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Consultations | Exploring the impact of the upcoming policy reforms

15th April 2021 Posted by

Blog by Dr Adam Read, External Affairs Director, SUEZ recycling and recovery UK

Earlier this week we started our series of online workshops and webinars focused on the recently released DEFRA consultations on Extended Producer Responsibility (EPR) and Deposit Return Schemes (DRS) that are planning to significantly reshape packaging design, recycling and recovery for the next 20 years.

Our first panel of experts included insights from Dr Margaret Bates (OPRL) who looked at the consultations through the lens of the consumer, with a particular interest in the role that packaging labelling will play in the success of these reforms. Emma Beal from West London Waste Authority and NAWDO, looked at things from a local government perspective. Our own Stuart Hayward-Higham also joined the panel and represented the perspective of service operators but with his specific interest being data and value for money.

This panel happened three weeks after the consultations were launched, giving our panel ample time to have reviewed the key issues and identify a few of the major concerns they felt worthy of wider industry discussion. With only seven weeks to go, this was an ideal opportunity for the audience to raise any initial questions they had from reading the proposals, and to get discussions flowing throughout the value chain about any number of specific points and wider themes. I was in the host chair and thoroughly enjoyed the opportunity to reflect on the proposals with such an informed panel, and to share the huge number of questions arising from the audience.

So, what were the key messages from this ninety-minute review?

It’s all about the budget

Throughout the session there were a number of recurring key themes, central to the presentations and many of the questions raised by the audience, the most prevalent of which centred around the revised forecast costs of the proposed system, which are now much higher than expected at £2.7bn. There are potential upsides in terms of expected efficiency gains over time to help bring down system costs, but the assumptions presented in the two impact assessments left the panel uncertain of how accurate these predicted costs might be. The panel agreed on the uncertainty, both possible up and downsides, associated with the costs and cost data proposed, identifying [1] how the different aspects of the new systems might work together better; [2] where evidence and data can be captured once and used across the system; and [3] real worries that in light of the significant uplift since the previous consultations, shows just how much might the policy proposals really cost once we get into delivery.

Another topic which arose, was how such a large budget should be managed effectively, given the EPR consultation is still proposing a number of different approaches to monetary flows and evidence points, all of which will be underpinned by a new organisation of which little is clear right now. Everyone agreed the new system must be transparent and robust to ensure fraud does not become a concern in future years, or this will undermine the system and impact on its effectiveness and its value for money.

Timetabling

Another big theme that recurred during the debate was the timeframe for all of the proposed changes to happen in, and to a lesser degree, whether progress on overarching body creation, decisions about modulated fees, and the delivery of all the backroom IT, systems, and protocols could happen in parallel to help speed things up.

It was clear from all perspectives that without sufficient clarity and notice of the policy changes and the deadlines for implementation of new systems that many organisations (public sector, brands, waste management companies etc.) will be unable to plan for change properly, and will be having to either take decisions under uncertain conditions, or delay decision-making and potentially threaten the early years of scheme success.

Margaret Bates reflected on the challenge for many leading brands where packaging is prepared some 18-months in advance, so it’s clear that a sufficient lead time for policy changes to happen is critical. The same will be true for changes to waste/recycling handling sites, including transfer stations and MRFs – things can’t happen overnight.

When asked, 84% of our audience agreed that the proposed timings are ‘needfully ambitious’, but there was a general consensus that the time available must be used carefully, with concurrent changes and preparation happening where appropriate, and where possible, we must build on and improve existing systems such as the current ‘per tonne’ payment system for business recycling.

Public responsibility

The evidence and payment flow models shared by Stuart Hayward-Higham, derived from the proposals,  also indicated that householders could end up feeling the full increase in costs from the system, which is forecast at an additional ~£100 per household, a 66% increase in current household costs incurred for all waste management. But are the public aware of the likely changes or the impact it will have on their consumption and recycling behaviours? The audience didn’t think so and many of their questions concerned when we should engage the public in discussions about these policy reforms.

The panel didn’t expect the public to be reading these consultation documents, and felt that perhaps some form of simple summary was needed so that consumers, business and household alike, could see the impacts and the planned changes in services, materials and costs. This is something that DEFRA will need to carefully think about after the May local elections, as consumer engagement is going to be key to the successful delivery of almost all of the proposals on the table currently, including those expected in the Consistent Collections Consultation (which will focus on core materials to be collected at the kerbside).

What the public are seeing right now is some brands/producers changing their packaging – most notably Coca Cola and their cardboard can – ahead of the regulations encouraged by both commercial and material market motivators, but is this giving the public the clear message they need about the changes that are coming? There were concerns around decisions which were made too soon may not be flexible enough for the actual future system once designed, leaving packaging unrecyclable or infrastructure unable to adapt to changing compositions and feedstocks which would result in a lot of wasted time and money.

Effective communication

Communication has a huge part to play in delivering the proposed systems, whether it be effective data sharing and evidence provision, or around product labelling and gaining business and consumer engagement. Ensuring that all the actors in the system understand their role and responsibilities will be key to the overall success of the planned changes.

It was clear from discussions that we cannot simply tell people what to do. After all, recycling scheme performance has historically been restricted by people not knowing what to do, or choosing not to do it! The consensus was that engaging, educating and sharing the benefits of this quality focused system is critical, and that should start after the consultation period, if not before. Though, who should be leading this public facing engagement?

The complexities of the proposed system(s) need to be made accessible for all audiences to allow individuals to interact with their packaging (and wider recyclables) more confidently, and much of this will come down to on pack labelling and packaging design, with more single materials being easier to recycle and reducing the need for consumers to think ‘what should I do’, ‘where does it go’ and so on.

One example discussed on the webinar was multi-pack drinks cans, made from aluminium: there will be one label for the outer packaging that holds the cans together, and one label for the cans themselves. Consumers will need to fully understand their options at the point of purchase (in-store or online) as some packaging will have higher modulated fees as they are harder to recycle. However, the packaging will not show the modulation in any form, so simple labelling about these different materials and what to do with them will be key to achieve both high capture rates and low contamination levels, but also a longer term behaviour change with consumers purchasing the right packaging – which is clearly going to be an issue with the DRS proposal.

Public littering was always going to feature under full cost recovery within EPR, but there was some debate amongst the panel about whether the public must take some of the responsibility for their actions, rather than placing the responsibility solely on the brands (through higher modulated fees for packaging that is more common in litter). Interestingly, there was quite a degree of alignment in the panels’ thoughts about using DRS rather than EPR (and modulated fees) to target littering head on, and rather than focus DRS on regularly recycled drinks packaging already captured by kerbside collection, use DRS to target materials that are more prevalent in litter and aren’t a feature of household collections – paper cups, chewing gum, crisp packets etc.

DRS

Following on from the litter debate, the panel considered how the EPR and DRS systems would work together on target materials that aren’t captured through the DRS system and end up in the household system (as recyclables or in the residual stream). The consultation documents identify this as a risk, and have proposed a way of identifying the volume of target materials left in the household system and then using a specific payment mechanism to get the collection authority a rebate for this material.

However, the panel were more interested in discussing and understanding why the DRS target items had ended up in kerbside collections and making this a theme of future communication campaigns. The clear message, from panel and audience alike, was that if the new DRS infrastructure is not easy to use and accessible, then people won’t engage with it, choosing to lose the deposits and make use of their more convenient kerbside recycling box where material volumes will be lost and costs incurred. There was some interest shown in the digital DRS trials happening in Wales and whether this might help consumers to use their kerbside bins for DRS target materials, but there was a degree of scepticism about the speed that such a system could be commercially viable alongside the planned timetable for the roll-out of DRS.

Discussions then explored if DRS should be postponed whilst EPR (and consistent collections) are fully embedded, and the consensus was that not only was this a prudent option but a favourable one. Afterall, launching both EPR and DRS reforms at once would be a lot for the whole value chain to adjust to and would make it hard to ascertain the true impact and cost of either system. Some of the data presented suggested that the bulk of the costs incurred in DRS are for moving materials out of cost effective kerbside collections to a new DRS. The additional materials being captured for the significant increase in budgets was also questioned by many, and considered a bad idea for government right now as the economy struggles to recover post lockdown.

By allowing time from EPR going live to deciding on DRS design and implementation, the true additional impact of the proposed changes can be assessed, where perhaps focusing DRS on specific waste streams first would be a better system, for example, targeting small batteries. In addition, the panel felt that DRS requires a heightened level of consumer education and behaviour change, as this isn’t doing recycling better, or reducing contamination in your kerbside bin, this is a system change for specific materials/packaging formats and will require the public to correctly associate a ‘deposit related ‘value’ to the plastic bottle in their hand and understand the issue of contamination should they put it in the wrong bin , and that won’t happen overnight.

Prevention must rise up the agenda

The panel revisited the issue of waste prevention throughout the session, as DEFRA’s English Waste Prevention Programme consultation is also currently live, although feedback suggests that this consultation is full of positive words but lacks any real commitment of action to drive resources up the hierarchy.

The panellists agreed that both the EPR and DRS consultations appear to be too focused on recycling, increasing material capture and reprocessing, and that there is a need for the system to move beyond this to deal with resource consumption. Under the proposed system, local government may see a drop in their recycling rates, something that Emma Beal (on behalf of NAWDO) was keen to explore as they move to more reuse and repair, thus reducing flows for recycling in some materials. OPRL have been looking at this recently, and as Margaret highlighted, they will be launching specific refill on-pack labels, which gave us all a strong indication of where packaging design is heading. Whilst it is prudent to remember that these two major consultations are part of a 25-year transition plan, there is no denying that investing in prevention and reduction will save us all money in the long run.

Perhaps this lack of focus on prevention was reflected in the poll question we asked about ambition: the audience feedback was mixed about the policies being bold, sensible or lacking in some key essentials for moving towards a circular economy, with the last option being the dominant response (over 50%).

The panellists were keen to encourage the audience to share their feedback, concerns and ideas during the consultation period (remember, only seven weeks remaining) because they felt government was committed to listening to the entire value chain to ensure they design the right system going forward.

Keys to success

In summarising, the panellists were keen to stress that this set of reforms, with the consistent collections consultation too, is a once in a generation opportunity to get materials flowing better back into the UK economy whilst delivering on our green recovery agenda, but to do it justice, we must all engage with the documents and share our feedback.

The agility of the system, along with improved quality of materials and robust, reliable data are all fundamentally important to the success of the proposed systems. We will need to build infrastructure that is both flexible and suited to new material streams and compositions, whilst ensuring quality materials are returned to market, increasing closed loop reprocessing, and keeping more of this packaging reprocessing in the UK. The uncertainties around the payment mechanisms, governance and modulated fees will all need to be addressed in the early years of policy implementation, and if done well, they should ensure confidence in the new system for all stakeholders, including the public.

This systemic shift will have taken years to design and implement with massive investment from all parties, and without thorough understanding of how the networked organisations operate within the current system today, and how they will be expected to evidence how they operate in the ‘new world’, the success of the proposal will hang in the balance. By seeking to understand value chains, collaborating with neighbours and responding to the consultations with an informed view, we can work together to deliver the next stage on the journey to a circular economy. This is why SUEZ recycling and recovery UK hosted this webinar, and have a series of deep dive workshops and open webinars planned over the coming weeks, to help build the sector’s dialogue around the key issues and to identify points where we all agree on a preferred model or approach.

I welcome you to sign-up to any of these sessions, and bring your questions, perspectives and concerns to the debate: register now.

In the meantime, good luck with the consultation documents, and remember this is all about thoroughly understanding the proposals and their impacts not just about answering the questions in the consultation.

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