Defra policies ‘not enough’ to unlock £1bn plastics recycling investment

Research for Viridor conducted by consultancy Anthesis suggested that £1bn in investment is needed to build 46 plastics sorting and recycling facilities if the UK is to end plastic waste exports.

This would equate to an extra 14-16 million tonnes of plastic recycled domestically during the next 25 years.

The report said the plastics recycling sector “does not benefit from long-term, stable revenues supported by long-term contracts and a predictable cashflow model”.

Anthesis spoke to investors including Hermes Infrastructure, Equitix, First Sentier Investors, CPPIB and I Squared Capital.

The report said Defra expected reforms such as extended producer responsibility, consistent collections and the plastics packaging tax would be enough to “provide sufficient clarity” to develop the required recycling and reprocessing capacity.

But it concluded: “To date, the recycling market has delivered limited infrastructure measured by both capacity and quality. There is little to indicate that current reforms will address this issue without additional intervention.”

It said the north-west of England had the most potential to benefit from investment in plastics recycling facilities and reprocessing because it is the region with the largest capacity gap.

The report said investment in the north-west would contribute to the Government’s ‘levelling up’ agenda.

Plastic collected for recycling in the UK is forecast to increase by 45% by 2035. Anthesis argued that the plastics recycling infrastructure shortfall could reach 1.6 million tonnes and increase plastic waste exports if investment is not forthcoming.

It concluded: “This investment could deliver an extra 46 industrial facilities across all regions of the UK, create 1,100 permanent skilled green jobs and a further 975 in the supply chain, and deliver economic benefits of more than £3bn across 25 years.”

Tim Rotheray, Viridor director of ESG, said: “When people put out their plastic recycling each week, they expect that material to be recycled in the UK. Ending plastic waste export is not only the right thing to do but also a major employment opportunity across the UK.

“New policy could unlock up to £1bn in new industrial facilities up and down the country. Businesses are ready to invest and policy reforms have the potential to address the barriers identified in this report, while putting the UK on track for a circular plastics economy.”

Anthesis consultant Anna Brockhaus said: “Our research shows how investment in high-quality plastics recycling infrastructure is not only critical to drive down waste and carbon emissions, but that this could also unlock economic benefits across the UK.

“We are at a pivotal point for both resource use and reducing emissions, and the opportunities identified in this research are key to creating a more sustainable world.”

The report follows criticism about the Government’s slow introduction of the resources and waste strategy through the Environment Bill.

The Committee on Climate Change criticised the “limited progress in policy implementation in recent years” of the resources and waste strategy and “policy gaps” in resource efficiency

Environmental Services Association (ESA) executive director Jacob Hayler told the Public Accounts Committee that ministers needed to “hit the accelerator” on reforms.

The ESA said its members were ready to invest £10bn towards a target of delivering net-zero carbon emissions from the industry by 2040.