Collapse of waste market will affect charges, says report

ANNUAL DOMESTIC waste charges need to rise by €24 over the next few years to make up for lost revenue companies are facing through the collapse of the waste market, an Oireachtas Joint Committee on the Environment was told yesterday.

In a report prepared for packaging recycling group Repak, economic consultant Dr Peter Bacon said the waste industry was facing a shortfall of revenue of between €20 million and €40 million due to the collapse in global market prices for recycled materials.

The value of a tonne of material recovered for recycling has fallen by €80 a tonne from 2007 prices, meaning that it is no longer economically viable for companies to continue to collect and process material.

Export prices for mixed papers reached a peak of €89.50 per tonne in July 2008, before falling to €44.8 in October. It is currently priced at only €7per tonne.

Cardboard peaked in March 2008 at more than €114 per tonne, but has since fallen to under €20.

"A shock like this is not much different to the shock suffered by the financial services sector," Dr Bacon told the committee.

The collapse in the market is such that the sector will not be able to continue to operate as previously and this will cause "major and immediate implications" for Irish waste-management policy.

Dr Bacon added: "Revenue loss is probably going to cause a widespread rationalisation of the waste collection business, disruption and possible non-collection unless measures are taken to ensure that the industry is rationalised in an orderly fashion."

A decision taken last month to help alleviate the crisis by the Minister for the Environment, John Gormley, allowed for some stockpiling until the markets recovered. However, Dr Bacon warned that for some materials - especially paper - it could lead to even higher costs in the long run.

"What's going to happen is paper deteriorates more quickly and if you don't get rid of it now the cost of getting rid of it after it has deteriorated is actually higher."

He recommended that the Minister use the Environment Fund to subsidise half the cost of accessing waste-to-energy markets in the UK for six months for paper that could not be placed on recyclate markets.

According to his report, this would cost about €50 per tonne. However, if the paper went into landfill it could cost up to €130 per tonne.