The date set in law for the UK’s departure from the EU is now less two weeks away. Unless the UK government is able to agree an extension, as is now its policy, or decides to withdraw its Article 50 notification, that is the date when it will cease to be an EU member state. If no deal is in place by the withdrawal date, the current system of rules that facilitates the UK’s trade with the EU’s member states will transform overnight.
There are competing narratives about what the consequences will be for the flow of goods through the UK’s ports – especially given that we still don’t know whether a withdrawal agreement will eventually be finalised. For those in the waste sector, one of the most critical potential impacts is on exports of RDF to continental thermal treatment facilities. Are exporters of RDF ready to maintain the flow of waste the UK now relies on, come what may? Or is the Guardian right to warn of “putrefying piles of rubbish” in the event that no deal is concluded?
Off guardian
The concerns raised by the Guardian last month are actually a little off the mark – or at least, behind the times. From the springboard of some leaked Environment Agency emails about “no deal” preparation, the newspaper leapt to a technical notice the government published in October 2018 that warned:
“if the UK leaves the EU without a deal, import/export licences issued by the UK would no longer be valid for shipments of waste to the 27 remaining EU countries from the day the UK leaves.”
That might sound problematic, but it has not proved an especially difficult issue to resolve. The EU rules governing waste shipments derive from wider international agreements, principally the Basel Convention, of which the UK is independently a signatory. These agreements will continue to apply to the UK post Brexit, and would allow the UK to continue to export waste on pretty much the same terms at is it has in the past – but a lot of new approvals referring to the right legal framework would need to be obtained, giving rise to a risk of administrative delays.
Fortunately, Defra has been working on this for at least six months, making contact with the ‘competent authorities’ in each country that receives waste from the UK to agree that no re-approval process will be required. Their efforts have been successful: with the recent conclusion of an agreement with Spain, the department has been able to reach agreements to roll over all existing approvals – so the technical notice has been withdrawn. That is, of course, excellent news, and takes care of many of the possible continuity concerns.
Port bottleneck
Another potential hurdle has also been crossed. Back in December, Defra published a draft Statutory Instrument to retain the EU’s waste shipment rules in UK law. It was expected to pass by way of negative procedure, but was flagged for debate by the House of Lords – largely because of the publicity over the risk of disruption. That debate has now taken place, and the necessary motion has been passed, ensuring that the UK has a legal framework in place for waste exports in the future.
However, it would be unwise to be complacent, and there are two remaining risks that exporters need to monitor.
- While RDF export is a process that already requires paperwork and checks, many other goods could face new or increased scrutiny at the border. If people make mistakes – turning up without the proper paperwork, for example – or if the volumes are greater than the port infrastructure can cope with, the resulting delays could have a knock-on effect on RDF exports. This would mainly affect movements through ro-ro ports on lorries, rather than bulk shipments on dedicated vessels – but that’s how around two thirds of the tonnage is transported. If exports are stuck in queues leaving the UK it will add to transport costs – and because transfrontier shipment (TFS) is highly regulated, exporters can’t easily switch from their planned ports to avoid queues.
- Getting out of the UK is one issue – but it also remains to be seen what checks there will be at ports of entry, especially whether there will be any increase in physical checks. If additional inspections are required, there could be delays at ports of entry, particularly if RDF exports are deemed a lower priority than – say – perishable foodstuffs or livestock.
Not permitted
Ultimately, the big issues here will be storage and the availability of alternative treatment or disposal capacity. If there are substantial delays at ports, this could result in a backlog of material in the UK. That material will need to be stored, treated or disposed of. While RDF mightn’t widely be seen as a “just in time” system, in practice it is. The industry regards RDF as a perishable product – and in any case exporters have to manage their contractual obligations to receive waste and with limited storage capacity. If they can’t bale and haul loads each day, they could rapidly bump up against the storage limit of their environmental permits, and have to refuse to receive waste. That could impact on waste collections.
A load of trouble: will RDF exports continue to flow smoothly after Brexit? Photo © Attero, used by permission.
The RDF industry has been seeking clarification from the Environment Agency (EA) regarding how it might police permits in this scenario – would it count as a force majeure event? Unfortunately, the EA seems unwilling to give a hypothetical answer or set out a special approach to dealing with this situation. Instead, they are saying that they will deal with issues as they arise. It would be helpful if the EA could be more proactive.
Store point
It therefore falls to the sector to try to make contingency plans to forestall the risk of breaching permits. One possibility might be to use landfill sites as temporary storage, as happens in the Netherlands. Landfill Tax would have to be paid on the material, but – subject to advance notification and agreement – could be reclaimed if the material is removed again within a year. But that would give rise to issues for exporters – paying the tax would worsen their cashflow position, and there would be costs associated with double-handling the baled material, which might also result in damaged bales.
Since there is very little spare UK incineration capacity, the most readily available back-up contingency is for operators to put in place landfill contracts for actual disposal of waste that can’t be treated, stored or exported. That wouldn’t be a great result in environmental terms, when much of the material would otherwise have gone to efficient combined heat and power (CHP) facilities, and may not be financially sustainable for exporters that have taken ownership of waste at prices that assume access to treatment at lower cost than UK landfill. These financial problems could be exacerbated if there are new tariffs, VAT charges or currency fluctuations that need to be dealt with.
According to the EA, survey work indicates that landfill capacity is available, at least in the short term, but there is an open question regarding how landfill operators might respond to a sudden spike in demand with no obvious alternative.
The progress that has been made on ensuring regulatory continuity for waste exports is welcome, and exporters will be working hard to maintain the flow of material the UK has come to rely on. However, help is still needed to make sure that material can continue to flow – or can be safely and affordably stored, treated or disposed of if delays arise. Clarity on how temporary breaches of storage limits will be enforced, and consideration of a special regime for short-term deposits in landfill are essential if exporters are to put reliable contingency plans in place – but best of all would be reassurance that we won’t be dealing with problems at the ports, whenever Brexit day may come.
Featured image © Countrystyle, used by permission.
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