The bioresources industry needs to enter an unprecedented period of change, in order to respond to regulatory reforms driven by environmental concerns and economic drivers. However, the degree of uncertainty about the timing, coordination and impact of reforms means that, rather than being able to deliver changes to bioresources management in the short, medium and longer term, there is a risk that the industry becomes stuck in a state of inertia. We believe that the sector has reached a critical point and it is clear that greater understanding and consensus over the future direction of the sector is required.
Unless the industry, regulators and other key stakeholders come together to make conscious and congruent decisions about the direction of travel we risk inaction or – perhaps worse still – short term decision making leading to poorer environmental and customer outcomes. This not only has cost, quality and service implications but also risks harm to the future potential of the nascent competitive bioresources market.
The current approach to implementing change is through individual regulatory actions to deliver specific improvements. For example, the Industrial Emissions Directive (IED) impacts upon sludge treatment sites, whilst Farming Rules for Water (FRfW) and the EA Sludge strategy both separately impact the recycling of biosolids to agriculture. Whilst each individual change may lead to some environmental improvements, the approach is failing to look at the holistic environment, consider wider outcomes or understand the interdependencies between changes in environmental regulation. This approach is less of a problem when changes do not lead to significant investment requirements. However, some of the recent regulatory decisions (e.g. IED and FRfW) have not only led to the need for significant investment but also risk altering the whole delivery model for bioresources services (e.g. away from anaerobic digestion, towards incineration).
Uncertainty over the best end to end, long-term solution for managing sludge also impacts the development of a competitive bioresources market by deterring market entrants from having the confidence to make long-term investment in the delivery of future bioresources capacity. Although unintended, the recent changes will lead to inertia, preventing the water industry from being able to develop long-term asset plans and it is progressively undermining the sustainability of the sector.
Conversely, if there was greater long-term certainty, sludge treatment and recycling has the potential to support delivery of national priority outcomes including sustainable agriculture, a circular economy, net zero carbon and lower costs for customers.
As a major provider of bioresources services, we believe that unless the current degree of uncertainty is reduced there is a significant risk that:
- the industry will no longer be able to reach net zero carbon by 2030;
- confidence in recycling biosolids to land may be irrevocably undermined; there is a higher risk of inefficiency due to abortive investment; and
- a competitive bioresources market will not develop to its potential, reducing opportunities for customers to benefit from more efficient outcomes.
As a significant amount of the uncertainty arises from external requirements being placed on the sector, we are calling on regulators, DEFRA, Ofwat and the EA, as well as other key stakeholders in the bioresources sector, to come together and co-develop a workable vision for the sector which existing operators and future entrants can work towards implementing. This will need us all to embrace systems thinking and take a broad perspective across the entire sludge treatment system and wider environmental system. By using such an approach we can find solutions that deliver balanced and holistic environmental outcomes, at an affordable cost to society.
We believe there is a compelling need for the development of a national long-term bioresources strategy and this is required quickly, well ahead of the next price review (PR24). We set out our proposal for development of a holistic bioresources strategy and we identify three core principles to support its development:
- a long-term coherent vision with clear environmental outcomes and greater regulatory certainty
- alignment of long-term environmental regulation and economic incentives
- development of a collaborative research and innovation pathway.
A long-term vision will support greater certainty in the best solutions for delivering bioresources services. This vision should also be accompanied by an appropriate transition plan, which encompasses reasonable expectations on the sector in moving to this new long-term vision, and will also enable effective planning for how this will support increased competition for the delivery of bioresources services.
In this paper we present a series of recommendations for changes in the sector to support the delivery of these three key principles and an overall sector strategy. With these elements in place it will enable water companies to deliver an adaptive asset plan to 2050 and ensure that PR24 plans are developed in the context of delivering longterm outcomes.
We are also outlining an indicative programme of activity to guide the sector through developing and delivering a long-term strategy. We have proposed that to instigate the work we use CIWEM, as an independent body, to coordinate and manage the development of a long-term strategy. This builds upon work we are leading through a joint Water UK and EA Bioresources Strategy Task and Finish Group and we believe that this work will go a long way towards delivering the outcomes set out in this paper. We encourage all stakeholders to participate in this work and support the delivery of a successful project outcome.
By acting together there is an opportunity to make a significant difference to the long-term sustainability of the bioresources sector and the wider outcomes that can be delivered.
We therefore ask that Defra, EA, Ofwat, water industry and other key stakeholders come together to set out the programme to develop this strategy and agree an action plan to ensure we realise the opportunities we have to deliver continual long-term value from bioresources. We hope that this paper provides a positive contribution towards delivering a sustainable and progressive future approach for a sector which provides essential services to customers and the environment. We welcome responses to this paper and anticipate the prospect of a productive discussion about the future of bioresources management.
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For more information, or to take the discussion further, the UU Bioresources team can be contacted at UUBioresource@uuplc.co.uk.