The Scottish Government’s Zero Waste Plan sets a vision of a closed loop economy in Scotland where the economic potential is accrued from materials arising in the waste stream. Associated targets are 70% recycling and a maximum of 5% to landfill by 2025.
The Scottish Government has more recently published a policy statement for The Waste (Scotland) Regulations 20122 which supports its Zero Waste Plan and these regulations were passed by the Scottish Parliament in May 2012. Some of the key aspects of this legislation will require businesses to separate out specific materials from the waste streams by 1st January 2014 (including plastic), meaning that the market will change in the medium term even though targets are set to 2025. These new regulations, will place additional demands on the waste management industry and present both opportunities and challenges for businesses.
Optimat has recently assessed the evidence base for plastics recycling in Scotland3. That work highlighted the need for significant additional plastic recycling capacity in Scotland if future targets are to be met; it is estimated that additional capacity for recycling of more than 150,000 tonnes per annum of plastics will be required by 2014.
This study has identified potentially viable business opportunities to increase recycling capacity in Scotland and thus contribute to this infrastructure gap. It focuses on business opportunities that complement existing activity – essentially opportunities that address current “weaknesses” in the supply chain. These are generally targeting less attractive materials or materials with less well developed supply chains. The business opportunities that have been identified and analysed are:
- processing of mixed, contaminated rigid plastic waste;
- processing of mixed contaminated plastic film waste;
- collection and compaction of expanded polystyrene waste;
- processing of waste u-PVC window and door profiles; and
- processing of waste plastics from WEEE.
The plastics under these categories represent arisings of between 300,000 and 400,000 tonne per annum in Scotland.
Analysis of the business models and financial viability for these opportunities indicate that four of them do offer the potential of viable business opportunities but that the collection and compaction of expanded polystyrene waste currently does not. This is due to the costs of collection and processing due to the low density of the material.
It is estimated that these business opportunities can deliver an additional recycling capacity of 71,000 tonnes per annum in the short term. There are concerns regarding the limitations of the current collection infrastructure (leading to a lack of suitable materials in the plastics supply chain) that restrict the processing capacity that we believe can be viably developed and may, in fact, also inhibit the development of the opportunities identified. It is expected, however, that The Waste (Scotland) Regulations 2012 will drive changes in collection activities and that additonal recycling capacity can be developed in the medium/longer term.
Optimat, therefore, recommend that Zero Waste Scotland undertakes the following:
- Raise awareness of these opportunities and encourages investment in new recycling capacity in Scotland. Obviously the key next steps for any potential investor are to identify waste streams, processing technologies and markets that they believe will support an investment and to develop a detailed business plan for this investment.
- Catalyse the development of the collection infrastructure and activities in Scotland. This will require engagement with public and private sector organisations to extend and optimise collection activities and to enhance the management and segregation of waste collected.
- Assess opportunities to support the development of markets for recycled materials.