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The roadmap to a resource efficient europe

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Dr. Adam Read – Director Waste Management & Resource Efficiency, AEA …

Dr. Adam Read – Director Waste Management & Resource Efficiency, AEA

Presentation at:
Scrap Ex – Secondary Commodities Markets Conference
13th November 2012


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  • Increased resource use is essentially resource depletionEven in the current climate there is still some potential growth, e.g. the UK is forecast to grow in the next financial yearStimulating growth implies jobs and wealthBusinesses –raw materials and mineral scarcity and price volatility are having a damaging effect on the economy
  • As well as being fundamental for global competitiveness, it will help Europe recover from the economic crisis and can create employment opportunities.
  • Taken from
  • Expensive commodities!
  • On this slide we can see the number of years supply of different materials left including tin, silver, copper, lead and others.So there is a real need to reduce the consumption and recycle as much of what we do use as we possibly can
  • The Roadmap outlines how we can transform Europe’s economy into a sustainable one by 2050, proposing ways to increase resource efficiency and decouple economic growth from resource use.It focuses on areas where it is felt policy action can make a real difference.It also discusses where prices do not reflect the real cost of a resource, and analyses from a life-cycle perspective.As well as transforming the economy by 2050, it includes milestones to be reached by 2020, and meeting these milestones are what is needed to put us, i.e. Europe, on the road to resource efficient and sustainable growth.
  • The Roadmap contains three strands which are to be met in order to lead to a resource efficient Europe, as well as discussing the role of governance and monitoring
  • The Roadmap suggests key steps that can lead to transforming the economy…One of the key drivers behind transforming the economy will be to change the behaviours and consumption of public and private purchases. This will have two net effects – drive RE and generate cost savings. Indirectly, it could lead to increasing demand for RE services and products, such as designing products that have a longer shelf-life or that can be easily repaired or recycled.There is a flip side to this – cost saving in one area can actually lead to consumption elsewhere and so must be accounted for in the development of policy and targets
  • Europe has the world’s highest net imports of resource per person according to the EU themselves. Over 8 billion tonnes of material was directly used in the EU in 2007.The aim should be to reduce that figure whilst at the same time increasing production and competitiveness. Improving re-use – waste exchange sees some businesses selling or giving their waste to another business to use as a raw materialNon-core business activities – e.g. its’ energy and water useMany businesses take a short-term view with different areas – thinking more long-term could lead to improved RE
  • Some members states are of course better at recycling, some are worse. Those in the upper echelons of recycling show that more can be done by states not performing so well.Of the remaining waste, most is landfilled or incinerated. Although waste generation is stable, some wastes are still growing, e.g. C&D, WEEE etc.
  • The Roadmap also has a number of targets related to waste management.As well as the above, they will continue working to eradicate illegal shipments of waste.
  • The Roadmap states that nutrition, housing and mobility are. Again, each of these areas includes 2020 milestones to be met as part of the Roadmap.
  • Deliverability, barriers and opportunity of the RE roadmap
  • 'leakage' of waste to sub-standard treatment inside or outside the EU – consider using funding research funding to help improve technologies for detection, identification, tracking and location of illegal shipmentsObstacles to the development of the recycling industry such as finance, planning and riskBehaviour– need to undo all the learning we have done since the industrial revolution – corporately not just personally
  • Inadequate innovation in recycling requires support research and economic incentives.General innovation is key to the EU’s potential. Innovation needed in extraction, processing, design, recycling, material substitution and general RE.Innovation Challenge Fund (Defra) 2012-13 - will establish the feasibility of new approaches enabling local businesses to extract value from domestic and commercial waste streams (i.e. through re-use and recovery). This should encourage partnerships between business, local authorities and local communitiesTightening legislation also requires effective policing
  • There is already a degree of waste commodity trading already happening in Europe.
  • Great technological advances have been achieved in recycling, organics processing, and waste to-energy conversion, and these have revealed opportunities in material and component recovery. Modern facilities recover much more material than was possible using manual systems, and they produce recyclates of a quality well above that required by most recycling protocols. These facilities can sort large volumes of varied waste, separating the valuable materials from those of less worth. They can also adjust sorting criteria to optimize selection based on scrap values in the spot market.Waste-collection operators and recyclers should focus on building new business models by working with manufacturers to identify and develop opportunities for value recovery. This could involve helping manufacturers design products and production processes to facilitate material reuse; it could also involve helping develop logistical solutions that allow manufacturers to incorporate recovered material in their production cycle. Contractors have already begun to transform themselves from waste operators into raw-materials and energy suppliers, in part by advising other companies on how to design products that can more readily be recycled and reused.
  • Although we obviously need to utilise materials better, for any waste that really is non-recyclable we should make sure we recover energy from it. One of the problems of energy recovery facilities such as EfW plants is the need to feed the beast. In fact, having recyclable material can add to the calorific value of waste…Some recycling efforts are also energy intensive with dated ones labour intensive – although this does create jobs. Every recyclable material has some problems. The overriding issue however is demand for recycled materials. Recycling as an industry is demand driven. Only those materials for which there is a great demand at any given time are economical to recycle.These steps are aimed to prevent waste going to landfill, an issue which is high in the waste sector and will continue to be so.This could, and likely will, lead to more applications for facilities such as AD, IVC and EfW in its various guises. This doesn’t mean that nimbyism will subside – EfW in particular remains a contentious issue, usually down to misconceptions still held
  • Companies may find they can satisfy their resource needs by recycling and reusing materials historically discarded as waste. Those involved in waste management have an opportunity to pave the way by developing services that allow manufacturers to capture value from materials left over after production or after a product has reached the end of its life cycle.
  • There are a lot of pressures on Europe currently – the Euro is under almost constant scrutiny and there has even been noises about a UK exit from Europe
  • Transcript

    • 1. The Roadmap to a Resource Efficient Europe what will this mean for the longer-term development of the secondary commodity market in Europe?Dr. Adam Read – DirectorWaste Management & Resource Efficiency, AEASecondary Commodity Markets Conference13th November 2012One Drummond Gate, Victoria, London
    • 2. Presentation scope+ Personal welcome+ About AEA+ The context of Resource Efficiency+ Overview of the Roadmap to Resource Efficiency?+ Is the Roadmap Deliverable?+ Defra / BIS Resource Efficient UK+ The EU as a Commodity Trading Block+ Impacts for Recyclers+ Unforeseen Consequences+ In Summary … 2
    • 3. A personal welcome 3
    • 4. A personal welcome+ Dr Adam Read - Practice Director @ Ricardo- AEA for Waste Management & Resource Efficiency - 18 years of operational expertise - 80 consultants (UK) - Former Local Authority Recycling Officer (RB Kensington & Chelsea) - Project Director for a number of EC product policy jobs - Technical Advisor to Defra on their Resource Scarcity Action Plan - Working with a number of waste companies on materials strategies+ Acknowledgements - AEA team (help with the research) - My clients for allowing me to ‘share’ their experiences - The organisers for the invite 4
    • 5. www.ricardo-aea.com 5
    • 6. Our Experience ….+ Resource Efficiency studies - Defra, WRAP, Envirowise, Private Sector companies+ Product Policy studies - Defra, Environment Agency, European Commission+ Resource Risk studies - Defra, ZWS, DfID+ Private Sector Support - Shanks, Connaught, Dairy UK, Veolia, Sita, Biffa, Hills - RFU, Christies, Diageo etc. 6
    • 7. Working in this space… 7
    • 8. Context to the RE Roadmap 8
    • 9. The Context+ There is only one world and one Europe!+ Growth of European economy even in times of austerity+ Increasing globalisation leading to increasing resource use - Pressure on dwindling resources+ European challenge = stimulating growth whilst leaving a sustainable future for future generations+ In the EU each person consumes - 16 tonnes of materials annually of which 6 tonnes are wasted (37.5%) - 3 tonnes of this going to landfill+ Businesses are facing ever rising costs for raw materials as resource availability comes under pressure - a real driver for change! 9
    • 10. Looking forward …+ Worldwide, demand for food, fibre and feed is predicted to grow by 70% by 2050+ Net imports of resources per person are at their highest in Europe (global comparison) but expect significant increases from rapidly developing economies (India, China, Brazil etc.)+ Predicted to require two planets to sustain us by 2050 (1.3 at current) = NOT SUSTAINABLE+ World Business Council for Sustainable Development states that ‘we require significant improvements in RE by 2020’+ Therefore, RE is a fundamental part of the European agenda for future global competitiveness… this is a business issue! - Will create jobs - Will help address the current global economic crisis locally … 10
    • 11. Liz Goodwin just last week! “In a recent survey 80% of UK based CEOs of manufacturing companies said raw material shortage was a risk to their business.” “A 147% surge in real commodity prices since 2000, and the uncertainty being caused by historically high levels of price volatility are hampering investment and economic growth” 11
    • 12. Europe 2020 Strategy+ Adopted in 2010 as a growth strategy for the EU to become a smart, sustainable and inclusive economy within the next decade+ One of the three reinforcing priorities = to promote a resource efficient, greener and more competitive economy - to help decouple economic growth from the use of resources, support the shift towards a low carbon economy, increase the use of renewable energy sources, modernise our transport sector and promote energy efficiency…. 12
    • 13. The agenda has been bubbling … “The robust international trade in illegally mined, quota-busting rare-earth metals highlights China’s near monopoly on the raw materials for environmental technology – a 95% dominance of world supply that is likely to become more widely noticed as China tightens its grip” The Times 28th May 2009 13
    • 14. What is Resource Efficiency?+ Doing more with less!+ Preventing waste, promoting reuse and recycling, developing markets for valuable products+ Generating the greatest benefits with the smallest quantity of natural resources+ Producing and consuming within both physical and biological limits of the earth+ Underpinned by LCA 14
    • 15. Materials identified @ risk+ Antimony+ Cobalt+ Indium+ Lithium+ Niobium+ Platinum+ Rare earth metals+ Tin+ Tungsten - Taken from the DEFRA report ‘A Review of the Future Resource Risks Faced by Business and an Assessment of Future Viability’ (AEA) 15
    • 16. Recycling rates globally …. 16
    • 17. China’s dominance …+ China is a leading producer of: - Rare earths (97%) - Antimony (91%) - Tungsten (81%) - Magnesium (77%) - Graphite (71%) - Germanium (71%) - Flourspar (59%) - Indium (50%) - Gallium (32%)+ Other leading producers: - Brazil – Niobium (92%), US – Berylium (86%) - South Africa – Platinum (61%), Congo – Cobalt (40%) 17
    • 18. Forecast prices to 2020 18
    • 19. Forecasts to 2020 19
    • 20. Priority Materials in the EU 20
    • 21. European priorities ….+ EC report (2011) highlighted 14 critical raw materials - Antimony Beryllium - Cobalt Fluorspar - Gallium Germanium - Graphite Indium Critical access is - Magnesium Niobium - Tantalum Tungsten required!! - Platinum Group Metals - Rare earths+ Raw materials are an essential part of both high-tech products and every-day consumer products+ Without these raw materials in sufficient supply, EU industry may be forced to stop production….+ We rely on the rest of the world for most of our supply 21
    • 22. Roadmap to a Resource Efficient Europe 22
    • 23. So what next?+ Worldwide demand for these (and other) raw materials increases ….+ Need an increase in collection and recycling of them - reducing the pressure on demand for raw materials - reducing energy consumption - reducing GHG emissions etc.+ Urban mining‘ is one of the main sources of metals and minerals for European industry - Need to build upon this…. 23
    • 24. The RE Roadmap 24
    • 25. Roadmap to a RE Europe+ Adopted in September 2011+ Outlines the key challenges and opportunities for Europe up to 2050+ Puts forwards issues which need addressing NOW+ Sets the milestones (some in 2020) which illustrate what is needed to put Europe on a path to resource efficiency and sustainable growth+ Provides a framework explaining how policies inter-relate and build on each other+ Outlines key inter-linkages between key sectors and resources+ Indicates how Member States should strive to remove the barriers that hold back resource efficiency 25
    • 26. RE Roadmap – Three strands+ Transforming the economy+ Addressing natural capital+ Tackling key sectors+ Also highlights governance & monitoring 26
    • 27. Transforming the Economy+ Step 1 - Sustainable consumption and production+ Changing behaviours - Driving RE and delivering cost savings - Leading to demand for RE services - Leading to demand for RE products+ Can lead to a ‘rebound effect’+ Milestone: - By 2020, we should have the right incentives to choose the most RE products and services through appropriate price signals and clear environmental information. - These purchasing choices should stimulate innovation amongst producers to supply more RE products and services 27
    • 28. Transforming the Economy+ Step 2 - Boosting efficient production+ Improve re-use – one man’s waste is another’s gold+ Improvements in non-core business activities+ Thinking beyond the short-term+ Avoiding the use of certain components and chemicals > REACH+ Milestone: - By 2020, market and policy incentives that reward business investments in efficiency are in place. These incentives have stimulated new innovations in resource efficient production methods that are widely used… 28
    • 29. Transforming the Economy+ Step 3 – Turning waste into a resource+ In the EU we throw away 2.7B tonnes of waste; 98M of which is hazardous – only 48% of this is re-used or recycled! Plastics+ Improved waste management recycling can create jobs – the ‘green economy’ BAA Waste Waste to MRF Beenham MRF Residual to EfW+ Milestone: - By 2020, waste is managed as a resource. Waste Ferrous recycling generated per capita is in absolute decline. Recycling and re-use of waste are economically attractive options for Aluminium recycling public and private actors due to widespread separate collection and the development of functional markets for Paper secondary raw materials. Energy recovery is limited to non recyclable materials … 29
    • 30. Step 3 continued ….+ The Commission will: - Stimulate the secondary materials market and demand for recycled materials through economic incentives and developing end-of-waste criteria (in 2013/2014) - Review existing prevention, re-use, recycling, recovery and landfill diversion targets to move towards an economy based on re-use and recycling, with residual waste close to zero (in 2014) - Assess the introduction of minimum recycled material rates, durability and reusability criteria and extensions of producer responsibility for key products (in 2012) 30
    • 31. Tackling Key Sectors+ Food+ Mobility+ Housing / building+ Typically responsible for 70-80% of all environmental impacts in industrialised areas 31
    • 32. Deliverability 32
    • 33. What will it achieve ?+ Depends on Member States and how they go about implementation+ History repeats itself …… - Landfill Directive - Waste Framework Director - Producer Responsibility Regs+ We need all member States to embrace this ‘reality’ and look to drive change sooner rather than later…..+ Is the UK Government up for it? Probably more so than Ireland, Portugal, Greece etc.+ This is an important point in global history…. Can we change what has been forecast? 33
    • 34. RE Roadmap Deliverability+ Barriers - Leakage of waste from the EU to sub-standard facilities - Obstacles to development  Finance  Planning  Risk perception - Inadequate innovation in recycling solutions - Behavioural lapses - Ignorance of decision- makers 34
    • 35. RE Roadmap Deliverability+ Opportunities - Innovation needed in extraction, processing, design, recycling, material substitution etc. - Innovation Challenge Fund (Defra)  will establish the feasibility of new approaches enabling local businesses to extract value from domestic and commercial waste streams (i.e. through re-use and recovery)  should encourage partnerships between business, local authorities and local communities - WRAP’s Waste Prevention Loan Fund - Tighten waste legislation  TFS, WEEE recast etc. - Waste-matching services (NISP etc.) 35
    • 36. UK – parallel strategy 36
    • 37. WRAP leading the charge! 37
    • 38. They aren’t the only ones…+ Challenges businesses to see risks as opportunities for change and improvement+ Focuses on specific scarce metals and minerals - those recognised as critical by businesses - especially in the hi tech, defence and environment sectorshttp://www.defra.gov.uk/publications/files/pb13719-resource-security-action-plan.pdf 38
    • 39. New approaches to embrace+ Re-design - Make recovery of these materials easier - Design products that are less reliant on ‘at risk’ materials+ Materials substitution+ New product engineering - University of Tokyo has developed an electric motor that can be used with Lithium batteries for electric vehicles on campus which doesn’t use rare earth elements in battery production+ Recycling - There is room to do more - We must focus on the resources at risk and those critical to EU manufacturing 39
    • 40. So what should we expect?+ More WEEE recycling! - It’s obvious in it?+ An increased interest in household & SME materials - WEEE, Batteries etc. (collection services or drop off?)+ New Campaigns - Get old mobiles etc. out of the cupboard @ home - Capture computers & TVs at the end of their life ‘better’+ New Partnerships - Hi-tech manufactures invest in closed loop recycling systems - Synergies with waste collection / processing companies - Evolution of the Tesco’s and Sainsbury’s models 40
    • 41. But when?+ Resource security and risk has been an issue for the last 5 years - So still slow to react+ The Oil crisis in the 1970’s was a pre-cursor - Did we learn our lessons then?+ So will the EU Roadmap make a difference? - Of course, it sets the agenda - UK Government has responded ….. Action Plan (March 2012)+ The current economic climate is helping make resource efficiency more mainstream – an issue for the Board Room! - Many Corporates are looking at resource risks / security - This will generate demand for local materials - This will drive European recovery @ all levels! 41
    • 42. Necessity is the mother of … 42+ Evolution of dentists from extraction to preventative care ….
    • 43. The EU Trading Block 43
    • 44. So what?+ Can the EU achieve Resource Efficiency in a global market? - It can improve its ‘rating’ - But reliant on many manufactured products from South Korea, China etc. - Should look to deliver significant closed loop improvements+ This means we need to look closely at what we will be manufacturing and then secure the right feed stocks….+ Needs closer attention to EU trading patterns+ Needs all member States to embrace this ‘joined up approach’ and not have its own trading arrangements…. Unlikely! - Are we really that enlightened….. - Too much ‘let the market decide’ 44
    • 45. The EU as a trading block+ There is a degree of waste commodity trading already happening – e.g. Solid Recovered Fuel - Is the UK giving up a valuable commodity? - Wrong material, wrong place, wrong time?+ Going forward ‘in demand’ materials likely to be ferrous and non-ferrous, textiles, WEEE etc.+ Commodity markets require standardisation to avoid ‘leakage’+ Need to aim for an equilibrium where we use (recycle) as much as we produce across Europe (or even in the UK!)+ Should we have recycling system that works at a EU level or should the UK be looking at self-sufficiency ‘to some degree’? 45
    • 46. Barriers+ Will the EU co-operate? - danger that each country will look after themselves (to be resource secure) - could drive over-capacity+ Infrastructure needs to be improved - requires capital investment which isn’t readily available in the current climate+ China is key to markets around the globe - difficult to change overnight+ Commodity waste exchanges across EU may be difficult without a single currency etc.+ Is it the most cost efficient approach? 46
    • 47. What Will This Mean for the UK Waste Sector? 47
    • 48. Benefits….+ The UK Waste Sector is already ‘European in flavour - Greater synergies between EU member States is inevitable - Material flows will continue where it makes sense (paper to Scandinavia) - Glass to France and Germany etc.+ Greater clarity over the target materials needed to ‘fuel’ the EU - These will increase in price - This allows Waste Companies to invest in collection & segregation equipment etc. - New technologies that allow segregation will come to the fore - Local markets for some rare earth metals etc. are likely to develop as global mining companies or larger waste management companies deem them a suitable risk…. 48
    • 49. Impacts for ‘recyclers’+ Technological advances+ New business models – leasing etc.+ More political drive and media attention+ More funding+ More support (corporate and public)+ Better collection systems to preserve quality+ Full move to a circular economy+ Logistics will become key! - Quality materials segregated and in the right place @ the right time! 49
    • 50. Quality trends since 2010+ Increasing concerns about quality from the end markets+ Less guarantees from Chinese & Indian reprocessors+ Returned loads from Indonesia and Brazil+ EA has clamped down on ‘waste’ exports+ UK and EU reprocessors continually setting the ‘bar’ higher in terms of quality and consistency+ Needs additional investment at MRF+ Needs more than 1 cycle @ MRF+ Now looking at evolution of service provision …..+ Quality is critical to closed loop reprocessing ….. 50
    • 51. Energy in the sector+ Ensure that energy is recovered from non-recyclable waste only+ Reduce energy intensity of waste treatments (AD, EfW etc.)+ Increase use of biodegradable waste for bioenergy generation 51
    • 52. Urban mining offers rewards ….+ Primary mining - 5g of gold per tonne of ore+ Urban Mining - 250g of gold per tonne of PFC circuit boards - 350g per tonne of phones+ Recycling this stuff NOW makes sense!+ And what about landfill mining for old resource ‘reserves’? - Research is underway - Demonstration plants in Europe & US 52
    • 53. How far could it go?+ Lets stop exporting raw materials worth money from the UK! - Rare earth metals - Recyclables - SRD / RDF+ Lets look at this holistically - We have an energy crisis - We need to generate jobs - We have potentially valuable raw materials that we export+ Lets think EU and lets make it happen - Needs strong Government leadership - Needs brave industrialists - Needs a fully engaged waste management sector ….. 53
    • 54. Unforeseen Consequences 54
    • 55. Unforeseen consequences+ Predictions can be difficult …+ Nationalist boundaries?+ Collapse of the EU?+ Holding onto what’s yours?+ The flow of materials? 55
    • 56. In Summary 56
    • 57. In summary …+ Short term (5 years from now) - Global production will continue to grow… - Europe comes out of austerity ….. - Enhanced waste management infrastructure is developed to address new target materials and manufacturing feedstock needs….+ Medium term (20 years from now) - Circular (oval if we are being honest) economy is established - Increasing energy and waste management costs drive efficiency improvement and innovation - Real corporate nervousness as materials start to run-out - More joint working between recyclers and manufacturers 57
    • 58. But ….+ EU will need more teeth to make this Roadmap a reality - but a European Commodities market does make sense!+ Member States will need to take the ‘bigger picture’ - or waste money and resources on over-capacity and inappropriate trading patterns+ The waste industry will respond - it always does! - targeting new materials (rare earths etc.) - developing partnerships+ But without Government leadership we may have some false dawns and some ‘dead ends’ before we find the right path! 58
    • 59. The last slide … promise! I will be staying for 1 or 2 orange juices … Dr Adam Read Global Practice Director Waste Management & Resource Efficiency 07968 707 239 adam.read@ricardo-aea.com www.ricardo-aea.com 59