Let's do business waste

The policy context and the impact of changes

Local councils across England provide valued collection services to businesses either directly or indirectly through support and advice. These services have recently received a renewed focus through the proposed introduction of Simpler Recycling reforms that will require non-household municipal premises (businesses) to have separate recycling and food waste collections in place by the end of March 2025 (with the exception of micro-firms that will be required to have collections in place by the end of March 2027).

Where services need to be expanded to allow full compliance with Simpler Recycling, local councils may find this challenging, particularly where they are planning for similar transitions to household services. Household services will need to be in place by the end of March 2026.

Simpler Recycling reforms are aimed at increasing the recycling performance of businesses, and this will generate additional tonnage requiring collection, handling, and treatment. Defra has not published any estimate of the additional quantity of business food waste that will be collected under Simpler Recycling, but it has previously indicated total quantities of food waste which may be collected could increase by 1.35 million tonnes by 2029^[1]. There may be capacity in the existing treatment infrastructure (anaerobic digestion), or capacity may be able to be created, but in the short term at least there are likely to be regional variations in available capacity, which may increase the cost of treatment in some areas.

A deposit return scheme (DRS) for drinks containers in England is planned for implementation across the UK with an updated implementation date of October 2027. The Government estimates that introduction of DRS will increase recycling rates for target drinks containers from an estimated 70 per cent at present, up to 90 per cent or higher. Other benefits include improvement in the quality of recyclate (through reduction in contamination), as well as a reduction in littering (with an estimated 85 per cent fewer drinks containers litter). DRS is likely to largely remove the target materials from collection services, reducing what can be a high value commodity. In the short term this may impact on the economics of service delivery, however this loss of revenue may be balanced out where extended producer responsibility (EPR) payments are extended to the collection of commercially collected packaging. 

It was originally proposed by Defra that EPR for packaging would extend to commercial waste, but it has since been confirmed that producer payments will initially be made only to local councils managing household waste packaging.^[2]

Further work is planned to understand the options that are available for managing payments for commercially collected packaging waste, a task force will be developed to analyse options and inform a review of EPR in 2026 to 2027.

The economic argument for increased recycling collections may be reinforced with the extension to the UK emission trading scheme (ETS) in 2028. This will place a carbon price on the cost of residual waste treatment via energy from waste (EfW). Businesses will be able to avoid the increased cost of residual waste treatment through waste avoidance or by increasing their recycling rate. To drive the appropriate behaviours the pricing should be strongly linked to the composition of an individual producer. However, the dynamic nature of the pricing mechanism will present a number of challenges for commercial waste operators, including local councils. This is a developing area and will be subject to consultation. 

The business market and net zero

With many local councilssetting ambitious targets to become carbon neutral by 2030, they will be reviewing their full range of service provision to see where improvements can be made. Businesses too will be keen to take steps towards lowering emissions and may value the use of low emission vehicles in their collection services. Improvements in recycling performance however are likely to make a far greater contribution to carbon emissions, and local councils can play a role in educating businesses through general communication as well as direct advice, for example in waste audits.

Information is available that estimates the size of businesses, and this can be used to build understanding of scale and diversity of businesses in the UK. SMEs (small and midsize enterprises) made up approximately 5.5 million or 99.9 per cent of private sector businesses in the UK at the start of 2022. Out of the 5.5 million SMEs, 5.47 million were “small” businesses (0 to 49 employees), 35,900 were classed as “medium-sized” (50 to 249 employees) and 7,700 were classed as large businesses (250 or more employees)^[3]. Businesses that did not employ anyone aside from the owner(s) equated to 74 per cent. 

Estimates of commercial waste generation are also available, with commercial waste accounting for approximately one-fifth (19 per cent) of total waste arisings within the UK (this compares to household waste at 12 per cent). This information however is not available at a granular level, and therefore may not be useful to inform service design. In any case, the design of services should be considered from a commercial viewpoint, in that these services are generally in competition with other service providers, with businesses selecting service providers based on the factors that are important to them at the time of selection. These factors are likely to include cost, and space constraints, but will also be affected by awareness of service offerings, and ease of engagement of service provider. Local councils may wish to consider how their services may flex or scale in line with demand and use targeted marketing to increase the take-up of their services.

A wide range of additional information and guidance is available to local councils. For example information on commercial waste zoning, where a single service provider carries out collections from a defined location, such as a business improvement district (BID). Zoning may lead to an initial improvement in service offering to a given area and will be subject to a market test and therefore the rates are likely to be competitive. They may however cause some market distortions by limiting competition in the areas surrounding the zones.

Local councils as service providers

Businesses have a legal duty of care to dispose of their waste responsibly. Local councils have a legal duty to provide waste services to residents, and to support businesses in the collection and disposal of waste where requested. Local councils fulfil these obligations in three main ways:

• Provide a full commercial waste service – customer management and collection.
• Provide a customer management service – where the collections are passed to a waste management company.
• Pass the full obligation to a waste management company.

Local councils are likely to deliver services with a focus on their geographic area, but this is often not in isolation, with many councils working collaboratively with neighbouring councils, including through partnership working. This network is a key strength for local councils and can be levered to understand the experience of others and receive support. When delivering commercial waste services, local councils may extend beyond the boundary of their area, presenting an additional opportunity for collaboration.

Simpler recycling is not a new concept and businesses in Scotland and Wales have been through similar transitions in recent times, with requirements for the separate collection of recyclables and food waste. In Scotland and Wales businesses have been provided with guidance to reach out to their supplier and discuss how they can be supported to comply with the requirements. Similar messaging in England could be seen as an opportunity to engage businesses, understand the challenges they may face and provide services that meet their needs.

Businesses will continue to change their behaviour as the costs of collection are understood. With food waste this may result in reductions in wastage and therefore tonnage available for collection. Single use plastics will also continue to decline, both in line with enforced bans, and through changing behaviours that may better meet the needs of their customers.

Local councils are likely to be well placed to support businesses by facilitating improved recycling collection, however they will need to be mindful of the changing demands that may be placed on services through composition shifts, as businesses continue to transition to a net zero economy.

Local councils across England provide valued collection services to businesses either directly or indirectly through support and advice. In this report we will review the legislative context, looking in more detail at the timeline for delivery of the Simpler Recycling reforms and consider some of the implications of roll out, including increased demands on Anaerobic Digestion (AD) infrastructure for the processing of food waste. The report also looks at the potential of businesses to reduce their environmental impact through better management of waste and waste prevention. There is also practical advice and information on the business waste market, and what is happening outside England in the world of commercial waste. 

Commercial waste services have recently received a renewed focus through the proposed introduction of Simpler Recycling reforms that will require non-household municipal premises (businesses) to have separate recycling and food waste collections in place by the end of March 2025 (with the exception of micro-firms that will be required to have collections in place by the end of March 2027).

This change follows similar reforms in both Scotland and Wales, with Wales launching their Workplace Recycling reforms in April of this year.

Additional change will come in the form of the Deposit Return Scheme (DRS) for drinks containers, Extended Producer Responsibility (EPR) for packaging and extension to the Emissions Trading Scheme (ETS). Although payments under EPR will not initially be made for commercially collected packaging, reforms are planned at a later date, and these combined with DRS will serve to change the composition of waste and recycling and impact the economics of collection. ETS will place a carbon value on residual waste treated via EfW. This will act as a reverse incentive to businesses, encouraging them to seek out ways to reduce waste and increase recycling. This will support the development of local council commercial waste collections but may present some challenges relating to passing on the charge to customers, with some elements of ETS likely to be linked to market-based carbon pricing.

Many local councils have declared a climate change emergency with a challenging target to be net carbon neutral by 2030. This is driving local councils to deliver services in ways that reduce carbon emissions, or support residents and businesses in their area to make similar transitions towards net zero.

In terms of commercial waste collections, reduction in carbon emissions can be considered in terms of transport (such as low emission vehicles, zoned collections) or waste generation (for example in reduced waste, increased recycling). Local councils can support businesses to reduce their carbon emissions through the design of services, and wider support, for example in waste audits.

Local councils may be looking to develop their commercial waste services, in areas such as expansion of recycling collections, or food waste services, and wish to consider information on the number and type of businesses, and the waste they may generate. This thinking is an extension of the way in which household services are developed and may present a challenge, as data may not be available at a granular level. Critically, commercial waste services are often in competition with other service providers and therefore local market conditions should be understood, together with a need to flex service delivery to the needs of businesses, communicate service offerings, and provide seamless service transfer arrangements.

Businesses may experience barriers that prevent them from increasing their recycling performance. These may relate to areas such as cost of service provision and capacity in terms of time available to consider options that may be available to them. Local councils can level the advantages of being both trusted and local, to facilitate engagement with businesses and offer them site visits that can assist with design of services and engage staff. 

Additional information and guidance are available to local councils from organisations such as WRAP. These sources provide more detail on how the design and develop commercial waste services. Case studies are also available on the impact of specific initiatives such as zoned collections. It is often useful to consider the results of these case studies from multiple stakeholders to get a balanced view, with benefits, such as reduced traffic congestion, being considered against potential risks, for example a potential reduction in service providers offering services in the areas around zones.

Trade associations are providing information to businesses on how to reduce carbon emissions, and the themes of these communications align well with the objectives of local council commercial waste collections. Businesses will therefore be seeking out service providers that can support them to manage their waste more effectively.

Local councils are likely to be well placed to support businesses by facilitating improved recycling collection, however they will need to be mindful of the changing demands that may be placed on services through composition shifts, as businesses continue to transition to a net zero economy. 

A key message to businesses will be that less waste = better business, in that having recycling and food waste collections in place will ensure compliance with Simpler Recycling. Additionally the process of engagement of recycling services may shine a light on waste generation as a whole, leading to better purchasing decisions, less wastage, and potential reductions in cost. 

This report has been developed for a general audience and may provide some insight for:

• service managers in local councils
• portfolio holders for waste
• councillors with an interest in net zero 
• policy makers in government.

A wide range of legislative and policy changes are planned in the coming years. Rather than being distinct in their impact, these changes may work collaboratively or be opposed, but ultimately will change the range and quantity of arisings requiring collection and treatment.  

In particular Simpler Recycling will set a requirement for businesses in England to have recycling and food waste collection services in place by the end of March 2025.

These changes can be seen as both a challenge and opportunity. On the one hand, new services may need to be developed quickly, which in itself will draw on already potentially stretched resources to consider changes in staffing, vehicles, equipment, containers, and infrastructure. On the other hand the demand for commercial recycling services is likely to grow, and this brings opportunities for local councils to support businesses and develop the range of commercial waste services that they may deliver.

Simpler recycling

Building on the foundation of legislation laid down in the Environment Act 2021, “Simpler Recycling” reforms will require significant changes to local council collection systems across household waste and business waste. A timeline for these reforms is provided in Figure 1.

Of particular note is the requirement for universal separate collection of food waste from “municipal” business premises:

“Non-household municipal premises, except micro-firms, will be required to make arrangements for separate food waste collections and to present the waste in accordance with the legislation by 31 March 2025.”^[4]

In the context of local council waste collection services provision to businesses, this requirement introduces a number of challenges, both in respect of requirements to changes in collection systems, as well as arranging for treatment of collected food.

Figure 1: Timeline for Implementation of Simpler Recycling

Collection of food waste from businesses

Small businesses served by local councils will likely overwhelmingly be classified as “municipal premises”, to which the Simpler Recycling food waste stipulation will apply.

Conformance with the March 2025 deadline for introduction of separate business food waste collections will require English local councils to implement demanding new collection services in an extremely short timescale. Notably, the deadline for universal collection of food waste from households is set one year later, in March 2026.

Particular challenges which will be experienced by local councils seeking to comply with Simpler Recycling business food waste collection requirements will include the following:

• Investment in fleet with food waste dedicated storage containers, as well as potential expansion in the workforce to cover more time-consuming segregated collections.
• Provision of appropriate food waste collection containers, which may differ according to volumes of waste produced.
• Possible resistance to participation in collection schemes from some businesses, for whom space for storage of food waste may well be limited, and separate collection may be perceived as onerous.
• Inclusion of dedicated food waste storage/bulking areas in transfer stations which may be space constrained.

Arranging for treatment of collected food waste

Further to arranging for collection of business food waste, local councils will need to establish an offtake contract under which this food waste will be treated. In general, the appropriate treatment route for collected business food waste will be anaerobic digestion (AD). Driven by renewables incentives, UK AD capacity has expanded rapidly in recent years – for an illustration of growth in the numbers of UK AD facilities predicated primarily on household and business food waste, please refer to Figure 2 below using analysis of data published by the Anaerobic Digestion and Bioresources Association. As shown, the number of installed plants focussed on these feedstocks grew rapidly over the period from 2009 through to 2019 and has subsequently plateaued. 

Figure 2: Number of AD Facilities primarily predicated on household and business food waste feedstock

While Defra has not published any estimate of the additional quantity of business food waste that will be collected under Simpler Recycling, it has previously indicated total quantities of food waste which may be collected, stating that

“consultation on household and business recycling consistency found that if all local councils provided kerbside food waste collection, the amount of food waste collected would increase by 1.35m tonnes by 2029”^[5]

While this increase would be contingent on the level of cooperation of households and businesses in separating food waste, the requirement for a further 1.35 million tonnes of food waste to be processed via anaerobic digestion could potentially create challenges for local councils in securing outlets for collected food.

Across the UK there may be some spare capacity across installed anaerobic digestion facilities. Moreover there may also be some scope to convert anaerobic digestion facilities currently predicated on agricultural wastes or energy crops to process additional food waste quantities. Nevertheless, rapid rollout of separate collections may lead to an excess in food waste collection, relative to available anaerobic digestion capacity in some regions. This imbalance could see a steep rise in anaerobic digestion gate fees, further increasing the cost burden on local councils.

Moreover, in some instances, local councils may be unable to establish an offtake contract for food waste due to scarcity of capacity. Any such councils which thus lack an outlet for management of food waste would be prevented from providing separate food waste collections in compliance with Simpler Recycling requirements.

Simpler Recycling - in summary

Simpler Recycling will apply to businesses, with dry recycling and food waste collections needing to be in place by the end of March 2025 (with the exception of micro-firms i.e. with nine or less employees, in which case collections will need to be in place by the end of March 2027). 

1. Simpler Recycling aims to make recycling easier and more consistent. As a result of a clearer understanding of what can and cannot be recycled, recycling streams from households and businesses should increase in quality and quantity, which is likely to decrease residual waste volumes.

2. For many local councils the introduction of Simpler Recycling will mean they are required to increase the range of materials collected for recycling. This may lead to a review of the collection system (for example vehicles used, frequency of collection) together with the associated infrastructure requirements for transfer and processing of recyclables. Any increase in recycling is likely to be balanced by a decrease in collected residual waste which could lead to an optimisation of residual collection resources. However, in other areas the services may not be able to be optimised due to wider productivity factors such as downtime due to travel. This is an example of where local factors influence operational design and therefore supports a need for local councils to retain flexibility in the delivery of their services.

Overall, there is unlikely to be an impact on the total tonnage of waste collected from businesses and households, however the composition of waste may change due to further planned policy changes. These are explored later in this document.

3. In the LGA’s response to consultation on simpler recycling reforms, the LGA highlighted the potential consequences of a deadline of 2025 for businesses to have recycling and food waste services in place, a year before households. In particular that any local council providing waste services to business will have to manage two timetables and the impact of this needs to be better understood by Defra. Where local council waste infrastructure is supporting both household and business waste services, all services may have to comply with the earlier non-household implementation deadline of 2025. This could add cost for local councils and reduce the amount of time for procurement and contract negotiation. In any case, reforms to commercial waste services ahead of domestic services may limit the supply of equipment available for local councils to implement household reforms.

4. The requirement for collections from micro-firms may present a particular challenge. These businesses, which by definition will have nine or less employees, may be largely mobile, for example a domestic builder, or include remote workers, for example working from a home office. Engagement and communication with these businesses will likely fall to local councils who may be able to offer services attached to domestic collections and are incentivised in terms of diverting this commercial waste from the domestic arisings.

5. The success of Simpler Recycling will be dependent upon the availability of sufficient resources and infrastructure. The increased collection of recyclables will increase the demand for recycling plants which may or may not already be in place. 

6. Simpler Recycling will likely contribute to net zero by increasing recycling, which reduces the use of raw materials, and reduces residual waste. Any reduction in residual waste will lead to less waste requiring landfill or incineration and thus a decrease in greenhouse gas emissions. These benefits will only be realised where a business understands their obligations and takes steps to implement appropriate collection systems. 

As part of the Simpler Recycling initiative, Defra announced that, by the end of March 2026, all local councils should implement weekly food waste collection services to households “unless they need longer to transition due to a long-term waste disposal contract”. Individual negotiations with Defra may be expected that extend this timeline where it can be demonstrated that local circumstances do not support a roll out in 2026, with an early example of this being Wiltshire Council, where Defra has agreed for the Council to rollout food waste collections from 1 August 2027. 

This ability to receive dispensation from Defra is unlikely to be available to businesses. 

Deposit Return Scheme (DRS)

At present, introduction of deposit returns schemes (DRS) in England is officially planned for October 2027. The scope of packaging targeted by DRS is as follows:

• Across England, Scotland, and Northern Ireland, in-scope recyclables will include Polyethylene terephthalate (PET) bottles, as well as steel and aluminum cans. Containers with a volume from 150ml up to three litres will be covered by the scheme.
• In addition to PET and metals, in Wales, the current planned scope of DRS also includes glass containers with the same target volume range.

The Government estimates that introduction of DRS will increase recycling rates for target drinks containers from an estimated 70 per cent at present, up to 90 per cent or higher. Other benefits indicated by the Government include improvement in the quality of recyclate (through reduction in contamination), as well as a reduction in littering (with an estimated 85 per cent fewer drinks containers littered). 

While local councils are not responsible for the implementation of DRS, its introduction may have indirect consequences for them. Metals and plastics are typically the most valuable recyclable commodities collected by local councils, and income from sale of these materials can reduce the net cost of collection service provision. To an extent therefore, the introduction of DRS will worsen the economics of local council recyclables collection, including across commercial customers. In Wales, similar losses may also occur due to the loss of glass from collections. Concurrently, there may be some marginal reduction in local councils’ residual waste disposal costs if DRS is successful in increasing diversion rates for target containers.

While these are perhaps the largest potential impact of DRS on local councils, further unintended consequences are arguably possible. For example customers seeking to avoid the requirement to pay a deposit fee and return containers may opt to purchase products in containers outside the scope of DRS. For example, this could lead to a preference for glass containers, while carboard cartons (Tetra Paks) could be preferred in some instances. Any such changes in consumption habits would further modify composition of waste which local councils are responsible for managing.

DRS - in summary

A Deposit Return Scheme (DRS) is proposed to be introduced in England in October 2027. Defra’s policy statement issued in April 2024 sets out that containers with a volume between 150ml and three litres are to be included within the scheme and the materials to be included are plastic bottles, steel, and aluminium cans, and in Wales the Scheme will also include glass bottles. In this context, plastic bottles refers to PET plastic, the most commonly used material for this type of container. 

Retailers of in-scope bottles and cans will likely be required to operate a return point for the scheme which will need to be collected via the scheme administrator, who is yet to be appointed.

Issues and impacts associated with the introduction of DRS include the following:

1. Where businesses currently have in-scope bottles/cans in their waste stream, the contractor collected waste volumes may decrease where these are moved to separate collection via reverse vending machines (RVMs). 

2. DRS will result in certain materials being returned via RVMs, and as a result it is expected that less recycling will require collection by local councils and contractors. This could potentially make collection services of materials within the DRS scope less viable, due to high value recyclable materials being removed from collections resulting in a higher net collection and processing cost per tonne of collected material. 

3. The implementation of DRS should not hinder local council commercial waste collections despite the shift in materials and material quantities requiring collection. However, the contractor appointed to collect recyclables from the RVMs will be in a good position to advertise their commercial waste offering to businesses with provision of a RVM or manual collection point, therefore potentially creating increased competition for commercial waste services for local councils. 

4. The scheme will be dependent on the availability of the RVMs and the potential for smaller businesses that regularly sell materials in scope (such as cafes and restaurants) to have a manual collection point. Recycling processing facilities for in-scope materials will be in higher demand once DRS is implemented however these should be in place prior to DRS launching.

5. DRS may help contribute to net zero. If recycling rates increase due to the implementation of DRS less landfill and/or incineration of wastes will be required thus reducing greenhouse gas emissions. Subsequently, if recycling rates increase the demand for raw materials and energy for production may decrease. 

6. A DRS has proven to be possible with examples in countries such as Germany, Norway, and Canada. Ireland rolled out DRS on 1 February 2024. Some of these schemes have been in place for decades, however, this does not mean the scheme is without its problems. The scheme can be expensive, due to its need for new infrastructure (reverse vending machines) and collection schemes. Additionally, there may be concerns about how to prevent fraud (redemption of non-eligible containers) and how to engage the public enough to fully participate in the scheme in the early stages of implementation.

Extended Producer Responsibility (EPR)

An Extended Producer Responsibility approach is due to be introduced to the UK in 2025 which aims to hold producers responsible for funding of the collection, sorting, recycling, or disposal of their product packaging. 

It was originally proposed by Defra that EPR for packaging would extend to commercial waste, but it has since been confirmed that producer payments will initially be made only to local councils managing household waste packaging^[6].

Further work is planned to understand the options that are available for managing payments for commercially collected packaging waste, a task force will be developed to analyse options and inform a review of EPR in 2026 to 2027.

Importantly, although payments for commercially-collected packaging waste will not apply in the first phase of EPR roll out, the impacts of composition change may still be felt, where producers work to improve the recyclability and capture rate of their packaging.

These composition changes will impact the volumes of recyclable materials available and therefore the tonnages collected and requiring handling and onward treatment. For local council collection operators, there will be a need to ensure that any collection system can adapt to changing composition in the coming years.

Flexibility in service delivery can be built into areas such as vehicle provision. For example local councils may wish to consider recycling collection vehicles (RCVs) for the collection of single streams of materials, rather than multi-compartment twin pack or pod vehicles. With multi-compartment vehicles, the fastest filling compartment can often place a constraint on the service, with materials often not being presented in a way that allows each compartment to filled evenly.

With this said, multi-compartment vehicles bring benefits in allowing a wider range of segregated materials to be collected on a single pass and should be considered as part of any planning process to see if the benefits outweigh any additional risks.

Emissions Trading Scheme (ETS)

The UK ETS is a market-based policy mechanism intended to assist in facilitating the achievement of net-zero in the UK, by placing a value on carbon emissions.

The UK ETS has been effective since 1 January 2021 replacing the EU Emissions Trading Scheme (EU ETS) after the end of the Brexit transition period. Prior to that date the UK was part of the EU ETS, which commenced in 2005.

The inclusion of Energy from Waste (EfW) has been announced by the UK Government, with an expectation that it will apply from January 2028. This is expected to have profound impacts on the waste sector.

Importantly, it is only the fossil content of waste that attracts ETS liabilities. This is in line with climate science that concludes biomass greenhouse gas emission do not contribute to global warming in the same way as fossil derived sources.

In many cases the fossil content of the residual waste received by EfW plants is quoted as being approximately 50 per cent. 

For local councils this means that the cost of treatment of residual waste via EfW will increase, as this carbon pricing is passed through the supply chain to the producer. Alternative treatment options other than EfW are available for residual waste treatment, but these are likely to be heavily controlled to limit leakage from the system.

In the case of commercial waste collections this cost will need to be passed to businesses. Ultimately this is a reverse incentive to businesses to reduce their waste and/ or increase recycling as any diverted waste will not be subject to ETS, and therefore the additional cost of treatment will not be incurred.

Local councils will need to be flexible in their approach to collection services, potentially reducing residual waste collections, and increasing recycling, as businesses adapt to the change in cost of service delivery and improve their recycling performance.

Additionally, local councils will need to develop charging systems to ensure that the cost of the ETS is accounted for in any charges made to businesses. The mechanism for appropriate pricing to be passed to residual waste producers is as yet unknown.

To drive the appropriate behaviours the pricing should be strongly linked to the composition of an individual producer. However dynamic pricing such as this will present a number of challenges for commercial waste operators, including local councils . This is a developing area and will be subject to consultation. 

A simpler area for local councils to consider is the pricing structure of associated services. Where a package of services can be provided to a business that meets a range of needs, appropriate containment, frequency of collection, cost etc. businesses can be supported to recycle more, reducing their reliance on waste disposal and incineration, and therefore reducing their exposure to costs under the ETS. Marketing and communications could be developed by local councils to reinforce these broader benefits.

The potential additional cost of the Emissions Trading Scheme

In order to estimate the potential cost of the ETS to businesses we need to consider a range of variables, including:

• tonnage of residual waste produced by a business
• the likely carbon emissions emitted through incineration
• the split of fossil and biogenic carbon
• the carbon value (volatile market, updated fortnightly).

Further detail on the assumptions that could be used to calculate the cost of the ETS for a given service are provided in Appendix A – Estimating the Increased Cost of Residual Waste Treatment via EfW - ETS.

Legislation and policy change - in summary 

Local councils have been set a significant challenge where they wish to support businesses in their compliance with Simpler Recycling. In some areas commercial waste collections may be offered that are already compliant with the full requirement i.e. including the full range of recycling and food waste collections. In other areas local councils may need to increase their service offering in a short space of time.

This may put local councils in competition with other organisations who are seeking to grow their services in the same timeframe.

Ultimately suppliers, for example of vehicles and containers, are also aware of the challenges being faced by the industry and are similarly scaling their operations to meet demand. The support of the complete supply chain will be critical to the success of Simpler Recycling, with this extending to consideration of any increased requirements for the treatment of waste.

The cost-of-service delivery will be critical to the success of any commercial waste scheme. Businesses will be looking to achieve compliance with Simpler Recycling, but in a cost-effective manner.

The economic balance for commercial waste services may come at a later date, as the ETS places a carbon price on the cost of residual waste treatment via EfW, and EPR is extended to commercially-collected packaging, supporting the cost of recycling collections.

Context of service delivery

Businesses have a legal Duty of Care to dispose of their waste responsibly. Local councils have a legal duty to provide waste services to residents, and to support businesses in the collection and disposal of waste where requested. Local councils fulfil these obligations in three main ways:

• provide a full commercial waste service – customer management and collection
• provide a customer management service – where the collections are passed to a waste management company
• pass the full obligation to a waste management company.

Fundamentally however, due to their statutory duty, local councils must provide waste services in their local area, where requested, and this sets them apart from waste management companies who have full control over the regions in which they operate. Waste management companies may also deliver commercial approaches that allow pricing per customer, with any costs of research and development spread across the wider base of their full operation. This can cause market distortions that local councils need to be aware of and react to, to ensure that any commercial waste charges fully compensate the council for the cost-of-service provision. Areas where distortions may occur include:

• Waste management companies may have led the way in implementing pay-as-you-throw schemes where the weight of individual residual waste bins is recorded and used to identify the charge to businesses. These schemes may cause businesses with high tonnages of residual waste to seek out services that do not charge by weight, leading to increased cost of disposal for these service providers. In some cases this may have meant that local councils have been incurring these increased costs of disposal.
• Businesses in rural or restricted access areas may not be offered services by waste management companies or the cost of these services may be elevated. Specialist, narrow access vehicles may be required to complete the collections, or in the case of rural collections, collections can be made but with lower levels of productivity.
• Waste management companies may actively target particular markets where the potential for high frequency collections or the ability to cross sell services is high. These high-volume customers may provide a solid base of operation, supporting growth or aggressive marketing in the nearby areas.

Local councils have two key advantages that they can lever:

1. They operate within a defined area which brings focus and local knowledge.

2. Waste collection councils and unitary councils provide household collections throughout their region, therefore there are many opportunities to combine services and therefore increase operational productivity. These improvements in productivity may lead to reduced service charges that can be passed on to businesses, making services more affordable and attractive.

With this said, the market for delivery of these optimisations is largely related to the range of materials collected from households, often at the frequency of household collections, and with this comes a natural segmentation of the market. Further market research by an council can determine the benefits of moving beyond this market into the collection of skips, Front end loader (FEL) containers or Roll on Roll off skips (Ro-Ros). With this expansion comes the need to understand the service offering of waste management companies as a local council comes into direct competition with them.

Actions that have been taken by local councils to improve the financial performance of their services include:

• Targeting of businesses that may not be aware of their commercial status for example holiday lets, in particular houses that are may be used as both a residence and a commercial property (for example Airbnb).
• Toll out of commercial food waste collections, ahead of household collections, to meet demand in the local area.
• Promotional marketing building on word of mouth, for example incentivising customers for referrals by providing some free emptying of their recycling containers.

Many local councils have declared a climate change emergency with an ambitious target to become carbon neutral by 2030. This sets a greater ambition than UK Parliament who have pledged to reduce carbon emissions by 100% by 2050 (compared to 1990 levels)^[7]

Although the associated targets and methods of delivery are not uniform, this is driving local councils to deliver services in ways that reduce carbon emissions, or support residents and businesses in their area to make similar transitions towards net zero.

Carbon reduction in relation to commercial waste collection services could be considered in two main ways:

1. emissions associated with the transport element of the services: collection, transfer, and delivery to a processing facility

2. emissions associated with the materials that are presented for collection

Emissions associated with transport

The transportation elements of service delivery will contribute to the overall carbon emissions of any service. Due to the wide remit of local councils additional areas will also be of significant importance, including the impact of collections on congestion, and associated air quality, as well as impact on street scene. Street scene impacts extend beyond the visual appeal of an area and consider the accessibility of shared spaces, ensuring that all pedestrians can navigate areas free of obstruction from waste and recycling containment. 

Vehicles – alternative fuels 

The case for alternative fuelled vehicles has been widely stated with benefits including reductions in  carbon emissions, reduction in particulate matter (which contribute to poor quality) and noise reduction, where electric motors and/ or electric bin lifts are used.

The range of electric vehicles (eRCV) continues to expand, increasingly allowing for a fuller range of services to be provided using these vehicle types. The Dennis Eagle e-Collect for example was originally launched in 2020. This was a 6x2 ‘standard’ sized RCV. This was followed by the 18 tonne 4x2, launched in 2022. The reduced footprint and turning circle of these smaller vehicles allow collections to be made from narrow access households and businesses.

Other alternative fuelled vehicles are currently in development and early stages of adoption, for example:

• Hybrid (Hydrotreated Vegetable Oil (HVO) and hydrogen gas) – Keenan Recycling.
• Hybrid (hydrogen-electric) – St Helens Borough Council.

Where councils have committed to carbon neutrality by 2030, many will be considering the life cycle replacements of their assets and looking to procure alternative fuel vehicles. With the benefits come additional considerations. These are considered for eRCVs:

• Cost: The reported cost of an eRCV is in the region of £450k. This compares to £200k for a diesel powered RCV.
• Range: The range of an eRCV will be dependent on a wide range of factors, related to the vehicle itself (Gross Vehicle Weight (GVW), battery capacity for example) and the planned collection route (miles travelled to route and disposal point) Some councils are looking to initially deploy electric vehicles close the depot to minimise miles travelled and ensure vehicles can return to charge where range anxiety is felt. Others are looking to hydrogen vehicles to ensure full service coverage within their area. 
• Charging time: Electric vehicles will usually charge overnight, with charging typically taking six to seven hours to complete. This fits with the normal working time of collection vehicles which are usually operated on a day shift only, but will need to be considered where local councils currently operate vehicles over more than one shift. These double shift solutions may be employed in areas with a night-time economy to support businesses with evening and late night collections.
• Charging infrastructure: This can be considered in terms of both the power requirements and chargers that will need to be in place, as well as the layout of the depot to allow charging to be effectively managed. Many current depots for example have vehicles double parked and this will make charging arrangements challenging. New depot designs may need to consider single layer parking which in turn may increase size requirements dramatically.
• Maintenance: Electric vehicles need to be maintained by appropriately trained technicians, requiring upskilling of existing staff or consideration of sub-contracted requirements.

As local councils consider their procurement strategy for vehicles, they may additionally target carbon improvements in their existing fleet. One method being considered is the use of Hydrotreated Vegetable Oil (HVO). This is known as a drop-in fuel and can often be used as a diesel replacement. It is reported to be sold as 90 per cent net carbon neutral, with producers also stating that it reduces nitrogen oxide emissions by as much as 30 per cent and particular matter by 85 per cent.

The emissions at the tail-pipe however do not represent the full impact of this fuel. Production may be from renewable sources (used cooking-oil) but could also be from palm oil production, which in turn contributes to rainforest deforestation. This uncertainty led to the Environment Agency (EA) initially looking to block their contractors from using HVO, however they have since acknowledged the environmental benefits where the fuel source can be confirmed. A further study has been commissioned.

Combined collection services – household and commercial

Local councils may choose to provide commercial waste collection services combined with household collections. As indicated above, this would largely relate to services offering a similar range of materials to those collected from households, often at the frequency of household collections.

Where spare capacity is being used on existing vehicles this allows additional collections to be made without increases to the number of vehicles in operation. This may be of particular interest to local councils with rural collections, where these vehicles may be limited by the distance they travel rather than the capacity of the vehicle. Where spare capacity can be used to service commercial waste customers, there may be small increases in miles travelled and therefore carbon emitted, but overall there is a benefit in comparison to a separate dedicated commercial waste vehicle. 

In any case, providing combined services in this way is likely to reduce vehicle movements in a given area. This of itself will reduce congestion associated with waste and recycling collections.

Timed collections

Timed collections are a further measure that are often targeted at controlling the street scene impacts relating to commercial waste collections. Businesses may be instructed to store waste on their premises and only present it for collection within specific time periods. Bristol City Council rolled out a new standard for commercial waste collection in 2022, following the example set by areas such as Westminster, Manchester, Glasgow, and Edinburgh.

The additional benefit is that collections can be scheduled for times outside of peak traffic hours, removing the potential for collection services to cause additional congestion at peak times.

In the Old City area of Bristol waste can only be presented for collection:

• Monday to Saturday: 5:30am to 10:30am and 5:30pm to 8:00pm.
• Sunday: 8:30am to 10:30am and 5.30pm to 8:00pm.

Business Improvement Districts

The concept of control of commercial waste collections is extended in Business Improvement Districts (BID) where contracts may be let for single contractors to carry out collections. 

For example, the Bath BID has partnered with Grist environmental as a preferred supplier for delivery of services to the BID levy payers. This has the potential to provide services to over 680 members. 

This form of collaborative service delivery can benefit local councils and businesses alike, for example:

• service costs are benchmarked regularly resulting in competitive rates for BID levy payers
• the carbon benefits of service delivery can be considered. In Bath, the benefits include:
  • zero waste to landfill solutions
  • minimisation of miles travelled, leading to reductions in carbon emissions through
    • optimised collection routes (high business density)
    • local treatment facilities

Cargo bike collections

Where a BID is serviced by a single contractor, the density of businesses may be very high, and this may support cargo bikes being used to make collections. This service type has been designed in the London Borough of Wandsworth where this service was developed in response to heavy congestion in the Putney area.

Emissions associated with collection of materials

For businesses, the transportation elements of any collection service may be highly visible, with many believing that carbon emissions relating to transport contribute a large proportion to their overall carbon emissions. The reality however is that waste generation makes a far greater contribution to carbon emissions, and businesses are able to play an active role in reducing these emissions by reducing waste generation or increasing recycling.

Of course, carbon emissions will vary considerably between different sectors and will be influenced by factors beyond transportation and waste generation, such as energy consumption and wider supply chain.

The average SME in the UK generates around 15 tonnes of CO2e (carbon dioxide equivalents) annually. In total SMEs are estimated to have a carbon footprint of at least 25.8 million tonnes CO2e annually, which equates to 6 per cent of the UK’s total carbon emissions.^[8]

To illustrate the carbon benefits of recycling we will consider the composition of waste from a variety of sectors, industry carbon factors^[9], and a range of recycling scenarios (0 per cent, 30 per cent, 50 per cent, 100 per cent materials recycled).

Composition is based on a typical business^[10], adjusted to reflect the retail, supermarket, restaurant, and hotel sectors. This is an illustrative example with suggested waste compositions for a range of business types to show the potential impact where a business has waste that is largely made up of food waste, paper, and card or a relatively even split across these key materials. The carbon emissions are expressed in kilogrammes per tonne of waste across the various business types.

Figure 3: Carbon benefit of recycling – across a range of business types

Contribution to net zero - in summary

Many local councils have set challenging targets to become target neutral by 2030. When considering commercial waste services, this drive for carbon neutrality is leading to a review of alternative fuelled vehicles, to reduce carbon emission relating to transport.

Other measures relating to commercial waste collection, such as timed collections, or coordinated service delivery in business improvement districts, may support wider benefits such as reduced traffic congestion or improvements to street scene.

Carbon reductions associated with waste generation can be achieved by supporting businesses to recycle more. This will be achieved in part through education of businesses but will be heavily supported through the pricing structure of services, allowing businesses, where possible, to see both the economic and environmental benefits of increasing their recycling rate.

It may be that the economics of services will only be truly aligned where additional measures are introduced that apply a carbon cost to the residual waste (through the planned extension of the carbon emissions trading scheme to waste) or producer responsibility is extended to commercially collected packaging through the EPR scheme.

Simpler Recycling reforms will require businesses to have recycling collections in place by the end of March 2025. This is with the exception of micro-firms (businesses with nine or fewer employees) where the timeline is extended. Micro-firms will be required to have collections in place by the end of March 2027.

Micro-firms could be considered as a key target for local council collection services, as these businesses may be likely to operate within the geographic constraints of a single council. Although each micro-firm is small in terms of number of employees, they are likely to represent a diverse range of businesses, and as a group, they make up a large proportion of businesses in the UK. 

When planning services, local councils may wish to consider the tonnage that could be generated from increased commercial waste services. This is an area that is likely to represent some challenges as commercial waste tonnages are not reported at a granular level. Commercial waste services may need to be designed with resilience in mind to cope with fluctuating demand, backed up by a marketing strategy to support growth. 

Enforcement is a further consideration as many small businesses often produce household-like waste and can illegally use domestic services for their waste. The first step is ensuring that these businesses have appropriate waste collection arrangements and are meeting duty of care requirements. Local councils could choose to take an enforcement approach which in turn generates new business, but needs to be planned carefully.

Businesses may be highly time-constrained leaving them with limited time to consider the detail of their waste generation and collection services. Additionally available space may be limited to locate additional containment for recycling. Local councils may be in a position to support businesses through engagement and education, backed up by flexible service delivery that can service businesses with space constraints.

Businesses categorised by size in the UK

SMEs (small and midsize enterprises) made up approximately 5.5 million or 99.9 per cent of private sector businesses in the UK at the start of 2022. Out of the 5.5 million SMEs, 5.47 million were “small” businesses (zero to 49 employees), 35,900 were classed as “medium-sized” (50 to 249 employees) and 7,700 were classed as large businesses (250 or more employees)^[11]. Businesses that did not employ anyone aside from the owner(s) equated to 74 per cent. 

Table 1: Estimated number of businesses in the UK private sector and their associated employment and turnover, by size of business, start of 2022^[12] 

Figure 4: Businesses in the UK by employee number 

The majority of businesses in the UK have nine or fewer employees. 260,855 businesses have ten or more employees. In Figure 4 above these are further broken down in to businesses with 10 to 49 employees, 50 to 249 employees and 250 or more.

In 2022, over 1 million businesses in the UK had 1 to 9 employees, with a further 4 million having no employees. A large proportion of these are likely to be in England, and will fall into the category of micro-firms, requiring recycling and food waste services to be in place by the end of March 2027.

Local councils will play a key role in engaging these businesses and providing services where relevant. However, it may be challenging to understand what services these businesses require as the group will likely be diverse in terms of the range of business types covered, and the nature of their waste generation (e.g. range of materials available for recycling) may not be known. 

Waste arisings in the UK and England

Commercial waste accounts for approximately one-fifth (19 per cent) of total waste arisings within the UK. Figure 1 sets the context of commercial waste generation in comparison to household, construction, demolition, and excavation (CD&E), and other waste from mining, agriculture, forestry, and fishing.

Figure 5 - Waste Generation in the UK Split by Source - 2018

This information is taken from UK statistics for waste, updated 28 June 2023. The latest data for total waste generation and final treatment of waste is 2018. 

England generates approximately 84 per cent of the UK’s waste. It is estimated that 33.9 million tonnes of commercial and industrial (C&I) waste were produced in 2021. This compares to 23.1 million tonnes of household waste produced in the same period.

Waste arisings at the local level

Unlike household waste, data on waste generated by commercial organisations is not subject to formal collation. As a result, data on commercial waste generated in the UK is fragmented across a variety of data sources. Total arisings are often estimated at the national level, with only limited insights provided at the local council level. The UK government’s estimates of the total waste generated in England by the households and the C&I sector is presented in Table 2.

Table 2: Waste generated by households and the C&I sectors, England, 2017-2021 (million tonnes) 

The difficulty in obtaining accurate information on the amount of business waste sent for recycling may have been a contributing factor in government decisions on the future of commercial waste services.

The main sources of commercial waste data in the UK could be considered as follows:

• WasteDataFlow.
• Permitted site data returns.
• Defra reconcile method.
• National surveys.
• Feedstock market assessments.
• Inhouse data sets.

These sources are described in more detail in Appendix B – Main Sources of Commercial Waste Data. Each of these data sources have different methods of collation and calculation and tend to serve different purposes. Each source comes with its own constraints, including in some cases, lacking public availability.

Feedstock market assessments and other inhouse datasets are generally held in confidence and therefore not in the public domain, making these of limited use to organisations outside of the holding entities.

It is important to keep in mind that commercial waste collected by local councils is generally limited to municipal-like wastes generated by small to medium size companies. This particular distinction is not necessarily clearly defined within commercial waste datasets. Whilst the material may be easily identifiable by type (for example glass packaging), it may not always be possible to distinguish the fraction generated by customers likely to use local council commercial waste collection services. 

The summary therefore is that whilst information may be available on the tonnages of commercial waste, these sources are often estimated and will lack the detail needed to develop services in the manner that might be used when designing household collection services.

Collections from businesses may require a more commercial approach and consider factors such as:

• Range of services provided: in line with the needs of businesses (compliance and otherwise) and on-market for a given area.
• Flexible services: to meet the needs of businesses, for example at a suitable frequency of collection, or on-demand.
• Scalable services: allowing growth of the services either as a whole, or in particular areas of service delivery. For example as the demand for food waste services increases.
• Marketing of services: Including support for businesses to understand any relevant regulations, and detail how services will support them to comply. By targeting businesses around existing customers there is the potential to create high route density which supports cost effectiveness (round costs are spread across a larger base of customers) and lowers carbon emissions per customer (travel distance is reduced between customers).

Barriers for businesses

A recent survey by the waste company Biffa highlighted that close to half (47 per cent) of UK SMEs use a commercial recycling service, and packaging waste is the most prevalent waste category produced by businesses. This includes cardboard, paper, and plastic. 

Cost was highlighted as the biggest barrier to sustainability (34 per cent of respondents) with other barriers including a ‘lack of time’ or that the ‘business has other priorities’.

To improve sustainability, businesses may first need to measure their current sustainability performance. Approximately a third (35 per cent) of businesses said that they did not measure sustainability, while 26 per cent used increases in recycling volume as a metric.

This survey reinforces the view that there is likely to be significant demand for recycling services where businesses seek compliance with the Simpler Recycling reforms. Businesses may value services that are easily engaged and work with existing constraints such as space. Local councils can support businesses by offering waste audits, identifying both materials available for recycling, but also potential wastage that could be reduced, and site visits that allow consideration of container placement, plus frequency and timing of collections.

Understanding businesses - in summary

Data sources are available that classify businesses in the UK by number of employees and estimate commercial waste generation. These are useful indicators that help to scale the potential increased demand for commercial waste recycling services but may be unlikely to assist with the detailed design or development of services at the local council level.

In any case, the design of services should be considered from a commercial view point, in that these services are generally in competition with other service providers, with businesses selecting service providers based on the factors that are important to them at the time of selection. These factors are likely to include cost, and space constraints, but will also be affected by awareness of service offerings, and ease of engagement of service provider.

Local councils may wish to consider how their services may flex or scale in line with demand and use targeted marketing to increase the take-up of their services. Support to businesses could be provided through site visits and waste audits, with these assisting to engage and inform businesses on both recycling services and waste reduction, in addition to ensuring that containers are located in accessible locations for collection, with services scheduled at an appropriate frequency.

A broad range of information and guidance is available to inform the develop of commercial waste services. Examples are included that touch on points highlighted in this report, provide insight from businesses, or provide additional context on the carbon impact of services.

Recent reports and opinions

Commercial waste collections from Business Improvement Districts (BIDS)

Commercial Waste Zoning (ESA)

The Environmental Services Association (ESA) is the trade body representing the UK's resource and waste management industry.

The ESA published a report in 2023, Commercial Waste Zoning: Implications for the United Kingdom, which looked at zoning as a potential route to reduce environmental emissions and reduce costs to businesses through collaborative procurement. Zoning in this sense identifies areas, such as a BID, where a single operator can provide collection services.

The study undertaken focussed on a waste zoning trial in Glasgow. Glasgow is seen as being a typical urban area under one local council and thus was determined a suitable region to trial waste zoning, where the outcomes can be considered applicable for any urban area. The key outcomes of the modelling were as follows:

• Increase in waste service costs to businesses.
• Events (such as COP26) create a significant short-term demand for waste services, which causes issues for a local zone operator without national support.
• Pricing was largely dependent upon local access to treatment and disposal facilities.
• Local scale was able to provide increased service flexibility for waste producers such as container types.
• Businesses outside of the zoned area were severely impacted due to a loss in market choice and potential increases in costs.

The report also discussed the franchise zoning currently in place across parts of the USA, notably Los Angeles and New York. This zoning has so far demonstrated significant issues, such as substantial cost increases for businesses and implementation delays. The tendering process was found to be extremely complex, taking some US councils up to ten years to develop and implement. 

Commercial waste zoning – Zero Waste Scotland

A report on the same project in Glasgow has been published by Zero Waste Scotland with many of conclusions following the themes of the ESA report. A key finding however was that data was unavailable in many areas, meaning that improvements, for example increases in recycling rate or  reductions in greenhouse gas emissions could not be fully assessed, leading to a lack of conclusions relating to the overall efficacy of this service delivery model.

Costs did increase, but this was in part by design, with the cost of residual waste collection being increased, to drive the intended behaviour of increased take-up of the recycling services.

A SWOT analysis was completed which considered commercial waste zoning from the viewpoint of a range of stakeholders:

• Waste management companies: may see commercial waste zoning as a threat. There is the potential for consistent revenue where they are awarded the contract, but where this is awarded to a competitor, potential customers may be unavailable for an extended period.
• Businesses: the creation of the zone can allow service design to be tailored to the local area.
• General public: timed collections and control of the presentation of waste can improve street scene, and reduce congestion due to collection vehicles.
• Local councils: broader goals could be achieved through the letting of a contract, contributing to improved environmental performance, for example low emission vehicles, or overall service compliance for example the availability of recycling services.

In summary

Commercial waste zoning, like many issues, should be considered from a wide viewpoint to understand the impact on a range of stakeholders. Initial findings, either positive or negative, will likely relate to specific circumstances and be timely in nature.

When considering the rollout of a similar scheme a local council should consider how this will apply to their own area, and potentially seek out the experiences of a range of councils.

Zoning may lead to an initial improvement in service offering to a given area and will be subject to a market test and therefore the rates are likely to be competitive. They may however cause some market distortions by limiting competition in the areas surrounding the zones.

British Chambers of Commerce

The British Chambers of Commerce published Climate Call to Action, Research Report, which suggests that out of the 1,000 plus businesses surveys, 90 per cent do not fully understand what the UK Net Zero target by 2050 means for them, 96 per cent of the businesses surveyed were SMEs. Twice as many firms that had more than 50 employees (36 per cent) had a plan in place to assist them in reaching Net Zero, compared with businesses with less than 50 employees. 

In total 46 per cent of the 1,000 plus businesses surveyed are using recycling and waste reduction practices. Key strategies provided for waste reduction include clear labelling of waste, recycling, and compost bins with examples of appropriate items for each; working with suppliers who can assist in minimising packaging and waste, including exploring bulk buying and products with longer lifespans; setting printers to double-sided and draft quality printing, along with monitoring and reducing printing behaviour; adopting e-signatures and digital documents to decrease paper usage; and banning single-use plastics in the office, possibly providing staff with reusable water bottles or coffee cups.

These findings support the earlier highlighted survey, in that businesses may not be initially equipped to consider the steps required to move them towards a net zero economy. This may be particularly relevant for SMEs. Local councils can play a key role in helping businesses reduce their carbon emissions e.g. by conducting waste audits as part of their commercial waste services. Other actions identified by the British Chambers of Commerce can be equally supported, for example by providing labelled containers for waste and recycling, along with additional guidance to help staff recycling effectively.

The Federation of Small Businesses

The Federation of Small Businesses released advice on how to reduce waste in small businesses in 2023, some of the benefits listed from reducing waste were: improved reputation with customers, increased job satisfaction for current employees, compliance with UK’s current regulations, being prepared for any changes to regulations in the future, cost savings in your business. It was also suggested that when developing commercial waste services, local councils should consider the strategies used by small businesses in waste reduction. 

Businesses are advised to begin this process with a waste audit and adoption of the waste hierarchy. Once a waste audit is completed, businesses are then advised to adopt practical measures which include collaborating with suppliers to remove unnecessary packaging, transitioning to digital alternatives where possible, joining circular economy clubs that promote exchanging or selling waste to other local businesses, implementing separate waste bins for different waste types, and consulting government-approved lists for potential waste buyers. Local councils can support these initiatives by providing resources, facilitating waste audits, and ensuring there is sufficient waste collection and disposal services.

Local Government Association – routemap

The Local Government Association’s waste routemap suggests interventions that local councils can adopt to increase sustainability in their services which are focused around waste to complement existing local council projects. The routemap suggests that local councils  who are aiming to improve commercial waste services may consider implementing a range of different interventions. These interventions have been divided into the following categories:

• infrastructure
• local council policy and regulation
• funding and investment
• knowledgeable exchange
• collaborative working
• systems working
• mindsets and beliefs.

All these categories are based on their potential to drive change and achieve the project goal (Figure 6). Three Rivers District Council achieved a recycling rate of 64.1% in 2019/20, which was the highest recycling rate in England. Although this recycling rate relates to household collection services, the building blocks for successful delivery may be similar when considering commercial collection services. The council attributes their success to co-operation with neighbouring councils, effective communication, and community engagement, with a wide range of recycling services offered. 

Figure 6: LGA categories of interventions to be considered when planning change

Local councils are likely to deliver services with a focus on their geographic area, but this is often not in isolation, with many councils working collaboratively with neighbouring councils, including through partnership working. This network is a key strength for local councils and can be levered to understand the experience of others and receive support. When delivering commercial waste services, local councils may extend beyond the boundary of their area, presenting an additional opportunity for collaboration.

WRAP – Commercial waste services

When developing commercial waste services, local councils may also consider guidance published by WRAP’s set of guidance materials for local councils on commercial waste services. This includes::

• Commercial recycling collections guide.
• Commercial and household waste and recycling apportionment tool.
• Commercial food waste collections.
• Commercial and industrial waste drop off guide.

WRAP’s guide to commercial recycling collections provides detailed information on how to implement commercial recycling for local councils, from the initial scope to continuous improvement. To ensure that the service is delivered successfully, the WRAP guide recommends the taking following steps when launching a commercial waste service:

• customers are recruited, supplied with containers, and informed of the schedule
• ensuring vehicles and crews are ready, round sheets are issued and operations and undergoing suitable training
• administrative aspects should be completed (agreements, waste transfer notes, accounts, and systems)
• staff in call centres must be fully briefed
• street-based public realm staff, Business Improvement Districts, and other relevant third parties should be informed and briefed
• transfer and bulking facilities or Materials Recovery Facilities (MRF), along with relevant staff, need to be notified and briefed, including details like collection vehicle registration numbers for weighbridges
• the communications group should be fully briefed for any launch publicity, and cabinet members and chief officers should be informed.

Additional information and guidance – in summary

Many SMEs, including micro-firms are likely to require support to comply with Simpler Recycling, and local councilswill be well placed for this. A wide range of guidance is available to local councils through WRAP and other routes, with guidance to businesses from trade associations supporting the view that businesses can make strong efforts towards reducing their carbon emissions by considering their supply chain, reducing waste, and increasing recycling.

The waste sector continues to move at a fast pace in England, across neighbouring jurisdictions and globally. The requirement for businesses to recycle (in particular non-domestic premises) has been in place in Scotland since 2014, with Wales making a more recent transition in April of this year.

Where looking to learn lessons from these transitions it is important to understand the similarities with Simpler Recycling and where legislation may vary. These may lead to differences in how services are designed, or the composition of waste and recycling that they collect.

A further consideration relates to how waste composition is likely to change in the coming years as organisations change their behaviour and react to both the cost of collection and treatment of their waste, as well as shifting attitudes of their customers.

Waste (Scotland) Regulations

The Waste (Scotland) Regulations 2012 require every business operating in Scotland to separate their waste for recycling and have been in force since 1 January 2014. All organisations in Scotland should be recycling (plastic, metal, glass, paper, and card). Food waste collections should be in place for:

• urban food waste businesses
• where the business produces over 5kg of food waste per week (from 2016).

Organisations likely to be covered by the regulations include cafés and restaurants, but also organisations such as staff canteens (where food is prepared and sold). Organisations can view their rurality classification using a postcode lookup.

An additional element under the regulations is a restriction in disposing of food waste into public drains or sewers. This is due to evidence suggesting that fat, oils, and grease are linked to a drain blockage, with this restriction seeking to reduce associated issues with drains.

Standing guidance to businesses includes:

• to contact their local council or service provider and understand how collections can be provided
• engage staff, including telling how to recycle, and supporting this by labelling bins
• make steps to reduce waste.

Improvements to recycling are highlighted as being better for business, the environment, and the economy:

• reduced demand for virgin materials
• creation of jobs in the recycling sector
• reducing reliance on landfill by increasing recycling – reducing associated greenhouse gas emissions
• production of renewable energy through the processing of food waste at anaerobic digestion facilities.

Workplace Recycling Wales

A final area highlighted for businesses relates to food waste. By requiring food waste collections the aim is to make businesses more aware of wastage. Ultimately food waste reduction is linked to wide environmental benefits as the energy, fuel and waste requirements associated with food production are avoided.

Separation requirements applied to non-domestic premises in Wales from 6 April 2024. These requirements are contained in the Waste Separation Requirements (Wales) Regulations 2023. A Code of Practice provides guidance to organisations to assist them with complying with the new legislation.

In a similar way to Scotland, Wales has set out the benefits of recycling. These include a reduction in the use of raw materials and reduced carbon emissions. Additionally in Wales, there is the ambition to replicate the successes achieved with recycling from households, where the recycling rate is reported as being over 65 per cent, with this helping to save approximately 400,000 tonnes of carbon emissions per annum.

The targeted materials for recycling mirror Scotland (plastic, metal, glass, paper, and card) with the addition of cartons (plus similar materials such as coffee cups), plus unsold small Waste Electrical And Electronic Equipment (sWEEE) and unsold textiles.

In line with guidance for household collections in Wales, material separation of recyclables is required. Glass should be collected unmixed with other materials. However, metals, plastic and cartons may be stored in and collected from the same container.

Food waste collections are required for premises, where more than 5kg of food waste is produced per week. This mirrors the regulations in Scotland, and the restriction on sending waste to sewers is also seen in Wales. Unlike Scotland there is no additional consideration of the rurality of the premises.

Similar themes continue between Scotland and Wales where advice is provided to businesses including:

1. Contact current supplier to plan the separate collection of recycling.

2. Carry out staff engagement and education activities to ensure staff know how to recycle.

3. Consider waste production on-site and consider changing buying behaviours to increase the recyclability of packaging.

Additional areas of advice include consideration of:

1. Consideration of internal and external bins. Make it easy for them to be used and make them accessible to all relevant staff.

2. Consider the health and safety implications of the collection system for example the size of bins, or the frequency of collection. Waste should be stored in a manner that does not present a hazard.

Other waste composition changes

In addition to large scale legislation change, businesses will continue to react to the cost burdens being placed on them and the attitude shifts of their customers. An example of the latter being the so-called "Attenborough effect” where it has been reported that in a given year more than 50 per cent of consumers reduced their use of single-use plastics as a result of awareness raised through series such as Blue Planet II.

These reactions will cause a shift in the materials requiring collection and processing via commercial waste services, continuing to highlight the need for local councils to be able to adapt to the changing environment. Examples are provided from Switzerland, where food waste is being diverted from landfill, and Hong Kong, where reusable takeaway packaging is reducing the use of single-use plastics.

Switzerland food waste

As part of a non-profit initiative running in Geneva organised by the community group Free-Go, public refrigerators were placed along streets. Restaurants can leave their surplus food there, and residents are encouraged to take what they need at no cost.

The programme is successfully diverting food waste away from landfill, while also feeding the hungry. So far during the trial, only three per cent of the produce handled has been binned. Annual costs are around $40,000, with the funding being provided by private groups and the city government.

The initiative is already being called a success and ReFood, a European market leader in food waste recycling has praised the project, saying that it demonstrates further progress in the fight against food waste.

The refrigerators are becoming so popular that queues are known to form hours before deliveries arrive and food typically lasts less than an hour in the refrigerator before being removed, prepared, and eaten. Due to the success of this scheme additional sites are due to be added and the number of shops and restaurants joining the scheme continues to increase. 

The UK has several similar voluntary initiatives to this one. For example, The Community Fridge Network, which has already redistributed the equivalent of 16 million meals, and the rising adoption of food waste redistribution apps such as Too Good To Go.

Reusable packaging pilot, Hong Kong

Single Use Plastics Ban and Restrictions

A wide range of upcoming legislative and policy change will impact the composition and volume of waste generated by businesses. An example of this in England is the single-use plastics ban and associated restrictions. Polystyrene food and drinks containers can no longer be supplied in England as food and drinks containers. One solution is to shift to an alternative form of single use packaging, shifting the composition of waste generated on or near a business (or in household waste where the items are consumed at home). A more circular solution is being trialled in Hong Kong, where reusable packaging is provided, and collected using Reverse Vending Machines (RVMs). This is an example of how collection systems may evolve in the coming years.

Hong Kong – reusable food packaging pilot

In Hong Kong, FoodPanda (the equivalent of Deliveroo in Asia) launched an innovative reusable food packaging pilot in September 2022, marking a significant step towards combating the single-use plastic waste crisis. This initiative, a first of its kind in Hong Kong, was developed in partnership with the World Wide Fund for Nature Hong Kong, aiming to transition the food delivery industry towards more sustainable practices. Customers in specific districts can order from a 'Reusable Packaging' menu and return their containers after use for a deposit refund and a FoodPanda e-voucher, enhancing the takeaway experience's sustainability.

The environmental impact of single-use plastic waste generated by the food delivery industry. With a high concentration of retail and leisure businesses in Hong Kong, the visible and environmental impact of such waste was significant, contributing to litter and posing health and safety risks.

Figure 7: Reusable packaging reverse vending machine in Hong Kong

The approach

To tackle this issue, FoodPanda implemented a closed-loop system for takeaway packaging. Customers can choose reusable containers for their orders and return these containers to designated collection machines or through courier collection services. This system is supported by incentives such as deposit refunds and e-vouchers to encourage participation. Additionally, FoodPanda introduced courier container collection services and plans to expand reusable container lending services for wider community engagement.

The impact

The pilot program has successfully reduced single-use plastic from going to landfill, helping reduce pollution from one of the most densely populated areas in the world. It is estimated that if everyone in Hong Kong utilised reusable packaging for take-away food, it would prevent 2.89 billion pieces of single-use plastic ending in landfill.

How is the approach being sustained       

FoodPanda sustains this initiative through continuous expansion of collection locations, the introduction of courier collection services, and the upcoming launch of a container lending program. The company also engages with corporate partners to extend reusable packaging solutions for events, showcasing a commitment to sustainability across various facets of its operations.

UK and Global policy change - in summary

Simpler Recycling is not a new concept and businesses in Scotland and Wales have been through similar transitions in recent times, with requirements for the separate collection of recyclables and food waste.

Although similar, the legislations in Scotland and Wales do not completely align, with both being different again in areas to Simpler Recycling. Key differences include:

Table 3: Materials Identified for Separate Collection - Simpler Recycling, Waste (Scotland) Regulations, and Workplace Recycling Wales

In Scotland and Wales businesses have been provided with guidance to reach out to their supplier and discuss how they can be supported to comply with the requirements. Similar messaging in England could be seen as an opportunity to engage businesses, understand the challenges they may face and provide services that meet their needs.

Businesses will continue to change their behaviour as the costs of collection are understood. With food waste this may result in reductions in wastage and therefore tonnage available for collection. Single use plastics will also continue to decline, both in line with enforced bans set out in legislation, and through changing behaviours that may better meet the needs of their customers.

Local councils are likely to be well placed to support businesses by facilitating improved recycling collection, however they will need to be mindful of the changing demands that may be placed on services through composition shifts, as businesses continue to transition to a net zero economy.

Simpler Recycling reforms will require non-household municipal premises (businesses) to have separate recycling and food waste collections in place by the end of March 2025 (with the exception of micro-firms that will be required to have collections in place by the end of March 2027).

Local councils have rolled out a wide variety of collections services to households and businesses and are taking active steps to reduce their carbon emissions. This experience can now be used to support businesses in similar transitions.

There may be some challenges, in terms of timescale of implementation. However suppliers are gearing up to the support the industry, and treatment capacity may be developed (new or extended facilities) or created through diversion of other materials (for example. diversion of energy crops from anaerobic digestion)

Businesses, particularly SMEs, will need support to comply with Simpler Recycling. Local councils are well placed to deliver this support by designing services that work with the constraints of businesses for example high frequency collections that reduce the requirement for onsite storage. Additional engagement and education can be provided to businesses through site visits and audits, backed up by clear labelling of waste and recycling bins.

A range of service options are available to reduce the carbon impact of commercial waste services. These include the roll out of low emission vehicles, with electric vehicles currently increasing in use across a range of waste services. The use of the technologies such as hydrogen fuel cells will increase in the coming years, with the debate continuing on the efficacy of some new technologies to cover large areas with high mileage per route.

The larger carbon impact of commercial waste services is likely to relate to the waste arisings, rather than transport considerations. Support for businesses to recycle more is likely to assist in the transition to a net zero economy. Increasingly businesses are going to become aware of the carbon impact of their services for example through the application of carbon pricing under the emissions trading scheme.  This will act as a reverse incentive to businesses to reduce their waste and increase the take up of any recycling system they have in place.

Local councils are well placed to consider the wider impacts of commercial waste services in terms of traffic congestion and street scene. Commercial waste zoning has been shown to provide a step-change in service delivery, for example the extension of the range of services available to businesses, but it should be considered from the viewpoint of a range of stakeholders to understand the impact on the whole system.

Wales and Scotland have rolled out legislation that requires businesses to have recycling and food waste collection services in place. The approach in each of these areas is similar to Simpler Recycling, and learnings from these schemes will be relevant to councils in England as they begin to consider development or extension of their commercial waste services.

Composition changes of commercial waste arisings will shift as recycling becomes more embedded but also due to changes under extended producer responsibility and the deposit return scheme for drinks containers. Service design will need to consider how to flex with change waste flows in the coming years.

The waste industry continues to move at a significant pace, with local councils considering waste and recycling service evolution to increase the range of materials collected, manage changing composition, whilst considering carbon reduction initiatives across their full range of services. They are however well placed to support businesses in making similar transitions to increase recycling and reduce carbon emissions, and this can be seen as an opportunity to generate revenue, create green jobs, and support the local economy.

Estimating the Additional Cost

For planning purposes the carbon charge related to the Emissions Trading Scheme (ETS) could be calculated as follows:

1. Tonnage as determined by the business

2. Likely carbon emissions are highly variable depending on the nature of the business but could be considered against a documented range for Municipal Solid Waste (MSW) of 0.7 to 1.7 tonnes of CO2 emitted per tonne of MSW. A carbon factor of 1 tonne of CO2 emitted per tonne of MSW could be considered for planning purposes.

3. The fossil/ biogenic split is also likely to be highly variable depending on the nature of the business, but is often modelled at or around 50 per cent fossil, 50 per cent biogenic

4. The current, carbon value is £35 per tonne of CO2 equivalent (albeit this represents a low point over the last two years). The Department for Energy Security and Net Zero (DESNZ) provides traded carbon values that can be used for modelling purposes to allow organisations to consider the longer-term impact of carbon pricing. These are not forecasts, but rather projections against a series of scenarios.

Figure 8: Volatility of Carbon Values Shown Over Two-year Period

WasteDataFlow

Data Type: Primary

Measurement Type: Aggregated weighbridge data

Description: WasteDataFlow is the online portal for local council waste data reporting in the UK. It forms the basis of municipal waste data statistics.

This includes specific questions asking local councils to report tonnages of material collected from commercial & industrial sources by the council or its contractors, including at the kerbside and at recycling centres.

However, this data excludes waste collected from commercial enterprises by the private sector outside of local council contracts. It is difficult to compare or benchmark tonnage data across local councils because the number and type of businesses collected from is not reported – the percentage market share of customers held can vary from one local council to another.

Permitted site data returns

Data Type: Primary

Measurement Type: Aggregated weighbridge data

Description: The Environment Agency publishes tonnage data of waste received and removed from all waste facilities operating in England under an environmental permit, with similar datasets available in other UK nations.

This data is primarily differentiated using the European Waste Category codes (EWC) waste coding system, which provides a description of the material and in some cases the industry that produced the waste. However there are considerable limitations, with many popular codes being quite generic in nature making it impossible to differentiate between municipal and commercial waste using codes alone.

Another area of uncertainty with this dataset is the potential for double counting, such as when waste is transferred from one permitted facility to another. The data also excludes waste handled at sites that are exempt from requiring an environmental permit.

Defra Reconcile Method

Data Type: Secondary

Measurement Type: Calculation Methodology

Description: Defra uses a bespoke methodology know as ‘Reconcile’ to estimate commercial & industrial waste arisings in accordance with EU Waste Statistics Regulation (WStatR) reporting requirements. Although no longer a member of the EU, this continues to inform the UK statistics on waste publication.

The methodology, which was revised in 2018, uses a combination of regulatory, statistical and industry data sources, and applies a number of assumptions in interpreting these data sources. Previous changes to the methodology and assumptions have led to significant changes in the overall waste arisings estimate.

Defra publishes separate figures for commercial and industrial waste; however the commercial waste figure is provided at the national level, across a wide range of constituent sectors and organisation sizes. Limited insight is provided at the subsector and local level.

National surveys

Data Type: Primary

Measurement Type: Survey

Description: Prior to development of Defra’s Reconcile methodology, national commercial and industrial waste surveys were undertaken in England to inform statistical reporting to the EU, with the last carried out in 2009. Wales has continued to undertake national C&I waste surveys, with the most recent occurring in 2018.

National surveys involve surveying a representative sample of businesses to identify what type and volume of waste they produce, and then use this data to estimate national waste arisings based on the population of businesses in that country.

The results provide a more detailed breakdown of waste types generated by different subsectors within the commercial and industrial sectors. Data may also be published at a regional level.

Although these surveys provide a higher level of confidence in the overall tonnage of waste generated compared with calculative methods (such as Reconcile), confidence levels are reduced when slicing the data into constituent groupings e.g. by subsector, size band or region. Due to this limitation, data is generally not published at a local council level.

Feedstock Market Assessments

Data Type: Secondary

Measurement Type: Calculation methodology

Description: It is common for owners and potential investors to commission feedstock market assessments to help inform investments in waste businesses and infrastructure. These studies can be at a national or regional level, are generally made available only to the commissioning entity, and are therefore not in the public domain.

Depending on the organisation undertaking the study and the particular feedstock market in question, a variety of methodologies may be applied to assess the level and nature of commercial waste arisings. Broadly speaking these will use studies that draw on primary data sets such as WasteDataFlow and Permitted Site Data Returns and apply assumptions to these, for example the approach to subtracting household waste from aggregated returns data or the estimation of commercial waste handled at permit-exempt facilities.

Inhouse Datasets

Data Type: Primary

Measurement Type: Aggregated weighbridge data

Description: There are a number of major waste collection contractors operating in the UK with significant business customers on their books. It is theoretically possible for these companies to collate this tonnage data into internal databases to provide insight into commercial waste generation from different sectors and regions.

Whilst potentially insightful, these datasets are by their nature not publicly available, and the accuracy and completeness of individual datasets is likely to vary between contractors and regions.