WASTE: THE OPTIONS

Have you explored your market's potential for recycled products?

Have you looked into strategic alliances that might give value to your waste stream?

It almost goes without saying that recycling is a hugely popular idea. It appeals because it reduces society's impact on the environment. Therefore, the primary benefit of recycling to industry lies in the marketing advantage of a good corporate reputation. But there are also identifiable financial gains. Recycling reduces the amount of waste to be transported to landfill sites and the bill for increasingly costly landfill space. It also offers a means to recover costs by drawing back into the product cycle materials that are otherwise lost. However, recycling is no panacea. The practicality of recycling is governed by comparing the costs of using recycled material with the costs of fresh raw material and the cheapest alternative means of disposal. Moreover, in several markets such as paper and glass (see the table below), the supply of recycled products may exceed demand. If this happens, prices will weaken sharply. What are the obstacles to recycling? Three key conditions must exist if recycling is to offer a company a real waste management solution. There must be: effective collection and sorting systems technological and managerial changes to the production cycle market demands for products made from recycled materials The waste management industry can help to create these conditions Effective collection and sorting systems Manufacturers need to overcome the costs and difficulties involved in collecting and separating a sufficient volume of reusable waste to make economic sense. The waste industry can act as a catalyst between thousands of individual producers of waste output and dozens of processors who would see waste as a raw material. But it must be available in the right place at the right time, in economic quantities, sorted and cleaned. Recent examples include diverting paper and card to board mills, beverage cans to steel or aluminium smelting works and glass to glassworks. Waste management firms cannot only offer and exploit economies of scale, but also provide the investment and managerial support for these kinds of initiatives. Changing the production cycle It is the manufacturers' responsibility to rethink their production processes to handle recycled material. In the motor industry, BMW are transforming the traditional breaker's yard into a disassembly plant. Under their recycling policy, car parts are now coded and assembled with eventual disassembly in mind. Further gains in recyclability will be facilitated by product redesign. Market demand for recycled products The most serious obstacle to growth in recycling is paradoxically the reason for its recent emergence - consumer demand. If the incorporation of recycled materials leads to a product showing lower performance, poorer appearance, or higher price, consumers' attitudes must shift substantially for the product to win a market share. Thus recyclability can have appealing or detracting qualities. Government Action EC and UK Government intervention to foster recycling has focused on household waste, especially packaging. The UK Government has set a target of recycling and composting 50% of recyclable household waste by the year 2000. This represents 25% of all household waste. COPAC (the industry body representing manufacturers, fillers and retailers) subscribes to a target of 50% of used packaging (industrial, commercial and household) to be diverted from landfill by the year 2000. In addition to setting targets, the Government is considering fiscal and market-based initiatives that could increase recycling by changing the incentives for those involved. In a recent report produced by consultants Environmental Resources Ltd (ERL) for the Departments of Trade and Industry and the Environment, four mechanisms attracted particular interest: Charges on products or raw materials Charges could be applied either to raw materials as they enter the production process or to finished goods going on sale. Changing responsibilities Manufacturers themselves could take over responsibility to take back the waste or participate in schemes which ensure the recovery and recycling of waste. Waste collection charges Households could be obliged to pay directly for waste collection in the same way that businesses are at present. This would encourage individuals to minimise, recycle or compost their own waste. Waste disposal charges A surcharge could be levied on private companies and waste disposal authorities above normal costs. The price would be handed on in the form of higher council taxes. These mechanisms are aimed at recovering the "social costs" of a product; ie what it costs society to handle the cost of a product's environmental impact after it leaves the factory. Although aimed at domestic and municipal waste (some 15% of total arisings), the impact of any scheme such as these would probably be felt by manufacturers in their product-pricing. When is recycling a good idea? For recycling to be a successful strategy, a firm needs the assistance of a waste management with a national infrastructure offering low-cost collection appropriate technology an innovative approach to recovery and reuse access to waste buyers

What materials can we recycle? Ferrous and nonferrous metals Manufacturers recycle 100% of the materials collected. The sole restriction on an expansion of recycled metals is the lack of a national infrastructure to recover and segregate scrap metals. The reclamation of metals is long established, and recycling rates have remained broadly constant over the last five years, although aluminium cans have boomed from 1,200 tonnes in 1989 to 6,000 tonnes in 1991. Glass Glass recycling has doubled over the last ten years. In 1981, 158 local authorities participated in the Glass Manufacturers Federation bottle bank scheme. This number had increased to 448 by 1991. However, the growth in recycling may lead to market saturation in green glass by 1994, and clear glass by the year 2000, under present technologies. Paper and board Paper and board recycling has increased by a third in the last decade. Waste paper and card recycling has now reached 44%, but reprocessing saturation is inevitable unless new uses such as composting, animal litter and insulation expand rapidly. Non-recycled paper is an aggressively traded international commodity. Plastics Recycling of production waste (200,000 tonnes per year) is well established but recycling of post consumer scrap remains problematic. Domestic waste plastics are dirty and mixed. Furthermore, end-use markets for products containing recycled plastics remain poor.

Conclusion: the benefits of recycling

Recycling is not cosmetic, even if the obvious benefits of recycling lies in improved corporate reputation. The decision to recycle should be taken as part of a company's manufacturing and financial strategies. Recycling has a dramatic impact on operations and internal accounting, where the demand for product redevelopment must be addressed.

The profit benefits can be remarkable. One recent case is of a hotel and restaurant chain which discovered it was paying waste disposal companies £15,000 annually to dispose of 500 tonnes of aluminium cans worth £250,000.

But companies must not forget that recycling cannot eliminate waste. It merely reduces the volume before incineration or landfill.

Waste: Somebody Else's Problem