Elsevier

Waste Management

Volume 118, December 2020, Pages 369-379
Waste Management

Waste management in Small and Medium Enterprises (SMEs) – A barrier to developing circular cities

https://doi.org/10.1016/j.wasman.2020.08.042Get rights and content

Highlights

  • Only 35% of SME waste is recycled in England – it is not mandatory to recycle.

  • Globally 27 of 42 cities evaluated have no requirement for businesses to recycle.

  • 15 cities had full or partial mandatory requirements for SMEs to recycle.

  • 8 scenarios were modelled based on global policy approaches.

  • Mandated recycling would lead to 67% additional recycling across 62 SMEs modelled.

Abstract

The Commercial and Industrial (C&I) waste stream is complex due to the diversity of material generated and variation in businesses by activity and size. Businesses in England generate more waste than households but despite this the C&I waste stream has historically been overlooked in waste policy. Many Small and Medium Enterprises (SMEs) do not segregate dry recyclable materials and biowaste for separate collection leading to resources being wasted. Implementing smarter systems for managing waste from SMEs will be a key component of developing circular cities. In England the government has pledged to improve the management of waste from businesses – however it is uncertain what interventions, if any, it will make.

This paper evaluates the mandatory requirement for businesses to separate out dry recyclable materials and biowaste in 42 global cities. The results highlight the patchwork of legislation towards C&I waste with 27 cities having no mandatory requirement for businesses to segregate material. Where the requirement was mandatory, the approach varied from being fully mandated to having exemptions based on the type and size of business, and levels of waste generated.

From the legislation in these cities eight scenarios were modelled to assess what impact these interventions could have in England based on waste data collected from 62 SMEs. Mandatory separation of dry recyclable materials and biowaste for all SMEs based on the approach in San Francisco would have the biggest impact leading to 67.2% additional waste being separated – an average of 31.1 kg/week for the SMEs sampled.

Introduction

Numerous studies have stated it is hard to compare waste management practice globally due to varying definitions of waste streams and different management strategies being adopted (Chalmin and Gaillochet, 2009, Eunomia, 2017, Greene and Tonjes, 2014, Greenfield and Woodard, 2016, Kaza et al., 2018, Exchange, 2017, Resource Recovery Forum and David Davies Associates, 2004, United Nations Environment Programme, 2010). As highlighted by the United Nations Environment Programme (2015) these distinctions become even more complex in Less Economically Developed Countries (LEDCs) due to waste streams being merged, and the paucity of reliable data. A key area where there is a lack of consistency is the management of Commercial and Industrial waste, hereafter referred to as C&I waste or business waste.

The C&I waste stream is complex with materials ranging from those similar in composition to household waste through to specialist chemicals and composite products. The waste is generated from single employee enterprises through to multinational businesses. As shown in Table 1 the definition of municipal waste varies throughout the world with nations including C&I waste partially or fully within the definition of municipal waste, whereas in other countries it is categorised separately. There is also variation in how C&I is managed – in some countries it is fully or partially managed with household waste, whereas in others it is collected and managed separately. Variables for the inclusion of C&I waste within municipal waste include the size of the business generating the waste and the composition of the waste.

Based on Organisation for Economic Co-operation and Development data, 24% of waste generated by member nations is household waste or municipal waste (and therefore would contain some C&I waste) compared to 33% C&I waste (United Nations Environment Programme, 2015). Research from Frost & Sullivan (2011) estimated that the value of the European C&I waste market was US$75 billion in 2010 and would grow by more than 1% per year to 2017 due to increasing waste levels and investment in new services. More recent research suggests that the global commercial waste market stood at US$141 billion in 2018 with a compound annual growth rate of 6.7% (Adroit Market Research, 2020). Despite the importance of C&I in terms of waste levels and market size, global waste policy has generally overlooked C&I waste focusing on municipal and household waste. At European Union (EU) level the Landfill Directive 1999 (EU Directive 1999/31/EC) and Waste Framework Directive 2008 (EU Directive 2008/98/EC) set targets for municipal waste and household waste respectively with no corresponding targets specifically for C&I waste. The European Federation of Waste Management and Environmental Services (2017) have lobbied for more inclusion of C&I waste in future European waste policy thereby improving resource efficiency and filling the policy gap. In June 2018 new incremental targets were published in the amended Waste Framework Directive for preparing for re-use and recycle municipal waste up to 65% by 2035 (EU Directive, 2018/851). As per the EU definition of municipal waste (see Table 1) the targets integrate C&I waste if it is similar in composition to waste from households. Given the complexities of the definition and inconsistencies in data across member states there remain uncertainties how these levels will be equated, and progress measured - significant quantities of C&I waste will still be excluded. The 2018 amendments to the Waste Framework Directive (EU Directive, 2018/851) also state that the European Commission shall consider setting targets for preparing for re-use and recycling for commercial and non-hazardous industrial waste by 31st December 2024 – but for the foreseeable future there are no targets. Within English waste policy there are no holistic targets at all for C&I waste (Department for Environment, Food and Rural Affairs, 2018). UK environmental trade associations have argued for closer integration of waste streams helping to develop more economic and resource efficient management systems (Environmental Service Association, 2016). Ricardo Energy & Environment (2016) suggest that the lack of reliable data on the quantity, composition and management of C&I waste both in the EU and UK may be a reason why specific recycling targets have not been introduced.

The full definition of C&I waste in England is set out in section 75 of the Environmental Protection Act 1990 (see Table 2) - it is all waste generated by industry and commerce. In England local authorities are responsible for managing household waste and they have a mandatory requirement to submit data to central government on how this waste is managed. No such system exists for C&I waste resulting in uncertainties on the levels of waste generated and pathways. For example, the government estimated that in 2012 38.9 million tonnes of C&I waste was generated (Department for Environment, Food and Rural Affairs and Government Statistical Service, 2017) but this estimate was “revised substantially” by the government with 2014 data suggesting waste levels had reduced to 19.8 million tonnes – a 65% reduction (Department for Environment, Food and Rural Affairs, 2017). This significant change was due to adjustments in the methodology adopted by the government rather than actual changes in the quantities of waste generated. A further complication is that historically in England, unlike some other EU member states, elements of the C&I stream have not been included in the definition of municipal waste – to address this the government has a reconciliation project which attempts to develop more reliable data on the waste stream (see Department for Environment et al., 2018). The latest government estimate is that 37.9 million tonnes of C&I was waste generated in 2017 far exceeding the 22.4 million tonnes produced from households (Department for Environment, 2020). There continues to be a debate surrounding our understanding of the waste stream and improving the quality of C&I data has been identified a priority by the government (Department for Environment, Food and Rural Affairs, 2018).

The most recent detailed data showing the breakdown of C&I waste by business source in England was based on 2009 arisings. It was estimated 30.7 million tonnes was generated by Small and Medium Enterprises (hereafter referred to as SMEs) 64.4% of the total C&I waste produced (Jacobs, 2011). SMEs are defined by the European Commission (2005) as businesses with less than 250 employees or have a turnover of less than €50 million. Globally SMEs represent 90% of businesses and more than 50% of employment (World Bank, 2020). Across the Organisation for Economic Co-operation and Development (OECD) (2019) almost one person out of three is employed in a micro firm with less than 10 employees and two out of three in an SME. In most OECD countries SMEs also contribute more than 50% of GDP (International Labour Organization, 2020). As such SMEs have a significant impact on resource flows and have an important role to play in the successful implementation of the Circular Economy.

In England individual businesses choose how their waste is collected but they have a legal obligation to ensure that the waste they generate is managed responsibly. The Environmental Protection Act 1990 places a Duty of Care on all businesses to ensure that any controlled waste they generate is handled safely and within the law (Great Britain, 1990). Businesses typically enter contracts with public or private service providers for the collection of waste and recycling – however as highlighted by Woodard (2020) many SMEs still illegally dispose of their waste through household waste services which is prohibited under Duty of Care. In addition, there is a range of legislation that stipulates businesses should separate recyclable materials for collection. Under the EU Landfill Directive, which was transposed in England through The Landfill (England and Wales) Regulations 2002, waste should be treated before going to landfill. The Directive defines treatment as “physical, thermal, chemical or biological processes including sorting that changes the characteristics of the waste in order to reduce its volume or hazardous nature, facilitate its handling or enhance recovery” (EU Directive 1999/31/EC) therefore the separation of dry recyclable materials or biowaste for collection would be counted as treatment. Under amendments to the Waste (England and Wales) Regulations 2011, businesses that generate waste are required to apply all possible measures to implement the waste hierarchy which would include separating recyclable materials for collection. There is a requirement for businesses to include a declaration that the waste hierarchy has been adhered to on Waste Transfer Notes which are issued when waste is collected. Amendments to the EU Waste Framework Directive adopted in 2008 also mean that waste collectors must separately collect paper, plastic, metal, and glass (EU Directive 2008/98/EC). This is transposed in England through the Waste (England and Wales) Regulations 2011 which stipulate that an establishment that collects waste must collect paper, metal, plastic, and glass separately from the 1st of January 2015 if technically, environmentally and economically practicable (TEEP). For clarity, comingled recycling which is then separated at a Materials Recycling Facility is classified as a form of separate collection. Public and private waste service providers must judge for themselves whether separate waste streams are required against TEEP, and revisit this regularly (HM Government, 2011). Proof and evidence of the analysis must be stored to present to the Environment Agency, the regulatory body, if requested (Gov.uk, 2014). The interesting point here is that the regulations place responsibility on the collector of the waste rather than the producer.

Despite these requirements there has been little to no enforcement of these regulations and research has shown that many businesses, particularly SMEs still do not have separate collections of recyclable materials and there is discrepancy between large and small SMEs. GHK (2010) showed that 67% of SMEs separated out dry recyclable materials for collection but the propensity to recycle increased with business size; 44% of sole traders did not recycle compared to 6% of SMEs with over 100 employees. The Federation of Small Businesses (2011) has lobbied government to improve the waste services for SMEs arguing this would improve compliance levels with Duty of Care. In the 2011 Review of Waste Policy in England the government stated that they would be taking steps to improve waste and recycling services to businesses especially SMEs (Department for Environment, Food and Rural Affairs, 2011a). A range of actions were implemented including good practice commitments that public and private sector service providers could sign up to (Department for Environment, Food and Rural Affairs, 2011b), guides to improve services (Waste Resources Action Programme, 2016, Waste Resources Action Programme, 2012, Waste Resources Action Programme, 2013a), service providers charging less for the collection of recycling than residual waste (Waste Resources Action Programme, 2013b) and the use of Business Improvement Districts1 (BIDs) to incentivise businesses to use the same contractor to collect recycling and waste therefore improving efficiencies (Roberts, 2012).

Despite these actions the government estimate that recycling rates in businesses generating municipal waste remain at only 35% (Department for Environment, Food and Rural Affairs, 2019a) and there continues to be non-compliance with Duty of Care with 46% of businesses not knowing what happens to their waste once it has been collected (Waste and Place, 2017). In evidence submitted to the House of Commons Environment Select Committee (2014) the Chartered Institution of Waste Management (CIWM) highlighted the total withdrawal from policy and intervention on C&I waste by government. In the government’s most recent waste strategy ‘Our Waste, Our Resources’ (Department for Environment, Food and Rural Affairs, 2018) the government once again acknowledged that more needed to be done to support businesses to recycle. In July 2019 the government published the results of consultation on proposals to increase the separation of recycling in businesses – though it is important to note that the consultation focused on waste from businesses which is similar in nature and composition to household waste – and as such does not include all businesses. 95% of respondents to the consultation agreed that businesses should be legally required to separate out dry recyclable materials for collection – with similar support for the requirement for businesses to separate food waste. Of a series of options set out in the consultation the preferred collection option based on responses was businesses being required to separate out mixed dry recyclable materials (paper, card, plastic bottles, metals), and glass and food waste for collection. The majority of respondents stated there should be no exemptions – it should be fully mandatory for all businesses (Department for Environment, Food and Rural Affairs, 2019b). The government subsequently announced they would to amend legislation so that businesses must make arrangements to separate recyclable waste from residual waste, and the government would consider other interventions to support small and micro businesses (Department for Environment, Food and Rural Affairs, 2019c, Department for Environment, 2019). However, it is unclear when the legislation will be revised or how it will be enforced, and what other interventions they will make.

Whilst there have been considerable peer reviewed papers on the household waste stream there remains limited research to understand SME waste including the composition of the waste, and current management behaviour. Similarly, there is limited research looking at the policy instruments and mechanisms that have been adopted globally to support the separation of recyclable materials within SMEs. If England is to adopt the principles of the Circular Economy and support the development of circular cities, a basic building block will be ensuring that dry recyclable materials and biowaste are being collected from businesses. At present there is clear leakage of resources from the C&I waste stream from businesses not separating materials and there is currently a lack of legislation, policy and vision to address this problem.

This paper assesses the impact that approaches requiring businesses to separate recyclable materials for collection from other jurisdictions, and current government proposals requiring businesses to recycle, could have on resource flows for SMEs in England. The aims were to (i) Evaluate the legal approaches towards managing C&I waste in a sample of global cities with a focus on the requirement for businesses to mandatory separate dry recyclable materials and biowaste for collection (ii) Undertake residual waste composition analysis for a sample of SMEs to understand the waste levels and composition from these businesses and to evaluate current resource leakage of recycling and biowaste from the lack of source separation; (iii) Apply scenarios based on the identified approaches from evaluated cities and the government proposals, to assess the impact on resource flows; (iv) Make recommendations for the improvement of recycling services for SMEs in England.

The research was conducted in two stages. Stage 1 evaluated the approach towards managing C&I waste in 42 global cities. The European Commission commissioned BiPRO & CRI (2015) to understand how waste source separation schemes operate in European capital cities including the provision of C&I waste. To avoid duplication this study focused on 42 cities in Australia, Canada, New Zealand and USA. In stage 2 residual waste was collected from 62 SMEs for analysis to understand the composition and levels of waste being generated. Scenarios developed based on the identified approaches on separate collection from stage 1, plus existing government proposals, were then applied to the 62 SMEs to evaluate the impact on their requirement to recycle or segregate biowaste on resource flows. The methodology applied is presented in Section 2, results and discussion of the approaches taken in 42 cities in Section 3, results and discussion of the waste composition and modelling in Section 4, and overall discussion and recommendations in Section 5.

Section snippets

Stage 1 – Evaluation of international policies on SME recycling

The evaluation consisted of collating and appraising legislation, policy documents and online resources from the 30 most populous cities in the USA (covering 21 states), and the 4 most populous cities in Australia, Canada, and New Zealand making 42 cities in total. Studies have already looked at approaches in other European cities and therefore the geographical scope was widened. Moreover, some innovative approaches towards waste have been developed in these territories, for example bans on

Results

In 27 of the 42 cities there was no mandatory requirement for businesses to separate out dry recyclable materials or biowaste for collection. Conversely it was mandatory for businesses to have a separate collection of dry recyclable materials in 15 cities and for biowaste to be separated in 12. There was variation in the scope of legislation ranging from all businesses being required to separate dry recyclable materials and biowaste through to conditions and exemptions. The source separation of

Results

Fig. 3 presents a breakdown of the overall composition of C&I waste sampled. In total 2.8 tonnes of waste were generated from the 62 businesses sampled over the week of analysis. The waste stream was heterogenous with food waste (18.2%) and cardboard (16.6%) being the prominent materials (see Fig. 3). Due to the range of materials identified for brevity they were grouped into primary classifications based upon their composition. Most of these classifications (Primary Classification A-F) were

Discussion and recommendations

The research highlights the patchwork of legislation in place globally regarding the management of C&I waste. The evaluation of approaches towards mandatory separation of recycling in businesses presents more questions than answers. Whilst some cities such as San Francisco have pioneering and well-established systems, for 64% of cities evaluated there was no mandatory requirement for businesses to segregate dry recyclable materials and biowaste for separate collection. Similarly, to England,

Conclusion

In their 2015 Circular Economy report the Ellen MacArthur Foundation (2015) pose the question ‘what should an ideal European recycling system look like?’. This study highlights that current system in England for SMEs is certainly far from ‘ideal’. 53.5% of the residual waste sampled from SMEs was dry recyclable material or biowaste and 61% of businesses did not separate dry recyclable materials or biowaste for collection. Whilst legislation stipulates SMEs should be reducing, reusing and

Declaration of Competing Interest

The authors declare that they have no known competing financial interests or personal relationships that could have appeared to influence the work reported in this paper.

Acknowledgements

The author would like to acknowledge the support of Brighton & Hove City Council in undertaking this research and the researchers who assisted in data collection. Aspects of this work were funded through the Santander Business & Collaboration Fund and Pathway to Zero Waste.

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