Britain has been part of the European Union (EU) for 43 years, so it’s no surprise
to discover how much of an effect European legislation has had on the UK’s recycling
industry. In fact, a majority of the UK’s environmental legislation came from EU
Directives, which is why the result of the EU referendum has generated so much uncertainty
around what the future holds.
Waste management and control requirements flow from the EU’s Waste Framework
Directive, which in turn has required member states to put in place legislation
and policies. This requirement has helped to develop the UK into one of the world’s
most forward thinking countries with regard to waste and recycling, as it has moved
from being one of the lowest performing EU countries to being at the fore front
of change in this area.
Whether or not the UK continues to be bound by EU Directives and Regulations
in the long run will depend on political negotiations, in particular on trade agreement
talks. At present, any UK law transposed from EU law would need to be amended or
repealed in order for the situation to change.
In any event, the UK Government and devolved administrations may choose to implement
their own environmental laws to achieve a similar or greater impact, but that remains
to be seen.
What are the immediate impacts?
In terms of legal, regulatory and licensing requirements it’s important to note
that nothing will change with regard to the day to day movement and handling of
waste. All Duty of Care Regulations still apply, as do Environmental Permitting
Regulations. Plus the environment agencies in England, Scotland, Wales and Northern
Ireland are still the enforcement bodies.
However, there have been some short term market and financial changes which were
mainly caused by changes in exchange rates post referendum. As the value of Sterling
has dropped, exports may now be more attractive to foreign buyers. It may also mean
that domestic reprocessors need to fight harder to retain supply.
For exporters this change has been largely positive, as the weakening pound has
meant that the exchange rate on the US dollar has seen a rise in material sale values,
particularly for cardboard. Therefore, cardboard producers should have noticed a
significant increase in rebates since the result was announced. However, this is
unlikely to be sustainable in the long run, and we have already started to see prices
For some materials, such as batteries, which require treatment outside of the
UK, the fall in the exchange rate now means that the process is more expensive for
What does the long term future hold?
Industry commentators are split with some wondering how big an impact leaving
the union will actually have. There is the possibility of easier dealings with countries
that are not part of the EU, as well as an opportunity for the UK Government to
create new laws more quickly, which could help the industry to develop and get rid
of some less appropriate EU regulations.
In February, The Department for Environment, Food and Rural Affairs (Defra) released
a five year plan on priorities. This was heavily criticised by the industry, as
waste and resources barely got a mention (This also indicates that not much will
change for a while). Let’s hope that the 25 year environment plan, which is due
to be released later this year, raises the profile of the sector.
The situation in the UK is even more complex these days, as devolved administrations
are pressing along with their own agendas on waste and resources regulations. We
could see more disparity in the future, making things more complicated for businesses
that operate throughout the UK.
If and when the UK finally leaves the EU, it appears that there will be a lengthy
period of uncertainty for the waste and recycling industry. However, companies will
still be required to meet regulatory requirements and will want to trade internationally.
For now companies should continue to focus on things that are under their control,
such as governance and quality of materials, while keeping an eye on political developments
and the markets so that they are prepared for change.
If you would like to find out more about the main material markets for cardboard,
plastics and metals, we are hosting a webinar on 14 June 2017. We will discuss the
main drivers behind each market to provide a better understanding of what factors
determine material pricing and where prices may go in the near future. You can book a place here.