate progress and investment in a fair transition to a greener circular economy?
At Biffa we stand ready and willing to play our part in the UK’s transition to a greener, circular and more sustainable economy. I firmly believe that the country is sitting on a once in a lifetime opportunity to unlock circa £18bn in investment in the circular economy that will create more than 16,000 jobs and 43 million tonnes of circular raw materials annually, while contributing to a reduction of circa 7.1m million tonnes of CO2. So on the eve of her inaugural budget I would remind our new Chancellor of the following:
Waste doesn’t need public money to drive change – it needs a sensible, stable policy environment: We have long been calling for a more consistent approach to policy development. A stable and clear policy environment with realistic timetables and as much consistency as possible across all devolved nations, will be key to allowing the waste sector to innovate as well as unlocking the private capital, services and infrastructure that are required to implement change. In a number of key areas good work has already been done here and a key Government priority for the waste sector must be to successfully implement, in close collaboration with industry, the already planned policies such as Extended Producer Responsibility, Simpler Recycling and a UK-wide Deposit Return Scheme for drinks bottles and cans.
There is an opportunity to be more ambitious in policy making if the UK is to truly drive demand for closed loop recycling solutions. The unintended consequences of the existing Plastics Packaging Tax (PPT) has meant that whilst the current cap at 30% has been broadly met, the cost of virgin material versus recycled content is disincentivising increasing recycled content beyond this cap and in some cases producers have actually reduced their recycled content down to 30%. A more ambitious approach would be to progressively increase the packaging tax rate over the next 10 years to be over £500 per tonne, along with an increase in the minimum threshold of 50% recycled content, which would increase demand and recycling. This would in turn complement Extended Producer Responsibility by placing the financial burden of managing packaging on producers. To ensure that there is investment in building the processing capacity in the UK for closed loop recycling of plastic materials we need to provide confidence that there will be sustained market demand for recycled plastic at a realistic price.
For net zero to truly succeed, plans for the decarbonisation of energy and transport systems will be critical. Biffa has already started to adopt alternative fuels across our fleet. In 2020 we set ourselves the ambition to buy no more combustion engine vehicles after 2030 and we now have more than 94 battery electric vehicles and electric HGVs, and 64 renewable diesel (including HVO) fuelled vehicles, in service. However, we urgently need a policy framework that will drive investment in grid upgrades to accelerate and support HGV electrification. Whilst the infrastructure matures to enable us to move entirely away from diesel powered vehicles we can still make improvements in the carbon footprint of our waste collection operations by increasing our use of Hydrotreated Vegetable Oil (HVO) fuel in our fleets. We would urge the Chancellor to incentivise the use of appropriate low carbon fuels through the tax system to help operators lower their emissions immediately.
Effective action on climate change is slipping down the political agenda even as the global impacts of extreme weather become increasingly profound. It has never been more important that people and organisations understand their roles and responsibilities in reducing emissions and ensuring a safe environment for future generations. Delivering system wide change and an acceleration in the UK’s wider journey to net zero will require this Government to demonstrate on Wednesday that they are prepared to use the right policy levers to maximum effect.
