Brexit concerns mount for UK's waste and water industries

The UK's departure from the European Union (EU) could result in economic downturn and the slow degradation of environmental regulations in the waste and water industries.

That was the view of high-level panellists who appeared before the EU Energy and Environment Sub-Committee at the House of Lords earlier this week (2 November); providing evidence on the UK’s environment and climate change policy after Brexit.

Speaking on behalf of the waste industry was Environmental Services Association (ESA) executive director Jacob Hayler, who expressed his concerns over the economic impact of Brexit.

Currently, the UK exports around four million tonnes of waste as fuel to the EU due to a limited domestic landfill capacity. But according to Hayler, this figure could diminish if the price of waste material rises from the present level of £60 to an estimated £75 per tonne under post-Brexit trade tariffs.

“I think a big fear for the industry at the moment is that we’re facing what we consider to be a looming capacity crunch where landfill capacity is closing throughout the country,” Hayler said. “We’re not bringing forward the investment in domestic treatment facilities. To date, we’ve been relying on exporting a lot of that material to other parts of northern Europe.

“Since the referendum decision, we’ve seen the sterling impact which has dramatically increased the costs of that option and fears about future potential tariffs that might limit that even further would drive up costs and create difficulties for waste management in the UK.”

Strategic direction

Hayler believes that the UK waste sector should look to become more self-sufficient in the treatment of waste material. This will not be an easy feat however, as estimates range from £5bn-15bn of infrastructure which would be needed to treat that waste domestically.

The immediate economic concerns are combined with uncertainty within the waste management industry regarding the the strategic direction of UK resource management policy outside of the EU. Around the time that Brexit is expected to occur in 2019, the sector will be subject to a whole new swathe of regulations and targets from the EU in the form of the Circular Economy Package.

While the rest of the continent renegotiate the main directives directed at recycling and landfill diversion, the UK Government remains frustratingly reluctant to commit to objectives which it deems unrealistic, Hayler insists. The UK performance in regards to waste management practices has been lacklustre up to date. The country is already struggling to meet 2020 targets for household recycling, and Hayler is concerned that the country could fall further behind if future EU regulations are not applied domestically.

“We are expecting [the Circular Economy Package] to be quite ambitious in terms of waste and recycling targets, and recovery of waste. What we’re anticipating is that none of the legislation will come to apply to the UK. We’ll have the existing targets that will last through to 2020 and then nothing beyond.

“In terms of strategic direction, we can look at what Government has saying as part of those circular economy negotiations at the council. They are not altogether keen on some of the more ambitious targets, so we can anticipate that perhaps the strategic direction may not be as ambitious as if we remained as part of the EU.”

‘Stroll to the bottom’

The water sector faces similar issues surrounding the future of British environmental standards, with a large majority of industry investment based around EU regulation, primarily through the Water Framework Directive (WFD) and Urban Waste Water Treatment Directive (UWWTD).

Also speaking at the House of Lords committee hearing was Water UK’s director of environment Sarah Mukherjee, who warned that the UK faces a “stroll to the bottom” if it fails to implement ambitious regulations and standards post-Brexit.

“The issue in the water industry focus primarily around the policy aspects, and how the various directives will or won’t affect us,” Mukherjee said. "I think it’s a similar situation with waste that the WFD will be revised in 2019. Do we follow that path? At what point do we lock in the directive into UK law and at what point does it perhaps go a separate way?

"Certainly water companies would not want to see any diminution of environmental standards. It may not necessarily be a race to the bottom, but rather a stroll to the bottom.”

George Ogleby