1. Sponsored by
Closing the loop: risk or reward?
A White Paper highlighting the opportunities and
challenges of a circular economy

2. Contents
1 Executive summary 04 3 The business perspective 13
3.1 caling the waste hierarchy: the drive for
S
greater resource efficiency
3.2 ontractual implications for the waste
C
supply chain
2 Working towards circularity: 07 3.3 pportunity knocks: maximising the loop
O
the state of play 3.4 genda for change: the key influencers
A
3.5 oes size matter?
D
2.1 oing round in circles – the big disconnect
G
2.2 he race for feedstock as the hierarchy
T
comes of age
2.3 he local authority gatekeepers
T 4 The waste supply chain 18
2.4 ront-runner focus: rethink your business
F
proposition
perspective
2.5 ho is influencing the circle of lifecycle
W 4.1 he great reclaim game: will the waste
T
thinking? industry lose out?
2.6 he year ahead: immediate priorities for
T 4.2 urvival strategies start to take flight
S
action 4.3 losed loop collaboration – a safe bet?
C
4.4 ind the knowledge gaps
M
4.5 lways be prepared: take action to future-
A
proof
Sponsor viewpoint 23
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4. 1 Executive summary
Set against a backdrop of global climate how attitudes towards waste and smarter In drawing on the key findings and
change, carbon economics and resource resource management were impacting at analysing their implications, this White
scarcity, the intrinsically valuable materials different points across the value chain. Paper sets out the evolutionary state
and scrap carbon that have for so long of play within business and the waste
been locked up in waste streams are now It questioned how attitudes to waste are management supply chain as these
becoming highly sought after. But how are changing in both camps and what the likely circular dynamics take hold.
organisations reacting to this challenge, implications of this will be, both now and
given our current linear ‘take, make, in the future. The resulting White Paper The conclusions drawn are intended to
waste’ system? As businesses begin to 35% of provides a narrative to help influence and act as an informative steer for decision-
recognise the benefits of an emerging steer thinking in this area, particularly for makers, both within, and outside of, the
circular economy and its ability to drive businesses the waste management industry, which waste industry, who are looking at how
greater resource productivity, the benefits are actively appears to be in a transitional phase. best to navigate this rapidly changing
are perhaps less tangible for the waste landscape and capitalise upon the new
management industry.
looking to We surveyed 435 companies in total – 361 opportunities it presents.
shift their businesses and 74 WMCs – asking them
However, as businesses look to reduce resource about the key issues: The premise of a circular economy is
environmental impacts and boost the founded on not only extracting greater
bottom line by moving waste up the
management • ow attitudes among waste producers
H value from waste materials, but on
hierarchy, the waste supply chain is focus are changing feeding this value back into the industrial
ideally placed to help them deliver on elsewhere, • ow fast closed-loop thinking is rising
H cycle or in some cases, the biological
their ambitions - providing it can react fast up the business agenda cycle. This strategic shift of resource use
enough to align itself as a key enabler to
seeking new •
What strategies are being adopted, and which, according to our research 76%
encourage this circularity. alliances by whom of businesses are now looking to align
outside of •
Whether closed-loop recovery themselves with, is certain to prove highly
To examine these issues in more depth, is superseding traditional waste consequential for the waste supply chain
edie.net and sister title Local Authority the waste management – a sector whose lifeblood is built on
Waste Recycling (LAWR) magazine, with industry to • here competition for feedstock is fiercest
W securing these materials.
sponsor FCC Environment, carried out help them • he evolving nature of the business and
T
extensive market research among both waste supplier relationship For 54% of businesses, reclaiming
waste producers (businesses) and waste deliver on •
How best to leverage competitive these waste streams will fundamentally
management companies (WMCs) to track this agenda advantage reshape their relationship with the waste
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5. The Resource Revolution
This White Paper forms a key output of the Resource
Revolution series - an extended campaign centred on the
emerging circular economy - comprising rich content, insight,
and networking opportunities.
supply chain – either through specifying There are major risks and rewards for key players in this space and, as the
significant contractual changes with waste campaign gathers pace, edie.net together with sister title LAWR will be charting
management providers or by streamlining these trends and highlighting the game-changers who are redefining the concept of
the number of providers they deal with. waste and the way it is perceived.
Not only this, but 35% of businesses are
actively looking to shift their resource More information about the campaign and how it aims to facilitate thought
management focus elsewhere, seeking leadership can be found at www.resourcerevolution.net
new alliances outside of the waste industry
to help them deliver on this agenda.
As these trends take hold, waste
management companies need to be
alert to the possibility that end-of-life
material streams could start side-stepping
traditional disposal and treatment routes
that have been their exclusive domain When it
for so long. More than three-quarters waste management companies don’t route forward in order to exploit these
of businesses are also focusing their
comes to feel there is a need to adapt or reposition opportunities. Traditional waste collection
efforts on waste minimisation and as closing the their business model in any way to take and disposal arrangements – certainly
these prevention strategies bed down, loop, 72% of advantage of the changing dynamics in the municipal markets – are built
this will further intensify issues around around waste flows. Consequently there on lengthy contracts with guaranteed
feedstock security. Already 31% of waste
businesses is a real danger they might not be able to tonnages. This, together with the fact the
management companies feel these issues are looking innovate quickly enough as the transition UK is still heavily reliant on landfill, might
are impacting on their operations, with to engage to a circular economy accelerates. be offering a false sense of security to
18% voicing real concern. some providers, who feel they don’t need
with waste Underpinning this inertia is both to change their service provision model for
Despite this, there remains a high management uncertainty and complacency. The nature the foreseeable future.
level of inertia within the waste supply providers to of waste is changing as thinking evolves
chain to address these fears and react and waste is increasingly viewed as a However, this still leaves one-third of
accordingly. For most, it is a case of help them resource. The industry is at a crossroads, waste management companies who are
‘keep calm and carry on’. Two-thirds of deliver trying to determine and navigate the best already repositioning themselves as the
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6. circular economy unfolds. These early biggest gains to be made is in high-value
movers and adopters appear to be taking extraction of waste materials – an issue
a more holistic approach – one based on widely recognised by both businesses and
client-centred consultancy services which
look to address the wider sustainability
their waste supply chains.
ABOUT US
issues around waste management. For 77% of waste management firms, edie.net is used by more than a million
sustainability professionals every year to
smarter extraction techniques – either in
keep up-to-date with the news, information
Ultimately, this could drive changes to the form of secondary materials or energy and analysis which directly addresses the
charging models for waste disposal as recovery – represent the biggest single issues affecting their companies. It is an
demand grows for smarter value extraction business opportunity over the next five invaluable resource for an increasingly
methods to better prepare materials for years. influential audience of decision makers
upcycling, reuse or remanufacture. across the spectrum of small, medium, large
This highlights a strong need for technical and enterprise-sized companies in the UK.
There are clear commercial gains for these innovation, which is also recognised as a
early movers. When it comes to closing commercial driver in itself by 54% of waste LAWR (Local Authority Waste Recycling)
magazine is the UK’s leading monthly
the loop, 72% of businesses surveyed, management providers. Increasingly, the
publication for the waste and resource
said they are looking to engage with waste waste industry is also recognising the need management industry. It is read by over
management providers to help them deliver to broaden its service offering – almost two- 6,500 waste and resource management
it. And the returns could be immediate, with thirds of waste management companies professionals across both the public and
30% of businesses planning to maximise said they were diversifying in a bid to be private sectors, as well as by political
resource use through the implementation more competitive. analysts, government and academia.
of a closed loop process for their waste
arisings over the next 12 months. Considering all of these factors, it is clear FCC Environment is one of the largest
that the waste supply chain needs to recycling and waste management companies
in the UK, employing over 2,400 staff across
While this bodes well for the 61% of re-engineer itself to deliver better value,
more than 200 facilities in England, Scotland
waste management firms who can see not only by generating cleaner, more and Wales. It is part of a global group with
commercial benefits arising from the profitable outputs from its waste streams, a strong heritage in providing services for
emerging closed loop economy, only 37% but by meeting client-led demand for communities and business. Its vision is to
of them feel entering into such initiatives more resource-efficient recovery built be the environmental company of choice,
will result in strong revenue generation over on lifecycle analysis and whole systems delivering change for a sustainable future.
the next five years. Where most see the thinking.
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7. 2 Working towards circularity:
the state of play
A circular economy is one in which manufacturers $630bn (£416m) a year by tonnes. The report’s main thrust broadly
resources are kept in use for as long as 2025, according to a recent report from the aligns itself with government policy both
possible, by extracting the maximum value Ellen MacArthur Foundation [LINK-1]. In at UK and EU level, which is seeking to
from them while in use, then recovering light of concerns from manufacturers and More than encourage greater efficiencies in this field
and regenerating products and materials their supply chains about rising resource half of through the delivery of zero waste agendas
at the end of each service life. As modern scarcity, this approach has been broadly and resource security action plans.
day resource management starts to shift welcomed. businesses
from a linear to circular economy, the stated However, the emergence of closed loop
business opportunity this opens up is The same study calculates that adhering that taking models could present a threat to one
immense. to circular economy principles could help particular sector – the waste management
UK plc generate savings worth up to greater industry. As manufacturers, retailers
Better design and more efficient use £700m annually, while also reducing yearly ownership of and brand leaders seek to take greater
of materials could save European greenhouse gas emissions by 7.4 million ownership of their waste streams for
their waste commercial gain, the waste industry
streams will itself is being fundamentally reshaped
result in as a result.
The circular economy significant New alliances are now being forged
In a circular economy, as opposed to a traditional linear economy, products are intended
to be more sustainable, as their design is based around reusable parts, allowing for a
contractual outside of traditional waste management
simpler end-of-life recovery process. In a circular economy, there is no such thing as changes with markets, resulting in material flow
waste – it is effectively designed out the system and becomes raw materials or energy for diversion – not only from landfill, but
something else.
their waste from the hands of waste management
management providers themselves. This is starting to
Designing for a circular economy is complex. To try and unravel this complexity,
collaboration is needed across the entire value chain, from start-of-life to end-of-life.
providers or raise questions around the future security
and supply of feedstock levels for these
This means that all of the stakeholders involved in the lifecycle of a particular product, streamlining providers.
from product designers and material scientists right through to recycling operators and
reprocessors, need to come together and work out the best solution.
the number
of providers 2.1 Going round in circles – the big
disconnect
they deal There are now clear signs that working
with towards a circular economy is presenting
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8. itself as a strong business opportunity, In contrast, most WMCs seem woefully stream. A significant number (44%)
but the waste management supply chain unprepared for such a scenario – believing confirmed they were taking measures to
is in danger of being left out in the cold as that ‘business as usual’ is a viable option. recover energy from their waste streams
it struggles to understand and navigate Despite admitting significant concerns while just under a third (31%) were actively
these fast-changing resource flow around feedstock security, two-thirds exploring closed loop opportunities.
dynamics. of WMCs surveyed (66%) did not feel
they would need to adapt their business More than three-quarters of firms (77%)
More than three-quarters of businesses models to position themselves at the also said they were focusing their efforts
(76%) surveyed said they perceived forefront of the circular economy agenda. on waste minimisation and prevention,
the emerging circular economy to be Consequently, there is a real danger they while more than half (59%) were looking
an important driver in becoming more might not be able to innovate quickly for greater reuse opportunities. Both of
resource-efficient – a trend which is enough if their sector should undergo these approaches will effectively take
already starting to reshape their a paradigm shift as it evolves into a materials out of the waste management
business models. As they look to resource-led economy. supply chain. This strategic repositioning –
extract greater value from their waste from a linear ‘take, make, waste’ economy
streams and feed it back into their supply Almost a 2.2 The race for feedstock as the to a more sustainable circular one –
chains, this is likely to have serious third of hierarchy comes of age is already registering serious concerns
repercussions for waste management Crucial to these transformational resource with almost half of the WMCs we
companies (WMCs). WMCs flow dynamics is the feedstock itself, surveyed.
surveyed which is becoming a sought-after asset –
More than half of businesses (54%) confirmed both by businesses as they look to close As this race for feedstock intensifies,
surveyed stated that taking greater the loop on their operations, and the WMCs will not only have to compete for
ownership of their waste streams will that issues waste management supply chain whose materials outside of the waste sector,
result in significant contractual changes of feedstock livelihood is dependent upon it. but from within their own industry too.
with their waste management providers security Almost a third of WMCs surveyed (31%)
or streamlining the number of providers The vast majority of businesses surveyed confirmed that issues of feedstock
they deal with. Just over one-third (35%) are now (86%) are now looking to move their waste security are now impacting on their
also felt that this transition would involve impacting management activities up the hierarchy business, while nearly a fifth (18%)
entering into new alliances with key with more than half (52%) seeking to profit said it was of real concern. Feedstock
stakeholders outside of the traditional
on their from it as they start to view their waste competition from overseas markets, such
waste sector. business arisings as a potential resource or revenue as the rising demand for refuse-derived
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9. fuel from Europe, was also considered of unlocking future feedstock supply as add value to their service offering and
significant by more than a fifth of those landfill diversion strategies take hold. capitalise on the opportunities that a more
we surveyed. circular economy might present.
It is not surprising that local authorities
2.3 The local authority gatekeepers were cited by the vast majority of WMCs Nearly three-quarters of businesses we
Despite these uncertainties, a significant as the most important stakeholder group surveyed (72%) are looking to engage
amount of potentially valuable material to target or engage with as the circular with WMCs to help them deliver closed
remains locked in landfill. National recycling economy agenda takes hold – especially loop solutions – this is a huge commercial
rates across the UK hover on average as many of these municipal waste opportunity which should not be
around the 40% mark except in Wales collection and disposal services are overlooked.
which is edging ahead slightly – outsourced to private waste contractors.
last year it broke through the 50% barrier. However, only one-third of WMCs
Calls are now intensifying among WMCs for In England, one recent development that surveyed are already reacting to this and
more government intervention to stimulate should sound alarm bells is that municipal believe their business model will need to
markets and unlock feedstock availability. recycling rates appear to be flatlining, change as a result. For some, a stronger
according to latest figures released by emphasis on more client-based strategic
Introducing measures such as landfill Defra [LINK-2], bucking the trend of thinking around wider sustainability issues
bans of certain materials including waste year-on-year percentage increases. This was considered necessary coupled with
wood and food were considered by could be due to local authority service There a rethink of charging models for waste
respondents to be important levers in this provision cutbacks as economic pressures are huge disposal. Others saw benefit in the need
respect, coupled with better regulation and take hold, but may also indicate a lack of for more data intelligence to match
enforcement of existing policies. A more suitable treatment capacity on the ground.
disconnects feedstock availability with treatment
prescriptive zero waste policy, especially in Unless this trend is reversed, tensions between infrastructure capacity.
England, was also thought desirable. around feedstock availability will only start-of-life
heighten going forward. This would appear to reflect growing
Crucial to facilitating this strategic rethink
(product client-based demand, particularly in the
are the local authorities themselves who 2.4 Front-runner focus: rethink your designers) blue chip sector, for more consultancy-led
are mandated to oversee the collection, business proposition and end-of- services based around waste prevention
treatment and disposal of large tonnages of Set against this backdrop of rising that can be rolled out across the entire
municipal waste. Consequently, they have a feedstock security concerns, WMCs life (WMCs) supply chain. Linked to this is a rising
valuable gate-keeping role to play in terms need to seriously consider how they can industries requirement for smarter value extraction
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10. methods to better prepare materials for Who is influencing the circle?
upcycling, reuse or remanufacture. Stakeholders, ranked by waste producers and WMCs, in terms of their importance to the circular economy
Interestingly, more than three-quarter of Businesses Waste management companies
WMC respondents we surveyed (77%) –
regardless of whether they were looking to
change their business model or not – said
that extracting more value from waste
presented the single biggest commercial
opportunity as the resource management 2.52 2.45
agenda unfolds over the next five years.
2.67 2.80
Despite this, there remains a high level 2.68 2.90
of business inertia among most WMCs
in reacting to these drivers. Some may 2.75 2.97
be harbouring a reluctance to change 2.82 2.97
while perception exists that they have a
safe supply of materials to tap into for 3.04 2.45
the foreseeable future. This is likely to be 3.15 3.41
particularly true for those operating in the
3.23 3.28
municipal waste market, where disposal
contracts can stretch for up to 30 years 3.52 3.35
with guaranteed feedstock levels built into
such arrangements. Key
Reprocessors
Waste contractors
2.5 Who is influencing the circle of Manufacturers
lifecycle thinking? Product designers
Waste contractors, reprocessors and Local authorities
Government
manufacturers are perceived by both
Public sector bodies
waste producers and WMCs to be the top Brand owners
three stakeholder groups leading on the Retailers
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11. circular economy agenda according to our disconnects between start-of-life (product
survey. designers) and end-of-life (WMCs)
industries and a pressing need for more
This is not surprising, given all three communication between the two ends of
are highly materials-focused in their the chain if a true circular economy is to
operations. A 2012 study from EEF, the be realised.
manufacturer’s organisation, found that
80% of its members thought raw materials Encouragingly, these issues are recognised
shortages now pose a risk to their and starting to be addressed with the
business [LINK-3]. advent of ‘teardown labs’ hosted by Why is behaviour change
Among businesses, product designers
organisations such as the Ellen MacArthur
Foundation [LINK-4] and the RSA Great so important?
were also ranked higher than average Recovery Project [LINK-5]. A true circular economy cannot be realised unless there
in terms of influence and leadership, is sustainable consumption. This is one of the biggest
suggesting a growing awareness of These labs aim to forge strategic alliances challenges as it requires the engagement of not just
business and government, but consumers too.
the importance of lifecycle analysis as between key stakeholder groups to
businesses begin to think more holistically examine the challenges of product Organisations must explore ways they can leverage
about how materials and energy flow disassembly in a practical way and their potential to deepen customer loyalty by involving
through the industrial system. encourage more lifecycle thinking across them in closing sustainability loops through reusing
the value chain. The Technology Strategy and repurposing. They must also encourage their own
That said, only a fifth of companies are Board [LINK-6] is also offering funds employees to replicate green actions carried out in the
actively seeking to engage with product for research and pilot projects aimed at home, such as switching off lights and recycling, in the
designers to influence thinking in this recovering problematic materials. work environment.
field, indicating a strong collaborative
Larger corporations, such as brand leaders, need to find
disconnect. Looking ahead, demand for facilitation
creative ways to highlight consumers as part of the
roles to enable more collaborative solution and identify how best to reframe ownership
Meanwhile WMCs perceive product thinking is likely to grow. WRAP (Waste around a new, sharing economy. This will also require
designers as showing the lowest levels of Resources Action Programme) will alternative business models built around service, leasing,
leadership in the circular economy agenda. play a central role here, particularly hire and refurb options.
by enabling big business to become
This would suggest that there are huge more resource-efficient through the
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12. development of alternative models that movers. Over the next 12 months, almost stakeholders outside of the traditional
centre on waste prevention and high value a third of businesses we surveyed (30%) waste industry. Manufacturers, for
recovery. The Circular Economy Taskforce stated they were planning to maximise instance, see partnering with other
[LINK-7], launched last year, has also resource use through the implementation manufacturers as key to closing the loop
brought together leading businesses to of a closed loop process for their waste due to the interconnectivity of supply
understand how circular models can be arisings. Significantly, a quarter of these chains, while a significant number public
developed in a way that keeps companies companies are actively looking to engage sector organisations and consultancies
profitable. On a more global level, the with interested parties to realise these are seeking closer ties with government
Ellen MacArthur Foundation has set up ambitions. This pull towards more bodies.
the Circular Economy 100, a consortium external collaboration appears to be
of 100 businesses, to help accelerate the most prevalent in the manufacturing and It is imperative that WMCs react to these
transition to a circular economy over the construction industries and the public emerging trends by taking a panoramic
next three years. sector, across all company sizes – view of resource management and start
from large corporations to SMEs and to add value, perhaps through tailored
2.6 The year ahead: immediate priorities micro-organisations. service models or service diversification.
for action Waste management audits and contracts
As the business case builds for moving While most of these companies see the must take account of minimisation and
towards a circular economy, there are value in entering into strategic alliances prevention strategies with in-built
clearly strong commercial opportunities with WMCs, a sizeable number are flexibility to address the possibility of
already out there for early adopters and also looking to join forces with other changing waste flow compositions.
Who are businesses looking to engage with to close the loop?
Waste Manufacturers Local authorities Government Reprocessors Energy Public sector Retailers Product Brand owners
contractors 57% 44% 43% 39% providers bodies 35% designers 19%
72% 36% 36% 22%
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13. 3 The business
perspective waste streams while almost one-third
3.1 Scaling the waste hierarchy: the (31%) are actively exploring closed loop
drive for greater resource efficiency opportunities. Perhaps unsurprisingly,
According to our survey, 86% of given rising concerns around raw material
businesses are looking to become more security, manufacturers expressed
resource-efficient and move their waste significantly more interest in closed loop
management activities up the hierarchy. initiatives than retailers.
More than half (52%) are seeking to profit
from this strategy as they start to view HOw businesses Recovering both materials and energy
their waste arisings as a potential resource are moving waste up the from waste was viewed as offering the
or revenue stream. most profit potential by slightly less than
hierarchy
half of companies surveyed (49%), while
Increasing recycling rates is considered more than a third (39%) thought secondary
the easiest and fastest way to achieve 82% Increasing recycling rates materials offered better value compared
better resource efficiency, with the with renewable energy (12%).
majority of businesses (82%) focusing
their efforts on it, followed by better 77% Better waste prevention In terms of material stream value, on
waste minimisation and prevention average metals (aluminium/steel) and
(77%). In terms of a sector split, appetite paper and card rated highest among
for improving recycling levels and
minimisation strategies is highest among
59% A greater focus on reuse respondents, followed by plastics (PET
and HDPE), food waste, WEEE/precious
retailers, manufacturers and public sector metals, and lastly glass, which was
organisations.
51% Zero waste to landfill targets perceived as having the lowest value.
Reuse is also rising up the agenda – more There was, however, a sector split at the
than half of companies (59%) are looking top of the table, as recovery of metals
for greater reuse opportunities – while half 44% Energy recovery was thought to offer most value by
(51%) have set themselves zero-waste-to- manufacturers, construction firms, public
landfill targets. sector bodies and those working in power
31% Closed loop initiatives and utilities, while paper and card were
A significant number (44%) are also taking singled out as being of most value by the
measures to recover energy from their retail sector.
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14. The zero waste agenda
Zero waste means going further than maximising recycling levels to prevent waste going to landfill. It
3.2 Contractual implications for the
encourages thinking around better minimisation strategies to effectively ‘design out waste’ in the industrial
system.
waste supply chain
Significantly, more than half of businesses
In the UK, the waste debate has traditionally revolved around meeting EU landfill targets and packaging (54%) stated that taking greater ownership
regulations. However there is a growing realisation that more legislative drivers are needed to target waste of their waste streams will result in
prevention and, as such, England, Scotland, Wales and Northern Ireland have embarked on the first step towards comprehensive contractual changes with
this by setting out their respective visions of zero waste society. their waste management providers or
streamlining the number of providers they
Scotland’s vision is considered the most ambitious and prescriptive. The Scottish Government’s Zero Waste Plan deal with.
includes landfill bans for specific waste streams, separate collections for food waste, restrictions on energy-
from-waste feedstock and measures to cut the carbon impact of waste. Under the plan, businesses are targeted
to reach 75% recycling levels by 2025, with just 5% of waste being sent to landfill.
More than one-third (35%) also felt that
this transition would involve entering
Wales has taken a long-term view with regard to waste. Its Towards Zero Waste plan sets out a framework for into new alliances with key stakeholders
improving resource efficiency stretching up to 2050. Measures include waste prevention, separate collection outside of the traditional waste sector.
of food waste and kerbside sorting for dry recyclables. It also sets out a 70% recycling rate for commercial and
industrial waste by 2025, with an interim goal of 67% by 2020. The Welsh Assembly is also drawing up sector As the majority of businesses (76%)
plans covering markets such as municipal, wholesale and retail waste, and construction and demolition waste. perceive the circular economy to be an
important resource-efficiency driver, this
England, by contrast, is taking a less prescriptive approach with its Waste Review that works towards a zero
is already starting to reshape business
waste economy by increasing reuse and recycling levels. The document is primarily based on businesses and
other organisations meeting voluntary targets, but the Government is also looking to strengthen this with the
models. In fact, one-third of companies we
publication of a waste prevention programme towards the end of this year. surveyed said their business model was
already changing to reflect this trend.
The Government did consult over proposals to introduce a landfill ban for wood waste, but has decided not to
go ahead with this for the meantime. Landfill ban proposals for textiles and food waste have also been put on Interestingly, this trend towards waste
hold pending further consultation and evidence gathering. supplier consolidation and evolving business
models appears to be most apparent in the
Meanwhile Northern Ireland’s waste strategy, set out in Towards Resource Management: The Northern Ireland upper end of the value chain, i.e. the retail
Waste Management Strategy 2006-2020, is currently under review. A framework for waste prevention in
sector. Further downstream, the majority
Northern Ireland was published in 2005 but this is likely to be superseded by a waste prevention programme
later this year. The Department of the Environment NI has also consulted on introducing landfill bans for specific
of manufacturers seem happy with their
materials and a strengthened recycling policy for municipal waste. existing waste management arrangements
and operational systems.
| 14 |
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15. 3.3 Opportunity knocks: maximising the Companies, by business sector, looking to to help them deliver on this. However,
loop implement closed loop processes over the various other key stakeholder groups
Looking ahead to the immediate future, next 12 months such as manufacturers, reprocessors,
30% of waste producer respondents local authorities, retailers and energy
stated they were planning to maximise providers were also considered important,
resource use through the implementation suggesting that multi-disciplinary
of a closed loop process for their waste collaboration will be essential.
arisings over the next 12 months.
21%
Manufacturers in particular are looking 3.4 Agenda for change: the key
to seize on opportunities here – despite influencers
their stated satisfaction with existing Retail Sector In terms of leading on the circular economy
contractual and operational arrangements, agenda, waste producers perceive
this could result in fundamental changes waste contractors and reprocessors to
on both fronts. be at the forefront, which is perhaps not
surprising, given the expertise of these two
Of those seeking to close the loop, one-
third (34%) of businesses have already
implemented such a system while a fifth
29%
Public Sector
stakeholder groups on end-of-life materials
handling and value extraction.
(20%) were already in discussions with Further down the value chain
key stakeholders. Significantly, a quarter manufacturers and product designers
of companies (25%) are actively looking were also ranked higher than average in
to engage with interested parties to terms of leadership by these respondents,
help them do this, indicating significant
commercial opportunities in this field –
particularly from within the manufacturing
33%
Construction
suggesting that target strategies around
lifecycle analysis and systems thinking are
starting to take effect. That said, only a fifth
and construction industries, as well as the of waste producers are actively seeking to
public sector. engage with the product creation process
to influence thinking in this field.
In terms of closing the loop, most
companies (72%) are seeking to either
engage with or target waste contractors
33%
Manufacturers
This would indicate that many businesses
are not putting lifecycle thinking into
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16. practice early enough in the value chain. customer education and strong messaging along with technical know-how (22%),
Unsurprisingly, the one business sector on behaviour change. Most lack of business model innovation (20%),
significantly ahead of the curve in this risk-averse mindsets (20%), consumer
respect is manufacturing – three-quarters This concern is compounded by the fact companies engagement (17%) and value chain
of manufacturers surveyed said they were that behaviour change was felt to be the (72%) are collaboration (14%).
either engaging with or targeting product biggest barrier to achieving a circular looking
designers to address this issue. economy and also the chief blocker to Inside the four walls of an organisation,
improving in-house resource efficiency. to either behaviour change and lack of awareness
At the other end of the scale, retailers In terms of the main barriers to achieving engage around the business benefits of a circular
scored lowest on average in terms of a circular economy, half of businesses with or economy were perceived to be the main
leadership, followed by brand owners surveyed (50%) cited behaviour change, stumbling blocks to achieving greater
and public sector bodies. This is a cause followed by lack of awareness (43%), target waste resource efficiency by 60% and 55%
for concern since all three stakeholder insufficient policy drivers (37%) and contractors of companies respectively. Regulatory
groups are by their very nature, consumer- business inertia (32%). A weak economic pressures such as producer responsibility
facing and could play a highly influential in climate was also felt to be a contributing
to help them and duty of care regimes were felt by
driving sustainable consumption through factor by a quarter of businesses (25%), deliver 45% of companies to be a significant
issue, while more than one-third (35%)
thought staff engagement needed to
Case be addressed. Meanwhile 27% thought
greater board-level buy-in was required.
John Lewis Partnership study
Where changing business perception in
snapshot
Centriforce Products this regard appears to be impacting most
upon the waste supply chain is in service
In a move believed to be a first for any UK retailer, John Lewis Partnership is developing a provision. Nearly a third of companies
pioneering closed loop business model for its plastics waste.
said that a lack of skills and expertise in
The company has entered into an agreement with Liverpool-based recycler Centriforce Products to recover plastics
waste from Waitrose and John Lewis stores so they can be recycled into useable products. high value waste management (31%) and
The retailer is also exploring opportunities to reuse Centriforce products such as plastic planks and sheeting in its inflexible waste contracts (30%) were
new store construction programme to achieve a true closed loop process in its plastics waste stream. The move is issues that needed to be addressed. This
part of a wider corporate strategy to create greater transparency in its waste management operations. would indicate there is growing demand
for waste management services among
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17. businesses that address the waste Business attitudes to the circular economy to either have to streamline the number
hierarchy, with clear focus on high value of WMCs they deal with, or significantly
extraction and/or minimisation strategies. change the terms of their contracts going
76% say the concept of circular economy is important to their business
This trend is starting to be reflected within 8
6% are looking to become more resource-efficient and move their waste up
forward, compared with 43% of larger
the waste supply chain itself, particularly the hierarchy firms and 44% of smaller companies.
among the more innovative providers who 5
2% now view waste as a potential resource or revenue stream
are looking at service diversification (see 3
0% say they are looking to implement a closed loop process for waste Likewise big corporations are leading the
arisings over the next 12 months
section 4.2). 5
4% believe their relationships with waste providers will need to change
field in maximising resource use through
going forward closing the loop on their waste arisings
3.5 Does size matter? with more than a third (37%) planning to
Not surprisingly larger companies are implement such a process over the next 12
furthest down the line in becoming more months. This compares with 28% of larger
resource-efficient, but smaller firms are firms and 25% of smaller companies.
also making strong headway. While 95%
of medium to large firms (150 – 500 That said, it is smaller organisations that
employees) and 94% of big corporates appear to be embracing the ideology of a
(500+ employees) are looking to move circular economy the most – 82% stated it
their waste management activities was important to their company, compared
further up the hierarchy, 77% of smaller with 78% of larger firms and 68% of big
companies (1 – 150 employees) are also corporations.
looking to do the same. Similarly, 65% of
larger firms and 56% of big corporations 54% 30% 52% 86% 76% This could suggest that smaller firms
now regard their waste as a potential profit do not yet have the scale of investment
opportunity compared with 45% of smaller to undertake more closed loop process
businesses. implementation despite showing most
willing.
However it is the activity of big
corporations in this field that is likely This finding is reinforced by board level
to impact most on existing contractual buy-in being less of an issue among
arrangements with waste management smaller firms (18%) than larger companies
providers. The majority (65%) expect (25%) and big corporations (39%).
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18. 4 The waste supply Key
Behavioural change
Lack of awareness
Insufficient policy drivers
chain perspective
Business inertia
Weak economic climate
Technical know-how
Lack of business model innovation
Risk-averse mindsets
4.1 The great reclaim game: will the What are the biggest barriers? Consumer engagement
Value chain collaboration
waste industry lose out? How waste producers and WMCs rank the barriers to change
As businesses look to become more
resource-efficient and extract greater
value from their waste streams, concerns
around feedstock security are heightening Waste producers Waste management companies
among waste management companies
(WMCs). Nearly a third of WMCs (31%)
surveyed confirmed that issues around
feedstock security are now impacting on
their business, while 18% believe it to be
of real concern.
13.6% 11%
Looking ahead, these concerns are set
to intensify – 42% of WMCs believe 17.3% 12.3%
that feedstock security could become
20.1% 20.5%
problematic in the future, while 14% say
this issue is now on their radar. These 20.3% 26%
fears are primarily driven by increased
22% 27.4%
competition.
24.5% 27.4%
While the majority of WMCs (61%) felt
32% 34.2%
this competition would mostly come from
within the waste industry, 47% believed 37.3% 39.70
new entrants into the sector such as 43.2% 43.8%
manufacturers, retailers and power and 50.1% 47.9%
utility firms, who are looking to reclaim
materials and energy for their own benefit
now pose a serious threat. Competition
from overseas markets was also
considered significant by more than a fifth
(23%) of respondents.
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19. Other factors driving concerns over material waste stream that was felt to strategies remain weak in the absence of
feedstock security include a greater policy pose a significantly higher security threat further landfill bans.
focus at EU level on waste prevention than the rest. This could be due to the
and reuse, which in turn is shaping the fact that the circular economy agenda is There are also emerging signs that local
Government’s zero waste agenda in still forming and a vast amount of material authorities themselves might start side-
the UK. A lack of quality materials for resource currently being sent to landfill stepping traditional waste outsourcing
recovery was also cited as a key issue could be unlocked and tapped into. models by aligning themselves with big
among WMCs, along with the emergence corporates for targeted capture of certain
of closed loop economies, the impact of The crunch point for WMCs may come if material streams. Unilever is already
producer responsibility regimes and a lack national recycling levels start to plateau exploring pilot ‘take back’ partnerships
of treatment capacity in the UK. (latest evidence on the ground may with local authorities, for instance [LINK-8].
suggest this is already starting to happen
In terms of feedstock supply, looking in England - see section 3.3). 4.2 Survival strategies start to
across the municipal, commercial and take flight
industrial (CI) and construction waste Other than the landfill tax escalator, In terms of existing contracts, WMCs see
markets, there was no single end-of-life specific policy drivers for diversion most opportunity in unlocking greater
Where the waste industry sees the biggest commercial opportunities over the next five years
77% 64% 54% 47% 46% 37% 32% 31%
Extracting greater Extracting greater Technological Producer responsibility Service diversification Circular economy Offering more client Targeting higher value
value from waste in value from waste innovation collaboration / closed loop consultation materials
form of secondary in form of energy collaboration
materials recovery
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20. resource extraction over the next five years to exploit future resource capture by unlock feedstock availability. Introducing
in the CI sector – both from blue chip extending their reach into the CI market measures such as landfill bans of certain
clients and SMEs. Slight gains from sub- while nearly half (48%) are looking to form materials including waste wood and food
contractual arrangements with other waste new alliances with waste producers. This were considered to be important levers in
providers are also expected over this time is requiring greater flexibility in service this respect, coupled with better regulation
frame, with even smaller gains forecast offering – almost two-thirds of WMCs and enforcement of existing policies.
from the municipal and construction waste (65%) stated that they are diversifying A more prescriptive zero waste policy,
sectors, suggesting these markets may their business portfolio in a bid to be more especially in England, was also thought
have reached a plateau. competitive. desirable.
The majority of WMCs (80%) are already Greater policy intervention is also being 4.3 Closed loop collaboration – a safe
reacting to these trends and looking sought by WMCs to stimulate markets and bet?
In terms of working towards a circular
economy, almost two-thirds of WMCs
surveyed (61%) viewed the emergence
Case of closed loop models and systems as a
business opportunity. That said, a high
study degree of uncertainty exists among nearly
Coca Cola Enterprises and ECO Plastics snapshot a third (30%) as to whether it will impact
upon them in a positive or negative way.
In an industry first, Coca-Cola Enterprises and ECO Plastics have established a joint venture
to close the loop on plastics bottle recycling in the UK – a move which the bottler giant is Not surprisingly, those that see it as
now looking to scale up in Europe. an opportunity are also engaging with,
The strategic alliance, Continuum Recycling, brings the recycling process full circle, with used plastic packaging or have plans to engage with, key
sorted and reprocessed domestically, before returning to UK shelves as part of another bottle. stakeholders to explore closed loop
The capability of this project has more than doubled the amount of bottle-grade recycled plastic (rPET) previously solutions in the next 12 months. Of those,
created in Britain, and enabled Coca Cola Enterprises to meet one of its key commitments – to use 25% rPET in all more than a third (36%) are already part
its bottles by the end of 2012. of an active closed loop project, while
The company is set to build on its achievements by replicating this model in France with a new joint venture with
42% have plans to launch a closed loop
PET recycler APPE to boost the capacity of its plastics reprocessing facility by 70%.
project or are currently in discussions with
stakeholders to embark on such a scheme.
| 20 |
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21. Meanwhile more than a fifth of WMCs Despite concerns around feedstock of business model innovation (34%),
(22%) are actively looking to engage with security and the transformational business inertia (27%) and technical
interested parties. dynamics underpinning the move towards know-how (27%). A weak economic
a circular economy, two-thirds of WMCs climate appears to be presenting more
Of the key stakeholder groups that WMCs (66%) did not feel they would need to of a challenge to the waste industry than
are looking to engage with or target, local adapt their business models in order to to businesses in this regard, with 44% of
authorities are cited as being the most position themselves at the forefront of this WMCs believing it to be a key barrier.
important (by 73% of respondents). This agenda.
is likely to be because of their government 4.5 Always be prepared: take action to
mandate to oversee the collection, 4.4 Mind the knowledge gaps future-proof
treatment and disposal of large tonnages While waste contractors, reprocessors As the resource management agenda
of municipal waste and the fact that many Where and manufacturers are perceived by both unfolds over the next five years, the
of these services are outsourced to private WMCs and waste producers to be the majority of WMCs (77%) see the biggest
WMCs.
WMCs top three stakeholder groups leading on commercial opportunities arising from
see most the circular economy agenda, there is smarter value extraction techniques, either
Manufacturers were ranked as the second opportunity significant divergence on the perceived in the form of secondary materials or
most important stakeholder group to leadership of product designers and brand energy recovery. This will require a strong
engage with by two-thirds (67%) of
in unlocking owners. If these knowledge gaps between need for technical innovation, which is also
WMCs, followed by government (60%), greater start-of-life and end-of-life industries are recognised as a business opportunity in
public sector bodies (53%), reprocessors resource to be addressed, these stakeholder groups itself by 54% of WMCs.
(51%) and retailers (47%). must step out of their silos and collaborate
extraction to deepen their understanding of the In addition, 46% of WMCs felt that service
The fact government ranks so highly over the next issues at play. diversification will open up new business
is surprising, but this might reflect the five years is channels while 47% saw strategic
waste industry’s desire for more policy These knowledge gaps are underlined by alliances with businesses on producer
intervention to in order to stimulate in the CI the fact that nearly half of WMCs surveyed responsibility compliance as a key
markets around material quality. The sector – both (48%) felt that a lack of awareness was commercial opportunity.
importance of engaging with brand from blue the main barrier to achieving a circular
owners and product designers was seen economy. Behaviour change was also Interestingly, only about a third of WMCs
as significantly less of a priority among chip clients cited as a significant stumbling block (37%) felt closed loop collaborations
WMCs (22% and 9% respectively). and SMEs by 40% of WMCs followed by a lack would offer a clear commercial opportunity
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22. unlockING future feedstock availability for their business over the next five years.
Factors affecting feedstock, ranked by waste management companies This suggests that many are still uncertain
as to how the circular economy will unfold
and impact upon their operations, and
whether or not they will need to reposition
their service offering in order to capitalise
upon it.
3.50 What is clear from this survey is that better
waste management is often seen as a
3.47 30
25
20
15
10
5
0
quick win for businesses looking to reduce
their environmental impacts and potentially
3.42
30
25
20
15
10
5
0
30
25
20
15
10
5
0
boost the bottom line. 30
25
20
15
10
5
0 30
25
20
15
10
5
0 30
25
20
15
10
5
0
WMCs would be wise to act now in order
to deepen their understanding of the
3.35 3.33 corporate resource efficiency agenda and
how it is evolving. This will enable them
to react swiftly and cater their service
3.27 provision more effectively to deliver this
bottom line value for their client base.
Not to do so would miss a clearly
emerging business opportunity at a time
when the waste management industry’s
expertise and technical knowledge in
materials handling and resource recovery
is most urgently needed.
Landfill bans of certain Better regulation and The landfill tax Corporate sustainability Higher local More prescriptive
materials enforcement escalator and resource efficiency authority landfill government ‘zero
measures diversion targets waste’ policy
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23. The attitudes of organisations that generate waste are changing rapidly, and this survey provides a
valuable overview of those changes.
More and more, businesses and public institutions understand that there is value in what they throw
away – and are seeking answers and advice from the waste management industry and beyond to respond
and extract as much value as possible from waste materials.
Waste producers know that improving efficiency involves reclaiming material from their waste
streams and feeding it back into the supply chain – be that as a secondary material or as, for example
with organic waste, compost and energy. And they must do it while striking a balance between volume
and material quality.
Providing the answers is the emerging role of the recycling and waste management sector. It is about
sharing knowledge and technology as we settle into a new position mid-way through a supply loop
rather than at the end of a supply chain. For many of us this is a fundamental shift in our business. FCC
Environment has, for example, remodelled its business to focus on generating resources rather than
dealing with waste.
As disposal, treatment and raw material costs continue to rise and as markets for secondary materials
develop, closing the resource loop will help us all to improve productivity and efficiency while reducing
environmental impact, reducing cost and boosting the bottom line.
This report maps progress along the journey so far. It confirms the demands upon the recycling and
waste sector, thereby reducing perceived risks and showing that for those companies willing to adapt,
the long-term opportunities are huge.
Kristian Dales, sales, marketing and communications director, FCC Environment
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