Sunday, 10 August 2008

Where there's muck, there's brass. And, even better, plastic

With oil prices sky-high and landfill taxes rising, businesses and investors are finally starting to realise the value of what we throw away, says Zoe Wood
Zoe Wood
The Observer,
Sunday August 10, 2008

Modern life is rubbish - it generates about 100 million tonnes of it a year - and until recently not many firms wanted to get their hands dirty. However, soaring oil prices and landfill tax mean the economic benefits of recycling are starting to stack up.
Recycling has been a money-spinner for Disney's Pixar, whose film Wall-E features a robot left to clean up a litter-strewn and uninhabitable Earth after humans have abandoned it. But the studio has been accused of hypocrisy for launching a vast range of merchandise on the back of a film with an eco-friendly message.
Back in the present day, however, 'the value of waste is now being realised,' says Peter Mills, commercial director at New Earth Solutions (NES), who reports the extreme phenomenon of 'landfill mining' in the US. 'People are going back in - in New York they are excavating landfill. That's something I've got one eye on here.'
Mills's company is backed by what is thought to be the first retail fund purely focused on investing in UK recycling facilities. Launched last month with a target of £15m, the fund will provide an investment pot for the company, which works with local authorities and claims to be able to recycle up to 60 per cent of the waste dumped on UK doorsteps.
The UK generates around 100 million tonnes of waste a year from household, business and industrial users. This week, figures from the Office for National Statistics showed the household waste mountain decreasing slightly - from 25.8 million tonnes in 2006 to 25.6 million tonnes last year - with around 34 per cent of rubbish now recycled. That meant the volume of waste sent by councils to landfill also fell slightly, to 15.8 million tonnes from 16.9 million tonnes the previous year. Environment minister Joan Ruddock described the figures as 'good progress' but admitted 'we still have some way to go before we are performing at the level of some of our nearest neighbours' on the Continent. That is an understatement. The UK is still considered the dustbin of Europe, with only Greece sending more refuse to landfill.
Phil Conran, recycling development manager at Biffa - a major player in waste management along with Veolia and Sita - points out recycling has always had to pay its way, because firms are only prepared to collect what is cost-efficient to recycle. 'A key factor will be landfill tax going up,' he says. 'The key economic factors in recycling are the value of the materials recovered and the cost of landfill. Because the latter has been so cheap, there has been no financial benefit to the industry.'
However, Conran says this is changing: 'The cost of oil means the cost of producing with virgin materials has gone up. There is now value in keeping materials out of landfill, so the economic equation stands up.'
Landfill tax is currently £32 a tonne, but will increase by £8 a year until 2011. Experts say that, once the gate fees charged at landfill sites are added on top, the cost per tonne of waste could approach £100 - a levy comparable to that charged in Germany a decade ago. Germany sends around 20 per cent of municipal waste to landfill, compared with almost two-thirds in the UK.
Wrap, the government-funded agency, is keen to attract investors to the recycling industry. It estimates the sector is worth about £12bn but says that could reach £30bn within 15 years as UK and EU initiatives gather pace. Steve Creed, director of business growth at Wrap, says that once oil hit $75 a barrel - it is now around $119 - the cost of using recycled plastic was on a par with buying new resin: 'The value of the materials has started to have an impact on what people think, when five years ago it didn't.'
Wrap points to success in recycling plastic bottles - with 182,000 tonnes a year now collected, equal to a third of the bottles used in the UK. Part of that success must be linked to the raw material cost, with the price of HDPE (high density polyethylene) having doubled to £200 a tonne.
Some retailers have complained that the reprocessing part of the recycling industry has not kept pace with collection, meaning efforts to introduce environment-friendly packaging are wasted. Consumers , too, have been disappointed to discover that not all the plastic they conscientiously sort into boxes is reincarnated because of the high costs of extraction.
Creed says Wrap is now working on a strategy to address the problem. 'New technology is required to extract mixed plastics but it is close to being available. The challenge is to encourage investors to look at the sector. Waste has been seen as a 'dirty' area and more risky, but the market has doubled in size over the past few years.'
The rising cost of extracting raw materials has also made the industry pay more attention to the value of metals locked away in old TV sets and computer monitors. The Waste Electrical and Electronic Equipment (WEEE) Directive aims to stop hazardous electricals such as cathode ray tubes, which contain lead, reaching landfill. But David Aitken, managing director at GreenWorld Electronics, says consumers and businesses are confused about how best to conform - and this ignorance has, according to Greenpeace, resulted in toxic waste washing up in scrapyards in Ghana, China and India. The campaign group is lobbying manufacturers to introduce global recycling schemes that would shoulder the burden of recycling old items, a plan Aitken supports: 'When a manufacturer sells a piece of equipment there should be an automatic returns policy,' he says.
However, much of the activity in the sector is geared to tackling municipal waste, as this is more closely tied to EU directives - and because, as Mills says, 'if you go to a bank with a local authority contract, it is as good as a government bond'.
NES has a £50m credit facility with German bank Nord, but Mills says the current climate is making it harder for companies with new technologies to get cash: 'There is a shortage of money in the system. We had an advantage because we agreed our facility before the credit crunch hit.'
Motorists queue for fuel conversion

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Published Date: 10 August 2008
By Fiona Gray
THE rocketing price of petrol and diesel has prompted a huge increase in the number of motorists converting their cars to run on cheap LPG fuel, Scotland on Sunday can reveal.
The number of conversions has doubled in the past six months and backlogs of up to two months are building for the work, despite a hefty price tag of around £2,000.But at less than 60p a litre, the savings to be made from running a car on LPG mea
n the price of conversion can be paid off in as little as a year.An estimated 25,000 cars will be converted to run on LPG in the UK this year, more than double the total for 2007.Drivers of large petrol-engined 4x4s are among the most desperate to change to LPG fuel, which was selling in Glasgow last week for as little as 51.9p a litre and no more than 64.9p a litre.LPG is a mixture of hydrocarbon gases like propane or butane, and comes from the separation of natural gas products or the refining of crude oil. Although its price has increased over the past year by about 10p a litre, its low fuel duty still puts it at half the price of a litre of petrol at 114.7p or diesel at 127.6p.An LPG conversion has almost no effect on a car's performance and the steel tank is safer than a plastic petrol tank in an accident. Despite a 25% reduction in miles per gallon, £10 of LPG takes a car one and a half times further than £10 of petrol.The fuel is popular with environmentally minded drivers as it produces 20% less carbon dioxide than petrol, although the LPG tank reduces boot space.Now the LPG revolution is hitting drivers of larger cars who can afford the boot space but not the soaring price of petrol. An LPG conversion could also get 4x4s around the new 'green' tax rating system with £300 slapped on polluting cars, announced in March's Budget.Chris Taylor, of national LPG supplier Autogas, said: "The general awareness and demand for LPG is up, and it's been getting progressively more popular for the last six months. We are inundated with inquiries about getting conversions done." Taylor added that while 12,000 conversions were made in the UK last year, this year 14,000 had been done by the end of June alone and he expected 25,000 cars to be converted in 2008 overall.LPG installer Clarkson Autogas in Glasgow is booked until the end of September for LPG fittings. Owner David Clarkson said: "The majority of cars we get are large six or eight-cylinder engines, although there are a number of smaller engines like Mondeos and Hondas coming through as well."Big

Centrica dangles £4bn cash to clinch stake in British Energy

Mark Kleinman
Last Updated: 11:23pm BST 09/08/2008

Centrica is planning to offer a cash sweetener for the Government's stake in British Energy in an effort to secure its backing for a £22.5bn merger with the nuclear power generator.
The owner of British Gas is galvanising up to £4bn to cover the cost of part or all of the stake in the hope that cash will persuade the Government to allow it a place in the deal.
Centrica is fighting against resistance from ministers to the idea that it could form a national energy champion in the face of overwhelming support in Whitehall for a takeover of British Energy by EDF, the utility which is majority-owned by the French government.

After admitting last week that it was looking to revive a merger with British Energy which had been rebuffed earlier in the year, Centrica has in recent days decided that it needed to re-think its paper-based proposal and offer cash for part of the Government's 35 per cent shareholding in the nuclear generator.
Last night, it was unclear exactly how such an offer would be structured. However, the fact that Centrica's board is looking closely at the option underlines its determination to play a central role in the outcome of the protracted auction of British Energy.
More on utilities
City sources say Centrica is privately unhappy that ministers have demonstrated their opposition to a deal between the two British companies, and believe a cash offer to the Government which could help replenish the Treasury's depleted coffers may yet find favour in Whitehall.
Last week, in response to Centrica's confirmation that it remained interested in a merger with British Energy, a Government official was quoted as saying that such a proposal would not be "receiving the support of this party. British Energy needs more [new nuclear] expertise, experience and knowledge technologies. Centrica's not going to provide that."
Led by Sam Laidlaw, its chief executive, Centrica believes some form of partnership with third parties such as EDF to provide nuclear new-build expertise would still allow the British company to assume the leading role in a takeover of British Energy.
Until earlier this month, Centrica had been expected to take a stake of about 25 per cent in British Energy as part of a deal led by EDF. That was to have been an agreed takeover with the backing of both British Energy and the Government. However, the talks stalled because the proposed 765p-a-share offer was rejected by Invesco and M&G, two of British Energy's largest institutional investors, on the basis that the price was too low and structured in too complicated a fashion.
While ministers are keen to resurrect the EDF-led deal, it remains unclear whether their efforts will be successful.
In its statement last week, Centrica said it could propose to British Energy "long-term power off-take arrangements, Centrica participating in British Energy's potential new nuclear partnerships or a possible merger of Centrica with British Energy, only if terms could be agreed and if all parties are fully supportive."
Centrica wants at least a minority interest in British Energy because the increased volatility of wholesale energy markets has forced up the cost of securing the gas and electricity it requires to supply to British customers. That has led to a political backlash and growing calls for a windfall tax on utility firms.
Last night, Centrica declined to comment further on its intentions.

Green gadgets that can help save money by remote control

Huma Qureshi looks at a growing range of gizmos designed to help cut energy consumption

Huma Qureshi
The Observer,
Sunday August 10 2008

With energy bills set to soar across the board in the wake of major price hikes from British Gas and EDF Energy, there has never been a better time to start changing your habits at home to help bring your bills down.
There is a lot more you can do than just switching to energy-saving light bulbs. According to the Energy Saving Trust, the average household could knock £270 off its energy bills - the equivalent of 1.5 tonnes of carbon dioxide emissions - by adopting energy-efficient measures in the home. Even the smallest of actions, like turning a kettle off at the mains after you've boiled it, can not only help you be kinder to the environment, but also make a difference to your electricity bills. 'Taking a sustainable approach to living can save you money,' says Alex Lambie, founder of the eco-energy website
Say goodbye to standby
Arguably the biggest waste of electricity - and money - is to leave electrical appliances on standby, rather than switching them off at the mains. It can save the average family around £38 a year.
But if you keep forgetting to switch the socket off, or think it's too much of a hassle because you've got too many appliances linked to each other, there are easier ways to power down - for instance, by using devices like the Bye Bye Standby and the Standby Buster. You just plug all your appliances into one of these gadgets (for example, by using an extension lead to connect your television, DVD player and sound system, and plugging that into the Bye Bye Standby at the socket). You can then turn the whole lot off at the switch by clicking a simple remote control.
Jeff Ellis from Bye Bye Standby says: 'It's a good habit to get into, to turn everything off last thing at night, but in reality it's a rare person that will go around the house and turn off every single socket. A remote-controlled way of doing it makes it much easier.' You can also buy devices such as The Owl, which monitor overall electricity usage in the home and tell you how much energy each of your appliances is using.
The eco-friendlier kitchen
If you are buying new white goods, the manufacturer's information should tell you how energy-efficient they are. Fridges, freezers, washing machines and tumble dryers all carry an EU energy label giving their energy-efficiency ratings (on a scale from A to G, with A being most efficient) and how much electricity they use, measured either as kilowatt hours per year (for a fridge or freezer) or kilowatt hours per cycle (for items like washing machines). By choosing an appliance that carries an A rating (or A+++ for fridges and freezers), the more money you can save and the more you can help the environment.
Many electrical appliances also carry an 'Energy Saving Recommended' sticker, a blue label showing approval from the Energy Saving Trust. The trust says that if everyone in the UK upgraded their old kitchen appliances to ones carrying a recommended sticker, the whole country could save nearly £700m worth of electricity. If you swapped your old fridge-freezer for a new blue-label one, you could save £34 a year.
There are smaller changes that you can make in the kitchen too - replace a rusty, leaky kettle with an energy-saving one, such as the Kenwood Energy Saving Kettle, and you'll be using 35 per cent less electricity and only boiling as much water as you need.
Hold the heat
Making sure your home is properly insulated is key to cutting your heating costs. However, getting your walls and loft insulated can be expensive - at least £500 if not more. If you are on benefits, or are over 60 and in receipt of benefits, you can apply for a government grant to improve your home's insulation. But if you can't afford to carry out a major project like re-insulation, you could opt for the Radiator Booster, which sits on top of your radiator, captures the heat rather than letting it escape down the back of your radiator, and circulates it evenly around the room. The Radiator Booster claims to heat your room more quickly than the radiator on its own, meaning that, theoretically, your boiler doesn't need to be on for as long.
Old boilers are notoriously eco-unfriendly and not very cost-efficient. New condensing boilers can save at least a third on heating bills. On top of this, devices such as the Zenex Gas Saver can sit on top of your boiler, capture waste heat from the flue and use it to pre-heat the water. Because it helps heating to happen more rapidly, it reduces the time your boiler needs to be on for, cutting gas consumption by up to 50 per cent. But it does cost £595.
Most cost-cutting can, however, just be common sense. 'There is a place for new energy - and cost-saving gadgets, but at the end of the day, it's just about changing habits and getting used to doing things differently,' says Lambie. 'There's so much that you can do if you just think about it - don't leave your phone charger plugged in all the time; run your laptop battery down to zero before you charge it up again. If you make a point of switching all the sockets off at night, then before you know it, it's part of your daily routine.'
Where to buy
· Bye Bye Standby energy saving kit (£29.99) available from Waitrose, Comet and Currys.
· Radiator Booster (£14.99), Eco Kettle (£34.99) and Standby Buster Kit (£29.99) available from Nigel's Eco Store:
· Zenex Gas Saver (£595) available from Zenex Technologies: 0800 328 7533
· Kenwood Energy Saving Kettle (£39.95) and Owl Wireless Energy Monitor (£34.95) available from John Lewis:
For more on grants for home insulation, visit

Fuel firms set for £11bn windfall in CO2 trading

Tim Webb
The Observer,
Sunday August 10 2008

Energy companies are set to scoop even bigger windfall profits from emissions trading than originally predicted, according to new estimates from the regulator Ofgem. Hard-pressed consumers could end up bankrolling most of this windfall through higher fuel bills.
The energy industry stands to make £11bn over the next five years, up from Ofgem's original estimate of £9bn. This is because carbon prices have risen since the beginning of the year, according to consultancy EIC. The industry insists that it makes no net profit from the scheme and rejects Ofgem's figures.
The European trading scheme was introduced to reduce industry's carbon emissions. Companies are given free permits giving them the right to emit a fixed amount of carbon. They have to buy additional permits on the carbon markets to pollute more, or pay a penalty.
But Ofgem claims that companies have been passing on the notional 'opportunity cost' of these permits to consumers, even though they received most of them for free. This is because using the permits to generate electricity deprives companies of the opportunity of selling them on the open market.
At the end of the year, the government will require companies to buy some permits, rather than receive all of them for free, which will reduce their profits from the scheme. This month The Observer revealed that the government was considering whether to use some of the proceeds to tackle fuel poverty.
Vince Cable, the Liberal Democrats' Treasury spokesman, said: 'My concern is over the very large packet of money the energy companies have made from the trading scheme, and the money is more than we thought before. The industry has been attacking Ofgem's numbers, and it's important the regulator defends them.'

Water firms are the biggest river polluters

Jon Ungoed-Thomas and Georgia Warren

BRITAIN’S water companies are this weekend revealed as the worst polluters of the country’s rivers and beaches - responsible for more than 300 offences in the past five years.
Despite a crackdown by the Environment Agency, water companies have killed thousands of fish and spoilt rivers with illegal discharges of sewage. Officials say fines are not big enough to be a deterrent.
The water companies have been identified as repeat offenders by the agency in its annual league table of the worst polluters. They account for more serious water pollution offences than any other sector.
Of the water companies, the most prolific polluter has been South West Water, which has been guilty of 47 incidents of unlawful pollution. It has been prosecuted for illegal discharges of sewage into the Taw Torridge Estuary in Devon, the River Truro in Cornwall and the River Dart, which runs off Dartmoor. The company has been fined £171,500 over the past five years.

In one of the most serious incidents involving South West Water, families at Dawlish beach on the south coast were warned to get out of the water because of sewage overflowing from a pumping station in the summer of 2006. The company was fined £7,000.
It is claimed that on some stretches of water in the southwest there is almost a constant risk from sewage overflows. “The company’s record on pollution is awful,” said John Osmond, general manager of Falmouth marina in Cornwall. “We have dockmasters who have hepatitis jabs because of the health hazard from sewage. In 2008, we shouldn’t still have raw sewage going into the sea and rivers.”
In the late 1980s, The Sunday Times’s Water Rats campaign exposed the filthy and dangerous state of some of the country’s rivers. Water quality has since dramatically improved, but sewage overflows remain a hazard.
Many of the court fines are too low to have any financial impact on the companies. Since 2003 Thames Water has notched up more fines than any other water company - £489,000 for 31 offences. This figure is dwarfed by its profits - £590m last year - and exceeded even by the bonuses paid to its senior executives.
David Owens, the chief executive of Thames Water, picked up a bonus of £662,000 last year.
Last May, Thames Water was fined £20,000 after a 35-year-old sewage pipe burst, churning out sewage into a stream in a National Trust woodland site at Woolton Hill, Hampshire. Thousands of fish were killed.
The fine represented just 0.001% of Thames Water’s £1.49 billion turnover last year.
Ed Mitchell, head of environment protection, policy and regulation for the agency, said: “We don’t think fines for environmental offences are sufficient to do what they are intended to do - which is to change behaviour.”
Thames Water has, however, dramatically improved its record on pollution. “Last year we reported reduced pollution with only one conviction, and had the lowest level of fines in the industry,” said a spokesman.
Southern Water and United Utilities were responsible for 40 pollution offences each since 2003. Both companies said their environmental performance was improving.
The companies which accrued the most fines for water pollution in 2007 were Severn Trent Water, Yorkshire Water and United Utilties Water. In September last year, Severn Trent was fined £34,000 for polluting the River Teme in Worcestershire, one of the country’s finest salmon rivers.
South West Water said its pollution record had significantly improved since 2003 and had not caused any “category 1” incidents - the most serious classification - for more than five years. The company said its large infrastructure meant cases of pollution were a higher risk.
“We face particular challenges because the southwest has a very sensitive environment, including a third of the England and Welsh coastline.”