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Waste – Regulation, Regulation & Regulation

Waste – Regulation, Regulation & Regulation

Waste is one of those industries built up out of regulation. Centuries ago, we threw our waste out of the window and expected the next rain storm to wash it away. In the 21st century, there are other considerations. We generate more of it. Much of it is manmade and will cause contamination. And as the earth’s resources become scarce, waste is now perceived as a resource. Reprocessed waste is used to make new products at best or to create energy or perhaps fertilizer. For historical reasons though, those who produce the waste are not (generally) set up for reprocessing it. Therefore, regulation has been put in place to prevent them from ‘throwing it out of the window’ – but rather disposing of it responsibly so that others can reprocess it and turn it back into a resource.

3 Issues Surrounding Waste Regulation

What are the issues surrounding regulation? First, governments might prefer not to regulate. Second, regulation should not benefit one industry sector to the advantage of another and thus skew the marketplace. Third, if there is to be regulation, try to ensure it has longevity so that investment decisions can be made with certainty.

Should Government Regulate?

Why would governments prefer not to regulate? It takes 12-18 months, sometimes longer for a particular piece of regulation to be formulated. After that, it takes longer still to gradually implement the change. In the meantime, industry has adjusted (possibly) to whatever the regulation is designed to regulate through (for example) a process change or a technology improvement. By its nature, regulation designed to plug one loophole often opens up another. So its never perfect and its slow moving. If the market were to regulate itself, changes would be swift at least. But would they be right? (Discuss!)

A level playing field

What about the level playing field? Its easier to illustrate with an example. If you are a UK plastics reprocessor and you export some of your output you receive government funding in the form of a PRN at a particular rate per tonne of material. If you’re a waste plastics trader and you export unsorted material which will then be reprocessed abroad at lower cost (perhaps, or just go to landfill?) then you receive another (higher) rate per tonne. So the reality is, after you’ve spent millions to set up your plant, gone through the growing pains to optimise the process you get less from the government for reprocessing UK waste than you would if you did nothing other than export it. Is that fair?

Certainty and Regulation

What about certainty in regulation? Why? Its simple really. With less certainty, investors perceive more risk. With too much risk, investors don’t invest (in waste) at all. If we want the UK to reprocess its own waste, and benefit from waste as a resource to the UK economy (thus creating jobs and growth) then please don’t make it more difficult for investors to mobilise their funds by moving the FIT’s, ROCS, RHI etc. goal posts.

Regulation is here in waste and its unlikely to go away. At Coolmangos, we help businesses with funding in the renewables area, and we help them turnaround from a bad situation to one that is profitable. We therefore have an appreciation of the boundaries that have been set by regulation in the renewables sector and how to work with them. If you would like to know more, call Matthew Broadbent on 07736 105055 or email matthew@coolmangos.com.

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