Proceedings of the 18 th Annual International Sustainable Development Research Conference, University of Hull, Hull, UK, June 2012; Track 4b

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1 Proceedings of the 18 th Annual International Sustainable Development Research Conference, University of Hull, Hull, UK, June 2012; Track 4b Track 4b: Markets, Institutions and Frameworks for Eco-innovation Eco-innovation opportunities in the waste management sector in Scotland Juliette O Keeffe*, Daniel Gilmour School of Contemporary Science, University of Abertay Dundee, Bell Street, Dundee, DD1 1HG. *Corresponding Author: j.o keeffe@abertay.ac.uk Abstract Scotland is currently experiencing a strong shift in waste policy, driven by climate change goals aimed at significantly reducing waste to landfill and maximising material resource efficiency. Despite strong policy ambitions, the growth in the waste recovery sector in Scotland has been relatively slow. This paper provides an overview of the waste management (WM) sector in Scotland, and presents findings of a 3 year project with small and medium sized enterprises (SMEs) in both waste and non-waste sectors on improving resource efficiency and identifying opportunities for industrial symbiosis. The outcomes of the project highlighted a number of key barriers and opportunities to improve resource management. In particular eco-innovation is required at many levels in order to allow capacity building for recycling services and end markets for recyclate. Conclusions are drawn on the importance of the role of eco-innovation in SMEs when responding to opportunities derived from changing policy frameworks and legislation. 1 Introduction: Over the past several decades, efforts to stimulate growth in the recycling sector have generally been associated with increasing diversion of waste from landfill through public awareness raising, improved public collection schemes or regulatory instruments such as landfill taxes. However, while the supply of recyclate has increased, the capacity to process materials within Scotland has not fully developed. Faced with landfill diversion targets from the EU, and strict targets under Scotland s Zero Waste Plan (ZWP), a need to shift away from simply managing waste, to a system of managing resources will be required. Closing resource loops in Scotland remains challenging with large quantities of recyclate being exported out of Scotland and often out of the UK. Eco-Innovation therefore has a role in providing solutions to material resource leakage from Scotland. This paper provides a brief overview of the waste management (WM) sector in Scotland comparing levels of growth in waste recycling and reprocessing activities to growth in waste collection activities from 2005 to Reviewing information collected in the ACE Eco-Partnerships (AEP) project carried out at University of Abertay Dundee 1

2 between 2009 and 2011 along with relevant literature, we consider the factors impacting the development of indigenous markets for reprocessed materials, and recommendations for reducing large material flows of recovered materials out of Scotland. 2 Waste Sector Review At an EU level, the primary driver for improved WM over the last 2 decades has been the EU Landfill Directive with technical requirements for landfills and targets for diversion of biodegradable municipal waste (BMW) from landfill by This has driven measures in the UK such as the Landfill Tax Escalator and Local Authority (LA) Landfill Allowance Schemes. Disposal taxes however differ across the EU and can result in unnecessary shipments of waste out of the UK in an effort to avoid landfill taxes. Without suitable domestic markets for waste however, it is difficult to prevent. Scotland now has ambitious goals for reducing waste to landfill in Scotland with the ZWP putting forward a number of objectives, including landfill bans of specific materials, and a long term goal of no more than 5% of waste going to landfill by Waste quantities According to Scottish Environment Protection Agency (SEPA) million tonnes of waste were produced in Scotland in 2010 with the tonnage by source indicated in Table 1. SEPA provides estimates of approximately 8.81 m tonnes of material recycled and 5.52 m tonnes landfilled in 2010 (Table 1). 2 Table 1: Estimated quantities of waste going to landfill in Scotland in *as estimated by waste return data; Waste Estimated Source Estimated Production in Tonnes sent to Tonnes recycled Scotland (2010) landfill Millions of tonnes Household C&D C&I * 3.40 Total *as estimated by waste return data; 2.2 Size and Growth in the Scottish and UK Waste Sector Approximately 130 Scottish enterprises were active in recycling and materials recovery (RMR) in 2011 with 160 local units. 3 These figures take into account enterprises whose primary business activity relates to recycling, but not specifically firms whose primary activities relate to the collection and disposal of waste materials, whether for landfill, recycling or other end uses a. In Scotland growth in number of enterprises involved in a UK SIC (2003) 3710 (Recycling of metal waste and scrap) and 3720 (Recycling of non-metal waste and scrap classification were used for data and equivalent SIC (2007) 3831(Dismantling of wrecks) and 3832 (Recovery of sorted materials) was used for data. 2

3 RMR was 4% between 2005 and 2011, whereas growth in number of local units was 10% over this period. Enterprise growth relates to establishment of new business, whereas growth in number of local units suggests existing enterprises are expanding for example by adding regional branches. In comparison to Scotland, the UK as a whole growth showed higher growth in both the number of enterprises (30%) and number of local units (27%) over this period. Approximately 155 Scottish businesses were active in waste collection, disposal and treatment (WCDT) in 2011 with 370 local units 3. Growth in WCDT enterprises was observed to be much higher as compared to RMR at the UK level and for Scotland b. In Scotland growth in number of enterprises involved in WCDT was 82% between 2005 and 2011, whereas growth in number of local units was 28% over this period. In comparison to Scotland, the UK as a whole growth showed higher growth in both the growth in number of enterprises (111%) and number of local units (75%) over this period. Three observations can be made from this data. First, growth in the waste sector in Scotland is below growth in the UK as a whole. Second, growth in the number of enterprises is much greater in comparison to growth in number of local units in Scotland for WCDT based enterprises providing some indication that there are new enterprises being created rather than existing enterprises expanding. And third and possibly most significant, growth in WCDT is much higher than for RMR. This provides an indication that the drive towards Zero Waste may be leading to disproportionate growth in the waste sector and may be indicative of material being collected in Scotland, but being transported to areas outside Scotland for recycling, recovery or reprocessing. The Scottish Government targets under the ZWP will require diversion of more than 3 million additional tonnes of waste from landfill in Scotland by Planned landfill bans on priority materials will assist in achieving tonnages required to expand the sector, particularly demand for collection services, however, where end markets are not suitably developed there is a risk that higher levels of incineration and energy from waste (EfW) will result, as demonstrated in some EU member states where landfill bans were introduced relatively early 4. Bringing EfW online too soon could result in competition for resources that could be put to composting or recycling 5. In Scotland landfill bans will be preceded by a requirement in 2014 to sort dry recyclate and some food waste in order to ensure the treatment infrastructure required for segregated materials is in place 6. Innovation in the sector however is required to ensure that investment in collection and processing capacity does not simply produce high quality raw materials for export from Scotland. A preferred increase in exports would be from added value industries producing manufactured products from recyclate. b UK SIC (2003) 9002 (Collection and treatment of other waste) was used for data and equivalent SIC (2007) 3811(Collection of non-hazardous waste), 3812(Collection of hazardous waste), 3821 (Treatment and disposal of non-hazardous waste) and 3822 (Treatment and disposal of hazardous waste) were used for data. 3

4 3 ACE Eco-Partnerships analysis of factors influencing the development of the Resource Management Sector in Scotland The ACE Eco-Partnerships (AEP) project carried out at University of Abertay Dundee between 2009 and 2011 worked with small and medium sized enterprises (SMEs) across Tayside, Scotland in both waste and non-waste sectors on improving resource efficiency and identifying opportunities for industrial symbiosis. The findings of the project highlighted a number of key barriers and opportunities to improve Resource Management (RM) in Scotland: 1. Factors influencing the quantity of recyclate available. 2. Factors influencing the development of processing facilities and end markets for recyclate. 3. Developing eco-innovation in SMEs and Third Sector businesses. The AEP project also involved detailed work with a waste sector SME in developing new markets for recovered material. The work is highlighted as a case study of how ecoinnovation in WM can lead to new business opportunities in resource recovery. 3.1 Factors influencing the quantity of recyclate available. Waste management sector SMEs involved in the AEP project noted that access to high quality waste streams in sufficient quantities was important, particularly in reducing investment risk and improving access to funding. To date, efforts to increase recycling rates across the country have primarily been focussed on household wastes, where Local Authorities (LAs) have been driven to meet Landfill Allowance Scheme limits and reduce costs associated with landfill charges. Less effort has been placed upon improving recycling rates in the private sector where initiatives to improve recycling and reduce waste are driven by voluntary schemes such as the Cortauld Commitment (C&I) and Halving Waste to Landfill (C&D) initiatives and company directed EMS requirements. Organisations such as WRAP have provided support and awareness-raising in the private sector, however large quantities of waste are still being put to landfill in these sectors. The AEP project considered common barriers to increasing supply of recyclate derived from the private sector. Surveys of over 100 non waste sector businesses (primarily SMEs) were carried out across a range of business types from life sciences to hospitality to construction. The distribution of businesses interviewed in shown in Figure 1. 4

5 Non-Waste Sector SMEs participating in the AEP project Tourism (4) Restaurants (23) Accomodation (30) Other (10) Agriculture (2) Care Sector (3) Life Sciences (5) Construction (9) Food Producer/Supplier (26) Figure 1. Distribution of non-waste sector businesses interviewed in the AEP project Across these sectors, the main barriers to recycling were cited as the additional costs of recycling (80%) and the lack of convenience and ease of use of services (64%). Other barriers noted by SMEs are shown in Figure 2. A lack of general awareness of recycling services available and reluctance to spend time seeking out new recycling contracts was observed to be a barrier for the smallest businesses in particular. 5

6 Barriers to Recycling in AEP (non waste sector) businesses % 10% 20% 30% 40% 50% 60% 70% 80% 90% Additional costs of w aste Convenience of w aste services Difficult materials to recycle/no outlet Special requirements Lack of space for additional bins Lack of local services Difficulty in getting staff to participate Figure 2. Barriers to Recycling as indicated by participants in the AEP project In terms of motivations to increase recycling, 77% expressed a desire to recycle more and apart from potential cost savings, about 20% of the businesses interviewed mentioned improving environmental credentials for the purposes of public authority tendering, environmental management systems or green business scheme accreditation as a motivation. WRAP carried out a review of existing literature, survey results and workshop results over looking at UK SME barriers to recycling 7. Many of the outcomes support findings in the AEP study, however as noted in the WRAP study, barriers can be sector and businesses size dependent as shown in a GHK survey where only 7% of businesses indicated that cost was a barrier to recycling. This survey however noted that over 40% of the micro-sme respondents did not pay for waste services therefore had no costs associated with recycling unlike larger SMEs Cost Barriers to recycling In Scotland, there are generally few financial incentives available to encourage recycling. In the private sector it is difficult to demonstrate cost savings from recycling, particularly for SMEs and businesses producing low quantities of waste. Pay As You Throw (PAYT) or Pay by weight systems have seen some success in areas of the US and Europe. In the US, there are approximately 5000 PAYT communities, where waste reductions of 14-27% have been experienced 8. Systems that charge for residual waste but provide 6

7 significant discounts or no charge for recycling can also be effective. In countries such as the Netherlands and Germany, PAYT systems are seen as improving fairness in the charging schemes for waste 9. These systems reduce the overall quantity of general waste disposed but increase quantities and quality of recyclate dramatically. For SMEs participating in the AEP project, the majority looked to LAs as a first point of waste services provision, particularly small SMEs in urban areas. The majority stated that costs were based on a fixed number of uplifts per week/month and fees were fixed regardless of whether bins were full or not. This was a particular disincentive for some businesses to procure additional bins to segregate waste for recycling. One business indicated that although they had been using a separate cardboard and glass recycling bin, they had reverted back to a single large general waste bin, as this provided them with a cost saving of nearly 2000 per year. Both SMEs and larger companies were interested in cost savings through improved waste management, and were willing to recycle more if it was cost effective but the majority did not realistically see that any cost savings could be achieved from recycling under existing service provision options. Within the WM industry, financial incentives to segregate waste were observed to be minimal, with skip charges being largely fixed, based on skip hire and transport, with little obvious linkage between the types of materials disposed of and charging. The firms that had attempted to procure segregated waste skips cited the cost saving to be on the scale of 5 to 10 per skip, and hardly worth the extra labour costs for training staff and sorting materials. The WM firms indicated that general waste skip contents for C&D waste would be recycled to levels up to 70%. It appeared that it was in the interest of the WM firm to carry out materials separation as an added value activity hence the pricing structure for segregated skips discouraged businesses doing this activity themselves Convenience and Ease of Use barriers SMEs participating in the AEP project commented that the only way to get full employee participation in recycling was to integrate it into existing practices and methods of working, with minimal training or extra work required. Wimalesena et al (2010) 10 studied the economic viability of recycling in the construction sector. A key recommendation to improve cost effectiveness of recycling was to introduce sorting systems that did not result in double handing of materials. Improving ease of use reduces the time required to manage materials, and maximises capture of recyclate. This may highlight an area of innovation need amongst WM firms to provide effective solutions to business to improve the quantity and quality of materials that can be recovered. The businesses showing the best return for segregating and increasing recyclate appeared to be those that dealt directly with waste re-processors or recycling firms that had a direct use for the material as opposed to middle-men collectors. This however did result in more time being spent seeking out end-markets for single waste streams and was only possible for businesses generating sufficient quantities to make it worth their while. An area that was observed to show potential for increasing quantities of recyclate being captured was improving collection logistics. For many SMEs, procuring recycling 7

8 services was only carried out when sufficient quantities were being generated. Across the AEP project, single waste stream investigations and interest in participating in local waste schemes was assessed. Many businesses expressed interest in participating in collective waste solutions for materials such as food waste or wood waste if coordinated on an industrial estate, or local scale. It was observed that although many of the businesses on their own did not produce enough waste to make single business contracts financially viable for WM firms, collectively small waste producers could provide sufficient tonnage for WM firms or recyclers to provide a service that was previously unavailable. However, determining who should co-ordinate this, or on what scale it should be rolled out or trialled was difficult to determine. Where the LA provided support for co-ordinating or highlighting opportunities to local businesses, there appeared to be greater support from businesses, as compared to WM firms initiating this activity themselves General awareness Most businesses surveyed in the AEP project were engaged in some type of recycling and willing to recycle more; however, those that were not recycling or only minimally recycling clearly had a lack of awareness of available services and did not have a clear idea on the quantities of waste produced and the costs they were incurring. Many of the businesses cited a lack of clarity from waste service providers, including LAs on determining the most cost effective and sustainable waste solutions available. Many SMEs were unaware of the ability to recycle more than just cardboard, paper and glass through the LA. A lack of general awareness around market service level and pricing was observed, manifest by inconsistency in the costs of recycling services provided by both the public and private sector. Some businesses had recyclate collected for a reduced rate compared to general waste, whereas others were being charged the same as general waste collection or more, if additional bins were required. There were some notable differences for materials such as waste cooking oil where some businesses were paying for collection compared to others who did not pay or were being paid a fee for their waste oil by collectors. Waste cooking oil appeared to be one of the more competitive areas for waste uplift, with collectors travelling from as far as Liverpool to collect waste oil from Tayside and Fife. The AEP project, however, still found examples of waste oil being placed in the general waste bin of some businesses that were unaware of recycling services available to them. A similar situation was observed for waste metals and waste wood and surprisingly cardboard with some businesses paying for uplift, and others receiving free uplift or a fee paid for their materials. In the C&D sector, the businesses with the lowest level of awareness about waste and recycling received the lowest level of benefit from recycling. Redmond et al (2008) 11 looked at studies of WM for SMEs in both the UK and Australia. The findings highlighted similar issues as those faced by ACE Eco-Partnerships SMEs, such as varying levels of awareness as to what a business should be charged for waste uplift. A lack of general awareness amongst many businesses prevents specific market expectations in terms of price and service levels from WM firms from developing. 8

9 3.2 Factors influencing the development of processing facilities and end markets for recyclate. Increasing tonnage of available recyclate in Scotland will require equivalent development of suitable end markets if high quality material resources are to be kept in Scotland. The ICE State of the Nation report (ICE 2011) highlights that quality of single waste stream is the most important factor in reuse however end markets for recovered materials must provide a sustainable demand 12. In the AEP project, demand for products with recycled content in the private sector were largely based on either meeting public tender requirements or to demonstrate continual improvement or environmentally friendly practices under EMS or green business scheme requirements. Knoeri et al (2011) looked at decisions on using recycled content materials in the construction sector. Although successful examples on their use exist, uptake is still limited with decisions to use a recycled content material was based on recommendations of engineers or colleagues. Civil engineering projects were more likely to use recycled mineral construction materials compared to structural engineering where materials were still seen to be novel or niche 13. Duran et al (2006) found that decisions to use materials such as recycled aggregate were linked primarily to the cost of virgin quarried materials if virgin materials were more expensive, the choice of material would shift to recycled aggregate 14. The location of the materials was also important with locally available recyclate preferred over virgin material sourced from some distance. The effect of location of source is proportionate to the raw material cost, with low cost materials having higher proportional cost effects per tonne for transport. Increasing demand for recycled materials can be related to awareness of the types and sources of materials with recycled content available. Both public and private sector stakeholders requested assistance from the AEP project on sourcing recycled content products. Public procurement channels may be central in stimulating demand for recycled content products and contributing to proving level of quality of products such as building materials or street-ware such as bins, bollards and outdoor furniture. However, to date, the source of recycled content materials may not be indicated or obvious. The visibility of locally sourced recycled content products is generally minimal apart from specific materials such as compost. With the drive towards more local sourcing of products, this could be an area of innovation by manufacturers in increasing the visibility of not just level of recycled content, but also source of recycled content. The AEP project involved a small number of SMEs interested in developing end markets for waste streams in Scotland, either through energy and compost production, reprocessing and reuse or creation of value added products from recycled materials in new markets. A number of factors influenced development of end-markets. Access to high quality recovered materials in sufficient quantities was observed to be important, particularly in reducing investment risk and improve access to funding. Data on sources of feedstock was also important, however difficult to secure. Products that were able to be certified to waste Quality Protocols were provided with a marketing advantage. 9

10 Location of facilities and economies of scale were additional factors observed to influence development of end markets Quality: Developing markets for recyclate depends on a number of factors specific to each waste stream however will benefit from an increase in quality of recyclate and demand for products with domestic recycled content. For waste processors, an essential factor in reducing costs and finding end markets for waste materials is to have clean, uncontaminated waste streams. Under the AEP Project, quality of feedstock was an important consideration for SMEs or third sector organisations investigating recycling opportunities. The quality of the feedstock had direct implications on the potential end markets for, and value of, their materials. The quality of feedstock was also seen to be vital to gaining quality protocol certification as poor quality waste streams could result in contamination of single waste stream recyclate, not to mention additional handling costs. Perceptions over the quality of materials derived from recycling as compared to virgin materials can still be a barrier to more extensive use of recycled content materials, even with established Quality Protocols (QP) in place. In comparing the use of virgin materials to recyclate, an issue for end users relates to level of contamination within the reprocessed recyclate. This is the case for almost all materials that will be used for manufacture into new products, and will be linked to end uses. Some materials will show limited potential for reprocessing into materials that will come in contact with food. For materials such as steel scrap, one of the biggest challenges is the identification and sorting of metals, particularly where mixed metals are present 15. QPs are intended to provide end markets with a level of assurance that a recycled content material meets specific standards of quality. Obtaining QP certification can put recycling firms at an advantage to those without accreditation as has been shown for AEP project participants. In the UK, QPs currently exist for materials such as compost (PAS 100), AD digestate (PAS 110) and recycled plasterboard (PAS 109). Certification of materials improves the marketability of a recycled product compared to non-certified materials and allows the waste designation to be removed; however, having QP certification does not remove all barriers related to quality, whether real or perceived that exist in the market place. The QPs may not assess all areas of interest to end markets. New uses for recyclate, may not have been predicted when establishing protocols, therefore new markets may be reluctant to accept these until proven safe. A central resource providing access to additional research carried out on recycled content products could be a valuable resource for potential end-users. This could include both WRAP studies, and scientific literature to provide additional confidence in the behaviour of materials end-users may seek to procure Access to Data on available Feedstock Under the AEP project, one of the most frequently requested area of assistance for SMEs and third sector businesses interested in joining the recycling sector was determining 10

11 level of feedstock available and where it was located. Although data on municipal waste is becoming more robust, data on C&I and C&D waste is still relatively poor in Scotland with the reality of materials flows largely unavailable for many waste streams. The situation is improving with additional requirements for data reporting on waste coming into effect in Scotland. Available quantities of food waste have been of interest in recent years as a priority material for landfill diversion, and potential feedstock for anaerobic digestion. Domestic food waste collection trials have taken place across several Scottish LAs, improving data on potential food waste arising from households. Currently the AD portal c provides mapping of all AD plants currently in operation in the UK, with details on quantities and types of feedstock taken in. This provides new developers with information on where feedstock may already be tied into existing contracts, or where there is under/over provision of services. Access to mapped data on quantities of materials available and location of current processing facilities and end markets for specific materials could assist the private sector in planning investments, and the public sector in identifying areas of need. A Scotland-wide materials flow mapping exercise would provide essential information needed by planners, waste managers, and private sector businesses to invest in the most appropriate location and scale of infrastructure needed for specific waste streams. The Waste Data Strategy for Scotland aims to produce a mass balance for waste, identifying how waste is managed and moves through production, distribution, and consumption markets 16. This information is urgently needed to prevent resource leakage out of Scotland and allow planning for new facilities in the most appropriate locations Location of Processing Facilities/Economies of Scale Simplified and tied up logistics and distribution networks could simplify access to feedstock issues by reducing a major barrier to economic viability of recycling, primarily transport costs. Potential savings have been shown to be the main motivation for private contractors in the C&D sector to engage in recycling, with the economic viability for recycling largely influenced by transport costs to facilities 17. The viability of recycling businesses participating in the AEP project depended on local access to good quality feedstock however without adequate quantities, transport costs were an important consideration for AEP project participants. Successful systems of shared logistics appear to minimize the impact of transport costs and allowed some recyclers to source materials from a wider geographical area due to partnership working with other companies with transport needs in opposite directions. Smaller bulking stations appeared to be a more satisfactory solution compared to immediate collection and delivery direct to reprocessors. This allowed materials to be collected in sufficient quantities to be transported when economical to do so. Looking for new end markets for recyclate and locating processing facilities in closer proximity to product manufacturers may also improve the logistics of material flows 18. In the Waste (Scotland) Regulations 2012, requirements to segregate waste will present challenges to businesses where a coordinated approach to awareness raising and c 11

12 collection schemes are not developed. In Edinburgh, the Business Improvement District (BID - Essential Edinburgh) has indicated intention to work with a specific WM firm to provide a single waste and recycling service contract for businesses. This arrangement is possible primarily because the 600 levy payers within the BID will be required to participate in the initiative, paid through their BID rates. However, where coordinating groups do not exist, such an arrangement could be difficult. AEP participants have already indicated the difficulty in developing new segregated collection schemes, particularly in offering services to small volume customers. In order to ensure high quality segregated waste streams, providing separate bins is essential for materials such as food waste, which are difficult to segregate from other waste streams post collection. The development of innovative solutions, both on the part of producers of waste and WM firms will be required to address location specific issues in advance of segregation regulations being put into effect. Innovations will need to take account of ensuring quality of waste streams is maintained while keeping the service convenient and cost effective for all parties. In addition, innovative ways of funding developments may be required. As shown in the development of renewable energy projects, Energy Services Company (ESCO) arrangements are providing an alternative to communities, schools or other small groupings that would otherwise not be able to finance projects on their own. ESCO arrangements are being employed in AD situations where the risks and benefits are spread across stakeholders such as LAs, energy companies, technology suppliers and other parties that individually can t take the risks alone 19. A similar situation for the RM in the form of a Resource Management Services Company (RMSCO) could allow for more coordinated partnerships to ensure effective closed resource loops could be developed. Waste collectors could assume risks of transport and logistics, LAs could assume risks of access to adequate feedstock supply and recyclers or technology providers could assume risks associated with technology deployment and development and end product development. 4 Developing eco-innovation in SMEs and Third Sector businesses. According to the Scottish Government, several billion pounds of investment will be required to develop the capacity to meet Zero Waste goals 20. In Scotland, the 3 major WM companies and two large independents operating in the LA market are looking to invest and grow 21. These firms will be seeking out access to long term processing or treatment contracts and access to tonnage in order to make investment in facilities profitable. This will exclude many SMEs and Third Sector businesses that will be unable to secure the scale of tonnages and contract assurances to make a business case for accessing finance. Sharp and Luckin (2006) analysed the community waste sector in the UK and identified the key challenges that are facing third sector businesses. Two of particular importance include: 1. Increasing competition with the public and private sector to deliver services and 2. The requirements of the tendering process being beyond the resources of a third sector organization 22. Large project tenders, particularly for LAs, often require integrated services (recycling and residual waste collection) on a large 12

13 scale, for durations of up to years. SME and third sector recycling businesses are often excluded from consideration on the basis they would not be able to deliver the range and scale of services required. The advantage for SME and third sector businesses, however, is their ability and willingness to innovate and adapt to a changing and challenging economic climate. Sharp and Luckin identified two basic features of effective recycling services; the ability to innovate in terms of new and existing waste streams, and the ability to communicate effectively with the public and stimulate co-operation and participation in waste services delivered. These are two features that exist in many SME and third sector WM businesses but are not actively encouraged through the current public waste services procurement processes. There are, however, opportunities in the provision of private sector services, particularly where service provision gaps exist at the moment, or current services are not fit for purpose for some waste types. Within the AEP Project, the SMEs and third sector businesses that have shown success in the recycling sector have demonstrated the ability to be proactive in seeking out new opportunities, obtaining QP accreditation for end products, engaging with existing support networks and funding streams, and finding gaps in current service provision and adapting systems to suit new waste streams. At the current stage in RM development in Scotland, the larger players in the industry are primarily focussed on securing highquantity, high-value waste streams that will allow economies of scale needed for capital investment. However, this provide an opportunity for smaller organisations to develop systems of collection and processing for lower quantity or value materials where service provision is underdeveloped, or end markets are seeking additional feedstock. SMEs and third sector businesses in the RM sector may be well placed to collaborate with small manufacturers or end users of recyclate, engaging with R&D providers to develop mutually beneficial systems for collection, processing and use of recyclate in the manufacture of new products. 13

14 CASE STUDY: Plasterboard recycler. In Scotland a number of waste management firms offer uplift of waste plasterboard from the C&D sector. However, due to the lack of a plasterboard manufacturer in Scotland, the demand for recycled gypsum for reuse in plasterboard manufacture is limited in Scotland, with recovered plasterboard waste primarily being transported to England for reprocessing. A Scottish SME recognised a potential business opportunity in processing waste plasterboard back into gypsum. The opportunity however depended on finding end markets for reprocessed gypsum. The company developed a processing facility to recover gypsum, and worked with SEPA on developing a quality protocol (QP) for recycled gypsum. The outcome was development of the PAS 109 QP for waste plasterboard derived gypsum, with the SME being the first PAS 109 gypsum producer in Scotland. This allowed the company to market, and sell, the gypsum locally, with the primary markets being agriculture and horticulture. Although the QP provided assurance of physical and chemical properties adhering to specific standards, the QP did not address all areas of concern to end markets. The AEP project carried out a specific study to assess properties of recycled gypsum in relation to soil ph effects, not assessed under the development of PAS 109. The study revealed that PAS 109 material behaved in a similar manner to natural gypsum in relation to ph, providing end-users with additional confidence that the material would not produce unexpected outcomes. With the assistance of AEP and Interface Innovation Voucher funding, the company was also able to carry out additional testing of other novel uses of recycled gypsum. The company is also investigating novel processing and end uses for other waste materials, becoming an excellent example of an eco-innovator in the waste sector. The company has shown innovation in all areas of the waste sector from collection to recycling to end-use development, which provides added benefit of controlling all stages of the waste to product pathway. Controlling waste collection services and processing allows greater knowledge of quantities and control over quality. Developing new uses for recycled gypsum are also assisting in increasing demand as quantity of supply increases. Materials collected in Scotland are thereby being transformed and put to new uses in Scotland. 5 Conclusions: Currently, growth in the RM sector in Scotland is lower than the UK average and shows some imbalance towards collection and disposal as opposed to resource recovery, recycling and reprocessing. Capacity building in the Scottish recycling sector will require more than just legislative and policy instruments driven by government to achieve Zero Waste goals. Businesses themselves may benefit by taking a more joined up approach to managing waste with the potential for businesses to work together more, for WM firms to be more flexible and adaptable to business needs, and for the value of waste to be recognized. The development of end markets that process recyclate back into usable product will be central to reducing material resource leakage from Scotland. As demonstrated by AEP project, there is a need for eco-innovation across the RM sector to improve access to waste services, and to stimulate end-market development. 14

15 Innovation is needed in developing cost structures that encourage rather than penalise recycling. Waste service providers that are able to innovate in order to address some of the convenience and ease of use barriers to recycling will be able to maximise resource recovery and quality by making it easier for businesses to segregate waste streams and easily integrate recycling into existing practices. Awareness raising and innovation in how businesses access waste services could be developed, such as more visibility and transparency in pricing and service availability. Demand for recycled content material needs to be addressed, however consumers can only begin to demand locally sourced recycled content materials if labelling and visibility of these products is improved. There may be eco-innovation opportunities for existing manufacturers to consider whether locally sourced recyclate could be used in place of raw materials either in full or in part. An increased range and scope of Quality Protocols for recyclate to address end-market needs could improve acceptability of recycled content materials as would visibility and access to research and data on recyclate uses by potential markets. Innovative methods of recording and mapping accurate waste data and fate of wastestreams will be essential in planning waste infrastructure and collection schemes. Access to data on feedstock and current capacity levels for collection and processing is needed to ensure waste processing facilities are developed where they are most needed and to allow the markets, including manufacturers to see where they could be sourcing raw materials. SMEs and third sector business will be important in tackling some of the difficult and smaller volume waste streams, creating niche markets that are not in direct competition with big organisations however new cooperative systems of waste management may be needed to spread the risk of investing in waste infrastructure and capacity building, such as RMSCO arrangements. References: 1 SEPA and ZWS The Waste Data Strategy for Scotland 2011.[Online] Available at 2 SEPA Waste Data Digest 2011 Zero waste plan data updated to include 2010 data [Online]. Available at [Accessed 14/05/12] 3 Office of National Statistics. UK Business: Activity, Size and Location (2003 to 2010). [Online] Available at: [Accessed 14/10/11] And Office of National Statistics. UK Business: Activity, Size and Location (2011). [Online] Available at: [Accessed 04/05/12] 15

16 4 Remade Scotland An Assessment of the Economic and Job Opportunities Arising in Scotland in Relation to the Growth in Solid Wastes Management. [Online]. Available at [Accessed 14/10/11]. 5 SQW Meeting Scotland s Zero Waste Targets. Assessing the Costs Associated with New Waste Management Infrastructure. April [Online] Available at: [Accessed 19/9/11] 6 Waste (Scotland) Regulations WRAP Increasing SME Recycling. Eunomia Research & Consulting March Kollikkathara, Naushad, Huan Feng and Eric Stern A purview of waste management evolution: Special emphasis on USA. Waste Management. 29, pp Reichenbach, Jan Status and prospects of pay-as-you-throw in Europe - A review of pilot research and implementation studies. Waste Management. 28, pp Wimalesena, B.A.D.S., H. L. S. P. Madanayake, I. P. T. R. Weerasinghe, J. Y. Ruwanpura and J. P. A. Hettiaratchi Recycling as a construction waste management technique. Waste and Resource Management. 163 Issue 2, pp Redmond, Janice, Elizabeth Walker, Calvin Wang Issues for small businesses with waste management. Journal of Environmental Management. 88, pp Institution of Civil Engineers (ICE). State of the Nation. Waste and Resource Management. Jan 2011 London. 13 Knoeri, Christof, Claudia R. Binder and Hans-Joerg Althaus Decision on recycling: Construction stakeholders' decisions regarding recycled mineral construction materials. Resources, Conservation and Recycling. 55, pp Duran, Xavier, Helena Lenihan and Bernadette O'Regan A model for assessing the economic viability of construction and demolition waste recycling - the case of Ireland. Resources, Conservation and Recycling. 46, pp Yellishetty, Mohan, Gavin M. Mudd, P.G. Ranjith, A Tharumarajah Environmental life-cycle comparisons of steel production and recycling: sustainability issues, problems and prospects. Environmental Science and Policy. 14, pp SEPA and ZWS The Waste Data Strategy for Scotland [Online] Available at 16

17 17 See Wimalesena et al, 2010 and Duran et al, 2006 above 18 Remade Scotland (2008) An Assessment of the Economic and Job Opportunities Arising in Scotland in Relation to the Growth in Solid Wastes Management. 19 Zglobisz, Natalia, Arturo Castillo-Castillo, Sue Grimes, Peter Jones Influence of UK energy policy on the deployment of anaerobic digestion. Energy Policy. 38, pp SQW Meeting Scotland s Zero Waste Targets. Assessing the Costs Associated with New Waste Management Infrastructure. April [Online] Accessed 19/9/11 Available at: 21 Remade Scotland (2008) An Assessment of the Economic and Job Opportunities Arising in Scotland in Relation to the Growth in Solid Wastes Management. 22 Sharp, Liz and David Luckin The community waste sector and waste services in the UK: Current state and future prospects. Resources, Conservation and Recycling. 47, pp