Paper price collapse blows hole in Britain's recycling strategy

Mark Milner, guardian.co.uk 11 Nov 08;

Britain's paper recycling strategy is under increasing strain after a collapse in waste prices in recent weeks, according to a leading industry organisation.

Britain lacks the capacity to handle the rising amount of paper being recovered for recycling, and its dependence on exports has left it vulnerable to a rapid price collapse, the Confederation of Paper Industries said yesterday.

Far Eastern buyers had been snapping up about three-quarters of Britain's exports of paper for recycling, but demand from the region has almost disappeared recently, the CPI said.

"With no obvious signs of Far East buyers returning to the market soon there is a serious possibility that storage of recyclables may end up being a high-risk strategy with huge costs to those requiring storage, including the taxpayers through local authorities," the CPI said in a statement.

"The worst-case scenario is that some material collected for recycling could go to incineration or landfill," CPI recovered paper sector manager, Peter Seggie, said.

The UK collects about 8.6m tonnes of paper and board for recycling every year but UK paper makers can only handle 4m tonnes, resulting in dependence on export markets, primarily the Far East and Europe, to take the remainder.

According to the CPI, far eastern buyers had been taking 3m tonnes but have backed away, triggering a price collapse in some paper grades. High prices have seen local authorities and commercial organisations such as supermarkets and printers generating cash by selling paper and packaging for recycling, but they face this income being reduced.

The CPI said ministers and the government-funded Waste and Resources Action Plan (Wrap) should draw lessons from the price fall, not least over the "gold plating" of recycling targets. "Before introducing higher and higher recycling targets, UK governments must ask themselves if there are solid, sustainable markets to accommodate reaching them," it said.

The government's advisory committee on packaging is due to report on the impact of the price slump today.

A spokeswoman for the Environment Department, Defra, said: "Commodity prices go up as well as down and, while we will continue to monitor the situation closely, we remain committed to our recycling and landfill targets. Defra will support the Environment Agency in taking a sensible approach to the enforcement of maximum storage limits at permitted and exempt waste sites, where this does not compromise environmental protection."