A report which attempts to bridge a ‘gap’ in knowledge about the size and value of the UK waste management sector has been published by the Department for Business, Innovation and Skills.
By far the largest proportion of Gross Value Added in the waste sector is generated from waste collection, according to Ekosgen
It estimates that the sector contributed £7.5 billion to the UK economy in 2010/11– considerably higher than the latest £5 billion official estimate from 2009. It also estimates that the waste management sector accounts for 128,000 jobs, up from the official figure of 94,000 in 2009.
The ‘From Waste Management to Resource Recovery: A Developing Sector’ study, released last week (September 1) was commissioned because the government believes there are ‘considerable’ opportunities for businesses to exploit as the UK moves towards zero waste. But, as there is a shortage of information in this area, the department asked economic development consultancy Ekosgen, in association with Emma Buckman Associates, to research what exactly the waste management sector is and how big it is.
The report explains: “There is limited data about the composition and size of the waste management sector and its economic contribution to the UK economy. This study was commissioned by BIS to help address this gap and identify the types of actions the Government could take to create the conditions for growth.”
For its research, Ekosgen conducted an online survey of 1,251 companies (representing 1% of the sector) and consulted industry experts at organisations such as the ESA and WRAP and local authorities. It also drew on Environment Agency data and other data sets to create a picture of the industry as a whole.
The report begins by defining the waste sector as that which comprises the following ten activities: Re-use of products to divert waste at source; collection and transport; brokerage of waste; sorting and storing; disposal through landfill; disposal through incineration; treatment of waste; processing of recyclate; composting; energy recovery.
However, it notes that the waste sector ‘bleeds’ into many other sectors – including haulage, health, farming and food and drink. It therefore suggests "that the sector is best viewed as comprising a core group of organisations which generate their income from waste management activities and a much wider peripheral group who perform it as a secondary or subsidiary function”.
Ekosgen chart showing employment in the waste sector according to activity
Key report findings include:
• There are a total of 128,000 Full Time Equivalent’s (FTEs) in the core waste management sector.
• Waste management generated approximately £7.5 billion Gross Value Added (GVA) -including the 16 largest companies. These 16 companies generate a GVA of £1.55 billion. and employ 27,500 FTEs (18% of the core workforce). By far the largest proportion of GVA is generated by waste collection, accounting for nearly half (46%) in 2009.
• Over half of the sector’s employment is within three sub sectors: (i): carrying and collection (22%); (ii) processing of recyclate (17%); and (iii) sorting and sale of waste or scrap (17%).
• The sector generates an average GVA per employee of £58,200. This ranges from £32,800-£99,800 across ten main activities, from low intensity activities (composting) to those with considerable infrastructural investment/capital intensity (energy recovery).
• Over the ten year period from 2006-2016 the sector is predicting steady growth recovering to 2006 levels in 2013 with steady growth to the 2016 period.
While the report focuses more on the commercial sector, it also looks at municipal waste management. The study found that approximately 22,175 people were employed by councils in waste management (64% in waste collection, 18% in recycling), with a public sector waste management ‘turnover’ of an estimated £3.33 billion.
Here, the report notes that the withdrawal of PFI funds and concern over long-term commitments meant that councils might move away from developing large-scale waste treatment infrastructure in future, in favour of smaller facilities which do not require so much long-term capital commitment and are often easier to secure local support for. This has particular implications for large-scale incinerators.
The report notes: “Stakeholders suggest that the absence of PFI credits for waste infrastructure and concerns over committing waste streams for such long periods will make smaller energy from waste facilities more popular in future years.”
In terms of collection, meanwhile, the report notes that many councils do not benefit from the value of recyclables as they are risk averse and prefer to let their contractors receive any monetary value for them. This, the report claims, is one reason why the net costs of waste management amongst councils is increasing and it suggests that councils partnerships can help.
In the report, Ekosgen also looks at drivers for change in the waste industry. The consultancy highlights the ‘fundamental’ role that new technologies such as gasification and anaerobic digestion have in waste management, alongside the implications this has for the workforce and required skills.
Experts, the report notes, also expect to see an increase in recovery and reuse of household and commercial and industrial waste in future years, as well as more local authority partnerships.
Ekosgen was also asked in the study to assess the barriers to growth in the waste sector and how the government may address these.
Barriers identified included difficulty in securing planning permission for new waste management infrastructure, lack of clarity surrounding renewable energy policy and electricity market reforms, difficulties accessing finance and the current economic climate.
The report suggests that a simpler, cheaper way of getting permits for waste operations and a refined planning system could help the sector develop, alongside recycling incentives for small and medium-sized enterprises (SMEs),
