LAWR

May 2015 Local Authority Waste & Recycling 7 news analysis bottle for survival Concerns are mounting that retailers will turn to cheaper virgin plastics using recycled content in our milk bottles". Dow says he has been "overwhelmed" by the support. Yet some have clearly had their heads turned. There is a fierce price war going on amongst the UK's supermarkets and their success or failure can rest on how much can be squeezed from their supply chains. Indeed, the situation facing recyclers of plastic milk bottles echoes eerily that which has faced those at the opposite end of the supply chain. Milk prices are at their lowest level since 2007 and in the past decade half of Britain's dairy farms have closed. Ministers have intervened in a bid to push the farmgate prices back above the price of production and help keep dairy farms afloat. Nevertheless, politicians have long been wary of playing with market dynamics – and this is the big concern for the recyclers. Rather than a few pence per litre, Closed Loop says an increase of 0.1p on a two pint plastic milk bottle is enough to secure the future of the industry. A YouGov survey in March showed that 68% of British adults supported the increase. Goodwin at Wrap says retailers and manufacturers need to look at the long game. "Right now, buying virgin HDPE for milk bottles might seem the better buy, but it is not a long term approach," she says. "Commodity prices go up and down. Recycled food grade HDPE will be a good buy again [the temporary supply issues in the US have been resolved] but if we don't stick with it now, there won't be any to buy in the UK." Closed Loop's Dow adds: "Surely a tenth of a penny is a small price for retailers and dairies to pay to show " A tenth of a penny is a small price to pay " commitment to their own environmental policy and save thousands of green jobs and the future of the circular economy." New system The industry has called for a system that rewards brand owners actively working to develop the circular economy. In its recent report, Growing the circular economy: ending the throwaway society, the Environmental Audit Committee also recommended the introduction of differential VAT rates based on life-cycle analysis of the environmental impact or recycled content of products. But "any changes would require amendments in EU law," the government noted in its response. With a new circular economy package promised by the end of the year, the rules could change. In its 2014-2020 strategy, the European Federation of Waste Management and Environmental Services, which represents 3,000 private waste management and recycling companies that hold 60% share of the EU's household waste market, says it will be lobbying for a lower rate of VAT on second-hand goods and green products. In a blog posting on the company's website in January, Closed Loop suggested that "we could start by reforming the current outdated regulatory system such as the Packaging Recovery Note and go further to reform the entire compliance system for packaging producers to reflect their true effect on the environment". The blog also noted how "cycles and shocks are a normal part of international economics but surely the government can see the need for urgent action on setting the correct fiscal and regulatory measures?". Back in November 2013 Dow said the company's expansion was a result of the whole industry working together. Almost 18 months on and its survival rests on the same level of collaboration. "I hope that support can be made available for the short-term, but we need to address the longer term situation," says Adam Read, practice director for resource efficiency at consultants Ricardo-AEA. "We need incentives, policies and levers that will support UK-based businesses, and the cycling of material within the UK where possible. But that's not easy when materials and products are part of a global economy."

• Cover