Local government praises recyclers for swift response to collapsing prices

The UK recycling industry has acted with considerable speed and maturity to head off a potential crisis in confidence after prices for recyclable materials collapsed last month.

That is the view of Paul Bettison, chairman of the Local Government Association's environment board, who claimed that a concerted response from recyclers, waste management firms and the government appeared to address fears that the collapse in demand for recyclate from Chinese recyclers could deal a significant blow to the burgeoning recycling culture developing amongst businesses and households.

Some experts had warned that with prices for materials – such as cardboard – falling from about £40 a tonne to virtually nothing as Chinese recyclers hit by falling demand for their products stopped buying waste material from Europe, there was a danger councils and waste management firms would be forced to stop recycling some materials.

But Bettison said that to date the industry had responded effectively to ensure that recyclable material was not sent to landfill.

"I've very impressed by the fact that the industry seems to have realised this is not Armageddon, and is just a challenge that all sectors have to address in a downturn," he said. "The problem for the recycling industry is that it has never had to live through a downturn, but like all industries it is learning how to adapt."

He added that a recovery in the price of some forms of waste material had helped ease pressure on waste management firms in recent weeks. "Metals giant Corus is now taking scrap iron again," he said, adding that as a result "the visions of mountains of scrap iron being stored on disused army firing ranges" that had been predicted by some commentators had not come to fruition.

However, Bettison also argued that the response to the problem from waste management firms and the Environment Agency, which has relaxed some of the rules governing the storage of waste material, had also helped to ensure that recyclate was still being processed effectively.

"There has been a positive response from all parts of the recycling chain and I think we are seeing companies do their best to solve the problem by making additional storage space available," he said.

Bettison said that the industry was also already taking steps to mitigate the risk of future problems by bolstering recycling capacity in the UK and investigating more flexible pricing arrangements with businesses and local councils.

"We're already seeing an increasing willingness from waste firms to look at more flexible contracts, where more of the benefit is shared with councils when prices for waste materials are high but the downside risks are shared as well," he said.

Councils are generally supportive of this approach according to Bettison, because while they would receive less money for waste at current market prices, flexible contracts would also reduce the likelihood of their waste contractors going under as a result of rigid fixed price contracts that are currently seeing many of them pay more for material than it is worth.