Unrevised transcript of evidence taken before

The Select Committee on Science and Technology

Inquiry on

WASTE OPPORTUNITIES: STIMULATING A BIOECONOMY

Evidence Session No. 11 Heard in Public Questions 143 - 158

TUESDAY 14 JANUARY 2014

10.45 am

Witnesses: Rt Hon Michael Fallon MP, Dan Rogerson MP and Rt Hon Gregory Barker MP

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Members present

Lord Krebs (Chairman) Lord Dixon-Smith Baroness Hilton of Eggardon Baroness Manningham-Buller Lord O’Neill of Clackmannan Baroness Perry of Southwark Lord Peston Lord Rees of Ludlow Earl of Selborne Baroness Sharp of Guildford Lord Willis of Knaresborough Lord Winston ________________

Examination of Witnesses

Rt Hon Michael Fallon MP, Minister of State for Business and Enterprise, Department for

Business, Innovation and Skills (BIS) and Minister of State for Energy, Department of Energy

and Climate Change (DECC), Dan Rogerson MP, Parliamentary Under-Secretary of State

for water, forestry, rural affairs and resource management, Department for Environment,

Food and Rural Affairs (Defra), and Rt Hon Gregory Barker MP, Minister of State for

Climate Change, Department of Energy and Climate Change (DECC).

Q143 The Chairman: I welcome two of our three witnesses. The Minister of State for

Climate Change is still on his way, but I would like to welcome the Minister of State for

Business and Energy and the Parliamentary Under-Secretary of State for water, forestry,

rural affairs, and resource management from Defra. As you know, this is an inquiry, which is

now reaching its final stage, into how the country handles biological waste and whether

there is an economic potential in biowaste. We are going to ask a number of questions

related to that topic but, first of all, if you would not mind, I would like to invite you to

introduce yourselves for the record.

Michael Fallon: Thank you, Lord Chairman. I am Michael Fallon. I am Minister of State of

the department of business and enterprise.

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Dan Rogerson: I am Dan Rogerson, Parliamentary Under-Secretary of State at Defra, and

resource management is one of the areas that I look at.

The Chairman: Thank you very much. Perhaps I could kick off with a rather general

opener. We have heard a number of pieces of evidence from witnesses about the economic

potential of biological waste, turning waste resources particularly into high-value products. I

wondered whether you, as Government Ministers, feel that there is a potential for

sustainable economic growth in this area and whether the Government needs to do more to

stimulate a waste-based economy. Who would like to kick off on that one?

Michael Fallon: Perhaps I could start and invite my colleague to add. The broad answer to

the first part of the question is: yes, we think there is potential here to generate high-value

products and there are economic benefits to be obtained from doing so and from using

waste resources. One of the advantages of our industrial strategy and the partnership that

we have with a number of key industrial sectors is that it does allow us to promote and

assist sustainable growth in that particular way. I think you had some evidence from one of

my officials, Janice Munday, on the construction industry and how that drives change in

waste management.

Perhaps an even stronger example is the work we do with the chemicals industry through

the chemical growth partnership that I co-chair with Neil Carson from Johnson Matthey. We

are looking very specifically at the potential for waste resources to power green

developments and a lot of effort is being put into targeting chemical and chemical-using

businesses that do have the potential to adopt new processes to harness waste feedstocks

for the future. I can elaborate in more detail on that, but there are a number of British

businesses now in this particular field and I think it is our job through these partnerships to

assist them and ensure that they have the right support to get from the more academic and

research-based stage through to commercialisation.

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The Chairman: Before handing over to Dan Rogerson, perhaps I could just ask: does your

Department have some sense of the potential scale of this industry? Looking at it in the

round, are we talking about hundreds of millions, billions or tens of billions? What is the

scale?

Michael Fallon: I am not sure we have mapped it in that particular way, so I am not sure I

can answer whether it is tens of millions or hundreds of millions. It is something we are

pursuing, as I have said, industry by industry. If we can put a more accurate figure on it I

would be very happy, if I may, to write to you.

The Chairman: That would be helpful to us if your Department could. I would like to

firstly interrupt to invite our third witness to introduce himself for the record.

Gregory Barker: Could I apologise first? I am very sorry. I was detained at the Department

just as I was coming out, but sincere apologies for being a couple of minutes late. I am Greg

Barker. I am the Minister of State at the Department of Energy and Climate Change.

Q144 The Chairman: Thank you very much. We are talking about the economic benefits

of waste and the scale and what policies the Government might need to implement to help

to achieve the economic benefits. I would like to turn to Dan Rogerson now to comment on

that.

Dan Rogerson: Thank you, Lord Chairman. From the perspective of making sure that we

get the best value out of resources that are there in the supply chain, we are obviously very

clear that the waste hierarchy sets out the overall framework for Government waste policy.

It is both a legal requirement and a guide to managing resources sustainably. Sustainable

resource management is crucial. I have been involved as a Backbench Member in the past

and seen how we have moved from talking about waste to talking about resources and

obviously Government policy reflects that, too.

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Our aim is very much to drive waste as far up the hierarchy as we can so it is treated at the

optimal level in environmental and economic terms. It is not just about how we manage

resources once they become a waste, but it is also about preventing resources from

becoming waste and there are a number of ways in which we do that at different points

during the supply chain. Where it is created, we want to see it valued as a resource and

reused or recycled or have energy recovered from it as appropriate. In order for that to

happen we need to make sure that the feedstock is of the highest quality and that is

something on which we have done considerable work. Of course, the right infrastructure

needs to be in place and investors need to have confidence in the sector as well.

We think the Government has a role in tackling barriers and in setting the conditions that

allow the market, businesses, local authorities and individuals to make the changes or move

us towards an economy in which waste is valued as a resource. While Government has a

role to play, however, a lot of the actions are for business and for others to take forward.

We want to see businesses seizing the opportunities to deliver growth while improving the

environment. We need to be sure that we are intervening where there is a need to do

something that only Government can do to ensure that others who are able to make the

best decisions about investment and about taking things forward do not have barriers in the

way. That is the approach that we would take, I think, across Government but certainly from

my Department’s point of view.

The Chairman: Could I just ask one particular point to follow up what you have said? You

talked about the waste hierarchy and the top of the hierarchy, as I understand it, is to

reduce waste. Ideally we would produce less of it.

Dan Rogerson: Yes.

The Chairman: If we were very successful at that, would that undermine the potential of a

waste-based bioeconomy because we would be having less material to put into the

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bioeconomy? How does your Department see the balance between encouraging a waste-

based industry and getting rid of waste altogether by cutting down on packaging and so on?

Dan Rogerson: In many ways it would be a nice problem to have if we had no waste coming

out that would go into it. I think we are a long way from that but, as I say, we are very clear

that that is what is in operation and that is the message that we send out. Obviously there

are different points in the supply chain—whether it is where things are produced or where

they are processed, at the retail stage and at the consumer stage—where waste arisings

come forward and there are opportunities for that to be captured and treated as a resource.

We can do things through the Environment Agency or through Government policy directly

to make sure we facilitate that and make it as easy as possible, but I think we are some way

away from driving out waste entirely and, therefore, seeing a collapse in this particular

industry in which the Committee is interested.

Q145 The Chairman: Perhaps as a final point before I hand on to others, I wondered to

what extent in your respective Departments—and if the Minister of State from DECC

would also like to come in on this—you look at what happens in other countries with

biological waste and how it is used and whether there are lessons that this country could

learn from other countries.

Gregory Barker: We are certainly aware that other countries, particularly in Europe, have a

longer record than we have. In the design of our energy-from-waste strategy I understand

that was looked at in some detail, but we do not have a regular ongoing comparison with

Europe. It is something that would be ad hoc. We do not have a metric to do that.

The Chairman: We have heard and I am sure you are aware, for example, that there are

some countries in Europe that put virtually no waste into landfill. They make use of it in

other ways and we are quite a long way behind those other countries.

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Gregory Barker: Historically, there is a much higher incidence of incineration in Europe.

That is true. For example, I visited the energy-from-waste plant in Amsterdam, which is a

very significant one, but that has been the case historically. I think there is a sort of

watershed around the turn of the century. If you look at incineration going back to the

1990s, certainly in the 1980s and beforehand, it was quite a dirty business. It raised a number

of concerns and often the energy derived from that waste process was very secondary or

even tertiary to the actual disposal of waste through burning.

However, following the EU directives, it cleaned up incinerators at the end of the 1990s and

the beginning of the last decade. Across Europe we saw a sea change, I think, in terms of

standards in terms of emissions coming from flue pipes, and a number of the concerns that

had historically been raised by communities in the UK about hosting incinerators have been

mitigated. There is still a very significant community resistance to many energy-from-waste

projects and I think that, in large part, rests on the history of energy-from-waste projects or

from incinerators.

Sometimes the fact that you have so much historic information circulating on the internet,

which often is quite old and certainly does not reflect the current state-of-the-art energy-

from-waste processes, tends to fan those concerns. We are very clear that there is a much

greater role that we can do and, certainly by comparison with Europe, that means playing

catch-up.

The Chairman: Would other Ministers wish to comment on lessons from other countries?

Dan Rogerson: There are slightly different circumstances. I suppose the fact that the feed-in

tariff was in operation longer in other countries has led to more anaerobic digestion in

countries such as Germany. There is a lot more crop-based energy as well. I think we would

aspire to see the opportunities from waste with regard to anaerobic digestion and that is

where we have offered that support. There are always lessons we can learn from other

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countries and look at them but, if it comes to municipal waste and local authority structure,

there are lots of differences that do not necessarily apply directly: what is collected and what

is not and all the rest of it.

The Chairman: Michael Fallon, is there anything to add?

Michael Fallon: Nothing.

Q146 Lord Willis of Knaresborough: This is to all our Ministers but perhaps we could

start with you, Dan Rogerson. You talked quite passionately about waste being a valuable

resource and, indeed, Michael Fallon did exactly the same. Can you think of another industry

or another walk of life where we burn or dump in a hole 45% of it and call it a valuable

resource? I find it incongruous that those two things go together. Every year we export

more waste, we dump more and we incinerate more than all our European competitors.

What is going on?

Dan Rogerson: When it comes to recovering energy from waste, I suppose the thing to

look at is that we are recovering energy from feedstocks that have not served any other

purpose. They go direct, whether it is gas or coal or even biomass that has not served

another purpose. In terms of the fact that it has served another purpose and then we are

recovering energy from it, it is being done. I accept what you are saying: that it is important

we have the message with the hierarchy that we offer opportunities and, as Government, we

put in place the structure that allows industry to take advantage of materials that are there.

With progress on things such as the materials recovery facility guidelines that we have

worked on with both the recycling industry and local authorities, and also the waste

collection industry, we are seeking to ensure that whatever comes out of the end of these

processes is in a far more usable state.

Lord Willis of Knaresborough: One of the things that concerns me throughout this

inquiry is that key to getting value out of waste is, in fact, to have it separated at collection

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so that there is not a costly process of disaggregating it in a facility to then be able to use it.

Yet it does not seem that the Government has a policy as to what should be separated, as

happens in Scotland or Wales. Why have we not done that, or have we and have I just

missed it? I do not mind who answers.

Dan Rogerson: I suppose I should answer on that. We have a colleague from the

Department for Communities and Local Government, which has taken a keen interest in

these discussions, and we are absolutely clear that it is a matter for local authorities as to

what is appropriate in terms of collection in their areas. Given the local circumstances they

know best and with the localism agenda of Government that is the key thing, but we want to

ensure, as I say, that materials that come through are in the best condition to be used so

that we avoid things to waste. Further back from that process we can look at materials, and

household waste is a relatively small fraction of the overall picture, as I am sure you would

agree, Lord Willis.

Lord Willis of Knaresborough: Yes, I understand that.

Dan Rogerson: Michael Fallon has already referred to commercial and industrial waste as

being significant. There are things that we can do around waste protocols to ensure that, if it

is a resource, we can prevent it being classified as a waste so that it can then go on into the

next process rather than having to go through a second set of handling and so on before it

can be used in that way. I think there are a number of things we can do to encourage that

supply chain working much better and that is what the Government seeks to do.

Q147 Lord Willis of Knaresborough: Are you happy just letting local authorities or the

industry decide how stuff is collected without having a policy to direct that—I do not mean

how it is collected, but how it is separated—so we give industry the very best opportunity

to get maximum benefit out of it? Does that not make sense?

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Michael Fallon: I think it does make a certain amount of sense and Government has to

examine where it can help best. We do encourage innovation at the centre of that process.

The Green Investment Bank has been sponsoring a number of leading-edge projects in the

handling and separation of waste, as you have described it. It has a big investment in

Wakefield in Yorkshire helping to deal with all Wakefield Council’s waste, for example, to

increase the recycling rate and to divert solid waste away from landfill. There are other

anaerobic digestion projects that Government has helped to sponsor and where we have

helped to encourage innovation. I think that is probably the best role for Government.

Lord Willis of Knaresborough: Wakefield cannot take Leeds’s waste because it collects

it in a different way and, therefore, it is not segregated in a way that makes that capital

investment worthwhile. I am trying to get from you: is there a need for Government to look

at its directions to local authorities to say, “These are the broad categories in which you

collect in order that industry can take maximum benefit and UK plc can get maximum

benefit”?

Michael Fallon: That is something that may well happen, but I think what we first have to

do is help the market commercialise some of these processes. There is a role there for

Government both on the research side and through the various funding mechanisms to

which we have added the Green Investment Bank. We now have the ability to assist, very

directly on the ground, those local authorities that want to deal with their waste in a

greener way.

Q148 Lord Willis of Knaresborough: If we take food waste, Scotland will have 95%

collected already. Its local authorities are collecting it. Its commercial premises are collecting

it. Wales will have 100% by 2015. England is nowhere near that because we do not have a

policy. Should we? Help me out here, Gregory. Let us have a policy somewhere. We seem

to just let things run.

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Gregory Barker: If you look at the relative size of England and Scotland and Wales, that is

partly the answer. When you say “the collection policy”, are you talking about domestic

waste or are you talking about commercial waste?

Lord Willis of Knaresborough: All waste, both domestic with local authorities and

commercial with companies that—

Gregory Barker: Are you talking about the point at which it is put into the bin? Are you

talking about different types of recycling schemes at the point of the consumer or are you

talking about the way in which it is then separated once it gets into the truck or into the

station?

Lord Willis of Knaresborough: I think we have all agreed that this is a valuable resource.

In order for it to be maximised, if it can be collected in an homogenous way in terms of its

waste elements then it is going to be better.

Gregory Barker: With DECC policy we certainly take the point. That is why we encourage

source-separated waste through AD incentives in both the RHI and feed-in tariff, but I am

also aware anecdotally that there are sometimes problems with separating at the point of

the consumer, particularly where domestic waste is, because it is not a very secure process.

People mix up recyclates in different bags and so you cannot always trust the recyclates.

There then still has to be a further screening process when you get to the sorting station in

order to make sure that the appropriate recyclates go to the appropriate point. You cannot

just rely on people always getting it 100% right. I believe there are some local authorities

that have different systems and it is almost more efficient for them to do that.

Lord Willis of Knaresborough: That is my point.

Gregory Barker: The broad point is well taken, but I think we just have to be careful about

stifling innovation and calling systems at the centre. We want to encourage the principle and,

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as I say, we do that through AD incentives in both the RHI and FITS, but there is not

necessarily a perfect system.

Q149 Baroness Hilton of Eggardon: Every single London borough has a different

system for dividing up waste, which is ridiculous. It means that nobody knows exactly what

to put in which bin and everyone has a different bin and different arrangements of plastic and

metal and so on.

Gregory Barker: That is not quite true because, by and large, people tend to live in one

borough.

Baroness Hilton of Eggardon: Well, I talk to my friends in neighbouring London

boroughs and they have totally different systems, which must make it impossible for industry

to decide how to collect the matter and make sensible investment. I do not understand why

you cannot have a system that tells local authorities how to divide up their waste. This does

not stifle innovation or other matters. It would just provide a unified system for the country

if everyone knew exactly what bits to put in which bin and they all had the same system.

Dan Rogerson: I am told 53% of local authorities in England do provide a food waste

collection, whether separately or mixed in with green waste. There has been progress on

that score.

Secondly, as I was saying in my previous answer to Lord Willis, this is a crucial area that we

want to see progress on and obviously we can help to spread best practice and show which

local authorities are doing well. Some local authorities do work together. We do find

clusters particularly now, given pressure on local government budgets. Where there are two

tiers you will find district authorities co-operating in a whole range of things. In my own area

in Cornwall, prior to it becoming a unitary, several of the district councils co-operated on

waste collection and so had a similar system.

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However, if we are looking at opportunities for industry to deal with what comes out of

waste from the supply chain, the waste is more consistent higher up the supply chain, from

processors and so on, because you are dealing with similar feedstock. Once you are dealing

with what comes out from the consumer’s bin or from the kitchen or whatever, then there

are a lot of different products all mixed up together even if food waste is collected

separately. While there are opportunities there, I do think there are opportunities higher up

that chain for managing those resources quite effectively and looking at what those

feedstocks are.

If you are mixing waste from food processing with slurry for anaerobic digestion or perhaps

some of the things higher up the waste hierarchy that you were talking about, I think more

consistent feedstocks would be useful. While it is an issue, I think there is a whole range of

points in the supply chain we need to look at.

Q150 Lord O'Neill of Clackmannan: One of the concerns that we have become aware

of is that there is a somewhat disaggregated approach from Government and each

Department is doing its own thing. When we had your officials here we got the impression it

was the first time they had been in the same room together. Could you give us any examples

of joined-up Government in this area? Is there a committee that all of you sit in to look at

matters relating to the exploitation of biowaste for chemical purposes? Is there work going

on, on an interdepartmental basis, even if it is just since the meeting on 17 December?

Certainly, prior to that, we got the indication that very little had been done across

Government in an integrated way. Maybe officials are not doing it. Are Ministers? Have the

three of you met to discuss it?

Michael Fallon: No, there is not an additional Cabinet committee or anything that co-

ordinates this particular area. We do come at it from rather different perspectives. We tend

to look at it much more from the industrial side, as you would expect, and from the

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research side. I do not think there is that kind of collective framework that you are seeking.

Maybe it is something that you are likely to recommend.

Lord O'Neill of Clackmannan: Who knows?

The Chairman: Dan Rogerson, did you want to add anything?

Dan Rogerson: Officials do meet to discuss new strategies and initiatives that come

forward. An example of that would be the bioenergy strategy of 2012 where there was

collaboration from Defra and DECC, represented here, and the Department for Transport

as well.

In my own Department, the resource programme steering group includes representation

from a range of Departments, including BIS and DECC but also DCLG—we have talked

about some of the issues there with questions from Lord Willis and others—and also

representatives from the LGA, the Environment Agency and also the Waste Resource

Action Programme, WRAP. It involves people from across a number of agencies working in

the sector and some of those are specific to particular areas. On anaerobic digestion

strategy, there is clearly a role for DECC with regard to taking advantage of those

opportunities from an energy point of view. From my own Department, we are seeking to

make sure that we can push resources up the waste hierarchy.

There is co-ordination there across the Departments. As I am sure you will know, Lord

O’Neill, when any Department brings forward a proposal, it then goes to the other

Departments for comment and consultation, which can then trigger further meetings and

discussions. That process is going on all the time.

Q151 Baroness Sharp of Guildford: We talked about incineration, but the problem is

that incineration is low down the waste hierarchy rather than high up. Coming back to this

issue of domestic waste and collection, in many cases you have the differentiation between

the disposal authority and the collecting authority and the collecting authority has the

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incentive just to collect as much as possible to be recycled as distinct from separating it out.

For example, if you have shards of glass mixed up with plastic that has to go to incineration

rather than be separated out. If one wants to look at the value of waste, it is much more

valuable if it is separated out and, on the whole, many local authorities have moved away

from separating out the waste because, as I say, the collection authorities have the incentive

just to collect as much for recycling as they can.

Dan Rogerson: I think Baroness Sharp is right to point out that clearly materials that come

through any process or system in as uncontaminated a form as possible would be more

useful to another user, to a reprocessor or whatever.

Baroness Sharp of Guildford: When they are contaminated, they will just go to

incineration and many of the disposal authorities have long-term contacts with incineration

and have some incentive to try to maximise the amount they can get into incineration.

Dan Rogerson: Yes. As I say, we can demonstrate through work with the Local

Government Association examples of where authorities do this effectively in the contracts

they have with the companies that provide it. There is a real opportunity for those that do

carry out a joint collection that we improve what comes out from materials recovery

facilities. That is what we are going for in the guidance that we have worked in the last year

on that area. That should be published this year and we should start to see some progress

there. It is ultimately a matter for local authorities to decide what is best for them in terms

of how their community wants to see things happen.

Baroness Sharp of Guildford: They can maximise their returns by maximising the

amount of recycling but having it all mixed.

Dan Rogerson: As we see increasingly see a market for these materials growing and the

demand for them growing—this is manufacturing and I am sure others will be able to talk

more about growing—and as, therefore, the value of them goes up, that in itself provides an

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incentive all the way through the chain for it to be dealt with. There are areas where, with

the code of practice with guidance, Government can help bring the different parts of the

sector together. On the other hand, the developing market should help that process as well

and create demand for these resources. As a Government, we are not proposing to instruct

local authorities on a single system across the whole of England. That is not the direction we

want.

Q152 Baroness Perry of Southwark: Just picking up on what you said, that you feel

reluctant to tell local authorities what to do, supposing there were a real incentive to get

local authorities to do things in a more helpful way for the bio industry, who would take the

lead on that? Which of your Departments should be taking the lead? Obviously you have a

Department that talks directly to local authorities all the time in DCLG. You have a

Department in Defra that is very concerned with promoting this kind of industry. The BIS

Department has interest in building up British business and so on. Who would take a lead in

dealing with local authorities; not necessarily giving directives, but sitting around the table

with them and with the industry and saying, “Look, there is a big opportunity here”?

Dan Rogerson: It is probably falling to me again, which answers your question in a sense.

We already take opportunities to hold round tables with local authorities. Obviously we are

very much in touch with the Local Government Association about making progress on all

these issues. You may be aware, Lord Chairman and Members of the Committee, that my

colleague Lord de Mauley wrote to local authorities on the question of separate collection

and, I think, concluded local authorities should take legal advice to ensure that they are

operating within the directives that we all operate in from the European Union to make sure

that we are fulfilling our responsibilities. We have not gone further than that.

I think it is fair to say that some local authorities would take a different view, but our advice

to them is that they must take legal advice if they think they can operate in a different way.

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We do take some leadership there about that interaction with local authorities although, as

Mr Fallon has said, when it comes to the opportunities for new processes and new sectors

of the economy taking off, clearly that would be a BIS lead.

The Chairman: Would either of the other two Ministers wish to add to that?

Gregory Barker: I would just say on anaerobic digestion I work very closely with Defra. We

are not satisfied with the current level of AD deployment. This is a relatively new

opportunity, particularly at the farm-based level, and we are working closely with

stakeholders. Both the Minister and I co-hosted a round table for stakeholders. I am trying

to think. Was it—

Dan Rogerson: It was the week before Christmas, was it not?

Gregory Barker: It was the week before Christmas. That was for local authorities. We

engage regularly with both local authorities and the stakeholders on AD. So far as the energy

sector is concerned, I think there is very good cross-departmental working. I cannot pretend

that we have all the solutions or that there is not significant progress we would like to see,

but it is not for the lack of being joined up at a departmental level.

The Chairman: When you say that in your Department’s view the uptake of AD is not

sufficient, I believe the number of AD installations is in the order of 120 or 130 at the

moment. We heard that in Germany there are over 3,000 AD installations, but the problem

with that is there is not enough biowaste to feed them. In Germany a large amount of maize

is grown as a feedstock and that seems to have various disadvantages related to competition

for land with biofuels and food and so on. Do you have a sense of where you want to get to

in AD installations? Are you aiming to get to several thousand or several hundred or what?

Gregory Barker: AD is mentioned in the Coalition agreement, quite unusually. This is a

specific technology that we identified with real potential. Our AD strategy says that we have

an ambition of three to five terawatt hours by 2020 and we have additionally put in an AD

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strategy to address the non-financial barriers to AD. I am afraid I cannot, off the top of my

head, give you an extrapolation of what that translates to on a like-for-like with the German

figure you mentioned, but I am sure we have brilliant people that could do that.

The Chairman: If you could, that would be helpful, yes.

Gregory Barker: I think it is fair to say there have been teething problems. We have not

seen as much AD as we would like. We have been liaising closely with the farming sector

particularly. There are issues around whether or not the smaller scale farm-based AD is

taking off. I think we are more comfortable with the larger scale. In fact I met the largest

operator of AD large-scale plants just before Christmas and they are very happy with their

investment rollout. It is the smaller-scale plants that are proving a little slower to get off the

ground and that is where we are focusing some of our attention.

Q153 Earl of Selborne: The fact that the United Kingdom reliance on landfill is still high

compared to some other EU members is perhaps at least an opportunity to plan a long-term

strategy for that proportion of the waste stream. Presumably, as long-term contracts fall in

from local authorities and the waste industries so in the long-term other fractions of the

waste stream could be brought into this long-term strategy. In order to achieve such a long-

term strategy it has been put to us that you need mapping of material flows, whether these

materials are in solids, liquids or gases, and this is something we do not seem to have at a

national level. Is it something that the national Government needs to be proactive to

achieve?

Dan Rogerson: That is probably one for me to lead off on. We looked specifically at

information needs within the AD strategy that Mr Barker has referred to. We provided

three years’ funding of the NNFCC, the National Non-Food Crop Centre, to provide the

biogas portal—this is an example of the sort of work that we do—which provides a set of

sources of information on subjects such as feedstocks but also research and, indeed,

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regulation to reassure those who would like to get into the industry about what they would

need to satisfy. It also maps the existing anaerobic digestion facilities.

It recognised that the sector dealing with biowaste was relatively new—except in the water

industry where AD for treatment of sewerage sludge has been around for much longer—

and that there was a need for the Government to provide that sort of resource, but as the

sector has developed the industry trade bodies are increasingly taking on the responsibility

for generating and publicising the information. The NNFCC, the body to which I referred

earlier, is currently discussing with the industry the future funding of that biogas portal, while

recognising that much of the information on the portal will continue to come from

Government and WRAP, the Waste Resources Action Programme, in particular.

Looking beyond AD, we publish a great deal of information on biowaste sources and

technologies through WRAP, and NNFCC itself also publishes a wide variety of information

not just on bioenergy but also on other bio products. WRAP developed a food waste

resources portal as well, which has gathered together available information on food waste

and that was developed under the AD strategy primarily. The information is available to

anyone, as is other information we produce on waste resources.

Another key development that the Environment Agency is taking forward—and it is

something I have been quite interested in since my appointment in October—has been how

we can do more to make things easier for everyone across the supply chain to manage

resources, to avoid the creation of waste if we can and, where it does go into a process, to

make sure that we get it dealt with in the most efficient way possible. Major progress has

been made with the electronic duty of care system or EDOC, which will make things easier

for people who are transferring waste between organisations and companies and so on or

reprocessors, but it also means that, because it is done electronically, it is captured much

more readily in terms of information. That resource will then be available to us as

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Government to inform the decisions that we take and the strategies that we push forward,

but also available to industry as well so that they see where these feedstocks are and what

resources may be available to them.

Q154 Earl of Selborne: I am not entirely clear whether that answers my question as to

whether this will provide all the data that is needed for your colleagues in DECC and BIS.

We are looking for bio-refineries, chemicals, biofuels, bio-based plastics. Without some very

clear information as to where the waste streams are coming from it is going to be very

difficult to plan these bio-refineries, which have to be on a regional if not on a national scale.

I would like to hear whether the mapping that you describe coming from a number of

different sources does put sufficient weight on mass versus value. It is no good just having

streams. You have to identify where these new industries are going to come from and,

therefore, build on that. Do you feel you have the information for evidence-based policy-

making?

Dan Rogerson: I think we are making progress on that. As I said, we focused on anaerobic

digestion because that is something that has come along earlier and that is more readily

understood as technology. You are quite rightly referring to newer technologies emerging

and new processes. We have to look at what those sectors are demanding and what they

would find useful as they emerge, but I do think that the EDOC system is the best way of

doing it because we do have to look at Government resources with regard to all of this as

well.

If there are industries that are coming forward then obviously BIS and the Green Investment

Bank and so on can provide financial resources for them to get off the ground, but the

EDOC system should help to bring information together that they can have access to. It will

be a valuable resource as to where these things are and it will help them with their

investment decisions about where to go. The alternative would be for us as Government to

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invest very heavily in lots of people to go round seeking this information and I think we

would then be into a cost benefit analysis and whether that is Government’s place. I return

to the earlier point I was making, that Government should be there to overcome obstacles

but not necessarily to do all that work.

Earl of Selborne: I worry that there is an element of ad-hocery here. You are relying on

people in the position to feed in a certain amount of data, but unless it gives you an overall

strategy it is going to be flawed, is it not?

Dan Rogerson: As I say, the Waste Resource Action Programme does do work in this area

and we provide funding to WRAP to do work across a range of the waste and resource

management sector, but if we can put things in place that will allow industry to help us with

that then I think that is all to the good and that certainly is what the EDOC system is about.

The Chairman: Would either of the other two Ministers wish to comment on this point

about mass value mapping?

Gregory Barker: I would just say that DECC does not provide a map such as the Earl of

Selborne suggests, but within the electricity sector, through the mechanism of the

renewables obligation, we do require electricity generators to declare their biomass

feedstock and those figures are collected by Ofgem and published so that there will be a

clear analysis of the feedstock that goes into the electricity system and where that comes

from.

Q155 Lord Dixon-Smith: The waste industry generally is inevitably immensely diverse,

but I have a historic memory now from my time in Essex where we ran a major hazardous

waste establishment. It caused huge concern to everybody but, in the end, it became almost

an information exchange because the fact of its existence brought all sorts of very difficult

materials together from very diverse sources and it was increasingly realised that one

source’s waste was another source’s raw material.

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We are at that stage now with the waste industry, we have heard, even down to the point

where one manufacturer’s product is a potential source of materials he needs to be able to

continue in production and so on. However, there does not seem to be any overall co-

ordination bringing this diversity together so that there is a single point where the policy is

being directed and the resources are being focused in a sufficiently national way. The fact

that we have the three of you here today representing three separate Government

Departments illustrates this. It does seem to me that, although one would not wish to

interfere with the structures that are involved in this business, somewhere there needs to be

a major co-ordinating body that represents everything to fulfil the function that goes right

back to that hazardous waste dump that, in the end, became an information exchange. We

do not have that, as far as I can see.

Dan Rogerson: You are right, Lord Dixon-Smith, to point to the way in which what we

might call the waste sector is very diverse. Increasingly, it is not just a waste sector. It is a

reprocessing sector or a recycling sector and, indeed, it is from one industry to another, as

you are quite rightly saying. I think it would be quite difficult to set up some sort of

organisation that would be able to co-ordinate the vast range of materials and processes and

bring all those together.

It would be Government’s role to do that, but what we can do as new sectors emerge is

work with them. If we hear from them that there is a problem that we can help address,

whether it be through a new code of practice with other industries or whether we can help

bring them together in the sorts of things that my colleague Mr Barker was talking about

with the round table meetings and bringing industry together, that is very much a role for

Government. That is something that we can do. In terms of locating each tiny element of

each material and tracking it all the way through, I do not think Government would be

convinced that that is our place.

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Lord Dixon-Smith: If I could just come back, in fact you have illustrated my concern. I

accept entirely that it is inevitably a Government role. What I am not sure about is the

extent to which the three of your Departments, who clearly all have an interest, work

together and whether they have “a co-ordinating system” to make sure that all three of you

are pointing in the same direction at the same time.

Michael Fallon: You have referred yourself to the diversity of the industry. I think it was Mr

Barker who made the point about the need to encourage innovation across this industry and

the technologies and I think it is very hard for the Government itself to try and direct that.

If I may give you an example: last week I visited the European Bioenergy Research Institute at

Aston University where they are developing some very advanced techniques—Pyrofomers,

intermediate pyrolosis—for converting the whole of landfill into heat and power, which leads

us to the prospect in 15 or 20 years’ time of landfill mining in this country, recovering all

these landfill sites. That is not something that Government can direct. We put up some of

the funding through the research councils and there is European funding in there as well.

There is encouragement, obviously, through the university and there are two or three

commercial companies now beginning to get involved in that process, but I do not think it is

for Government to direct what the outcome of all that should be and what the various

technologies are that should be supported.

Lord Dixon-Smith: I have accepted that. What I have not come to understand is whether

the three Departments work together closely on this in a co-ordinated way or whether they

are tending to take individual departmental decisions about particular bits here and there

without that central focus.

Michael Fallon: You have heard how our officials cooperate on the various working groups.

If it is your conclusion from that that there should be some stronger ministerial

collaboration then that is obviously something we would think about.

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Q156 Lord Willis of Knaresborough: I wonder if I could just follow up Michael Fallon

on that. I totally agree that Government should not be directing technologies and, indeed, I

think the whole Committee would agree that that is the position. However, would you not,

as the Minister in BIS, accept that, in order to create the new technologies and for them to

flourish, there has to be a market potential and the market potential in terms of waste

depends on having good data on which to make investment decisions and so on?

What the Earl of Selborne is trying to get at in terms of this mass versus value is that, unless

you have the data on how much mass you have of particular waste streams, it is very difficult

for you as a Minister to put your resources, or TSB or whoever to put their resources,

behind emerging technologies and emerging industries. Would you not support the idea, in

terms of a mapping exercise, in terms of the amount of waste we have or the waste streams

we have? That is not a hugely complicated task.

Michael Fallon: I think we heard that there could be resource implications from collecting

that kind of data.

Lord Dixon-Smith: You ask the industry for it.

Michael Fallon: But I certainly concede the point. If we were able to better map the sector,

that would inform the work of the Technology Strategy Board and all our other funding

streams. Of course that is true.

Lord Dixon-Smith: But you ask the industry.

Michael Fallon: Perhaps my colleague can just comment again on the practical implications

of that kind of data collection.

Dan Rogerson: I accept that Lord Willis is not suggesting the extreme example I was saying

of someone from Government going out to every manufacturer and every processor in the

country and saying, “What have you got in the bin and what are you doing with it?”

Lord Willis of Knaresborough: That was never suggested.

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Dan Rogerson: What we can do through the money that we give to WRAP is to engage

with all the industry bodies about: what is a problem to them? What is that is a cost to them

to get rid of? What do they have on their books that could then be used elsewhere? WRAP

does work in this regard.

As I say, the industry bodies are key in this, the sector bodies, because it is in their interest

for their members to be able to turn what is a cost to them into either something that is

cost neutral or something that is a resource. That is where we see a lot of that information.

Government can do work through the Environment Agency on waste criteria and that is

where we can help. For example, when is a waste a waste and when is it not? If we can keep

it from being considered a waste, the handling of it and the treatment of it is much more

straightforward.

There is work undoubtedly we can do there, but when it comes to that management

information through the electronic systems that we are putting in place about handling—and

sometimes they are very small amounts of waste—once that is all on one database it

becomes much easier to aggregate. That is a useful tool for us and it will be a useful tool to

people in the sectors as well. While BIS takes the lead on driving biotechnology forward,

where you have a company that want to get going in an area they will probably site

themselves where they think there are feedstocks from others and there may be a role, for

example, for local enterprise partnerships in supporting that process as well and providing

little pots of money to help them with their research locally about what materials are

available.

An example might be the processes that are there for waste oil that will have been disposed

of for many years and a lot of which is now reprocessed, and companies have done that off

their own back. They have got in there and realised there is a resource out there that they

can collect, reprocess and resell. It probably has not taken a lot of support from

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Government to make that happen. If there are barriers and obstacles then, absolutely, all our

Departments should be part of dealing with them, but where industry can get on and do it

let us support that to do that themselves.

Michael Fallon: There are a number of Government partnerships, as I referred to right at

the beginning, that do foster this work. As well as co-chairing the Chemistry Growth

Partnership, I co-chair the Industrial Biotechnology Leadership Forum. That and the

Chemistry Growth Partnership have access through the chemistry innovation knowledge

transfer network, which helps drive this. As my colleague Mr Rogerson has said, where we

have proposals from local enterprise partnerships, again we are able to put money behind

those.

The city deal we concluded with Teesside, for example, just before Christmas includes

Government support for feasibility studies for a couple of industrial waste heat networks to

help prepare them for public or private sector investment and a plan to identify the next

steps in expanding the production of green hydrogen, for example, and other feedstocks for

low carbon production. Where we can get that information and see the commercial

opportunities, we have the forum in the department of business to be able to try and bring

the small innovative companies together with the various funding streams that we know

about.

Q157 Lord Rees of Ludlow: I would like to follow up on the question of incentives. We

heard from various witnesses how effective the landfill tax had been in reducing the amount

of stuff going to landfill, but we also heard a lot of criticism of various sector-focused

initiatives like renewable obligation, renewable heat incentive, renewable transport fuel

obligation and the feed-in tariff. It was plain that these were generating uncertainties and

distortions and also perhaps encouraging too much waste to go to energy use when it could

be used for higher-value products. I wonder if you would like to comment on that and also

26

on any other ways in which one could provide more stable incentives and also, in that

context, perhaps what your hopes would be of the Green Investment Bank.

The Chairman: Perhaps Greg Barker would like to kick off on that one.

Gregory Barker: Thank you very much. Certainly our primary focus at DECC is clearly to

deliver secure, affordable and low carbon energy and that is what our incentives are aligned

to do. The recently-completed Electricity Market Reform Act is expected to result in £110

billion of investment across a broad range of energy sectors. We aim to do this without

distorting other markets and, certainly for the segment that does use biomass, after energy

use there is still plenty of biomass waste left over.

To put that in perspective, I think every year the UK produces about 200 million tonnes of

waste and, of that, about 6 million tonnes is used in energy recovery. This is waste, ideally,

that no one wants because 20 million tonnes of waste still goes to landfill, which is, as we

have all made clear, unacceptable and undesirable. We even exported 1 million tonnes of

waste in 2012 for use as fuel overseas. That is not to say that we do not accept that there is

a potential here for distortions and we are very mindful of this.

DECC policy considers impacts on other markets by applying bioenergy strategy principles

and, of course, in the most commonsense way, the waste hierarchy. Our analysis concluded

that the price of woody biomass, which is the one that tends to be the most focused on and

argued about, is more influenced by global factors than by domestic supply and demand. That

was the conclusion of our bioenergy strategy in 2012. We think there is still more potential

domestically to divert a further 2 million tonnes of wood from landfill to energy recovery.

In terms of prices of refuse-derived fuel, they are more influenced by the export price and

the landfill tax. In terms of support levels to reduce over time, we would anticipate such

distortions coming down because it is the case across all of the DECC policy landscape that

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we aim to reduce subsidy and financial support mechanisms as soon as possible, wherever

possible.

Lord Rees of Ludlow: I wondered if BIS has any comments on this and on the Green

Investment Bank.

Michael Fallon: I think Mr Barker has described the incentives quite plainly. I do not wish to

get too hung up about it. Although it is incredibly diverse, the waste industry is still very

small in terms of the product. It is probably only 1% of the whole thing, so there is plenty of

potential for all different uses to be accommodated here. As the technologies become

proven and as they get scaled up then obviously we move closer to balancing the various

risks involved in the high-tech carbon derivative applications and I think there is enough

waste around for everybody to utilise who wants to utilise it.

Lord Rees of Ludlow: But industry need confidence to invest if they are going to enter

this market, do they not?

Michael Fallon: They do, but we have more general incentives and I think the confidence is

certainly out there. This is a very attractive country for people to come and invest, whether

it is in energy or in waste. Increasingly we are seeing flows of foreign investment into this

country because of the general investment climate, the tax credits we have for research and

development, the lower rates of corporation tax and the fact that the business climate here

may be more welcoming to their investment than it is in their home markets.

Dan Rogerson: Just in a good, circular economy way to finish up where I started, the

hierarchy is crucial to that. If we make it clear that we stick to the hierarchy, and our policy

is based on that, then that should ensure that the policy landscape fits in with it. I think all

Departments are committed to that, that we capture the energy we can from waste that is

genuinely residual waste that we cannot do anything else with. That is where we want to get

to and if there are other uses that we can exploit then we will explore them first. If we are

28

clear about that as the aspiration that is where we want to get to, then that should help

inform all the other policies and schemes that come from that.

Q158 The Chairman: I would like to thank our three witnesses this morning for their

very helpful responses to our questions. There were a couple of points that you agreed to

follow up in writing. Michael Fallon, I asked at the beginning about your Department’s

estimate of the potential size of the bio-economy, including energy production and also

these higher-value products that Lord Rees referred to in his question. Greg Barker, I think

you said you might be able to give us some more information on AD and where your

Department envisages the country going in terms of the number of AD installations.

Gregory Barker: Indeed.

The Chairman: If there are any other points you would like to follow up on, please feel

free to do so and, in the meantime, thank you again. You will receive a transcript of this

session for you to make minor editorial comments on if you so wish and, in due course, of

course, you will read the report that we produce and the recommendations associated with

it. Thank you very much.