Karen Betts Lets Recycle Conference Speech

Delivering a recycling system fit for the future

Thank you for your kind introduction and for inviting me to speak today on a topic that couldn’t be more important – to us as a society and to each of us as individuals – the future of recycling in the UK and the transition to a circular economy.

Because there’s no doubt that, in the race to stop climate change and to ensure we leave the planet in good order for our children and grandchildren, we must all become better custodians of the world’s resources, and quickly.  Quite simply, we urgently must use less and reuse more.

That isn’t, of course, a blinding insight.  We’ve known it for some time.  British scientists have been at the forefront of global research on climate change – into its causes and what we can do to arrest it.

Likewise, food and drink manufacturers have been responding by investing, for instance, in green energy, in reducing our water use and in working with farmers to reduce greenhouse gas emissions in agriculture.  We’ve also been working hard to reduce the amount of packaging we use and to increase the amount of recycled materials in new packaging.

But despite this, what’s clear, and what’s disappointing to so many of us, is that the UK has a dirty little secret:

That is, much of the recyclable packaging that households up and down the country are carefully sorting isn’t actually being recycled. It’s going to landfill, it’s being exported, or – even worse – it’s being incinerated.

That’s because the UK’s waste and recycling systems are fragmented.  They have not kept pace with advances around the world that have enabled circular economies to spring up everywhere from Chile to France.  Somehow, amid the pandemic, Brexit and the war in Ukraine, the UK has got left behind. 

We all want it to catch up.  Let me pause with you for a moment to imagine what things will look like when it does.  

Close your eyes – yes, really – and imagine the year 2038, 15 years from now.

NASA’s Trident spacecraft will be arriving on Neptune, we’ll be hailing autonomous helicopters to get around cities, and drones will be building tall buildings. 

Certainly the world will be warmer, but we all hope global warming will have been arrested and kept within manageable levels by concerted global action.

As part of this, rooted in impressive and deep collaboration and co-working between government and industry, the UK will once again be leading the way on recycling. We will have an effective, efficient world-class recycling system, which will have driven down the use of packaging and driven up recycling across the board and the re-use of recycled materials.

This recycling system will be next generation Extended Producer Responsibility 2.0.  It will be underpinned by regulations and exacting targets.  Producers will be responsible for all packaging throughout its life cycle, and for its re-use over and over again in new packaging, to keep the delicious and nutritious food we make fresh and safe.  Innovation will have found solutions for hard to recycle materials, and brought better, more environmentally-friendly materials to market.

The UK will have learned from other circular economy schemes around the world, and we will have overtaken them.  We will be recognised as a global leader in recycling, keeping materials in the UK and using them again and again, safely and efficiently.

In this future, households will know how to sort their refuse correctly and will be confident about what to do to ensure it will be recycled and turned back into packaging again.

Manufacturers will have easy access to high-quality recycled material, and more than 80% of plastic packaging will be made from recycled plastic.

Large scale investment in consolidated recycling centres nationwide will ensure that all flexible plastics and food contact materials are collected and recycled too – so a crisp packet will become a crisp packet once again, or a biscuit packet a biscuit packet again.

And our circular economy will truly thrive.  Our reliance on new resources will be dramatically reduced, as will plastic pollution.  Everyone, from consumers to companies and governments, will know clearly what they need to do to improve the environment, and everyone will be doing just that, while continuing to innovate to improve the situation yet further.

What’s more, the UK’s new generation EPR scheme will have attracted billions of pounds in new investment.  This will have built new, green infrastructure and created new businesses, new jobs, new research and innovation labs, and new technologies.  The UK economy will be in growth and standards of living will be rising.  Our recycling system will have proved President Biden right when he said ‘when I think climate change, I think jobs’.

And the ultimate test will have been met.  Plastics and packaging will be being kept in the circular economy, and off our beaches, streets, parks and oceans.  New plastic pollution will be a thing of the past, freeing up resource to tackle the – still hugely challenging – plastic pollution left by previous generations.

So if that’s where we think the UK can and must get to over the next 15 years, the question is ‘how’.  How do we create an outstanding, robust, fit for the future EPR system in the UK, as rapidly as possible?

The food and drink industry supports EPR

Now all that goes to a key point I wanted to make to you today, and on which I want to be crystal clear.

The food and drink industry wholeheartedly supports EPR.  We want it introduced successfully in the UK as soon as possible.   

Because every day that we don’t have it, we fail to meet our commitments to our consumers and to our shareholders – to include much higher levels of recycled content in new, recyclable packaging.

What holds us back on this at the moment is access recycled materials for new packaging – in short, there simply isn’t enough of it to meet demand because the collection and recycling system we have in the UK isn’t generating it.

We want to do the right thing – by consumers, by society, by our employees, by our children and grandchildren.

But without a good EPR scheme in place, this is nigh-on impossible.

So in supporting EPR then, what do we want?  What do we think the essential components are of a good scheme?

 Many food and drink manufacturers have now worked for many years – hand-in-hand with central and local governments, the waste industry and environmental charities – on the design and implementation of a range of successful EPR schemes around the world.

We’ve learned that the best schemes include these five components:

 First, end-to-end system accountability

The best EPR scheme we work within around the world place both physical and financial responsibility for the whole system with producer companies – and that includes ownership of materials.

This means responsibility not just for contracting to collect materials, but for ensuring the right sorting and recycling infrastructure is in place, and for incentivising investment.In most schemes, producers are legally responsible for system performance.

This works well when producers have the authority and autonomy to design and manage operations under the oversight of a strong Regulator, as we see for example in Belgium and Ontario. 

This accountability means that producers have a direct interest in three things: boosting recycling rates for quality materials; designing new, highly recyclable packaging; and ensuring the system runs at peak efficiency to keep costs down.

The second component is that EPR must be producer-led

We know from successful EPR schemes overseas that producer-led EPR, combined with effective regulatory oversight, delivers higher recycling rates at a lower cost per head.

This is because producer-led schemes harness the expertise and experience of producers in managing highly complex supply chains and logistics.  This makes us good at delivering results while keeping costs down, which is the bedrock of our own businesses.

And I should be clear that by producer-led, we don’t mean to the exclusion of other parts of the value chain, each of whom will have a critical role to play in delivering a successful scheme.

The third component is that collections must be consistent

This is critical.  EPR will only work –

if households know what they should be recycling and sort their refuse correctly, and if a consistent set of materials is collected nationwide – the system needs a volume of material to operate optimally and to innovate for the future.

Without consistent collections, EPR won’t drive higher recycling rates; nor incentivise investment in new, efficient sorting and recycling infrastructure at scale

Good comms are critical too.  Households must know – through clear labelling and good comms campaigns, what they should be doing. And confusion – which we see today across different recycling practices in different local authority areas – like ‘can I recycle the lid of my yoghurt pot as well as the pot itself’ – must be eliminated.

The fourth component is investing in chemical recycling

Countries everywhere have recognised that they won’t be able to achieve their recycling goals without investment in new, advanced recycling technologies – to enable the hardest to handle materials to be recycled and reused.

Take flexible plastics, for example – bread bags, or the bags that frozen vegetables and oven chips come in. We’re not recycling these in the UK.  We’re exporting them (to countries like Turkey), incinerating them or sending them to landfill.  

That simply isn’t good enough, and we need a clear plan – backed by forward-thinking government policy, to enable scientific advances and to attract new investment. These are stated government priorities but aren’t currently being looked at for waste and recycling.

The government is about to consult on chemical recycling here. What’s critical to us is that policy incentivises investment and innovation in this space – or the UK will be left behind and we’ll have to rely on advances being made elsewhere in the world.  That won’t be good for recycling, nor for our economy more broadly.

Fifth, and finally, everything is linked.

It’s critical that we all understand that Extended Producer Responsibility, Deposit Return Schemes and Consistent Collections are not separate policies.  They are interlinked and interdependent.  They must be looked at holistically.  Government must adopt a whole-systems approach if we’re really to establish a circular economy in the UK.

If these, then, are the key components of EPR, what do we think of the UK government’s plans?

 Here I must pause to stress again: how much food and drink manufacturers support the introduction on EPR in the UK.  That we believe successful EPR is critical to bringing an end to environmental pollution by ensuring that the packaging used for everyday products, including to keep food and drink safe and fresh, is recycled at scale so those materials can be re-used.

That this is the only proven way to bear down on the unnecessary use of new materials, including virgin plastic – so we can all reach our net zero and other environmental goals.

that we know that EPR, DRS and consistent collections are all complex policies involving a very wide range of actors across different parts of government and the economy, and that at their core lies significant systems change. And that we understand that putting in place the policies necessary to establish a circular economy isn’t easy.  We know this from all the other schemes in which we are involved around the world, from Germany to Ontario in Canada and Colorado in the US.

However, it won’t be a surprise to Minister Pow and her team – and it’s a pity she wasn’t able to be here in person today – that we’re deeply concerned about the UK government’s current plans for introducing EPR. 

In short, we do not believe their scheme design is fit for purpose.  

At best, it will cost everyone more than it needs to.  At worse, it will fail, wasting large amounts of time and money.

Every company I talk to, across food and drink as well as FMCG more broadly, has lost confidence in the government’s plans, and this is uniting – usually – both retailers and producers.

The problem is fourfold:

First, the government’s plans are not ambitious enough, and don’t confront necessary reforms. As such, there’s a big risk EPR in the UK will be more expensive than it needs to be and won’t be value for money for consumers. 

The bill for EPR is big – around 2 billion pounds a year, which we estimate will add more than £1 per week to household bills.

The reforms we believe are necessary to ensure value for money don’t appear to be part of the government’s plans.

What we’re seeing instead is the government tinkering with our current, fragmented and underperforming recycling system – without undertaking the difficult but necessary work needed to transform it into a fit-for-the-future system.  

Under the government’s plans, producers are legally liable for the performance of EPR and for improving recycling rates without actually being responsible for running the scheme and optimising its performance.

Set up in that way, the DEFRA scheme looks like a tax, not a responsibility project. DEFRA’s plans are closer to the schemes established in Russia and Hungary, which are explicitly about raising government revenues, than they are to high performing schemes, like Belgium’s, which we believe the UK should be using as a model.

All this makes us very concerned about costs, which we believe will escalate quickly in DEFRA’s scheme, and about demonstrable value for money, for businesses and consumers. 

Second, there’s a problem with pace.  The Secretary of State wants EPR in place quickly.  So do we.  FDF’s members would write a cheque tomorrow to get good EPR in the UK quickly.

But ‘any old EPR’, delivered to a government self-imposed deadline, won’t do.  We need a system that will work.  And we need to recognise that a lot of critical planning time was lost during COVID and Brexit.

It would be helpful too if government could recognise how much experience producers have of EPR around the world, and be more open to working in genuine partnership with us on the scheme’s design – and in its broadest sense, and not through a complex web of non-disclosure agreements.

Third, there’s a problem with clarity.  We all need to understand what’s required of us next year, and then in 5 and 10 years’ time.

With EPR apparently being launched in early 2024, we still don’t know what fees will be charged.

There’s no clarity on the ownership of materials.

No clarity on guidance for councils or households.

No vision for the whole-systems transformation that EPR represents.

And critically in the longer term, we don’t know how the system is expected to evolve. We’ve been very clear that we believe that EPR must transition over three to five years to a scheme that’s led by producers in partnership with the value chain – and for that transition plan to be baked into the regulations. We’re prepared to accept a scheme that falls short of this to start off with – recognising complexity of the transition that the system will have to go through if a successful circular economy is to be realised.  But we all must be clear that where we start will only be the first step on a journey to optimal EPR.

Fourth, there’s a problem with vision

EPR, consistent collections, DRS – as I’ve said, these are all interlinked.

But we’ve seen no evidence that government is ready to deliver the scale of transformation that’s going to be necessary.  More than two years after the consistent collections consultation launched, we have no sight of the government response.

The EPR regulations have only been seen by a handful of individuals, and under non-disclosure agreements. And we do not know yet how these two critical elements will work together.

In short, this all gives the strong impression of not being ready. The only parts of the system that we think could be delivered on time are the parts that collect fees – albeit as yet undefined sums of money.

So we’re urging the government to act now to review their plans before it’s too late. We want them to take the time to be sure that we’re creating a system that will work. We all want to get EPR going – and as soon as we can. But, as I’ve said, we need a workable system not any old system.  A pause in government’s timelines – in order to ensure a good, workable plan for change and transformation – seems to us to be the most sensible course of action right now.  Doggedly pressing on in the face of all I’ve described poses multiple risks.

To conclude, allow me to stress again…

Food and drink manufacturers across the UK make the high quality, safe, affordable and convenient food enjoyed by everyone across the UK every day.

In doing what we do - whether that’s making the cakes that bring a smile to our faces, the cereal we depend on to get us going in the mornings, the crisps we snack on at lunch or the pasta we have for supper – it’s also so important to us that we do what we do while minimising our impact on our planet. While leaving a legacy to be proud of.

So let’s work together to get the circular economy right. 

Let’s hand the right legacy to our successors.

And do the right thing by the planet on which we all depend.

Thank you.