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Metals Recycling Industry

It is a pleasure to have you in the Chair, Mr. Chope. Metal is the most recyclable of materials. High-quality metal can be made from recovered metals and used time and again. In the UK, metal recycling is a well established, £4 billion to £5 billion industry. Recovering 15 million tonnes a year, it is the UK's biggest recycling industry. As we process far more metal than domestic manufacturers need, we are one of the world's largest exporters of recovered metals. In short, metal recycling is a UK success story, but I suspect that because the industry tends to be scattered across the country and is not concentrated in individual constituencies, it goes unrecognised. The industry faces several challenges, and I shall raise five issues of concern—fairly briskly, I hope. First, as the hon. Member for Southampton, Test (Dr. Whitehead) made clear, there is the problem—resulting, rather bizarrely, from a European Court judgment on the EU packaging directive—that recovered metal is classified as waste under European law. That approach means that the industry has been subjected to an increasing burden of waste regulation, which applies even when metal has been fully separated and prepared as secondary raw material. The need for redefinition has become urgent with the introduction of the new 2007 regulations on trans-frontier shipment of waste, because they are creating trade barriers, shipment delays and advantages for non-European competitors. It is somewhat bizarre to provide opportunities for non-EU states. Given the UK's leading position in export trade, the situation is particularly damaging to UK metal recycling. The revised EU waste framework directive, which is currently having its Second Reading in the European Parliament, creates an opportunity for long-term change. The directive will enable reconsideration of the point at which certain materials cease to be waste. Reclassification is urgently needed, and the European Commission has carried out a metals case study in anticipation that metals will be one of the first materials to be considered. However, I understand that there are attempts, to do with steel interests in Italy, to make last-minute amendments to the draft waste framework directive. The amendments threaten to introduce new administrative hurdles, and could prevent the ““end of waste”” outcome. An interesting point for the House to consider is how better to interact with the European Parliament, because our only locus in this issue is for us to lobby or make submissions to the Minister, who has a locus through membership of the Council of Ministers. However, there is no forum in which we get alongside Members of the European Parliament and say to our colleagues there that this issue is of significance to the UK and to UK industry. Reclassification is urgent. I therefore hope that the Government will seek to impress that upon other members of the Council of Ministers, and will press colleagues at the European Parliament to agree the directive swiftly to ensure that the mechanism for determining the end of waste is comitology. My Front-Bench colleague, my hon. Friend the Member for Vale of York (Miss McIntosh), who is a former Member of the European Parliament, will be able to explain lucidly and clearly to the House the distinction between comitology and co-decision. However, the basic fact is that co-decision would simply take several years longer. If comitology can be the mechanism for determining end of waste, it would just be speedier. Materials deemed to have reached ““end of waste”” under this procedure are also deemed to be ““recycled”” for the purpose of meeting the directives for end-of-life vehicles, the waste electrical and electronic equipment directive, and the directives relating to packaging and batteries. We also need to ensure that a simple definition of ““recycling””, as proposed by the Council of Ministers, is maintained. Secondly, trade in recovered metals takes place in a well-established global commodity market, which often relies on a chain of brokers and traders between source and reprocessor. Prices may be several thousand pounds per tonne. The value of the material means that there is little doubt that the metal will, at the end of the chain, be melted into equally high-value new metals, using established reprocessing methods. Furthermore, the UK is a world leader in this market. However, because recycled metals are classified as ““waste””, the industry is subject to the European trans-frontier shipment of waste regulations. These regulations were revised in July 2007 to address growing concerns about the dumping of problem wastes, but today we are discussing not such wastes but recycled metals of high value. These waste regulations now require that commercially confidential information be publicly stated and that advance certification be obtained from overseas recipients to confirm that reprocessing will be ““broadly equivalent”” to EU standards. So material can only be shipped to countries outside the OECD where the Government of the country in question has confirmed that it will accept this ““waste””. In addition, Europe has imposed additional pre-notification requirements on shipments to the 120 non-OECD countries that have sent no reply. Applying these controls to metal shipments provides no additional environmental benefit. The new waste regulations are designed for problem wastes such as complex products where materials are not yet separated, or materials for which there is no clear market. However, recycled metal does not get fly-tipped or dumped. Indeed, high market values mean that theft is by far the greatest risk. The new waste regulations are therefore wholly inappropriate to recycled metals, but such metals get caught up in them because they are currently classified as ““waste””. The metal recycling trade will suffer if these barriers are not lifted. The situation is very straightforward: recovered metals should be reclassified as non-waste, which would remove recycled metals from these regulations entirely, and we should also seek revision to the EC annex VII form in order to remove the requirement to state commercially confidential information about suppliers and customers. Of course, if one is dealing with complex waste, one can see that there is a need to discover where it has come from and where it is going to, so that it does not end up being dumped in a hole in a developing country. However, in the case of metals of high value, all that we are doing in giving our commercial competitors information about the value of the waste, who the customers are and where it is going is giving them a commercial advantage. That is crazy. Generally, we should ensure a light touch in implementation of the regulations to minimize the costs, delays and administrative burdens that fall on metal recyclers, particularly in relation to obtaining ““evidence”” of overseas reprocessing. Thirdly, as with every other matter, regulation should be proportionate. Metal recycling is very different from the waste sector. The UK has been recycling for generations; it sells a valuable product all over the world in an established market, and the industry has a mature structure. However, a one-size-fits-all approach designed for the waste sector means that the average metal recycling company must comply with some 15 different sets of environmental regulations, as well as the Scrap Metal Dealers Act 1964. Each set has its own procedures, costs and paperwork, which obviously amounts to a substantial red tape burden, particularly for small businesses. That degree of regulation is neither proportionate nor risk-based. I submit that we need a more proportionate approach to regulation that takes into account the needs of the industry as well as the environmental needs. There should be a full review of regulation affecting metal recyclers—involving the industry, the Department for Environment, Food and Rural Affairs, the Department for Business, Enterprise and Regulatory Reform, and the regulators—that considers the needs of both industry and the environment. There should be some risk-based training requirements, and sites with waste management licences must demonstrate that their managers are competent. Nearly three quarters of metal recyclers now do so by deemed competence—in other words, by showing proven experience or by completing a simple assessment process. The Environmental Permitting Programme will introduce new certificates of technical competence for licensed sites, and these certificates must be designed to meet metal recycling needs, not the needs of the waste industry, with adequate time allowed for their introduction. As the hon. Member for Southampton, Test said at the start of this debate, industrial off-cuts need to be recognised as by-products and not as waste. In short, the Government collectively must try to ensure that this industry is not regulated out of competitive existence. Fourthly, illegal operators must be got rid of. I suspect that one reason why this industry does not have the public recognition that it deserves, given its turnover and value, is that there is still something of the Steptoe image about it—the image of the scrap metal yard. In reality, most scrap metal yards are run very efficiently. They are, of course, subject to statutory controls, they must be licensed by the local authority and there is specific legislation relating to them. However, there are illegal operators out there and they need to be stamped out, because freeloaders operating outside the regulated system threaten to undermine those within the industry who are behaving responsibly. Tackling those freeloaders requires adequate resources to be provided to aid regulators in closing down illegal operators and in imposing appropriate fines. There needs to be a joined-up certificate of destruction system for end-of-life vehicles, so that the vehicle's last registered owner must obtain a certificate of destruction when it is scrapped. An incentive for, or penalty on, the last owner, together with a robust Driver and Vehicle Licensing Agency monitoring system, would make that happen, driving out illegal end-of-life vehicle operators completely. In addition, there should be a requirement for a waste carriers licence disc to be displayed in trade vehicle windscreens, to ensure that they can be properly identified on sites. There must also be recognition that more regulation in itself will not necessarily solve metal thefts. Legitimate operators are not the problem; it is those who are acting illegally. Finally, as well as driving out freeloaders, the Government need to get together with the industry to examine how the UK can improve its recycling performance. If the UK is to meet its future recycling targets under the end-of-life vehicles directive and other directives, there needs to be more joined-up thinking involving the recycling industry. That is a challenge, because this issue straddles a number of Government Departments. A recycling taskforce therefore seems sensible—a partnership between Government and the recycling industry to plan for achieving future EU product recovery targets and landfill reduction. That taskforce must take into account all the relevant factors, such as post-shredder technology developments, landfill targets, landfill tax, research and development assistance, and generating industrial energy from waste capacity. What we are talking about here is a raft of new European directives, not just on recycling metals but on developing advanced separation techniques and new solutions for residual wastes. We need to ensure that the UK remains at the forefront of such developments, and that recycling continues to be a success story. That will require everyone working together, but the Government taking a lead. There are issues that we need to consider seriously if the industry is to continue to make a considerable amount of money, to contribute to a positive UK balance of payments, and to export large amounts of recovered metals overseas. There are issues that the Government need to address.