Written Statement - Achieving a more circular economy for Wales

On 2 December the European Commission adopted an EU Action Plan for a circular economy to boost global competitiveness, foster sustainable economic growth and generate new jobs. This statement sets out for Assembly Members and the wider public the Welsh Government’s commitment to develop a more circular economy in Wales.  In this statement I will explain why it is important for Wales to move towards a more circular economy, and the benefits that this will bring to businesses and society as a whole, especially in relation to the Wellbeing of Future Generations Act. I will explain briefly what action the Welsh Government is taking to move Wales towards a more circular economy.

The consumption of natural resources through the production, use and disposal of goods bought by the public, businesses and the public sector has major economic, social and environmental consequences. Science tells us that the over exploitation of natural resources is having a major impact on global biodiversity and global warming. The cost and security of supply of our natural resources, used as raw materials for manufacturing, are major constraints on the future resilience of our economy. The cost of food and consumer items can also present difficulties for those struggling to make ends meet. The disposal of wastes is a cost to business and society as a whole, both in terms of the value of the materials disposed of and the costs of safe waste management.  

Our traditional approach to managing materials is a ‘linear’ one that can be described as ‘take, make, use, and lose’. Here, far too many materials have a short life of productive use, and their value is then lost from the economy through disposal to landfill. We need to be far more resource efficient and develop a more circular approach to the use of materials in Wales. A circular economy means that materials can be productively used again and again and hence create further value and with it generate multiple benefits.

Towards Zero Waste, our waste strategy published in 2010, effectively sets Wales on a path towards a more circular economy. It re-emphasised the  goal of using the equivalent of one planet’s worth of resources by 2050. It established ambitious targets for waste prevention and recycling to help meet the one planet resource use goal.  

Studies which estimate the benefits to Wales of achieving a more circular economy include an Ellen MacArthur Foundation/WRAP study that identified potential economic savings of over £2 billion each year, and a WRAP and Green Alliance study that predicts the potential creation of up to 30,000 new jobs. Achieving a more circular economy will deliver other multiple benefits in respect of the well-being goals, including:  

•  ‘A Resilient Wales’ - helping reduce or reverse biodiversity loss through reducing the exploitation of natural resources and reducing greenhouse gas emissions with the reduction in consequential habitat loss; 
• ‘A Healthier Wales’ - protecting and improving health through reducing emissions associated with waste and its management;
• ‘A More Equal Wales’ - providing jobs, training, skills across a diverse range of the population and saving money by reducing wasted food; 
• ‘A Wales of Cohesive Communities’ - involving and engaging communities in sustainable waste management, including reuse and surplus food redistribution; 
• ‘A Wales of Vibrant Culture and Thriving Welsh Language’ - further embedding sustainable development behaviours and cultures within society, using the arts as appropriate to help with raising awareness and behaviour change, and using the Welsh language in communications; and 
• ‘A Globally Responsible Wales’ - making an important contribution to the one planet resource use goal and helping reduce or reverse global biodiversity loss.    

Questions have been asked about how realistic it is for Wales to become truly circular, in other words self-sufficient, in its use of natural resources.  Of course Wales does not produce or manufacture all of the food and other products it consumes – it relies on the global production, manufacture and trade of food and goods (and services). Neither is it self-sufficient in the natural resources consumed by its residents and businesses. Therefore, for the foreseeable future, Wales cannot create 100% circularity. Our aim to achieve one planet resource use will depend upon other countries also taking action to address resource efficiency and create their own circular approach.  But Wales most certainly can become a lot more circular and can do a lot more to drive this approach.

In terms of consumption and the products sold by retailers in Wales, there are material cycles or circles at different geographical levels.  There are some products bought and consumed in Wales that are only made in Wales.  A recycling circle can be created if the recyclate derived from these products when they become waste can be supplied back to Welsh manufacturers to use as a secondary raw material in the place of primary, virgin raw materials.  There are some products bought and consumed in Wales that are made in the UK, some made in Europe and some made in the rest of the world.  Here, in simple terms, the circular approach, in respect of recycling, means getting the waste recyclate back to the source of production. It is important that goods manufactured abroad and imported for use in Wales have as high a recycled content as possible, and that gives us an opportunity to sell recyclate from Wales to other manufacturing countries.  

In order to maximise the contribution to the well-being goals in respect of recycling, we need to grow the Welsh recycling circle as far as we can.  We need to ensure that as much waste as possible collected in Wales is closed loop recycled or ‘upcycled’ in products manufactured in Wales. We also need to ensure that all products manufactured in Wales have as high a recycled content as possible, and that manufacturers are able to source enough high quality recyclate feedstock, from both Wales and wider afield (should the supply from Wales be insufficient to meet the demand for raw materials). We also need to create a greater demand for these products.

To do this effectively we need to collectively raise more awareness of the benefits of the circular economy to Welsh manufacturing companies, especially to Small and Medium Enterprises. We also need to ensure a joined up approach along the supply chain, including with local authorities and waste management companies who collect recyclate in Wales.  The successful delivery of a circular economy within Wales will require all those who produce waste, collect it and reprocess it to tailor their activities to provide a consistent supply of high quality recyclate to those Welsh manufacturing companies who can use it.  That’s why in 2011 we published the Collections Blueprint for local authorities to adopt where practicable.  I would like to see all local authorities in Wales adopt the Blueprint approach.  

The Welsh Government has an extensive programme in place to help deliver a more circular economy in Wales. This includes the proposed provisions in the Environment Bill to achieve more recycling by businesses and the public sector, the statutory recycling targets set for local authorities in the Waste (Wales) Measure 2010, the £9.5 million grant awarded in October as core funding of the Waste and Resources Action Programme Cymru, the £1.186 million awarded also in October to Constructing Excellence in Wales for their programme for sustainable waste management in the construction sector, and the £13 million provided to local authorities under the Collaborative Change Programme for them to improve their recycling services.  These programmes will help ensure the consistent supply of high quality recyclate from all sources, especially from households, that can then be used by Wales based reprocessors and manufacturers. The programme will also seek to create a greater demand for goods with a high recycled content, and we see sustainable public sector procurement playing a key role here.  

For it all to work, there needs to be a strong, integrated joined-up approach throughout the product and recyclable material supply chain, from manufacturers and retailers, through to those who collect recyclable materials after consumption, and then back to manufacturers who use the recyclable materials as a new raw material. That’s why I have asked WRAP Cymru to set up a ‘task force’ of key supply chain organisations to achieve this.  

We will need to be more innovative in our approach.  Wales has a good track record of innovation in terms of resource efficiency, with a lot of excellent work being carried out across the academic institutions in Wales. We need to build on this further and ensure that academia is part of this WRAP Cymru task force. The new the EU ERDF programme for Wales contains priorities for innovation and SME support. There is also the recently announced funding for the circular economy under EU Horizon 2020 programme – around £500 million.  We need to collectively ensure that Wales gets its share of this funding.

Wales is a small country. This can sometimes bring disadvantages in respect of economies of scale.  However, as a small country we have an excellent opportunity to all pull together in the right direction.  We can play to our strengths here. A fragmented approach will not deliver the type of circular economy we need – and the extra jobs and economic benefits it could yield.  This is especially true in respect of recyclate collection – from households, businesses and the public sector.  We need to work collaboratively with all stakeholders to deliver a more consistent and sustainable waste management service across Wales. The benefits will be huge. We must grasp them by putting in the necessary effort to change.