Industry Insight: UK Costs Drivers

When it comes to your waste and recycling operations, industry experts at ACM Waste Management offset waste increases by keeping their ear to the ground and being prepared for industry developments. Our second article in a series of waste management industry insights from leading environmental waste management and recycling company, ACM Environmental PLC with Russ Sampson, Principal Environmental Consultant in the North West looks at the reasons behind potential waste cost increases. Chartered Waste Manager Russ Sampson ensures that he is aware of the changes which are made year on year and continuously monitors his clients’ accounts to help prepare for waste management industry developments affecting the region.

We asked Russ Sampson CMIWM to shares his industry insights on cost drivers in the UK

UK Costs Drivers

As with all businesses, the recycling and waste management industry is prone to inflationary pressures such as increased labour costs, fuel costs and the costs of meeting ever increasing environmental regulatory standards. Other costs affecting the waste management and recycling industry are less obvious and include the international waste markets, as well as the effects of driving organised environmental crime from the industry.  Several factors likely to increase the standard industry cost base are expected to become influential over the next few years and I work with clients to strategically minimise these impacts that can affect businesses and other institutions.

The traditional disposal outlet for waste in the UK was landfill rather than other methods such as recycling, however since the mid 1990’s Government policy has been to discourage landfill in line with EU legislation and drive towards the low carbon ‘Circular Economy’.  The net effect has been an increase in landfill gate fees from around £10 per tonne in 1996 to approximately £110 per tonne of waste today, driven primarily by increases in landfill taxes and prescribed landfill operating costs.

Materials Recycling Facilities (MRFs) and Energy from Waste plants (EfW) represent huge capital investments with high operating costs, and so operators of these facilities align their gate fees with what the local market conditions will bear.  They also produce waste by-products that can only be disposed of to landfill, and during times of closure for maintenance or emergency shutdown, waste is usually diverted to landfill.  Inherently, costs of waste are passed on up the chain.  As landfill capacity in the UK is rapidly running out (we only have an estimated several years left at current consumption rates), supply and demand economics comes into play and the gate fees rise further still.

Quite surprisingly household waste from Greater Manchester travels all the way to Runcorn by train for incineration and approximately half a million tonnes each year of household waste from Merseyside travels over 150 miles by train in the opposite direction for incineration at Teeside.  I am able to personally ensure that my clients waste is managed only at cost effective independent local waste management facilities, minimising Carbon Footprint and preventing ‘waste tourism’.  The most effective way to avoid both commercial and other waste cost increases altogether is to minimise the amounts of waste generated in the first place and to segregate materials at source where economically viable, recovering value from recycling streams to generate income.  This conflicts directly with the commercial interests of all waste management industry contractors who require ever increasing waste volumes to feed their growing businesses and are content to truck away as much volume as they possible can to feed their own capital infrastructure.

What have ACM done to try and offset these costs?

Waste collection contractor costs do vary drastically as each will specialise in collecting and sometimes processing different kinds of waste, and they design vehicle routes accordingly. In my experience, no single contractor is capable of handling all waste types in all areas at the most competitive cost.  ACM Waste Management work with an extensive supply chain network delivering waste management and recycling services to clients and ensuring that the most appropriate and cost-effective contractor is selected for each individual waste stream, which is all managed through ACM as a single source of supply.  As newer and better options for the collection of waste become available, ACM are able to simply switch suppliers where considered beneficial to the client.

Costs can be leveraged down through source separation of wastes and through the utilisation of waste handling equipment that both reduce transport costs and increase rebate values.  The optimal way to reduce waste costs is to generate less waste altogether as addressed by the ACM Avert™ process.

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If you would like further advice regarding any aspect of strategic waste management, please do not hesitate to contact Russ directly - r.sampson@acmplc.com or 07903 805180.

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