The document discusses the Roadmap to a Resource Efficient Europe and what it may mean for secondary commodity markets in Europe. It provides context on resource efficiency in Europe, outlines the three main strands of the Roadmap which are transforming the economy, addressing natural capital, and tackling key sectors. It discusses some of the challenges and opportunities for delivering the Roadmap across Europe.

1. The Roadmap to a Resource Efficient Europe
what will this mean for the longer-term
development of the secondary commodity
market in Europe?
Dr. Adam Read – Director
Waste Management & Resource Efficiency, AEA
Secondary Commodity Markets Conference
13th November 2012
One Drummond Gate, Victoria, London

2. Presentation scope
+ Personal welcome
+ About AEA
+ The context of Resource Efficiency
+ Overview of the Roadmap to Resource Efficiency?
+ Is the Roadmap Deliverable?
+ Defra / BIS Resource Efficient UK
+ The EU as a Commodity Trading Block
+ Impacts for Recyclers
+ Unforeseen Consequences
+ In Summary …
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3. A personal welcome
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4. A personal welcome
+ Dr Adam Read
- Practice Director @ Ricardo- AEA for Waste Management & Resource
Efficiency
- 18 years of operational expertise
- 80 consultants (UK)
- Former Local Authority Recycling Officer (RB Kensington & Chelsea)
- Project Director for a number of EC product policy jobs
- Technical Advisor to Defra on their Resource Scarcity Action Plan
- Working with a number of waste companies on materials strategies
+ Acknowledgements
- AEA team (help with the research)
- My clients for allowing me to ‘share’ their experiences
- The organisers for the invite
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5. www.ricardo-aea.com
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6. Our Experience ….
+ Resource Efficiency studies
- Defra, WRAP, Envirowise, Private Sector companies
+ Product Policy studies
- Defra, Environment Agency, European Commission
+ Resource Risk studies
- Defra, ZWS, DfID
+ Private Sector Support
- Shanks, Connaught, Dairy UK, Veolia, Sita, Biffa, Hills
- RFU, Christies, Diageo etc.
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7. Working in this space…
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8. Context to the RE Roadmap
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9. The Context
+ There is only one world and one Europe!
+ Growth of European economy even in times of austerity
+ Increasing globalisation leading to increasing resource use
- Pressure on dwindling resources
+ European challenge = stimulating growth whilst leaving a
sustainable future for future generations
+ In the EU each person consumes
- 16 tonnes of materials annually of which 6 tonnes are wasted (37.5%)
- 3 tonnes of this going to landfill
+ Businesses are facing ever rising costs for raw materials as
resource availability comes under pressure
- a real driver for change!
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10. Looking forward …
+ Worldwide, demand for food, fibre and feed is predicted to
grow by 70% by 2050
+ Net imports of resources per person are at their highest in
Europe (global comparison) but expect significant increases
from rapidly developing economies (India, China, Brazil etc.)
+ Predicted to require two planets to sustain us by 2050 (1.3 at
current) = NOT SUSTAINABLE
+ World Business Council for Sustainable Development states
that ‘we require significant improvements in RE by 2020’
+ Therefore, RE is a fundamental part of the European agenda
for future global competitiveness… this is a business issue!
- Will create jobs
- Will help address the current global economic crisis locally … 10

11. Liz Goodwin just last week!
“In a recent survey 80% of UK based CEOs
of manufacturing companies said raw
material shortage was a risk to their
business.”
“A 147% surge in real commodity prices
since 2000, and the uncertainty being
caused by historically high levels of price
volatility are hampering investment and
economic growth”
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12. Europe 2020 Strategy
+ Adopted in 2010 as a growth strategy for
the EU to become a smart, sustainable and
inclusive economy within the next decade
+ One of the three reinforcing priorities = to
promote a resource efficient, greener and
more competitive economy
- to help decouple economic growth from
the use of resources, support the shift
towards a low carbon economy, increase
the use of renewable energy sources,
modernise our transport sector and
promote energy efficiency…. 12

13. The agenda has been bubbling …
“The robust international trade in illegally mined,
quota-busting rare-earth metals highlights China’s
near monopoly on the raw materials for
environmental technology – a 95% dominance of
world supply that is likely to become more widely
noticed as China tightens its grip”
The Times 28th May 2009
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14. What is Resource Efficiency?
+ Doing more with less!
+ Preventing waste, promoting
reuse and recycling,
developing markets for
valuable products
+ Generating the greatest
benefits with the smallest
quantity of natural resources
+ Producing and consuming
within both physical and
biological limits of the earth
+ Underpinned by LCA 14

15. Materials identified @ risk
+ Antimony
+ Cobalt
+ Indium
+ Lithium
+ Niobium
+ Platinum
+ Rare earth metals
+ Tin
+ Tungsten
- Taken from the DEFRA report ‘A Review of the Future Resource Risks Faced
by Business and an Assessment of Future Viability’ (AEA)
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16. Recycling rates globally ….
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17. China’s dominance …
+ China is a leading producer of:
- Rare earths (97%)
- Antimony (91%)
- Tungsten (81%)
- Magnesium (77%)
- Graphite (71%)
- Germanium (71%)
- Flourspar (59%)
- Indium (50%)
- Gallium (32%)
+ Other leading producers:
- Brazil – Niobium (92%), US – Berylium (86%)
- South Africa – Platinum (61%), Congo – Cobalt (40%)
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18. Forecast prices to 2020
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19. Forecasts to 2020
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20. Priority Materials in the EU
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21. European priorities ….
+ EC report (2011) highlighted 14 critical raw materials
- Antimony Beryllium
- Cobalt Fluorspar
- Gallium Germanium
- Graphite Indium Critical access is
- Magnesium Niobium
- Tantalum Tungsten
required!!
- Platinum Group Metals
- Rare earths
+ Raw materials are an essential part of both high-tech products
and every-day consumer products
+ Without these raw materials in sufficient supply, EU industry
may be forced to stop production….
+ We rely on the rest of the world for most of our supply 21

22. Roadmap to a Resource Efficient Europe
22

23. So what next?
+ Worldwide demand for these (and
other) raw materials increases ….
+ Need an increase in collection and
recycling of them
- reducing the pressure on
demand for raw materials
- reducing energy consumption
- reducing GHG emissions etc.
+ 'Urban mining‘ is one of the main
sources of metals and minerals for
European industry
- Need to build upon this….
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24. The RE Roadmap
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25. Roadmap to a RE Europe
+ Adopted in September 2011
+ Outlines the key challenges and opportunities for Europe up to
2050
+ Puts forwards issues which need addressing NOW
+ Sets the milestones (some in 2020) which illustrate what is
needed to put Europe on a path to resource efficiency and
sustainable growth
+ Provides a framework explaining how policies inter-relate and
build on each other
+ Outlines key inter-linkages between key sectors and resources
+ Indicates how Member States should strive to remove the
barriers that hold back resource efficiency 25

26. RE Roadmap – Three strands
+ Transforming the economy
+ Addressing natural capital
+ Tackling key sectors
+ Also highlights governance & monitoring
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27. Transforming the Economy
+ Step 1 - Sustainable consumption and production
+ Changing behaviours
- Driving RE and delivering cost savings
- Leading to demand for RE services
- Leading to demand for RE products
+ Can lead to a ‘rebound effect’
+ Milestone:
- By 2020, we should have the right incentives to choose the
most RE products and services through appropriate price
signals and clear environmental information.
- These purchasing choices should stimulate innovation
amongst producers to supply more RE products and services 27

28. Transforming the Economy
+ Step 2 - Boosting efficient production
+ Improve re-use – one man’s waste is another’s gold
+ Improvements in non-core business activities
+ Thinking beyond the short-term
+ Avoiding the use of certain components
and chemicals > REACH
+ Milestone:
- By 2020, market and policy incentives that reward business
investments in efficiency are in place. These incentives have
stimulated new innovations in resource efficient production
methods that are widely used… 28

29. Transforming the Economy
+ Step 3 – Turning waste into a resource
+ In the EU we throw away 2.7B tonnes of waste; 98M of
which is hazardous – only 48% of this is re-used or recycled!
Plastics
+ Improved waste management recycling
can create jobs – the ‘green economy’
BAA Waste Waste to MRF Beenham MRF Residual to EfW
+ Milestone:
- By 2020, waste is managed as a resource. Waste Ferrous
recycling
generated per capita is in absolute decline. Recycling and
re-use of waste are economically attractive options for Aluminium
recycling
public and private actors due to widespread separate
collection and the development of functional markets for Paper
secondary raw materials. Energy recovery is limited to
non recyclable materials … 29

30. Step 3 continued ….
+ The Commission will:
- Stimulate the secondary materials market and demand for
recycled materials through economic incentives and
developing end-of-waste criteria (in 2013/2014)
- Review existing prevention, re-use, recycling, recovery and
landfill diversion targets to move towards an economy based
on re-use and recycling, with residual waste close to zero (in
2014)
- Assess the introduction of minimum recycled material rates,
durability and reusability criteria and extensions of producer
responsibility for key products (in 2012)
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31. Tackling Key Sectors
+ Food
+ Mobility
+ Housing / building
+ Typically responsible for 70-80% of all environmental impacts in
industrialised areas 31

32. Deliverability
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33. What will it achieve ?
+ Depends on Member States and how they go about
implementation
+ History repeats itself ……
- Landfill Directive
- Waste Framework Director
- Producer Responsibility Regs
+ We need all member States to embrace this ‘reality’ and look to
drive change sooner rather than later…..
+ Is the UK Government up for it? Probably more so than Ireland,
Portugal, Greece etc.
+ This is an important point in global history…. Can we change
what has been forecast?
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34. RE Roadmap Deliverability
+ Barriers
- Leakage of waste from the
EU to sub-standard facilities
- Obstacles to development
 Finance
 Planning
 Risk perception
- Inadequate innovation in
recycling solutions
- Behavioural lapses
- Ignorance of decision-
makers
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35. RE Roadmap Deliverability
+ Opportunities
- Innovation needed in extraction, processing,
design, recycling, material substitution etc.
- Innovation Challenge Fund (Defra)
 will establish the feasibility of new approaches
enabling local businesses to extract value from
domestic and commercial waste streams (i.e.
through re-use and recovery)
 should encourage partnerships between business,
local authorities and local communities
- WRAP’s Waste Prevention Loan Fund
- Tighten waste legislation
 TFS, WEEE recast etc.
- Waste-matching services (NISP etc.) 35

36. UK – parallel strategy
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37. WRAP leading the charge!
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38. They aren’t the only ones…
+ Challenges businesses to see
risks as opportunities for
change and improvement
+ Focuses on specific scarce
metals and minerals
- those recognised as critical
by businesses
- especially in the hi tech,
defence and environment
sectors
http://www.defra.gov.uk/publications/files/pb137
19-resource-security-action-plan.pdf 38

39. New approaches to embrace
+ Re-design
- Make recovery of these materials easier
- Design products that are less reliant on ‘at risk’ materials
+ Materials substitution
+ New product engineering
- University of Tokyo has developed an electric motor that can
be used with Lithium batteries for electric vehicles on campus
which doesn’t use rare earth elements in battery production
+ Recycling
- There is room to do more
- We must focus on the resources at risk and those critical to EU
manufacturing 39

40. So what should we expect?
+ More WEEE recycling!
- It’s obvious in it?
+ An increased interest in household & SME materials
- WEEE, Batteries etc. (collection services or drop off?)
+ New Campaigns
- Get old mobiles etc. out of the cupboard @ home
- Capture computers & TVs at the end of their life ‘better’
+ New Partnerships
- Hi-tech manufactures invest in closed loop recycling systems
- Synergies with waste collection / processing companies
- Evolution of the Tesco’s and Sainsbury’s models
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41. But when?
+ Resource security and risk has been an issue for the last 5 years
- So still slow to react
+ The Oil crisis in the 1970’s was a pre-cursor
- Did we learn our lessons then?
+ So will the EU Roadmap make a difference?
- Of course, it sets the agenda
- UK Government has responded ….. Action Plan (March 2012)
+ The current economic climate is helping make resource
efficiency more mainstream – an issue for the Board Room!
- Many Corporates are looking at resource risks / security
- This will generate demand for local materials
- This will drive European recovery @ all levels! 41

42. Necessity is the mother of …
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+ Evolution of dentists from extraction to preventative care ….

43. The EU Trading Block
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44. So what?
+ Can the EU achieve Resource Efficiency in a global market?
- It can improve its ‘rating’
- But reliant on many manufactured products from South Korea,
China etc.
- Should look to deliver significant closed loop improvements
+ This means we need to look closely at what we will be
manufacturing and then secure the right feed stocks….
+ Needs closer attention to EU trading patterns
+ Needs all member States to embrace this ‘joined up approach’
and not have its own trading arrangements…. Unlikely!
- Are we really that enlightened…..
- Too much ‘let the market decide’ 44

45. The EU as a trading block
+ There is a degree of waste commodity trading
already happening – e.g. Solid Recovered Fuel
- Is the UK giving up a valuable commodity?
- Wrong material, wrong place, wrong time?
+ Going forward ‘in demand’ materials likely to be ferrous and
non-ferrous, textiles, WEEE etc.
+ Commodity markets require standardisation to avoid ‘leakage’
+ Need to aim for an equilibrium where we use (recycle) as much
as we produce across Europe (or even in the UK!)
+ Should we have recycling system that works at a EU level or
should the UK be looking at self-sufficiency ‘to some degree’?
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46. Barriers
+ Will the EU co-operate?
- danger that each country will look after
themselves (to be resource secure)
- could drive over-capacity
+ Infrastructure needs to be improved
- requires capital investment which isn’t
readily available in the current climate
+ China is key to markets around the globe
- difficult to change overnight
+ Commodity waste exchanges across EU may
be difficult without a single currency etc.
+ Is it the most cost efficient approach? 46

47. What Will This Mean for the UK
Waste Sector?
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48. Benefits….
+ The UK Waste Sector is already ‘European' in flavour
- Greater synergies between EU member States is inevitable
- Material flows will continue where it makes sense (paper to
Scandinavia)
- Glass to France and Germany etc.
+ Greater clarity over the target materials needed to ‘fuel’ the EU
- These will increase in price
- This allows Waste Companies to invest in collection &
segregation equipment etc.
- New technologies that allow segregation will come to the fore
- Local markets for some rare earth metals etc. are likely to
develop as global mining companies or larger waste
management companies deem them a suitable risk…. 48

49. Impacts for ‘recyclers’
+ Technological advances
+ New business models – leasing etc.
+ More political drive and media attention
+ More funding
+ More support (corporate and public)
+ Better collection systems to preserve
quality
+ Full move to a circular economy
+ Logistics will become key!
- Quality materials segregated and in
the right place @ the right time!
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50. Quality trends since 2010
+ Increasing concerns about quality from the end markets
+ Less guarantees from Chinese & Indian reprocessors
+ Returned loads from Indonesia and Brazil
+ EA has clamped down on ‘waste’ exports
+ UK and EU reprocessors continually setting the ‘bar’ higher in
terms of quality and consistency
+ Needs additional investment at MRF
+ Needs more than 1 cycle @ MRF
+ Now looking at evolution of service provision …..
+ Quality is critical to closed loop reprocessing …..
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51. Energy in the sector
+ Ensure that energy is recovered from non-recyclable waste only
+ Reduce energy intensity of waste treatments (AD, EfW etc.)
+ Increase use of biodegradable waste for bioenergy generation
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52. Urban mining offers rewards ….
+ Primary mining
- 5g of gold per tonne of ore
+ Urban Mining
- 250g of gold per tonne of PFC circuit
boards
- 350g per tonne of phones
+ Recycling this stuff NOW makes sense!
+ And what about landfill mining for old
resource ‘reserves’?
- Research is underway
- Demonstration plants in Europe & US
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53. How far could it go?
+ Lets stop exporting raw materials worth money from the UK!
- Rare earth metals
- Recyclables
- SRD / RDF
+ Lets look at this holistically
- We have an energy crisis
- We need to generate jobs
- We have potentially valuable raw materials that we export
+ Lets think EU and lets make it happen
- Needs strong Government leadership
- Needs brave industrialists
- Needs a fully engaged waste management sector ….. 53

54. Unforeseen Consequences
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55. Unforeseen consequences
+ Predictions can be difficult …
+ Nationalist boundaries?
+ Collapse of the EU?
+ Holding onto what’s yours?
+ The flow of materials?
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56. In Summary
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57. In summary …
+ Short term (5 years from now)
- Global production will continue to grow…
- Europe comes out of austerity …..
- Enhanced waste management infrastructure is developed to
address new target materials and manufacturing feedstock
needs….
+ Medium term (20 years from now)
- Circular (oval if we are being honest) economy is established
- Increasing energy and waste management costs drive
efficiency improvement and innovation
- Real corporate nervousness as materials start to run-out
- More joint working between recyclers and manufacturers
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58. But ….
+ EU will need more teeth to make this Roadmap a reality
- but a European Commodities market does make sense!
+ Member States will need to take the ‘bigger picture’
- or waste money and resources on over-capacity and
inappropriate trading patterns
+ The waste industry will respond
- it always does!
- targeting new materials (rare earths etc.)
- developing partnerships
+ But without Government leadership we may have some false
dawns and some ‘dead ends’ before we find the right path!
58

59. The last slide … promise!
I will be staying for 1 or 2
orange juices …
Dr Adam Read
Global Practice Director
Waste Management & Resource
Efficiency
07968 707 239
adam.read@ricardo-aea.com
www.ricardo-aea.com
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