Waste and Brexit: What It Could Mean For Your Business
The waste trading industry is a complex one. We have, however, managed to develop a lot of skill in processing waste to create energy.
UK bins currently have more recycled materials in them than ever, and our habits as a whole are improving in stride. Big amounts of paper, card, glass, plastics and metals are now being taken in, sorted, processed, packaged and sent out to be reused.
Waste that isn’t recycled is burnt in a furnace, sending steam to a turbine through a large network of pipes, which then generates power for the grid. This is useful and efficient, but unfortunately not enough to use all of our waste- we still have a lot spare, and that’s where the EU comes in.
Yearly, we send over 3.5 million tonnes of waste to the bloc, with our biggest buyers being Germany, Sweden and the Netherlands. They use this for their own energy, similar to how we use it.
Additionally, we send a further 15 million tonnes of recycled waste to the EU, which gets packaged and shipped worldwide via Rotterdam.
After Brexit, we aren’t certain what changes will be made, but we can outline the possibilities and prepare for the best and worst-case scenarios- namely three:
Scenario 1: Leave things as they are
There’s always a chance that we like the current market enough to keep it as is.
If we manage to negotiate an exit from the EU that involves following all their environmental laws, things will be exactly the same, although we will no longer be able to change anything within the bloc.
If we negotiate a deal that doesn’t involve following any of their laws, there is an option of deliberately keeping the same laws- and not fixing what isn’t broken. We won’t have to follow all of the EU’s laws, but there is a large chance of not being able to export our waste if we take this stance.
If we manage to work out a way to continue taking part in free trade, there won’t be any real huge differences. This will keep the market running smoothly and not disrupt anything. If not, see scenario three.
Scenario 2: Stay in the EEA
The European Economic Area (EEA) is an agreement made between the members of the EU, which allows for the inclusion of non-members in their single market. The EEA joins together the EU members and three of the four European Free Trade Association (EFTA) states (Iceland, Liechtenstein, and Norway) in the single market, on the condition that they follow the rules of the group.
This deal includes, taken from the official http://www.efta.int site, “free movement of labour, goods, services and capital within the European Single Market, including the freedom to choose residence in any country within this area.”
This means that we can continue selling our waste without imposing tariffs, and we can continue working in more or less the same way. The downside to this (to some), however, is that we would need to still follow all of the EU’s environmental laws. This means nothing would’ve changed, and some would definitely argue that there wasn’t any real point in leaving if we still follow all their rules and reap most of the benefits of being a member.
One thing that will change, is that we can no longer alter or have any influence on the rules the EU passes. We will still have to follow the EU’s rules, but can no longer have a say in them.
There will be some exceptions, including laws about birds and habitats, but these will likely be replaced with similar alternatives written by us.
Scenario 3: We create our own rules
As mentioned in scenario one, there is a chance we may not be able to work out a way to stay in the single market or partake in free trade. When we leave, export and import licences issued by the UK will no longer be valid for EU27 members, and vice versa. While recyclable waste is safe, due to them being shipped under the Green Control Procedure designed by the Organisation for Economic Co-operation and Development (OECD), this really opens up the possibility of a worst-worst case scenario where we can’t trade any of our waste.
EU regulation currently prohibits member states from exporting waste for disposal and exporting mixed municipal waste for recovery to countries outside the EU or the EFTA. We will have to hope they can make an exception for us, or we can remain in the EEA as described in scenario two, and as nothing like Brexit has ever happened before, we can’t be sure on whether this will happen or not.
If this goes well, we may have the option to draw up our own laws and regulations, albeit with tariffs preventing the trade from being as frictionless as it was before we left. We will also still have to follow some of the EU’s rules, as many of our current policies are conditions of agreements we’ve made with other countries.
If it doesn’t go well, we could have a slight problem in the short-term, with a need for building more facilities long-term.
Brexit may offer some opportunities for the UK to move away from an EU-style approach and towards even more efficient methods. An example of this is that the EU currently uses weight-based targets to judge value, but if the UK moved towards a carbon or value-based method, the profit margins are higher, and we could possibly become the best at processing waste in the world.
No matter the choice we make, there is always a high risk of disruption. The higher the risk, the higher the reward, however, and there’s only one way to find out what will happen.
We’ll just have to see how it pans out.
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