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Recycling & Waste World

03 May 2011 03:05:45

Will Budget help recycling sector?

The announcement in last week's budget that the government plans to increase the Green Investment Bank's capital from £1bn to £3bn, and intends to enable the waste and recycling sector to benefit from proposals to fast-track waste management facilities through the planning system, was welcomed by the industry.

However, disappointment was expressed on other aspects of the budget.

Carl Thomson from the Whitehouse Consultancy said: "This was a broadly positive budget for the waste and recycling sector. More disappointing is the announcement that the 20p fuel duty differential for biodiesel made from used cooking oil will end next year. The government will offer support for waste biodiesel through the Renewable Transport Fuels Obligation, but the scheme is under review and its effectiveness is not yet proven."

Nicola Peake, managing director of May Gurney Environmental Services, voiced concern over the continuation of the council tax freeze: "This means it is imperative for local authorities to find new ways to deliver more for less, when demand for services is growing. Introducing recycling services is key to helping local authorities reduce taxes and landfill fines.

"Equally we expect more local authorities to look for new ways to mine the waste stream and generate revenues from it. While the council tax freeze will be off-set by grants from the Department for Communities and Local Government (DCLG), the reality is that local authorities still face the toughest financial settlement in living memory."

While the Chartered Institution of Wastes Management (CIWM) pointed out the waste management sector is expected to invest between £10 and £20 billion in new infrastructure and services in the next decade, it added: "There are still many barriers to growth for this sector that need to be addressed to ensure that sustainable waste and resource management is plugged into all the right areas of government policy – resources, energy, carbon and the economy – to deliver the maximum environmental and economic benefit for the UK."

Thomson from the Whitehouse Consultancy echoed the CIWM's concerns over the government’s proposals for growth. "The budget suggests the government is aware that growth in the sector will depend on relieving pressure on business and reducing the burden of regulation, but it will need to do more to get the financial incentives right if it is to realise its ambition of a huge increase in anaerobic digestion and move towards a 'zero waste' economy."

In terms of financial incentives, the CIWM was among those who welcomed the extra funding for the Green Investment Bank (GIB) and the power, albeit delayed, for the bank to borrow.

However it pointed out that "This still feels like a government tinkering around the edges of genuine green economic growth. Supporting low carbon investment is essential and while a carbon price floor for energy generation sends out a positive signal, we are still a long way from having a robust and integrated framework for the future.

"We are keen to see more detailed thinking in the proposed Green Economy Roadmap due out later this year."

Caroline May, partner and an environmental law specialist at Norton Rose LLP, also expressed reservations about the extra funding for the GIB: "It falls a long way short of the estimated £550bn investment that could be needed over the decade to 2020 in order to meet targets on climate change, energy efficiency and renewables.

"The GIB will only be able to borrow money from 2015 and it is feared that the GIB will not be able to do its job while its funding is wholly reliant on the treasury."

Stephen Tetlow, chief executive of the Institution of Mechanical Engineers, added: "The £3 billion for the GIB is welcome, but well short of the £20 billion needed to update the UK's creaking infrastructure."

The chancellor's proposals to speed up planning also prompted reservations.

CIWM again: "We remain concerned about the potential tension between local planning priorities and more strategic environmental and resource efficiency objectives at the regional and national level.

"Likewise, the presumption in favour of sustainable development is a helpful step, but only if accompanied by a robust and detailed definition of 'sustainable development' that takes full account of our resource use and shuts the door on potential abuse of this loophole."

Paul Levett, deputy chief executive of Veolia Environmental Services said "We look forward to seeing the detail as it impacts the new infrastructure which is needed by our industry in order to deliver on the waste hierarchy."

This article was originally published in Recycling & Waste World.

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