Of all the clichés in business journalism, describing a sector as “set for growth” among the most overused.
But if the description can be applied to any part of the UK sector, then it can surely be applied to recycling.
As the nation generally becomes more environmentally aware, both companies and individuals are looking to minimise the amount of waste they produce – a trend intensified by pressure from the EU.
Mike Walker, policy director at the Environmental Services Association (ESA), which represents the UK’s waste management industry, says that the recycling sector is now worth around £8bn – an increase of £3bn, or 60%, since 2001.
The recycling sector is now worth around £8bn – an increase of £3bn, or 60%, since 2001
Mike Walker, director at ESA
“The main driver has been the landfill directive,” he adds, “which has meant that local authorities can no longer send all their biodegradable waste to landfill.
Conditions for growth
“There are three target years and each year they have to reduce their biodegradable waste as a proportion of total waste sent to landfill.
“By 2010, this has to be reduced to 25% below the 1995 level. By 2013, it’s by 35% and then by 50% by 2020. That has been the principal driver for changes in municipal waste management.”
Such regulations put the conditions in place for growth in the industry in general, but other rules emanating from Brussels have led to rapid increases in demand for certain types of recycling services from some of the biggest companies in the world. And, as Walker says, “all of this is increasing the value of the industry”.
The Waste Electronic and Electrical Equipment directive, in particular, sets strict targets for the recycling and recovery of redundant electrical equipment. It came into force in 2003 and requires producers of such equipment to pay and take responsibility for recycling it. Most importantly, it now has to be separated out from other municipal waste.
Walker says this part of recycling is changing from being a case of “mass transport and dump” to a far more sophisticated, technically demanding sector whose main task is to sort and recover materials.
Composting, he says, is another major growth area.
“It used to be something people did in their gardens; now it’s an industry producing half a million tonnes of high quality compost every year. Most of that is separated from municipal waste.”
Although there are four or five big companies in the “waste management” sector – such as Virador, Biffa, Shanks and Theolia – the sector is dominated by small and medium businesses. However, there has been significant consolidation in the sector over the last 10 years, and this is set to continue.
