Carrot or stick, should Europe use more recycling incentives?

Emerging economies are more likely to use incentives than penalties to encourage recycling among businesses, according to the KPMG ‘Green Tax Index’. This stands in stark contrast to Europe, where companies tend to be penalised for poor recycling performance. The US also bases its approach on incentives, all of which prompts the question of whether Europe should consider adopting a similar tack.

The accountancy firm compared tax regimes in different countries and their impact in encouraging reuse or recycling of materials. Overall, it found that governments have become more innovative in using tax and other fiscal instruments to conserve resources, reduce waste and encourage reuse and recycling. Landfill taxes are also very widespread.

Of the countries analysed, incentives for efficient use of materials or waste recycling were part of the national tax code in South Korea, China, Brazil and South Africa.

In Brazil, manufacturers benefit from a tax credit on the acquisition of certain waste materials if they are destined to be recycled into new products. Eligible waste materials include plastic, paper, glass and various metals. Meanwhile, Mexico City provides a good example of waste-reduction tax incentives offered by municipalities. The city grants a tax credit to corporations that recycle or reprocess their solid waste.

China proved unusual in taxing the use of certain minerals, including iron and tin ore. The reason for this is a government push to conserve domestic mineral resources and prevent further damage to the environment. Molybdenum, magnesium, talc and boron are also taxed.

Incentives are also offered in China, with KPMG citing the example of reduced or no VAT on goods produced from recycled materials. Qualifying goods include sand produced from construction waste, powdered rubber made from end-of-life tyres and electricity or heat produced from organic waste.

Incentives and penalties in Europe

In Europe, France was singled out as having a system based entirely on penalties, with a tax on the removal of refuse from buildings liable for property tax (except factories), and on the recovery and elimination of both paper and electronic waste.

The Netherlands abolished its Packaging Tax in 2013 in favour of a Packaging Waste Control Levy payable by companies that introduce more than 50,000 kilos of packaging into the Dutch market.

Across the North Sea in the UK, there is a nationwide tax on the commercial exploitation of virgin aggregates, namely rock, sand and gravel. The levy aims to encourage increased use of untaxed alternative construction materials such as recycled construction and demolition waste.

“It’s time for Europe to take a leaf out of the BRIC economies’ book and use more incentives to encourage businesses to recycle,” comments Nigel Hunton, MBA’s CEO. “We’re working with the UK government to discuss the possibility of introducing zero or reduced VAT on products made from recycled goods.”

To read the full KPMG report, please click here.

» Video of John Gimigliano of KPMG discussing some key findings from the survey.

Keeping the momentum going on recycling innovation: MBA talks plastics recycling with UK MP Vince Cable

As China’s ‘Operation Green Fence’ continues, causing chaos for some Western exporters and highlighting the fragility of the global recycling market, The Guardian recently posed the question: ‘Could China’s ‘Green Fence’ prompt global recycling innovation?’.

The article highlights China’s huge market monopoly, explaining that the country imports 70% of the world’s 500 million tonnes of e-waste and 12 million tonnes of plastic waste annually. Given China’s dominant position, any sudden policy changes from Beijing stand to rock the global recycling trade, with ‘Operation Green Fence’ a good case in point.

Speaking at the BIR’s recent convention in Shanghai, Renwu Cai, general manager of MBA’s joint venture recycling facility in Ghangzhou, told the Bureau of International Recycling (BIR) Plastics Committee that the ‘Green Fence’ campaign was designed to ‘crack down on illegal enterprises’, although he acknowledged that even law-abiding companies had been hit by customs clearance delays and additional costs.

So how can Western countries reduce their reliance on the cost-effective practice of exporting waste, The Guardian asks, particularly as the top waste exporters (Europe, the US, Japan and Hong Kong) have a lower demand for secondary raw materials and lack the infrastructure to process more waste at a domestic level.

Creating the right conditions for Western recycling to thrive

MBA’s Mike Biddle believes that a wave of innovation and investment in recycling technology is needed to catalyse successful domestic recycling markets in the West. This could include more sophisticated handling and treatment techniques and more high-technology processing plants.

However, creating the right market conditions for domestic recycling to thrive will require government support, hence MBA’s discussion with Vince Cable, the UK’s Secretary of State for the Department of Business, Innovation and Skills. With planning permission a major obstacle to creating new recycling facilities in the UK, our CEO Nigel Hunton spoke to Mr Cable and his colleague John Mann about how this kind of investment could be incentivised.

Nigel explained that ‘Operation Green Fence’ is having a positive impact for businesses with high-tech plastics recycling plants in the UK, such as MBA. He also underlined the significant investments made by MBA and EMR in the country’s recycling infrastructure and highlighted that the two companies will, in 2014, have achieved a recycling rate of 99% of all recyclable waste processed for ELV’s (End of Life Vehicles), ahead of the government’s 2015 – 95% target. The UK has a real opportunity to lead the world in recycling, Nigel believes, and that’s why he is asking Vince Cable to consider offering zero VAT on products made from recycled plastics.

Meeting with Vince Cable MP

Smarter waste management and sustainable design

Beyond the expansion of Western recycling infrastructure, smarter waste management and tighter import and export controls can also help to increase waste quality, asserts The Guardian. The BIR has recently published guidelines on environmentally sound waste management for recycling professionals, while in the UK, Defra is introducing new regulations this autumn requiring recycling facilities to measure the quality of recyclables.

Similarly, manufacturers must be a lot more proactive in creating sustainable designs and specifying recycled materials over virgin raw materials. Tapping into the 10 million tonnes of plastic waste discharged into the sea each year is just one option, an approach adopted by our client Electrolux and Ecover.

Investing in end uses for secondary raw materials is critical to the realistic expansion of Western recycling facilities, according to Bob Ensinger of the Institute of Scrap Recycling Industries.

Meanwhile, the US EPA has created a Sustainable Materials Management roadmap to 2020, and says education and stronger public and private partnerships are required to advance recycling, reuse and waste reduction in the United States.

While in the short to medium term, concludes The Guardian, exporting waste abroad looks set to continue, a real focus on recycling innovation and sustainable design could boost Western recycling industries and economies.

To read the full Guardian Sustainable Business article, please click here.

Barry Crowley appointed Chief Financial Officer for MBA Polymers

We’re delighted to welcome Barry Crowley to MBA Polymers as our new Chief Financial Officer.

Barry joins from Edwards Group where for the last eight years he has been Group Financial Controller. Edwards is a leading global supplier of vacuum equipment and technology services. It was acquired by private equity investors in 2007, successfully listed on NASDAQ in 2012 and acquired by Atlas Copco a Swedish based global industrial company in January 2014.

Before joining Edwards, he was responsible for financial business change management at RWE npower. Prior to that had a 13 year career with GlaxoSmithKline as Director, Business Development (UK Financial Services), Corporate Accounting Manager and Accounting Development Manager, He trained as an accountant with KPMG in Ireland, and is member of the Irish Institute of Chartered Accountants.

Nigel Hunton, MBA’s Chief Executive commented, “Barry brings exactly the right financial experience to MBA Polymers at this important stage of our development. He has a record of leading financial transformation in Edwards from the carve-out from The BOC Group, acquisition by private equity, an IPO and finally a trade sale. Importantly for us, this experience has has also been coupled with delivering organisational change within major blue-chip companies arising from organic growth, acquisitions and mergers and implementing the necessary financial reporting, systems and processes. We welcome Barry to a fast-growing business starting to make a real impact in the world of recycled plastics.”

MBA and Aeroplas team effort boosts product quality and manufacturing efficiency

Through a dynamic partnership with MBA Polymers, Aeroplas is optimising its manufacturing efficiency while helping us to fine tune the performance of our own products. As a leading European manufacturer of thermoplastic injection mouldings to the catering and horticulture industries, Aeroplas has been sourcing recycled plastics for more than 20 years. It began working with MBA in 2010 and hasn’t looked back.

“We’re delighted with MBA’s products and with our working relationship,” says Hardy Gakhal, Managing Director. “This is a real team effort. We provide detailed, constructive feedback to MBA which in turn allows the MBA team to optimise certain characteristics of the raw materials they supply to us. A great example of this is the work we’ve done to reduce brittleness and therefore melt temperatures, which has enabled us to use less energy at the manufacturing stage.”

MBA’s recycled plastic pellets are principally used by Aeroplas to produce flower pots and clothing hangers. Many of these hangers are supplied to Braiform, a company that provides reusable hangers and smart packaging solutions to the retail industry.

“Our product development team rapidly identified how our recycled plastic pellets could be enhanced to meet Aeroplas’ specific requirements,” says Gary Claypole, MBA Polymers. “We have also worked with Aeroplas on site to optimise its manufacturing processes. The company can now use MBA products on all its moulds and this is proving very effective in terms of improving cycle times.”

Please contact us for more information on MBA Polymers products or to make any enquiry about collaborating with MBA.

MPs call for lower VAT on recycled products

UK policymakers are calling for lower VAT on products with recycled content, following the launch of a new report entitled ‘Circular economy: ending the throwaway society‘. Produced by the Environmental Audit Committee, the report also recommends longer warranty periods for consumer goods and a ban on food waste being sent to landfill, as part of a wider move towards creating a circular economy.

“We had throwaway economics in the past, but that disposable society simply isn’t sustainable in the 21st century,” said Environmental Audit Committee Chair, Joan Walley MP. “Less than half of the stuff we throw away each year is recycled and turned back into something useful.

“The good news is that with the right government support, we can stimulate UK manufacturing, create jobs, grow our GDP and reduce our environmental footprint,” she continued. “We have to create a more circular economy that rewards innovative businesses, values natural capital, and is resilient in the face of rising global resource prices.”

The report recommends that the government should take steps to reform tax and producer responsibility regulations to reward companies that design greener products. In particular, it suggests that lower VAT rates should be introduced based on the environmental impact or recycled content of products. Tax breaks should also be considered for businesses that repair goods or promote reuse.

Dell closed loop recycling (click for full)

This could in turn lower the retail price for a whole range of products made using recycled plastic, from clothing to plant pots to vacuum machines, coffee-makers and computers. Dell, for example, has just become the first computer manufacturer to launch a computer made partly of third-party certified ‘closed loop’ plastics.

“The Environment Audit Committee’s recommendation to lower VAT on products containing recycled content is great news for British shoppers and consumer goods companies trading in the UK,” says Nigel Hunton, MBA’s CEO. “Should it be adopted, it could also provide a significant boost to the UK’s recycling industry. We fully support the creation of policies designed to incentivise sustainable product design and create a flourishing recycling market in the UK.”

Nigel and our founder Mike Biddle presented MBA’s thoughts on the challenges and opportunities for plastics recycling in the UK to more than 100 stakeholders at Westminster in 2013. Mike highlighted the sustainable business model that could help the UK to become world leader in recycling plastic waste, while Nigel called on MPs to introduce zero VAT for companies selling products made from recycled materials.

“By treating waste in the UK as a resource, and recycling it in a cost effective, environmentally sound way, the country could attract jobs and investment, reduce its dependence on fossil fuels and forge a reputation as an innovator in waste treatment,” says Hunton.

In addition to lowering VAT rates for recycled products, another important step will be establishing eco-design standards to ensure products are easier to repair, upgrade or recycle. In tandem, the government should work with industry to set longer minimum warranty periods for consumer products, the report finds. Finally, it also recommends streamlining the UK’s area-by-area approach to recycling in order to boost performance in line with the EU plans to increase recycling rates to 70% by 2030.

To learn more about how MBA Polymers could work with your company to provide high quality recycled plastic for your products, please contact us.

MBA Polymers strengthens team with two senior appointments

We’re delighted to welcome Peter Whiting and Nick Deeming to the MBA Polymers team. Peter joins as non-executive director, while Nick is our newest Board member. Both will bring significant technical and business expertise to MBA as we continue to expand our company and develop cutting-edge sustainable polymer technology.

Having graduated in physics from Oxford University, Peter followed a career as a market analyst in the technology, engineering and automotive sectors. He also worked as Chief Operation Officer, European Equity Research, at Swiss financial services company UBS. He now supports diverse businesses with strategic business consultancy, including software supplier Microgen, where he serves as a non-executive director, and global technology network Eleven Canterbury.

Commenting on Peter’s appointment, MBA’s CEO, Nigel Hunton said: “Peter is a highly experienced advisor with a broad range of skills centred on financial services and technology. He combines financial analysis with strong communication skills and as a non-executive director has a proven ability to bring rigour, insight and integrity to organisations.”

Nick Deeming

Nick brings 30 years of business and legal experience, having worked with boards, led corporate transactions and specialised in managing risk and implementing change. Most recently, he was a member of the Executive Management Board and General Counsel for Transocean Ltd. His previous roles include Chairman for Christie’s International Realty and Christie’s Insurance, General Counsel for Christie’s International plc and Chief Legal Officer at the Linde Group.

Welcoming Nick to the team, MBA Polymers Chief Executive Nigel Hunton said: “As a General Counsel, Nick has been right at the heart of executive leadership with a remit including legal affairs, corporate transactions, risk control and compliance and has worked closely with Chairmen and CEOs to deliver strong leadership, international best practice and effective corporate governance.”

MBA Polymers encourages youngsters to recycle at company fun day

Earlier this month we held a fun day at our Worksop site to say a big thank you to our employees for their hard work. Organised by MBA’s Sue Thompson and Faye Wicks, the event was a big hit with all the family, with attractions including a tug of war, football, face-painting, bouncy castles, mini fairground rides and a land train running laps of a local field. Importantly, it was also a prime occasion to encourage young people to get involved with recycling and understanding the values of resources and how this helps protect the environment.

Children traded plastic bottle tops for tickets to attractions, with one child bringing over 1,800 tops to be swapped. They also created some fantastic bottle top art. It was a great way to inspire youngsters to think about recycling while having fun.

Speaking to local newspaper the Worksop Guardian, Wicks said: “The kids really got into it, and we showed them in a fun way that recycling does have its rewards. We believe it’s a really important message, and one we’re keen to keep delivering.”

MBA would like to extend the invitation to the wider public next year and engage families throughout the local community with recycling while explaining the important job we’re doing in keeping materials in use, diverting waste from landfill and contributing to the circular economy.

To see images of the day, please visit our Facebook page.

Can celebrities successfully tackle the plastic waste challenge?

Major pop stars are helping to raise awareness of plastic pollution and promote products made with recycled plastic content. Musician and entrepreneur will.i.am is collaborating with Coca-Cola on a 3D printer that uses recycled PET bottles as input material for new objects. Meanwhile, singer Pharrell Williams has just won a prestigious Cannes design prize for a new line of denim clothing made of ocean plastic waste. But will their efforts be truly game-changing, given the scale of the plastic waste challenge?

“It’s great that celebrities with significant power to influence young people are coming up with designs that make use of recycled materials,” says Nigel Hunton, MBA’s CEO. “They can play an important role in making products with recycled content desirable. However, ultimately, what we need to make substantial progress on reducing plastic waste are cost-effective, scalable technologies that can process large quantities of plastic and transform them into new materials.”

Celebrity innovations

The new 3D printer has been launched under the EKOCYCLE brand, a joint initiative by will.i.am and Coca-Cola to make products incorporating recycled plastic ‘cool’. It allows users to create fashion and music accessories with a printer filament made partly from post-consumer recycled plastic bottles.

In 2013, will.i.am told Jo Confino, an executive editor of the Guardian, that “we should make ‘to plastic’ a verb,” when describing his ambitions to help people see plastic waste as a commodity. He explained that he had actively sought Coca-Cola’s support for the EKOCYCLE project, which has now expanded to include brand partnerships with Levi Strauss, Adidas and the National Basketball Association (NBA). In order to become a brand partner, companies must prove their products uses at least 25% recycled PET.

RAW for the oceans

Pharrell Williams’s ‘RAW for the Oceans’ line of denim clothing, which comprises jeans made with fibres created from ocean plastic waste, won first prize at the inaugural Cannes Product Design Grand Prix. The new line is the result of a collaboration with the Bionic Yarn company and the Vortex Project, and will be in stores from September 2014. The judges said it was a visionary project that stood out for its form, function and innovation, as well as its sustainability ambitions.

Tackling plastic waste at scale

At MBA Polymers, we process more than 110,000 tonnes of plastic waste annually from post-consumer durable goods including cars, electronics and construction waste. At our three high technology processing plants, we create high quality secondary raw materials for companies including HP, Nespresso and Electrolux. Importantly, our recycled plastic pellets require less than 20% of the energy needed to produce virgin plastic.

» Visit the RAW for the Oceans website

New Closed Loop Fund sparks controversy

At this year’s Plasticity Forum, MBA founder Mike Biddle and an impressive line-up of leaders from many different fields tackled the question of “The Future of Plastics”. Other speakers included former President of Costa Rica Jose Maria Figueres, now Co-Chair of the Global Ocean Commission and President of the Carbon War Room; Bill McDonough, a world sustainability leader in the area of design, co-author of Cradle to Cradle and recently appointed Chairman of the World Economic Forum’s Meta-Council on the Circular Economy; and New York’s ex-‘Recycling Czar’ Ron Gonen, who has collaborated with major companies to establish the Closed Loop Fund. Mike invited McDonough to speak on how plastics fit into Circular Economy principles and he is shown below being interviewed by Mike after his presentation. Mike invited Gonen to speak at the forum to share his ambitions for the fund, which will loan $100m to US municipalities working to improve waste recycling rates and recycling infrastructure.

Gonen has a strong reputation for scaling up recycling efforts, having founded Recyclebank and grown it to service 50 cities and 1m households in six years. He also expanded recycling efforts in New York during his two-year tenure, increasing paper and textile collections in schools, launching e-waste collections and banning polystyrene foam.

The Closed Loop Fund’s founding investors include some of the world’s biggest consumer goods companies: Walmart, Coca-Cola, PepsiCo, P&G and Unilever. According to Plastics News, they decided to start the fund to help boost recycling rates in the US, where recycling rates still lag behind Europe. Just 13% of plastics are recycled in the US, compared to 33% in Europe, where there are plans afoot to ban certain hazardous plastics and introduce binding targets on plastic waste.

mike-biddle-plasticity-2014

Municipalities can win zero-interest loans from the fund by putting forward worthy projects. However, will the loan really help to scale up high impact recycling schemes, or is it a just another sustainability play from big corporations keen to pass the buck? This is the question posed by Upstream in a recent piece for the Guardian. The company argues that the fund’s goal of providing 100% of US consumers with access to recycling is unrealistic.

The $100m may sound like a lot, it says, but it’s a drop in the ocean compared to the participating companies’ combined annual profits ($61.3bn), and won’t be sufficient to help states and cities keen to make progress on recycling. Minnesota alone spends up to $70m annually to fund its curbside recycling programme, for example, while San Jose recently spent $50 million modernising its material recovery facility. Also, since this is purely a loan, local governments will eventually need to find new funding to continue their efforts.

plasticity-2014

A consortium of public interest groups, including Upstream, 5 Gyres, Eureka Recycling, Green America, Story of Stuff Project and Texas Campaign for the Environment, have openly criticised the fund, and called upon the companies involved to back ‘proven policies’ to boost recycling such as extended producer responsibility, already widely adopted in Europe, which holds consumer goods companies financially responsible for the collection and recycling of their waste packaging.

So what do you think about the Closed Loop Fund? Should major companies step up and take more responsibility for investing in recycling solutions? Let us know by contacting us.

Ocean plastic waste causes $13bn of damage a year, scientists say

Plastic waste floating in the world’s oceans causes $13 billion of environmental damage annually, a new report has revealed. Entitled ‘Valuing plastic’, the report was compiled by the Plastic Disclosure Project (PDP) in partnership with natural capital analysts Trucost and UNEP. Focusing specifically on the consumer goods industry, it calculates the volume of plastic used by 16 major companies and clearly highlights the business case for measuring, managing and disclosing plastic use.

During a public webinar on 9th July 2014, PDP Director Andrew Russell said that defining a strategy to derive real business benefits from smarter plastic use started with identifying the risks and opportunities in a structured way. He explained that PDP wanted to help companies manage plastic in the same way that they already address aspects such as carbon, water, forestry and social value. And companies are already benefitting commercially from taking a smarter approach to plastics, he confirmed.

According to Trucost, the total natural capital cost of plastic in the consumer goods industry is more than $75bn each year. This spans environmental impacts including the harm done by plastic litter to marine ecosystems and the loss of valuable resources when plastic waste is sent to landfill.

Among the key findings, the report revealed that plastic use in the food sector has the largest impact in absolute terms, responsible for almost a quarter of the total natural capital cost. The most significant downstream impact of plastic use by the consumer goods sector is marine pollution, while the biggest upstream impact is greenhouse gas emissions released from producing plastic feedstock, which is responsible for almost a third of the total natural capital cost.

The impacts of plastic also vary around the world. Companies face higher natural capital costs if they purchase or dispose of plastic in Asia compared to North America, Europe or Oceania due to the higher pollution intensity of manufacturing in Asia and its lack of adequate waste management facilities.

Plastics disclosure project 2014

Trucost’s Alistair MacGregor, who also spoke at the webinar, explained that current levels of disclosure are low and often motivated more by regulatory pressure than ‘material’ issues. The first PDP discloser is UK-based cosmetics company LUSH, which has now completely banned small plastic particles from its products.

The report recommends that progressive companies can improve management of plastic and win customer loyalty by developing closed loop models that recover resources and materials. For example, Unilever has made $250,000 of savings by using 15% less plastic packaging in its Dove products.

Similarly, Dell’s Environmental Affairs Director Scott O’Connell, said that Dell had goals to recover 2bn pounds of e-waste and use 50m pounds of recycled plastics in its products by 2020. Indeed, Dell has just launched the first ever PC made using third party certified closed loop plastic. And with recycled plastics becoming more cost-effective, O’Connell anticipates there will be an opportunity to ensure that ‘closed loop’ products deliver cost as well as environmental benefits.

“It’s great to see companies across the consumer goods sector tapping into innovative solutions for cutting plastic waste and incorporating recycled plastic in their products,” says Nigel Hunton, MBA’s CEO. “Companies are increasingly asking us about the business and sustainability benefits of using high quality recycled plastics in their products and they’re quick to seize on the opportunity to reduce their carbon footprint.”

In the long term, the report concludes, progress on plastic, improved waste management infrastructure and more effective legislation will require collaboration between multiple stakeholders, particularly in developing countries.

To read more about the PDP report, please visit Plastic Disclosure Project. To learn why MBA’s sustainable plastic polymers use just 20% of the energy it takes to produce virgin plastic, please visit www.mbapolymers.com.