Little to stimulate recycling in quarry firms' bid to fend off tax

Proposals intended to head off a tax on aggregates were unveiled by the quarrying industry in November. The package includes an environmental fund and an offer to pursue the environmental management standard ISO14001 at all sites. But the industry has a difficult task to convince Ministers that its proposals will stimulate aggregates recycling and reduce quarrying demand.

A tax on aggregates remains one of the strongest contenders for new environmental taxes. But earlier this year, Planning Minister Richard Caborn signalled that Ministers might be persuaded that the tax was unnecessary if the industry came up with an alternative that was "demonstrably better" in both addressing environmental impacts and stimulating alternatives to quarrying (ENDS Report 281, pp 3-4 ).

In November, the Chancellor confirmed in his pre-Budget statement that the tax remains under consideration - but he noted that "proposals made by the industry to reduce the environmental impact of aggregates extraction" had yet to be looked at.

The Quarry Products Association (QPA) unveiled its proposals - to be implemented only if the Government shelves the tax - a few days later. The QPA, whose members account for 90% of industry production, dubbed the package "a realistic alternative to the proposed aggregates tax."

The Council for the Protection of Rural England (CPRE), a key proponent of a tax, welcomed the QPA's proposals. "They look like they could improve the industry," a spokeswoman said. "But we'd like to see them put in place jointly with a tax rather than instead of one."

CPRE's principal concern is that the industry's proposals would not reduce demand for primary aggregates. "We believe a tax would encourage the use of recycled aggregates and also send a message to consumers that the use of aggregates has environmental costs. The QPA's proposals do not recognise that aggregates are a finite resource."

  • Environmental management: As predicted by ENDS in June, certification to the ISO14001 environmental management standard forms the centrepiece of the QPA's proposals. All members would be required to gain certification within three years - covering some 2,000 quarries and related operations. They would also be required to set up local liaison committees for all sites.

    The target is ambitious and would be a major step forward in uptake of ISO14001 in the UK. The process would help quarrying firms to identify and manage their environmental impacts - but would do nothing to reduce the total amount of quarrying.

    Citing research by consultancy MJ Carter Associates, the QPA says that "early implementation" of ISO14001 would cost the industry up to £25 million per year. But experience in other sectors suggests that there would also be significant cost savings through increased efficiency.

  • Recycled aggregates: The QPA concedes that under a tax specifiers might find a "short-term attraction" in considering recycled materials. But in the longer term, it argues, there would be stockpiling of lower grade primary aggregates, causing prices to fall.

    The QPA also contends that a tax should not be introduced until there is a better understanding of the types and quantities of waste suitable for recycling. Nevertheless, it insists that it wants to see substantial increases in aggregates recycling.

    Stimulating recycling would in fact offer new commercial opportunities for some aggregates businesses - but the outcome would be uncertain. It might favour quarrying firms with existing waste management subsidiaries, but there would also be disruption to landfill operations.

    The landfill tax has already encouraged some QPA members, such as ARC and its Greenways Waste Management subsidiary, to invest in projects such as recycling areas at landfill sites for demolition and construction waste.

    However, the industry's proposals for stimulating recycling are very thin on detail. One idea is to establish an accurate statistical baseline on the availability of recycled and recyclable materials - something on which the Department of the Environment, Transport and the Regions (DETR) is already working. Another proposal is to develop specifications for recycled aggregates in partnership with construction firms.

  • Industry funded trust: One of the QPA's more significant proposals is to invest £20 million per year in a "sustainability foundation." Its work would include the restoration of "orphan" quarries and conducting environmental research relating to the industry.

    A possible feature of an aggregates tax is that the Treasury might permit some funds to be channelled into environmental projects. Under the landfill tax, site operators can divert up to 20% of the tax revenue in this way. The proposed trust might, therefore, remove one of the arguments in favour of an aggregates tax.

    Ironically, however, some of the £20 million per year could in principle be funded from landfill tax credits, since many quarrying firms have landfill subsidiaries. Indeed, the pressure to divert landfill tax credits into the proposed trust might prove irresistible, given that such funds can already legitimately be spent on research into sustainable waste management - which would include secondary aggregates - and restoration of contaminated land, which might include orphan quarries.

    The QPA has also proposed that the foundation might fund the Aggregates Advisory Service, which the DETR launched in 1996 to promote the use of secondary aggregates. Irrespective of the negotiations on the proposed tax, the DETR has been keen that the service should be funded by the private sector from next year (ENDS Report 280, pp 14-15 ).

    The fund would also take over operation of the QPA's quarry restoration guarantee scheme, extending it to hard rock quarries. The scheme - essentially an insurance package to ensure that quarries are restored in line with planning consents - already covers sand and gravel sites.

  • Environmental assessment (EA): QPA members would submit EAs for all new quarries, regardless of size. This commitment would remove ambiguities as to when an EA is required, although the revised statutory EA framework, to be implemented next March, will in any case tighten up the rules considerably (ENDS Report 276, pp 40-42 ).

  • Planning enforcement and pollution control: The QPA is offering support for the idea that planning authorities should be given powers to charge quarry operators annual fees to fund enforcement work. However, it argues that the fees for firms certified to ISO14001 should be set at a "significant discount."

    The QPA also wants the local authority air pollution control regime extended to sand and gravel production and processing sites. Currently it only applies to stone processing.

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