WRAP: Growing the market for recycled materials

After a steady if unspectacular start, the Waste and Resources Action Programme has set out a raft of ambitious targets for the next three years.1 WRAP holds flagship position in the Government's strategy to boost recycling, and is confident that it can directly deliver more than a million tonnes of additional recycling capacity and succeed with new programmes on household waste collection and education. But its goal to reduce annual growth in municipal waste looks challenging - especially the "smarter packaging" contribution it is seeking from the major supermarkets.

At its launch in 2000, WRAP was described by the then Environment Minister, Michael Meacher, as a "key mechanism" for delivering England's national waste strategy, along with statutory recycling targets and extra money for local authorities.

WRAP's core mission was to "promote sustainable waste management" by working to create "stable and efficient markets for recycled materials and products" and "removing barriers to waste minimisation, reuse and recycling."

Four years on, WRAP has grown into a respected - and sometimes envied - centre of expertise with over 120 staff and a remit that has expanded to include waste minimisation, collection and public awareness programmes. Annual funding will reach £76 million in 2005/06, up from £54 million over the first three years, and the organisation is confident of securing longer-term funding in this summer's spending review.

WRAP's structure is similar to that of the Carbon Trust, the body established by the Government to promote low-carbon technologies (ENDS Report 322, pp 23-26 ). Launched within a few weeks of each other, both are private not-for-profit companies.

Chief executive Jennie Price was new to waste and recycling. A barrister by training, she was formerly head of the Construction Confederation.

Most of WRAP's senior management was recruited from the private sector. Business and procurement director Steve Creed came from Carillion; Liz Goodwin, head of WRAP's materials programmes, had worked in the chemical industry; and Gareth Lloyd, WRAP's recently appointed head of communications, was plucked from Transco.

Policy director Ray Georgeson is a notable exception. The former head of environmental charity Waste Watch, he was a key figure in the community recycling sector for many years. Another influential figure was David Dougherty, founder and former head of a US organisation which in many ways acted as the model for WRAP, the Seattle-based Clean Washington Center.

Achieving delivery?
WRAP's first business plan, for the three years 2001/02 to 2003/04, included a range of quantitative targets covering standards, procurement and financial mechanisms as well as four materials - paper, glass, plastics and wood (ENDS Report 313, pp 16-17 ).

Paper and glass were thought to offer the best potential for tonnage gains, while plastics and wood were areas where recycling levels were low but there was the potential for significant increases. Although there was no programme for organics, the target to establish a standard for composted products was intended to overcome a major barrier to growth.

"We thought this a bold move at the time," said WRAP chairman Vic Cocker at the recent launch of the organisation's second business plan. "We had 10-20 people working for WRAP."

WRAP was unwilling to provide a breakdown of its performance against the targets ahead of the publication of its latest "achievements report" in July. While it is clear that many have been missed, Ms Price says that "quite a few" were achieved.

The report could well attract the interest of the National Audit Office, which is currently selecting candidate environmental programmes for investigation following its recent assessment of the UK emissions trading scheme (ENDS Report 351, pp 27-30 ).

Ms Price says that its market development programmes are delivering an extra one million tonnes per year of additional recycling capacity, and that a further one million tonnes is due on stream "in the next few months".

Once gains from all the capital grant and research projects are "fully realised", a further two million tonnes of annual capacity will be produced. If the "reasonable assumption" is made that this four million tonnes of capacity operates for at least 10 years, the cost to the public purse is estimated to be around £1 per tonne.

These estimates, says WRAP, relate solely to its R&D and capital projects and exclude its advocacy and procurement work, "which make essential contributions to the programme as a whole, but are not so easily related to tonnage figures."

Shotton - a turning point
A key success was securing state aid clearance last year from the European Commission for a grant to support a major expansion of Britain's newspaper recycling infrastructure. The £17 million grant went to UPM-Kymmene to support a £128 million conversion of its Shotton mill on Deeside, North Wales, to 100% recycled fibre use.

The flagship project went far from smoothly. Originally, UPM's rival, Aylesford Newsprint, was made the preferred bidder, only for negotiations to break down when it was unable to offer timing guarantees. Work on the facility was then delayed as WRAP waited ten nail-biting months for the Commission's approval, eventually granted last summer.

The additional 320,000 tonnes of capacity for waste paper at Shotton is well short of WRAP's target to help deliver a 500,000 tonnes per year increase in newspaper recycling capacity.

However, WRAP says that the size of the expansion was due to a change in market conditions. The target was set after it received "a very clear indication from the industry" that it was appropriate, says Ms Price, but "the downturn in advertising after 9/11 meant such a large increase in capacity would have led to a dramatic drop in the price of newsprint."

WRAP could theoretically consider another newsprint grant, says Ray Georgeson - but it would be very difficult to get it past the Commission. The Shotton grant was allowed partly because it is for an area that qualifies for state assistance under EU rules, and partly because it was earmarked for the installation of pollution abatement equipment - something clearly mandated in the EU guidelines on state aid for environmental projects.

However, Shotton has had indirect effects which could prove as important as the increase in paper recycling capacity.

First, the new recycling schemes supplying paper to the mill from an additional four million homes will also involve the collection of other materials.

Second, to ensure security of supply, UPM has introduced local authority contracts spanning 5-10 years instead of the usual one or two. This provides a more secure income and encourages recycling officers to think about long-term provision.

Lastly, the Shotton decision paved the way for the Commission to approve the other WRAP projects notified for clearance, enabling grants to the compost, wood, plastics, glass and aggregates sectors to go ahead. One of the first fruits of this breakthrough was a £1 million grant for the UK's first plastic bottle sorting and reprocessing plant - capable of recycling 20,000 tonnes of bottles per year. The facility is due on stream in July 2005 (ENDS Report 351, p 22 ).

Another milestone in the first three years, says WRAP, was the adoption of new composting standard PAS100, developed in conjunction with the Composting Association (ENDS Report 334, p 33 ). Since the standard's publication in 2002, more than 30 producers have applied for certification, covering more than 40 facilities and 60 products. These account for some two-thirds of UK capacity for high-quality compost.

"Organic waste is a priority in WRAP's new extended programme," says Mr Georgeson, "but didn't feature much in the first business plan, as we were told in no uncertain terms by many of our stakeholders."

WRAP is now working on a full organics market development programme, focusing on the development of applications in horticulture, landscaping and organic agriculture. It has also started to award capital grants to compost producers, with Dorset-based Eco Composting receiving more than £100,000 towards an in-vessel facility to process 41,000 tonnes of kitchen and garden waste over five years.

Product development
As well as helping bring new recycling capacity on stream and developing standards, WRAP has funded numerous R&D projects which should lead to the commercialisation of new products.

One example is lightweight truck body panels containing a core of 100% recycled mixed plastics between two outer layers of virgin polypropylene. The panels, weighing 60% less than traditional plywood panels, attracted considerable interest at this year's commercial vehicle show.

Another is the work on glass. According to Ms Price, the brick industry is "very interested" in using up to 10% ground glass in clay bricks, due to the energy saving benefits and associated cost savings. The glass also increases a brick's frost resistance.

WRAP also contributed towards the cost of the UK's first plant to produce water filtration media from glass cullet. Due on stream in 2005, it will make 20,000 tonnes per year. The total potential market for the product, which WRAP says has significant benefits and cost savings over traditional products, could reach 230,000 tonnes of glass.

Together with other applications for glass on the edge of commercialisation, WRAP estimates that these new markets will soon require some 800,000 tonnes of cullet - which would almost double the total amount of glass currently recycled.

Many of the new applications require coloured glass, so they complement to some extent the existing recycling efforts by the glass container industry, which requires predominantly clear glass.

But the glass manufacturers are worried that greater competition and higher cullet prices could raise the costs of meeting their energy-saving target in the sector's climate change agreement. They have become even more concerned following publication in January of the UK's draft allocation plan for the EU emissions trading scheme (ENDS Report 348, pp 18-22 ).

"The allocation we've been given is well below what we need," says David Workman of British Glass. "Unless we achieve closed-loop recycling in containers and flat glass, there is a danger of conflict arising."

As an opening salvo in the battle between sectors to secure greater supplies of cullet, British Glass released a life-cycle assessment earlier this year which claimed that closed-loop recycling of glass containers achieves greater savings in carbon dioxide emissions than any other type of glass recycling.

However, WRAP's plans will please local authorities, which will hope that diversification will improve cullet prices.

In the event, WRAP failed to meet some of its targets for glass. Ms Price admits that it "underestimated how hard commercialisation of glass recycling technologies would be," but believes it "did the right thing to go for diversification."

Similarly, Mr Georgeson says that WRAP failed to meet its target to increase the use of recovered fibre in the graphics, printings and writings sectors because it "vastly underestimated how difficult it would be to get people to change their purchasing policies." To overcome this, over the next three years it "will probably have to put grant funding in for manufacturing capacity", as well as increasing demand in the public sector through its procurement programme.

Few complaints
In spite of the many missed targets, WRAP is generally held in high esteem by the waste industry. This is perhaps surprising given that its funding was increased significantly at the same time as the landfill tax credit scheme was pared down.

"WRAP remains by far the present Government's main practical achievement on waste," says Dirk Hazell, chief executive of the Environmental Services Association. "Pound for pound it's providing phenomenally good value for money.

"ESA has always supported its core mission, but we want it to do its core job well rather than take on additional factors which can only dilute its work."

One example of this, says Mr Hazell, is WRAP's new programme to develop reusable nappy services - something it was put under pressure to do well before the Environment Agency's still awaited life-cycle assessment comparing reusables and disposables.

Another example, he says, is its new home composting programme, which aims to divert 400,000 tonnes of organics from the household waste stream. Such programmes are fine in leafy rural or suburban areas, he says, but can be unsuitable in others where few homes have sizeable gardens.

Clearly, both of these programmes do indeed represent a shift away from the promotion of recycling - but it is also worth noting that neither offers much for the waste management industry, while some councils could turn to home composting programmes instead of agreeing contracts with waste firms to collect organics (ENDS Report 338, p 38 ).

Mr Hazell's other main concern is that "it is very difficult to draw a line between developing a market and distorting a market." However, he adds that "people with an axe to grind are usually those whose activities have suffered."

Expanded role
From seven programmes three years ago, WRAP now has 12. These are summarised, together with targets, in its new business plan (see box ).1 This overlaps with the first plan by one year, covering the period 2003/04 to 2005/06.

The enlargement of WRAP's role dates back to the waste review by the Cabinet Office's Strategy Unit in 2002. The Unit warned that urgent action was required to reduce waste growth and boost recycling and composting if the UK was to meet the landfill diversion targets laid down in the landfill Directive.

Heavily involved in the review, WRAP emerged from the process with a massive expansion of its responsibilities and budget (ENDS Report 340, pp 46-47 ). These included a new market development programme for organics, similar to those already established for paper, glass, plastics and wood, and an advisory service for councils to help them develop collection schemes for organics and other materials.

It also assumed responsibility for a new national waste awareness campaign, and for a waste minimisation programme covering home composting, the promotion of reusable nappies and packaging design.

The new business plan also includes an aggregates programme. Since 2002, WRAP has also received funding from the Aggregates Levy Sustainability Fund for a programme to overcome market barriers to the use of recycled aggregates.

WRAP's mission statement has been reworded to accommodate those programmes not directly involved with recycling. It talks of "accelerating resource efficiency" - an area, says Ms Price, that "very much needs a voice" in Whitehall.

"If you sit down with the DTI or some sections within DEFRA to talk about sustainability they will talk about energy and water but it is difficult to get them to talk about solid resources," she says.

One way that WRAP could try and push waste up the Government's environmental agenda would be to make the point that in broad terms recycling helps to reduce CO2 emissions. WRAP says that preliminary research it conducted with the Carbon Trust indicates that using secondary materials results in "substantial" energy savings compared with production using primary materials.

Achieving 30% recycling of municipal solid waste in 2010 could reduce greenhouse gas emissions by the equivalent of 10-15 million tonnes of CO2. However, not all of the potential saving would occur in the UK as some of the displaced production of primary materials, such as aluminium, would be overseas.

By 2006, says WRAP, it will have delivered an extra 4.25 million tonnes of new recycling capacity. Of this, some 1.25 million tonnes will be material drawn from the municipal waste stream, accounting for almost 15% of the new capacity needed to reach the Government's target to recycle 33% of household waste by 2015. It will also deliver three million tonnes of new aggregates recycling capacity.

Tackling minimisation
Perhaps the biggest challenge now facing WRAP, says Mr Georgeson, is the "holy grail of decoupling waste arisings from GDP". This, he points out, has not yet been achieved by any country.

Led by Mark Barthel, former head of environment at BSI, WRAP's new waste minimisation programme faces the key task of getting the major supermarkets signed up at senior level to help reduce the 35-40% of household rubbish that begins life as a purchase from their stores.

While it may seem to be in the supermarkets' interest to maximise food sales, Ms Price argues that the use of "smarter packaging" would reduce retailers' cost base. "We need to understand what they want and involve them in developing the programme, like our glass programme did with the brick industry." There is also a link between recycling as a feel-good activity and the fact that retailers are "keen on their customers having a good experience".

A notable omission from the minimisation programme is any project to test direct or variable charging - something supported by local government, the waste industry and environmental groups, but not by Environment Secretary Margaret Beckett.

"Personally, I think the case for some form of direct or variable charging has been made," says Mr Georgeson. "I'm not convinced that it's essential, and I don't think the necessary infrastructure or landfill tax levels are in place, but I really don't see why we can't allow a few local authorities to try it out."

WRAP is more confident about its procurement programme, following the Government's new commitment to sustainable procurement (ENDS Report 345, p 24 ).

"I've got high hopes of meeting our target on local authority procurement," says Ms Price. "The Government really understands it now. All it will take is a couple of Departments to say they'll only use recycled material - and local authorities would be happy to follow suit."

Demand-side emphasis
Is there a danger that with the growth of WRAP the Government is putting too much emphasis on the demand side of the equation? "Personally I don't think demand will outstrip supply - if anything it will be the other way round," says Ms Price.

"I'm worried that local authorities might collect the heaviest material [to meet tonnage-based recycling targets] without paying enough attention to where they will send it. Having said that, these days there is a much stronger degree of understanding of markets in local authorities."

An opportunity to assess WRAP's role and the overall balance of waste policy initiatives will arise next year, when reviews of WRAP and the national waste strategy are due to begin. There may also be further discussion about the idea of a "strategic waste authority" but, whatever the shortcomings of the present arrangements, it would be a surprise if WRAP did not have its life extended.

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