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RESOURCE EFFICIENCY IN THE UK ›

WHERE NEXT?

6TH MARCH 2017

We hosted a panel discussion to launch our latest report, Amplifying action on resource efficiency, which brings forward new business trials showing that greater resource efficiency could deliver significant economic benefits to UK businesses. Speakers included:

  • Chris Preston, Deputy Director for Waste and Recycling, Defra
  • Jon Cape, Managing Director, iPower
  • Rowland Hill, Sustainability Manager, M&S
  • Caroline May, Partner, Norton Rose Fulbright
  • David Symons, Director, WSP | Parsons Brinckerhoff
  • James Murray, Editor, businessGreen
  • Dr Steve Wallace, Director, Aldersgate Group

Read on for highlights from all of the speakers' contributions.

Aldersgate Group Director Steve Wallace introduced the Group’s latest report, Amplifying action on resource efficiency, which brings forward new business trials showing that greater resource efficiency could deliver significant economic benefits to UK businesses.

The new research, published by the Aldersgate Group on behalf of the REBus project, is based on the successful delivery of 26 business pilots “that have validated the business case for resource efficiency from the bottom up”. To date, the pilots have already delivered £4.89m in financial benefits and reduced materials consumption and greenhouse gas emissions by 62,619 tonnes and 1,953 tonnes, respectively. While other reports have presented a macro-level analysis of benefits, the REBus project, which largely consists of SMEs, shows these benefits “are being realised in real time and sets a positive example for others”.

Steve highlighted a range of learnings and policy recommendations arising from the project:

  • the need to improve the definition of waste to incentivise material reuse
  • the huge potential for public procurement to stimulate demand for resource efficient goods and services whilst simultaneously saving money from the public purse
  • the scope for fiscally neutral VAT amendments to incentivise markets for secondary materials
  • the critical need to provide technical and financial support for innovative SMEs
On technical support, Steve noted “many of the businesses that are part of the REBus project would have struggled to achieve such gains [resource savings, financial benefits and greenhouse gas emission reductions] without the technical support that was provided. It’s just as much about technical support as it is about financial support”. Steve concluded that "the industrial strategy provides an ideal vehicle for the government to set a clear direction of travel for some of these policies and it would be great to see more ambition in this regard in the next draft".

Chris Preston, Defra’s Deputy Director for Waste and Recycling, underlined the department’s desire for “the UK to become one of the most resource efficient countries in the world”.

He noted that making the transition would “stimulate new markets, reduce costs and improve economic productivity, creating new employment opportunities as well as protecting and improving the environment”. Chris added that “the backdrop to really moving this agenda forward and making a huge difference to the UK economy has been set really quite nicely” given current work on the 25 Year Environment Plan, Industrial Strategy and the discussion on the EU’s Circular Economy Package.

Leaving the European Union creates “a unique opportunity to drive up resource productivity in the UK while improving natural capital”. He emphasised that the department remains “committed to driving up our performance on recycling waste and continue to be fully engaged in the current negotiations at the EU”. They will also “look at how we can extend this to incentivise a much wider range of activities that promote resource efficiency and increase resource productivity before these materials become waste”.

Rowland Hill, Sustainability Manager for M&S, stressed that, although businesses are already tackling resource efficiency, to get real traction there needs to be “a government interventionist approach because it has to be a big systems change. You cannot just rely on ‘proof of concepts’ that industry will deliver”.

Rowland explained that the carbon and water footprint of cotton is dropping globally, largely due to retailers using more of other fibres instead. If use swings back up again, so will cotton’s carbon and water footprint. In terms of what M&S “can do for sourcing sustainable cotton, it pales in significance to how that whole market functions. Solutions need to work across the whole market…That’s the role of government leadership”.

Climate change is “intrinsically connected” to the resource efficiency agenda. Rowland warned that there is danger of moving towards materials that are more easily reused or recycled without looking at the biggest picture. For instance, paper bags have five times the carbon footprint of a plastic bag whilst glass bottles are ten times that. “There is a balance in all that that needs to be appreciated…We should really look at the carbon accounting that sits alongside [resource efficiency] as well”.

Caroline May, Partner at Norton Rose Fulbright, stressed that the “role of law in this agenda is to provide a framework of carrot and stick” within which business both knows that it’s operating and “has the confidence to know its competitors are operating”.

When the waste framework directive was drafted in 2008, the priority was to identify waste as it occurred and ensure that, once identified, it would be “disposed of, treated or used in a proper way to avoid harm to human health or the environment”. But waste is a “variegated and complex market” and “one man’s waste may be another man’s by-product”. The definition has “become a problem because we’ve moved on. Markets have moved on. The challenges have moved on. The law needs to evolve with it”.

Most large organisations are selling products globally and certainly within Europe. With Brexit, there is a challenge in that setting higher waste targets than the rest of the world would lead to “cries about anti-competitiveness and how [UK] laws are out of step”. Therefore, the UK must “keep a toehold on what is going on around the world [and stay] active and engaged in these debates”.

Jon Cape, Managing Director at iPower, highlighted that “energy resource efficiency and materials resource efficiency need to go hand and hand”.

Jon stressed the importance of new financial instruments. “Very often you are trying to fund long-term assets with short-term finance and it’s no surprise that that doesn’t work”. Finance must be “consistent with the asset lives that we are creating”. Over the past seven years we have seen a de-risking in both the reality and perception of solar for institutional funders. A similar de-risking process for resource efficiency “is key to making this work”.

A problem that iPower and many organisations have been dealing with is that traditional business models are “not suited to create the most resource efficient solution”. In discussing energy option appraisals with the public and private sectors, “we have found time and time again that the key criterion is capital cost. Not surprisingly, in energy terms, if capital cost is your key criterion, then more often than not you choose a high carbon and unsustainable solution”.

David Symons, Director at WSP | Parsons Brinckerhoff and the Aldersgate Group, warned that the temptation for construction “is to think about how we manage demolition waste once the ball wrecker has struck” but the opportunity lies in how we can “design things from the outset that are much more flexible, longer life and clever”.

The UK’s currently recovers approximately 89% of its construction waste “but that waste is going to low end uses” such as clean cover for landfill or roads. “From the circular economy perspective, it’s knocking the value of that material down really quickly”. David shared a range of examples of smarter design already happening. For instance, Network Rail produces approximately one million tonnes of aggregate and ballast waste annually from ballast renewal. The alternative of slab track rail “entirely does away with the need for ballast”.

The UK’s national infrastructure pipeline to 2020 lists 600 projects with a combined capital spend of £425bn. Engineers have a huge challenge “to design these things much more cleverly without asking the demolition contractor to do the heavy lifting”. David posited “if we’re not going to have the full force of the EU Circular Economy Package, we must sort how the UK can be an engineering leader on this so that we can export these skills and knowledge”.

James Murray, Editor of businessGreen and event chair, closed the discussions noting how the wide range of terminology for this agenda poses a challenge in having it “cut through in a meaningful way with the public and with policymakers”.

He added that the Aldersgate Group’s new report makes clear that resource efficiency “makes sense now” and can reduce risk whilst making returns. There has been “a lack of movement” in government on this agenda but “we must remember that all is still to play for”. The critical work now is to activity engage on the open consultation for the Industrial Strategy, and the impending Emissions Reduction Plan and 25 Year Environment Plan.

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