A new report from WRAP that delves into the strategies local authorities need to consider when getting the most revenue out of recyclate, suggests that local authorities could be better off selling their recyclables directly to reprocessors.

WRAP’s recent briefing, ‘Approaches to Material Sales: a guide for local authorities’, is ‘intended to help local authorities maximise the benefit that they obtain for the dry recyclables collected as part of their provision of waste services’. It is aimed at all local authorities apart from those with ‘very long-term contracts that outsource ownership of recyclables with no provision for the value obtained to impact on the contract cost’ and focuses on the sale of separate materials from kerbside collections, household waste recycling centres (HWRCs) and bring sites. However, there is the caveat that ‘many of the principles described will also apply to mixes of materials’.

The summary report, ‘Turning Recyclate into Revenue: A short guide for local authorities’ states: ‘One myth… is that consortia/partnerships inevitably generate superior prices as they send to market larger amounts of material than an individual local authority could achieve. In fact, most reprocessors are happy to accept “small” tonnages.’

It continues: ‘Just because the collection service is contracted out does not mean that materials have to be traded through the WMC. A well organised authority committing suitably experienced and capable resources to materials trading could certainly carry out this activity in-house. Indeed, many reprocessors would argue that local authorities should deal with them directly, to reduce the loss of potential value through additional supply chain interactions.’

Quality counts

The report notes that understanding quality, and what precise grade the materials fall into, is essential for understanding prices and risk. ‘The more attractive your materials are to buyers, the higher the price they can command’, it reads.

According to WRAP, simple steps to help maximise revenue include the following:

• where the buyer is responsible for the cost of transport, ensure loads dispatched to reprocessors are full;
• ensure all loads are appropriately baled; and
• undertake robust sampling to ensure you are being paid on the basis of the actual quality and composition of the material you sell.

A risky business

Highlighting the risk present because of the uncertainty around materials pricing, the report states: ‘Where a local authority decides to sell the materials itself, but is not able to directly influence the material quality, it will need to consider how material quality risk is allocated between itself and the WMC in the collection contract. Ownership of material also has to be clearly established at all times and this can be complicated where, for example, the contractor owns the collection fleet and operates the depot and bulking facility, as liability issues need to be clearly dealt with where the waste collected remains in the ownership of the authority but in the possession of the WMC.’

Conclusions

The guidance concludes: ‘Few local authorities can afford not to consider the scope to increase their income streams from the sale of recyclable materials. This guide has set out some key considerations that will help you to do so effectively, equipping you to evaluate the potential to set your materials sales arrangements on a more productive – and ultimately more profitable – footing.

Read the full report here.