Response to the Defra Consultation on draft Materials Recovery Facility (MRF) Regulations for insertion into Environmental Permitting (England and Wales) (Amendment) Regulations 2013

26th April 2013

Introduction
1. CRR has been calling upon central government and local authorities to act urgently to improve the quality of materials collected for recycling in the UK.  We contend that real recycling should be about maximising the economic, environmental and social benefits of recycling for everyone, from the local council tax payer to the global reprocessing industries. Our concern is that investment in collection, materials handling and sorting systems that begin by gathering a range of different materials in one bag or bin and the resulting cross-contamination could permanently undermine the environmental and financial benefits of recycling. Our campaign aims to influence local authority policy and practice, and build consensus within the UK of the economic and environmental importance of separated collections and systems that maintain the maximum economic and environmental value from secondary resources.

2. A list of CRR stakeholders and further information concerning CRR can be found on this site.

General Comments on the Paper
3. CRR welcomes any discussion and actions designed to improve the quality of material for reprocessing. The quality of material output from UK MRFs has been a major source of concern for our members since the advent of the MRF as a recycling apparatus. There has for some time a need for statutory regulation.

4. We welcome the sentiment if not the sense in the statement at paragraph 1.4 that the purpose of the proposed MRF Regulations is to help stimulate the market conditions necessary to improve the quality of the material produced by MRFs so that it can be more readily recycled. This arrangement of words seems rather cart-before-horse. From our perspective, the market conditions are not of themselves going to improve the quality of material. Only the collectors and MRF operators can do that, and we wish they would.

5. We are unable to agree with the second sentence of 1.4 (repeated at 2.6 and elsewhere) that information on the quality of recyclate produced by MRFs is needed to demonstrate compliance with the separate collection requirements of the revised Waste Framework Directive. The rWFD requires separate collection. Comingled collections into MRFs fall short of this requirement. We hope this regulation change is made and that it works as envisaged, but this will not change our view that the rWFD is improperly transposed.

6. We welcome the admission, albeit something of an understatement, at 2.3 that whilst the quality of recyclates currently produced by co-mingled collections and MRFs can meet the quality specifications of reprocessors, this does not always appear to be the case.

7. We are keen to see monitoring of MRF quality output in as much as it should lead to improvements in the quality of material received by our stakeholders and the UK secondary materials industry. However, let us be clear: choice is not a meaningful substitute for quality. It may be true that more information on available quality might help, but lack of information is not in our view the real issue. We question whether the statement at paragraph 2.10, that this regulation is needed to address current market failure of imperfect information and so improve market efficiency, is valid.

8. Generally speaking, there are business relationships between reprocessors and MRF operators. Those responsible for purchase of feedstock have a reasonably efficient and up to date mapping as to which MRFs are producing a quality which is acceptable, and in what type and grade of material. This is a dynamic situation and it changes from time to time. The proof of the pudding is the sample or trial load. These are accepted and usually paid for by the reprocessor, generally on the basis of a claim of improvement or difference for one reason or another by the MRF operator. They are then examined and experimented with at the reprocessing plant.

9. It seems to us that this basic mechanism is unlikely to change. The MRF operator may well, as a result of these proposed insertions to the permitting regulations, in future be able to provide sampling documentation in support of claims to improvement. That seems useful, but it will surely not be a substitute for a sample load. Nor will it, we suspect, sway the buyer other perhaps than to testify that the trial load is representative of the quality of further loads to come. As one seasoned paper buyer said when CRR first began to campaign, “I don’t need to do a composition test or even really to look at the load. I can tell just by the smell of it whether it is going to be up to standard.”

10. We are not sure quite how or why this need to address current market failure of imperfect information was constructed. A reprocessor, if asked whether more information on quality would be helpful, is very likely to answer in the affirmative. But what the reprocessor really wants is the quality material itself. Our experience and overwhelming impression is that the real problem is simply that the comingled collections and the MRFs have between them contaminated the material to the point where there is no hope of redemption in terms of UK reprocessing. It is our assumption that Defra, unwilling to square up to the fact that comingling and MRFs are actually diminishing the quality required by the rWFD and reprocessors, has opted to address an incidental and somewhat constructed need, that of information for reprocessors regarding the quality in MRFs. This is unnecessary spin, in our view.

11. That criticism notwithstanding, there are certainly valid reasons for producing information on the material quality attained by MRFs. Some of these are mentioned in Section 3 of the Impact Assessment. Our hope is that some standards and benchmarks will be set, and that these will relate sufficiently to critical thresholds dictated by existing reprocessor plant. We were under the impression that achieving standards was the original objective of the exercise.

12. Information may indirectly lead to improvements in quality feedstock for UK and EU reprocessors. If used and disseminated in the right way, information will bring comparison and analysis in the wider context of economic and political comment on the situation. That cannot be a bad thing from a reprocessor or environmental point of view.

13. Information should also improve of understanding and throw light into the murky world of low grade mixed material export, particularly that to Asia. This should improve compliance with the Transfrontier Waste Regulations, as alluded to at paragraph 2.2, and allow wider examination of the social, environmental and economic consequences. All this is needed, not least since much of this export appears to be about avoiding EU regulation and UK Landfill Tax. This should be of interest to local authorities, especially those with fair trade charters, concerned about downstream effects of their effluent.

14. In a wider context, as a result we might better understand not only what materials should now be available to the UK or EU secondary materials economy, but those which may become available in the future, bearing in mind the aspirations and visions in the recitals of the rWFD and elsewhere. This would allow government to be much bolder in its materials strategy for the future, and investment in recycling will surely follow.

Answers to Consultation Questions
Question 1: a) Do you agree that the Government should intervene to correct the
information asymmetry to improve the transparency of information on material quality? b) Do you agree with this proposal to mandate MRFs above a certain size threshold to measure, sample and report on their input, output and residual? c) If not, what other interventions (including voluntary schemes) could be used to achieve an improvement both in the provision of transparent information and an improvement in the quality of MRF material outputs?

(a) We are not convinced of the informational asymmetry, but we agree that there should be intervention to improve the transparency of material quality and how it is achieved.

(b) Yes.

Question 2: a) Are the assumptions in the draft Impact Assessment correct? b) Do you have any further information to improve our assumptions? c) Could the proposals have any impacts other than those intended?

The Impact Assessment seems reasonably comprehensive on all points except for the financial questions. On the one hand, we consider the expense borne by the reprocessing industry in terms of coping with low quality material, revealed by the Resource Association’s Costs of Contamination report. In order of magnitude terms, this runs to tens of millions annually. On the other hand, it seems to us that the estimate of the cost of sampling in MRFs is already low at £0.8Mpa, and that more sampling than proposed will be needed for credibility. Taking these numbers into account, the Impact Assessment should have included some cost-benefit analysis, based on some expectation of improvement of material quality about which consultees could have come to a view. Similarly, the figures at paragraph 2.11 could have been broken down further. This is an exercise which still needs doing and making transparent.

Question 3: Is 1000 tonnes per annum a fair threshold or do you believe a different
minimum threshold level should be applied?

We are concerned that poor quality material will find its way to smaller MRFs and thus escape monitoring. For this reason, we take the view that even 1000tpa may be too high a threshold.

Question 4: a) Do you agree with the proposed scope and exclusions? b) Is six months a sufficient transition time for MRFs to comply with the sampling requirements?

(a) We note the definition of a MRF at 3.3. We were originally concerned that single material sorting and grading facilities (grades of paper/card or plastic polymers) should not be included but are reassured by 3.3(4).

(b) This regulation inclusion has been discussed at length and the quality issues behind it since 2005, so all those affected should be well aware of the proposals by now.

Question 5: We welcome views on the approach taken to sampling. Do you agree that the input, residual and main output streams should be sampled?

The CRR view is that the sampling regime proposed is unlikely to yield a confidence and reliability consistent with the aims of the changes as outlined in the consultation paper. CRR stakeholders, experienced in checking suitability of materials for reprocessing, suggest that a rather more frequent and rigorous approach is needed. This means sampling more material on each occasion and at an order of magnitude greater frequency that that proposed.

Monitored material will have to prove itself to the consumers we represent. Otherwise it’s just monitoring to tick a box. This is a box regarding information provision about quality. We have already indicated above does not represent the real problem, which is the quality itself.

Whilst we appreciate that the sampling is a burden to the MRF operator, credibility requires a perception on the part of the purchaser of the material that the system is not open to easy abuse. There is a subsequent proof-of-the-pudding test when the first load is received, but if that shows that the material was not of the promised standard, the whole system is rapidly undermined.

These proposals seem unclear as to what and how sampling is to be carried out. The MRF operator will do the work, but the proposals are short on how the sampling will itself be monitored.

All three streams should be sampled. If this is an exercise in transparency, then all material should be covered by it.

Question 6: Do you agree that material transferred from one MRF to another, should not be sampled?

We strongly disagree with this. Material transferred between MRFs should be sampled at both locations. These transfers have the potential to allow reject rates and contamination to be disguised. Material transferred between MRFs must be deemed to fall into one of the three streams considered in the question above, both on departure and arrival.

Question 7: a) Do you agree with the proposals, including sampling weights and testing frequencies? b) Do you agree with the possibility of sampling reductions where a high degree of consistency is demonstrated? c) For MRF operators: do you intend to make use of the opportunity to reduce the prescribed sampling frequency by demonstrating a high degree of consistency in the composition of output?

(a) We are unsure as to how these proposed weights and frequencies were decided upon. As mentioned in our answer to question 5, in both our experience and assessment, the samples are too small and infrequent. The data these would produce will not occasion the trust which is the object of the exercise. In our view to proceed with these samples and frequencies could easily make the regulation change all but pointless.

(b) Sampling could be relaxed when a degree of consistency is reached. However, this is something to be decided on when this change to the regulations has been shown to be effective. Any relaxation should be subject to the agreement of those material consumers regularly involved, as well as the regulator.

Question 8: Which option do you support on transparency of information from the
options below, or do you have an alternative suggestion, and how often do you think
results should be sent to the EA?

a. Only have the information retained by the Regulator;
b. MRFs to make information available to customers on request;
c. EA publish the information in some manual/electronic form and regulate the access (e.g. local authorities and reprocessors would need to register for access); or
d. EA publish the information in some manual/electronic form with unrestricted access.

We agree with Defra’s preference for option (d). Transparency is of the essence and essential to demonstrate confidence and understanding as to material flows and fates. Figures might reasonably be submitted to the EA quarterly. Some authorised digest of the data, published perhaps annually, setting it against the wider UK materials balance, would help put it in a context which could be used and appreciated by non-experts.

Question 9: a) Do you agree with proposed audit requirements? b) If not, do you have alternative suggestions?

It is not enough that a deceived purchaser in the UK or EU will not purchase further loads after a disappointment with quality. Just because Asian importers rarely complain about quality and repatriations of loads are relatively infrequent does not mean that material for export should not be checked. We have already established that there are sufficient reasons to do so. In the case of export, there is in our view still plenty of incentive and potential for some MRF operators to abuse the system to divest themselves of excessively contaminated or substandard material.

It is not so long ago that UK MRF operators advertised quite openly in the UK trade press for the services of bale dressers. No doubt these people became skilled in the art of concealing contamination in a bale of ostensibly recyclable material in order that it might pass subsequent inspection for export or other purchase. This should set the context for consideration of these questions.

Inspections should be quarterly in our view, to match the reporting requirement.

Regulator monitoring has to go beyond checking that the sampling and recording methodology confirms to a standard. Verification is needed that these are adequately performed and calibrated. In our view there is no short cut: there must be random sampling by the regulator of whatever tonnage is present in the MRF at the time of inspection, which results will be checked against the sampling results recorded by the operator durign the period preceding the inspection.

At least some of the inspections should be unannounced. It is far too easy for MRF operators wishing to give a false impression of good quality to slow down the sorting belts, draft in extra staff and move in better quality material for the day of a prescheduled inspection. We know this happens when important visitors are shown around. We assert that bona fide MRF operators with nothing to hide should welcome randomised inspection as a means of pinpointing those within the industry who bring it into disrepute.

Question 10: Do you think that minimum standards should be included in this proposal? If yes, what would your proposed maximum contamination percentage be for paper, plastics, metals and glass, and how should they be developed for the supply chain? In this instance we are assuming that contamination levels equate to non-target and non-recyclable material.

As mentioned above, we were under the impression that achieving standards was the original objective of the exercise. We are slightly surprised at this question being asked and the lack of discussion of minimum standards in the consultation document. We are wondering why this most important objective has been dropped as it appears to us to leave a large hole in the reason for regulating MRFs, or at the very least, a substantial opportunity lost.

Acceptable contamination thresholds have been discussed a number of times before in many discussions called by WRAP between reprocessors and MRF operators. They are related to existing reprocessing plant and the unacceptable cost of downtime caused by contamination. They have also been explored at length by those involved in working toward achievement of End-of-Waste for the various material categories. So these are well-known and understood.

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