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Waste management policy should be aligned with the carbon agenda to optimise green outcomes, says a UK report. By Garth Lamb

One of the single greatest issues on the environment business agenda is how to better price the external impacts of resource use, including those relating to health, amenity and the environment. The establishment of a global emission trading scheme last year, while still immature, has for the first time given CO2 emissions a dollar value – and that is beginning to ripple through the entire environment industry.

According to a joint UK report from corporate financial advisers Grant Thornton and waste consultants Oakdene Hollins, waste management policy should be realigned with the carbon agenda. It says the current blunt focus on simple tonnage reductions is “loosely and incoherently coupled to an environmental benefit” and can even lead to “negative side effects”, an echo of the recent Australian Productivity Com-mission draft waste report that “recycling can be good – up to a point”.

However, the environmentally and politically charged carbon debate has created a powerful driver, one the report says is likely to radically alter both public policy and commercial arrangements for managing waste.

Let’s take glass to illustrate the point. Manufacturing one tonne of glass emits around 840 kg of CO2. Collecting, cleaning and reusing the bottles saves on average 640 kg of CO2/tonne of glass comp-ared to landfilling it – in effect it puts a tonne of new bottles back on the shelf for 200 kg of CO2. Sending it back to a furnace to be remade gives a benefit of 314 kg CO2/tonne, still a fair saving.

However, mixed and contaminated glass cannot be reused in this closed loop recycling as new bottles demand low colour contamination. Typically then, this glass is crushed and ground into sand-like consistency, an energy intensive process that actually produces a negative net carbon impact, of 2 kg CO2/tonne if making a cement aggregate and 43 kg/tonne as a filtration medium for wastewater.

The report says less and less closed loop recycling is occurring as the current UK approach sees “all recycling applications receive equal merit in policy terms, irrespective of the net environmental benefit achieved”.

Carbon constraints
Ironically, the net environmental benefits of recycling may fall as recycling rates increase. The report, The impact of the carbon agenda on the waste management business, argues closed loop markets can become saturated and broader life cycle benefits may also be swamped.

The UK’s 60 per cent glass recycling target would see 1.6 million tonnes of recycled product on the market in 2008, up from just over one million tonnes in 2004. However, its 2008 bottle making capacity is projected to be only 1.1 million tonnes, leaving the half-million tonne shortfall destined to become aggregates, filtrates and such – which are less beneficial in terms of carbon.

An increase in mixed collection as a way to reach higher targets at the lowest cost also reduces the potential for closed loop reuse. Faced with these two major pressures, only 70 per cent of UK glass containers collected in 2004 became containers again, down from 90 per cent in 2000. Grant Thornton claims the overall carbon benefit of glass recycling will cross into negative territory “in the very near future”.

However, it says policies that take account of carbon impacts could produce higher recycling rates – 80 per cent or more – without increasing costs. For example, the UK currently imports 500,000 tonnes of green glass wine bottles a year, more than double the amount it makes at home. If wine was imported in bulk vats and then bottled locally, the market for the most beneficial recycling option would increase.

Alternatively, surplus cullet could be exported back to the countries that are net exporters of wine bottles. With carbon now priced at about 20 Euro/tonne ($34), a global scheme for the import/export of recyclable materials “could attract significant trading incentives” if governments encouraged international carbon permit trading.

The report said the growing acceptance of a carbon constrained future meant “the present expectation of ever-increasing recycling targets will not persist”.

“Contracts based on this expectation will increasingly jar with environmental outcomes, and will be revised, probably to the detriment of those locked into extended commercial arrangements for waste handling.”

Copies of the report are now available online from http://tinyurl.com/lpu63

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