The Environmental Audit Committee is calling on government to introduce a landfill ban for food waste and lower the rate of Value Added Tax (VAT) on recycled products to help boost the circular economy and end the ‘throwaway society’.

The calls come in a new report, ‘Growing a circular economy: Ending the throwaway society’, which has been issued following an inquiry into whether it is possible to de-couple economic growth from natural resource use, and what roles household recycling and the waste management sector have in the circular economy (where resources are reused and recycled rather than disposed of).

Following several evidence sessions, which asked members of the waste and resources industry as well as Members of Parliament (such as Resource Minister Dan Rogerson) to identify the economic and environmental benefits of growing a circular economy and what conditions government needs to set to help develop it, the EAC concluded that a ‘disposable society simply isn’t sustainable in the 21st century’, but that ‘with the right government support we can stimulate UK manufacturing, create jobs, grow our GDP and reduce our environmental footprint’.

Report recommendations

According to the report, there ‘are potentially billions of pounds of benefits for businesses across the economy by becoming more resource efficient’, and although central government ‘recognises this opportunity’, rather than ‘scaling up its work, it is cutting it back’. It concluded that government’s approach ‘lacks leadership’ and should look to, amongst other things, standardise recycling collections across local authorities.

The report offers government a raft of recommendations to boost the circular economy, including:

• supporting the European Commission’s proposals to recycle 70 per cent of waste by 2030;
• introducing differential VAT rates based on lifecycle analysis of the environmental impact/recycled content of products;
• introducing tax allowances for businesses that repair goods or promote reuse (led by a cross-government working group led by the Cabinet Office);
• reforming the packaging recovery note (PRN) system to include an ‘offset’ for ‘lower charge products that have higher recycled content’;
• working towards a ban on products that cannot be recycled;
• ensuring funds generated from the PRN system are distributed to bodies promoting the circular economy;
• directing local authorities in England ‘towards a more standard approach’ for recycling, including ‘separation systems that enable reliable delivery of compatible sorted waste products to all recyclers, separate food waste collections, and a ban on food waste to landfill’;
• introducing a deadline for mandatory reporting on the electronic duty of care (edoc) system;
• working with industry to set longer minimum warranty periods for goods; and
• removing trade barriers to remanufactured products so they are treated in the same was as ‘as new’ products.

We need ‘strong tax signals from the Treasury’

Speaking of the report, EAC Chair Joan Walley MP said: “We had throwaway economics in the past, but that disposable society simply isn’t sustainable in the twenty-first century. Less than half of all the stuff we throw away each year is recycled and turned back into something useful, despite prices for raw materials rising across the world…

“Unless we rethink the way we run our economy and do business in a different way, environmental problems like climate change will get worse and the cost of living and doing business in the UK could continue to rise. 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. 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.”

Walley concluded that in order to move to “a more sustainable and price-shock-proof economic system”, there needed to be “strong tax signals from the Treasury” in support of the circular economy.

In response, Resource Management Minister Dan Rogerson said: “We are fully committed to building a circular economy and want to see the UK leading the way in new waste and recycling markets. That is why we have invested £17 million to encourage businesses to become more resource efficient.

“We will continue to work closely with local authorities, industry and the voluntary sector to consider how best to take these recommendations forward and will respond to the committee in due course.”

Industry reactions

Welcoming the EAC’s report, Aleyn Smith-Gillespie, Head of Business Model Innovation at the Carbon Trust, commented: “The ideas put forward by the select committee are welcome as businesses need the right incentives from government, as well as being made to take greater responsibility for the long-term impact of their products and services.

“Efficiency, business model innovation and product redesign are all important elements in tackling the resource challenge. Consumer education and engagement by brands, as well as business models that deliver better value to customers must also be part of the mix. Change can only happen as scale once companies are convinced it will be better than business as usual, and the financial case stacks up. This requires clear examples proving that greener products and greener business models can be both sustainable and successful.”

Dustin Benton, Head of Resource Stewardship at Green Alliance also welcomed the report, saying it “shows politicians from all parties recognise the need for, and value of, the circular economy" while highlighting that "government needs to put circular economy opportunities at the heart of its industrial strategy”.

He added: “The UK’s piecemeal approach to recycling frustrates manufacturers who want to use recycled materials. A more standardised system would allow reprocessing to happen at the right scale for materials which, as our recent research has shown, could support 47,500 more jobs in the UK.”

He further added that “ccodesign can put money in consumers’ pockets" and that banning food waste from landfill and sending it to anaerobic digestion instead could generate £140 million worth of biogas each year.

Speaking for compostable bag manufacturer Novamont, Tony Breton said: “We are very pleased to see the committee has recognised the disgraceful volumes of food waste that are simply sent to landfill under the current system. And we approve of their call to introduce smart regulatory changes to tackle this issue.”

Read the ‘Growing a circular economy: Ending the throwaway society’ report.