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Can businesses make money from recycling?
Have you ever heard the saying, ‘One man’s rubbish is someone else’s treasure’? This is becoming increasingly true as the UK moves towards a circular economy. With more recycling plants opening up, businesses can turn their waste into valuable commodities.
Businesses can take advantage of this by ensuring they manage their recyclables correctly to earn rebates on their collected recyclables. At worst, your commercial waste collection costs will come down, and at best, your business can earn revenue for waste management!
This article covers everything you need to know about recycling rebates and other independent schemes for economically efficient waste management.
💡 Key takeaways:
- What is a rebate? Recycling rebates are payments made to UK businesses that manage their recyclables appropriately, turning them into valuable commodities.
- How does it work? Recycling plants effectively purchase valuable recyclable waste from waste collection providers, who in turn pay rebates to businesses that give them these raw materials.
- How did rebates arise? Government policy or regulations make no mention of rebates. These have arisen as waste gradually becomes a valuable commodity.
What are recycling rebates?
Recycling rebates are payments businesses receive for managing their recyclables to make them into valuable commodities that recyclers can use to manufacture new products.
These rebates are calculated based on the weight and market value of the recyclables collected, such as cardboard, paper, plastics, and metals, and are paid by commercial waste collection providers.
The rebate can be given as:
- A direct cash payment.
- A discount on future waste management services.
- A credit on the business’s account.
What waste can your business get rebates for?
Businesses can get rebates for recyclable waste that fetches a price from recyclers, who can use it as raw material to make something more valuable. What waste is considered a valuable commodity depends on its composition, state, quality, level of contamination, whether it’s packed as per requirements, and the delivery volumes.
For example, dry, non-soiled, sorted, and baled commercial cardboard waste can fetch a reasonable price because it makes manufacturing new cardboard cheaper and more environmentally friendly than using virgin materials (wood pulp).
The rebate amount will depend on how much your waste collection provider receives for delivering it and the terms and conditions of the rebate as stated by the Service Agreement. Waste collection companies typically design rebates to remove counter-party risk and ensure their operational costs are covered.
Prices, minimum volumes and typical requirements of recyclable waste
The table below summarises the average prices, the required volumes* and the typical requirements of the most common recyclable wastes purchased by recyclers:
| Waste Material | Typical Minimum Volumes (kilos) | Current Market Price Estimate (GBP/tonne) | Typical Requirements |
|---|---|---|---|
| Aluminium (Cans/Foils) | 500 kg | £800 - £900 | Must be clean, sorted, and compressed |
| Steel | 100 kg | £200 - £300 | Free of contaminants, sorted by grade |
| Copper | 100 kg | £5,000 - £6,000 | Clean, stripped of insulation |
| Brass | 200 kg | £3,000 - £3,500 | Free of other metals and contaminants |
| Cardboard | 100 kg | £70 - £80 | Clean, dry, and baled |
| Office Paper | 100 kg | £150 - £200 | Sorted, free of contaminants like plastics |
| Newspapers & Magazines | 2,000 kg | £50 - £70 | Sorted, free of other types of paper |
| PET (Plastic Bottles) | 1,000 kg | £80 - £90 | Clean, labels removed, sorted by color |
| HDPE (Plastic Containers) | 500 kg | £200 - £300 | Clean, sorted by type and color |
| PP (Polypropylene) | 1,000 kg | £150 - £200 | Clean, sorted by type |
| Clear Glass | 5,000 kg | £30 - £40 | Clean, sorted by color, no caps or lids |
| Colored Glass | 5,000 kg | £20 - £30 | Clean, sorted by color, no caps or lids |
| Scrap Wood | 2,000 kg | £20 - £30 | Free of treatments, nails, and other materials |
| Used Tyres | 1,000 kg | £50 - £60 | Free of rims, sorted by size |
*These minimum volumes are those needed to cover operational costs. It shows the key part that waste collection providers play of aggregating the output of multiple businesses to meet the minimum quotas required by recycling plants. These volumes are estimates based on the experience of our experts.
Source: letsrecycle.com, zestrecycle.co.uk
How can I best negotiate a rebate?
All businesses, especially those that generate significant amounts of recyclable waste, should monitor rebates and market prices closely. Knowing how much waste collection companies earn from YOUR recyclables can help you choose a provider offering more favourable rebate conditions!
How did recycling rebates for businesses arise?
Interestingly, the emergence of recycling rebates for businesses is a consequence of the broader waste management policies and regulations rather than direct government intervention in the rebate schemes. In other words, it’s not something directly pushed by the government, like the landfill tax or Contracts for Difference (CfDs) in the energy sector.
Here is how the different waste regulations implemented over time create the perfect landscape for rebates:
| Regulation | How it caused rebates |
|---|---|
| Landfill Tax | Financial incentives for businesses to recycle to avoid high landfill disposal costs. |
| Environmental Protection Act 1990 | Legally obliges businesses to manage waste through licensed operators, who can then offer rebates. |
| Devolved Regs in England, Wales, NI and Scotland | Enforces the waste hierarchy, prioritising recycling and recovery over disposal. |
| Packaging Waste Regulations | Sets specific recycling targets for packaging materials, incentivising businesses to recycle packaging waste. |
Can households also receive recycling rebates?
Households aren’t typically offered rebates. Instead, councils, acting as the designated ‘waste carriers,’ receive any revenue from delivering recyclable waste to recycling centres and manufacturers. This revenue helps offset recycling program costs and reduces the financial burden on local governments.
However, residents can work directly with independent recycling programs to sell their sorted recyclables, bypassing the council.
Recycling rebate example
A business in the UK recycles 2 tonnes of cardboard and 1 tonne of PET plastics per month.
The waste management company collects these materials every month, sorts and processes them, and then sells them to a recycler. If the current market price for cardboard is £70 per tonne and for PET plastics is £90 per tonne, the waste management company will likely calculate the rebate as follows:
Cardboard: 2 tonnes x £70 = £140
PET Plastics: 1 tonne x £90 = £90
Total rebate = £230
This £230 could be provided as a discount on the business’s next waste collection bill or as a direct payment to the business.
💡 Service Agreements: The rebate terms and conditions are typically detailed in the Service Agreement signed by your business and the collection company. Your business will typically have to generate this waste consistently for the agreed-upon period.
What happens if the recycling rebate is higher than recycling collection costs?
It is uncommon but possible for recycling rebates to exceed collection costs.
Waste collection companies design the rebates to ensure profitability (cover operational costs and a minimum profit), so for most businesses, receiving a net rebate is unlikely.
A profit from waste management is possible for businesses that produce large, steady volumes of high-value recyclable waste such as copper and have long-standing agreements with waste collection companies or even directly with recyclers.
Selling recyclables directly to independent companies
Households, organisations, and businesses can arrange directly with several independent ‘brokers’ who act as middlemen between them and the recyclers.
While residents can directly transport their recyclables to buyers, waste regulations require businesses to arrange for its collection and transportation with licensed waste carriers.
Here are some examples of independent companies offering this service:
- Vinted: Sell used clothes online.
- Think cans: Lists buyers for crushed cans in the UK.
- Cash for Clothes: Lists businesses that purchase used clothes by the kilo.
- Recorked UK: A charity that collects used corks for free. They donate their profits to charities and schools.
- Scrap Local: Lists buyers for metals (ferrous and non-ferrous), cars and batteries.
- Recycling Lives: Directly purchase electronic waste and batteries from businesses.
What’s the main difference between these independent programs and commercial waste collection?
Independent recycling programs typically act as middlemen, connecting businesses and households with re-sellers, recycling plants, manufacturers, or any other business that receives or purchases this waste. This is typically ideal for one-time collections or businesses with their waste carrier license, which can collect and transport it directly with the receivers.
In contrast, commercial waste collection companies provide comprehensive waste management services for recurring waste collections. This includes providing commercial waste bins, instructions on waste segregation and disposal of the waste stream, and any necessary documentation and procedures to guarantee compliance with waste regulations and its devolved policies. This is akin to the complete service provided by councils to households.
The future of recycling rebates
Recycling is an unstoppable train. Recycling technologies are making manufacturing new products from recyclables cheaper than increasingly scarcer non-renewable resources such as metal ores and trees. Also, extracting raw materials from nature typically causes environmental and social harm, both of which are increasingly coming at a premium.
Instead of avoiding contemporary waste policy in your business, front-run the opportunity and save costs by managing your waste effectively. It’s simple and effective.
Commercial recycling rebates – FAQs
Our business waste experts answer commonly asked questions on recycling rebates for businesses in the UK:
What documentation is required for recycling rebates?
Businesses must provide and keep a Waste Transfer Note for each collection. This document records the details of the transferred waste and is signed by both the waste producer (your business) and the waste carrier, demonstrating compliance with waste regulations and Quality Control of the received waste.
Can all businesses receive rebates?
Most businesses can participate, but eligibility varies based on the type, quality and volume of waste generated. Most rebate programs require careful sorting and processing of the waste, such as compressing and baling. It’s essential to check the specific requirements of your chosen waste management provider.
Are recycling rebates environmentally friendly?
Of course! Recycling rebates encourage businesses to recycle more, reducing the volume of waste sent to landfills and incinerators. This creates a circular economy that conserves non-renewable resources and reduces pollution and carbon emissions.
How do market conditions affect recycling rebates?
Like any valuable commodity, the value of recyclables fluctuates based on market conditions. High demand and low supply can increase rebate amounts, while market saturation or low demand can decrease them. Staying informed about market trends can help businesses maximise their rebate potential.
How can small businesses manage the costs of recycling equipment?
Small businesses can manage costs by starting with basic recycling practices and gradually investing in more advanced equipment such as crushers, compressors and balers. Some waste management companies also offer equipment rental or leasing options, which can be a cost-effective way to get started.
Can my business get a rebate for recycling batteries?
Of course! Batteries can fetch a high price as they can be turned into a valuable commodity called black mass, which can fetch a price comparable to refined metals such as tin and aluminium!
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