Packaging - extended producer responsibility: full business and regulatory impact assessment (BRIA)

Annex A – Packaging collection costs in Scotland

Zero Waste Scotland (ZWS) provided Defra with outputs from their modelling of Scottish household collection and disposal costs. Having collected data from local authorities in confidence, they were unable to provide the full modelling and were only able to provide aggregated estimates for each waste stream. Further analysis was conducted by Defra to estimate the packaging element of these costs for the IA.

Packaging residual waste costs were estimated using the following method. Collection costs were estimated by multiplying the kerbside residual waste costs by the proportion of packaging in residual waste in Scotland by weight (21%). This was taken from household waste composition produced by Eunomia for WRAP^[56].

To estimate the disposal costs, specific data on the tonnage of target dry materials collected for recycling and in residual waste in Scotland, provided by ZWS were used. Using the same waste composition analysis, non-packaging dry material was removed from these tonnages. Packaging in scope of the Scottish DRS system as also removed. The remaining packaging in residual tonnages were multiplied by a disposal cost per tonne. This was estimated by first estimating the proportion of residual waste sent to landfill (71%) and EfW (29%) in Scotland^[57]. For the proportion sent to landfill, the Scottish Landfill tax rate (£91.35^[58]), was added to the assumed landfill gate fee used by WRAP in their household collection modelling (£27.91). Again, the EfW gate fee used by WRAP in their household collection modelling was used (£84.15).

Packaging related dry recycling costs were estimated as follows. Collection costs were estimated by multiplying the total dry collection costs by the proportion of packaging in dry collections by partially compacted volume. A specific estimate for Scotland was not available and the proportion used by WRAP in their England collection costs modelling was used (78%). This was considered appropriate as waste composition analysis^[59] shows that the proportion of packaging in dry recycling by weight is similar in England and Scotland.

To estimate net recycling end-of-life treatment costs, target dry materials tonnages were again taken from the ZWS analysis. As with residual waste tonnages, these were adjusted to remove non packaging materials as well as packaging in scope of DRS. The number of local authorities signed up to the Scottish Charter for Household Recycling was used as a proxy for waste collected as multi-stream (93%). It is assumed that LAs would receive material revenue for this packaging. Revenue per tonne rates were assumed for each high-level material type. Where possible these were aligned with WRAP household collection costs modelling. The proportion not collected as multi-stream (7%) was assumed to go to a Material Recycling Facility (MRF) for sorting, with councils paying a gate fee. In line with WRAP’s modelling, a MRF gate fee of £60 per tonne was assumed. This accounts for the lower value of this material once DRS packaging is removed.

Lastly, it was assumed that a certain proportion of costs associated with local authorities transitioning to the Scottish Charter for Household Recycling would relate to packaging. As the Charter includes separate food and dry collections, the proportion of packaging in food and dry recycling collections (60%) was used^[60]. It was multiplied by total transition costs, added to the packaging recycling collection costs and annualised over the appraisal period.