Oireachtas Joint and Select Committees
Tuesday, 18 May 2021
Joint Oireachtas Committee on Agriculture, Food and the Marine
Farm Plastics Recycling: Discussion
Apologies have been received from Deputy Paul Kehoe and Senator Victor Boyhan.
Before we begin, I remind members that, in the context of the current Covid-19 restrictions, only the Chairman and staff are present in the committee room. All members must join remotely from elsewhere in the parliamentary precincts. The secretariat can issue invitations to join the meeting on MS Teams. Members may not participate in the meeting from outside of the parliamentary precincts. I ask members to mute their microphone when not making a contribution and please use the raise hand function to indicate. Please note that messages sent to the meeting chat are visible to all participants. Speaking slots are prioritised for members of the committee.
Today's meetings is in two sessions. The first session, from 3.30 p.m. to 4.30 p.m., is an engagement with a representative from James Fitzgerald Agricultural Services. The second session, from 4.30 p.m. to 5.30 p.m., is an engagement with representatives of the Irish Farm Film Producers Group, IFFPG. For the first session on farm plastics, I welcome to this meeting Mr. James Fitzgerald, owner of James Fitzgerald Agricultural Services, joining remotely. We have received his opening statement and briefing material, which have already been circulated to members. We are limited in our time due to Covid-19 safety restrictions, so the committee has agreed that the opening statement is taken as read. The committee will use the full session for questions and answers. All opening statements are published on the Oireachtas website and are publicly available.
Before we begin, I must read an important notice on parliamentary privilege. Witnesses are protected by absolute privilege in respect of the evidence they are to give to the committee. However, if they are directed by the committee to cease giving evidence on a particular matter and they continue to do so, they are entitled thereafter only to a qualified privilege in respect of their evidence. Witnesses are directed that only evidence connected with the subject matter of these proceedings is to be given. They are asked to respect parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable. Participants joining the committee meeting from a location outside of parliamentary precincts are asked to know that the constitutional protections afforded to those participating within parliamentary precincts does not extend to them. No clear guidance can be given on whether, or the extent to which, participation is covered by absolute privilege of a statutory nature.
I invite questions from the members for Mr. Fitzgerald. We open up the subject on farm plastic.
I welcome Mr. Fitzgerald to our meeting. I have been reading his submission. For the record, I am small suckler farmer in the midlands and my form of silage is wrapped bales, so while I am familiar with the process, I was not familiar with the intricacies of the arrangement. I was aware I was paying a levy, but I was not aware of where that levy was going. From reading the two submissions, I would call the system being explained to us in both submissions as, and I do not use words loosely, extremely discriminatory. I would like to give Mr. Fitzgerald the opportunity to elaborate further on his submission to the committee, especially with regard to what I would call the missing 30% of the levy that I am paying. I have paid a levy on my plastics for ten years, give or take. The contractors have decided to get the farmers to buy their own plastic. I have been paying 100% of the levy, but from reading the submissions, while that entire levy is going to the IFFPG, it is only collecting 70%. Where is the 30% balance going? How is it being used? What is being used on?
On the frequency of farm collections or the conditions, if there are any, for the IFFPG to do them, in the documentation I have read, they are offering collection point collections and farm collections. I have a recollection of looking for farm collection myself, to try and avoid a bit of hassle, and it was not forthcoming. Mr. Fitzgerald might elaborate on that as well. Perhaps he would also elaborate a little more, from a private contractor's perspective, on what he mentioned about the Repak-style system that is in use for waste on the industrial side of things other than farming.
That is it for the moment, Chair. Basically, I want to give Mr. Fitzgerald an opportunity to elaborate further on the written document he has submitted to us in the context of the few points I have raised.
Mr. James Fitzgerald:
First of all, to address the position on the levy, the IFFPG is the statutory agency charged with collection of the levy. There are approximately 40 or 50 importers and retailers of farm plastics in this country. They are all signed up with the IFFPG. They pay a levy at the point of import, or the point of sale, on the plastics. This is a system that has prevailed as a result of legislation originating in 2001.
Down the years, there have been a number of players. The IFFPG has been in the market but prior to it being established, Farm Relief Services was also involved at a level alongside it. A number of contractors were involved with Farm Relief Services, some of whom subsequently joined the IFFPG as contractors. Most of us who are independent contractors have had a contract with the IFFPG at some stage. When contractors get involved and have an investment, and if the tender does not work out, they end up outside of the system along with their investments, licences and permits, so there is very little option but to keep going in the business they started.
The IFFPG collects 100% of the levy and uses it at its discretion within the company. Its business is to export farm plastics. The issue is that the IFFPG is deemed to have fulfilled its statutory remit when it has collected 70% plus of the material. The balance of us are collecting and have been collecting, shipping and exporting plastic over a number of years. We have been able to do that without the use of the levy in a buoyant market situation.
Originally, the IFFPG-type enterprise was set up under statutory guidance to correct the fact that there were no recycling or collection facilities and plastic was being spread out around the country. The original remit of the scheme was to address that particular issue. The situation has now evolved. The amount of plastic being used has considerably increased and we have independent contractors. The IFFPG goes out to tender every four to five years to ask contractors like me to tender for so many counties or whatever. Those that fail in that are still plastic collectors. We get no assistance whatsoever. What has helped us is that we were in a position to export plastics as a result of buoyant markets between 2012 to 2017 but since 2017, the Chinese market disruption has created a situation where a normal functional market has not worked. We are, therefore, looking to the IFFPG at this point for a share of the levy or, indeed, some of the levy that may be due on plastics already shipped. That is the background to the levies side of it.
What we have in mind when we speak about Repak, our understanding is that for assemblers of plastics, it will make a contribution to those that export. It is paying out the levy to anyone, whereas the IFFPG has ended up, by virtue of its remit, being a competitor in the same market as private operators. That is not exactly what was envisaged.
Senator Paul Daly made a point about farm collections by the IFFPG. The group runs a bring centre collection. I was part of its system for a number of years. The bring centre aspect of it has run quite successfully at various points such as towns, marts and various places around the country, but the IFFPG also provides a farm-to-farm collection service, which many people want. One reason there seems to have been a consolidation of IFFPG contractors down to a small number of five, six or seven is that they do not have the same geographical cover. Therefore, it appears it may not be economic for the IFFPG to send out a lorry to collect farm plastics in certain areas. In that instance, where the nearest IFFPG contractor is more than 40 miles away, the service I provide at a bring centre to take in farm plastics services a 30- or 40-mile radius. There is no particular issue with that but I do not have lorries on the road. It is a fact that the cost of keeping lorries on the road is quite expensive and prohibitive for farm-to-farm collections. There is a price at which it is viable and, perhaps, if we were getting more money for plastics or getting some contribution from the levy, we could be in a position to provide a viable farm-to-farm collection service. That is what we had in mind on Senator Daly's three points.
Can Mr. Fitzgerald confirm that he, as a sole trader and private collector, does not receive anything from the recycling levy or deposit I pay when I buy my plastic? Can he confirm that he has to operate without receiving any of that?
To elaborate a bit further, what Mr. Fitzgerald is saying clearly to us is that for a number of years it was profitable to collect and export plastic without receiving the levy. He was able to do that without the levy. The IFFPG was collecting the levy and charging farmers at its depots for taking in the plastic, even though private operators were doing that in the absence of a levy. I presume there was probably a collection charge but they had no access to the levy. Now market conditions have changed, it is no longer profitable to export plastic without the existence of the levy. Has Mr. Fitzgerald now plastic on hand? Has he collected plastic he is not able to export? Has he a quantity of plastic stored waiting for a new home, let us say?
Mr. James Fitzgerald:
Yes. Part of that uneconomical scenario relates to low oil prices over the last number of years, which have changed the dynamic of the market. It is a commodity market and we would expect in the medium to longer term that this will correct itself. Perhaps, with a bit more legislative assistance, both in Ireland and in Europe, we would be in a position where this market could balance itself out.
I welcome Mr. Fitzgerald. I am looking through the material and Senator Paul Daly has brought up some of the issues. As the Chairman noted, it seems crazy that there is a system whereby the IFFPG collects 100% of the levy but only collects 70% of the plastic, while the farmer also has to pay a deposit fee for the plastic to be returned.
I have a couple of questions for Mr. Fitzgerald. Does the current arrangement cause issues for him in terms of where he can operate? The Chairman brought up this second issue. While Mr. Fitzgerald stated he has 1,500 tonnes of plastic on site; do other operators also have stockpiles of plastic? If so, can he let us know what is happening with it? Can he outline the advantages he sees a publicly-supported private collector model would have for the environment and farmers?
Mr. James Fitzgerald:
Under the current arrangement, I am free to operate where my facility permit allows, locally. My collector's permit allows me to operate in about four to five counties.
The constraints in that regard are associated more with the original collection permits and licence in respect of the National Waste Collection Permit Office, NWCPO, in Offaly and the local authorities themselves. I am not really constrained, in the sense that I could operate nationally but the economics of doing so are counterproductive. It is a business with a certain footprint, and it will not extend beyond that because the cost of haulage is a killer.
On the stockpiles of plastic around the country, all the independent operators have stockpiles of plastic. These are estimated to be 10,000 tonnes among contractors in the private sector That is the scale of the situation. It has been a difficult market and the stockpile is not only a concern for us. I understand the IFFPG also has some stockpiles but I cannot confirm that.
I thank the Chair and members for having this matter included on the agenda. I welcome Mr. Fitzgerald. I understand that when the Department initiated the scheme it basically involved farmers paying a deposit upfront and they were to get a refund. Can Mr. Fitzgerald confirm that was the basis on which the scheme was set up? Farmers paid €5, €6 or €7 for a roll of plastic and they were supposed to get their money back when they brought the plastic back.
I also understand that the Department, with a stroke of a pen, changed green waste to amber and that caused a major problem. Green waste can be disposed of free of charge in other countries. I would like confirmation of that.
I understand there is something called a trammelling machine - I may have named it incorrectly - which the plastic is pushed through. Does that turn the plastic into green waste? Is it an expensive process?
Figures show that farmers have paid between €1.6 million and €2 million a year upfront for plastic upfront, or rather they paid for it after the companies that brought the plastic in had paid for it. At the end of the day, it is the farmers around the country making bales and silage who are paying for all this plastic. There is also the collection point to be considered. Am I right in saying that most plastics have doubled in weight when they are brought back from farms because they are covered in bits of muck and dirt and that we are looking at a cost of €50 a tonne? That suggests an income of at least €3 million a year for the body overseeing this.
I have done some research in this area. There are systems in place for recycling plastics. Setting up an industry would require machinery costing between €5 million and €6 million. Has anything been done in that regard? Is there an opportunity to undertake this type of endeavour in Ireland and avoid what has happened here?
My understanding from photographs I have seen is that large stockpiles of last year's plastic are being held by the people accredited with collection. Mr. Fitzgerald may not know that. What will be the outcome of that? Is it correct that between 10,000 and 14,000 tonnes of this waste is stuck in the hands of private individuals around the country? Chaos is about to occur because the Department is not doing anything to try to resolve this issue. Everything I have seen suggests this is like a closed shop.
Mr. James Fitzgerald:
I thank Deputy Fitzmaurice for his questions. His first point concerned the deposit refund. To confirm, that is the way the legislation was set up. Farmers were to pay upfront and then get a refund when the material was recycled. That is provided for in the original legislation back in 2001. I confirm that is the case.
Mr. James Fitzgerald:
No, the model seemed to evolve, morph or mutate from that approach. On the deposit refund scheme, the legislation also made provision for an approved body alternative. This is the element of it under which the IFFPG has been established as an approved body. It is the State-approved body to collect the levy on farm plastics coming into the country. The context vis-à-visthe legislation is that the system has moved away slightly from the legislation.
The Deputy raised the issue of green versus amber waste. Until 2013, all farm plastics were exported as green waste. In other words, farmers baled their plastic and shipped it to a recycler. A certificate was provided when it was leaving and another was provided when it came back. The situation changed in 2013 when farm plastics were designated as amber. This involved a significant shift and difficulty in respect of the export of farm plastics.
Mr. James Fitzgerald:
Amber waste is considered hazardous waste. I do not know the context but amber waste is significantly more difficult to export. First, a bond of about €5,000 per load is required. For example, I could have a bond of €20,000 in place for four loads of plastic to be in play at any one time in my yard. Once the first load was recycled, I could then ship the fifth load. It significantly restricts our movement of and trade in plastic. The amber designation also created difficulties with the loading of plastic at yards. For example, if a lorry could not come on a certain day, the load had to be abandoned and permission has to be obtained for another load two days later. This is causing extreme difficulty here for those shipping plastics.
It also created an even bigger difficulty with regard to the yards to which farm plastics could be exported. Amber waste cannot be exported to a green facility, which cuts out most of the facilities. There are only three amber facilities we know of, namely, one in the Netherlands and two in Great Britain. Our markets on the Continent could not take this waste because amber waste cannot be shipped to a green facility. That is the case even though Irish farm plastic, and farm plastic Europe-wide, is classified as green waste. This aspect is managed by the National TransFrontier Shipment Office, and its view was based on the fact that there would be commingling of hazardous materials. Grit, soil and organic matter are not hazardous materials. We import and export cattle and other livestock, for example, and that activity involves bedding and all sorts of issues. There is no greater difficulty to the country in that regard than with farm plastics, but that is the perception in the National TransFrontier Shipment Office.
Deputy Fitzmaurice also mentioned the trammelling machine. The National TransFrontier Shipment Office has indicated that farm plastics may be trammelled, a process that involves putting the material through a big screen and screening it out.
However the volume of material one gets out of a trammel is less than 5%. It is really dust, some sand, stone and little things like that. It is a costly procedure to put the material through a trammel and to export it as green waste. That is the first element of it. It does not add any value. The current recyclers for farm plastics are quite well prepared to accept untrammelled plastic, which is what they have done for years, in their recycling facilities in England, Wales, Scotland and in Holland. We think trammelling waste is a waste of time, to coin a phrase, to deal with that issue.
The Deputy mentioned the figures of €1.6 million to €2 million. Again, those are estimated figures. However, it was money that farmers paid. When one buys a roll of plastic, and it is 40 kg or 50 kg in a roll, it doubles its weight when one brings it back in for recyling because it is a hygroscopic material and retains water and it would have a certain amount of grit and dust in it. It doubles its weight naturally. That is one of the issues with it. We might put 16,000 tonnes of plastic on the market, but we will end up getting 25,000 tonnes to 30,000 tonnes of plastic back in as a result of that issue.
Deputy Fitzmaurice mentioned a plastics recycling facility. That is rather interesting, in that there have been a number of iterations of plastics recycling facilities in this country over the last ten or 15 years. Unfortunately, in many cases, it has been a graveyard for money. The recycling facilities failed commercially, but I am not privy to the reasons this might have happened. It would appear that, perhaps, lack of investment and engineering technology were letting people down. There was a great Bord na Móna facility in Littleton, County Tipperary. It is a super yard, ideal for the particular job. However, the process of handling farm plastics involves fairly robust machinery and, in many cases, the investment has not been appropriate or enough to get the machinery that would ensure that the facility would run. That is my view of it.
I have a further brief question. My understanding from the research I have done is that there was a reluctance to guarantee supply to some of the people who were willing to invest in the proper machinery in this country. Would the industry have heard of that? While what Bord na Móna is doing is appreciated, I understand that the gear it has is not fit for the silage plastics. It is basically like a monkey and an elephant, in that it is not fit for purpose.
My first point was that for some of the people who were willing to invest the €3 million to €5 million for the proper gear, there was no guarantee being given to them of the amount of plastics they needed to make the plant viable.
Mr. James Fitzgerald:
There is certainly strong anecdotal evidence in a couple of instances in that regard. I cannot verify any of that but that appears to be what is out there. A guarantee of supply is the first thing one needs when one is making a big investment in a place. It seems that, for whatever reason, these types of guarantee were not forthcoming with regard to processing plastic in this country.
I have a final question for Mr. Fitzgerald. If the State decided to provide some private operators, given the ties they have in England where there are some big operators, with the moneys required here, for example, between €2.5 million to €3 million per year, would there be an incentive for them to come over and set up something that would create jobs here and, perhaps, alleviate the problem that is building up around the country?
First, I am involved in farming, but it is only the wrap bales I am involved with - the smaller cycle of work. I thank Mr. Fitzgerald for appearing before the committee. It has been three years since concerns of a critical nature that there was going to be a problem down the road were highlighted. There have been a few Ministers in that time, and some of them went as far as saying that they would offer any assistance they could. Here we are in 2021 and the horse has well and truly bolted. Why was this issue not resolved? That is one question. Why was support never given to an Irish recycling plant, such as Barrington and Filco? Private individuals invested millions and would have worked well if they were guaranteed a decent gate fee from the IFFPG. Hundreds of jobs could have been created instead of high-ranking officials creating more jobs for the boys, in my view, in the initial establishment of the IFFPG and later. Also, why did the IFFPG not operate the tried and tested Repak model, where significant subsidies were passed directly to Irish recyclers? If it had, we would now have an industry that is self-sufficient in terms of recycling.
I might have another question after that, but I would appreciate it if Mr. Fitzgerald could answer that.
Mr. James Fitzgerald:
To address the Deputy's last point regarding the Repak model first, in a way what has happened here has been the result of an unpredictable evolution of things since the waste management legislation was introduced. Originally, there was no market at all for farm plastics, pellets or the like. That has developed, but it was an ad hocdevelopment of the system. The evolution of the collection and recycling of farm plastics has followed an unsteady trajectory over a 15- to 20-year period. For the first seven or eight years there was no gate fee being achieved for the export of farm plastics, and the IFFPG would have had to subsidise substantially the recycling of farm plastics at facilities abroad. However, for most years in the last ten or 12 years there was a market for that particular product. We need a dynamic type of model that takes account of the market fluctuations, and possibly one that would, encompass the ideas of, perhaps, the Repak model. We certainly believe that what the Deputy said about the Repak model is true, that it would help significantly in this regard. Rather than seeing independent farm contractors or collectors as competition in the market, the IFFPG could collaborate with us in some way in order that we could achieve the one purpose, that is, to move the existing stocks of plastic and to develop into the future on that basis.
The Deputy further asked why support was not given to an Irish plant. That is a question for the people in the IFFPG, as I was not privy to the scenario in the establishment of those facilities and was only just vaguely aware that they were there at the time.
Some of these things date back seven to ten years at this point. The Deputy might put that question to the IFFPG. Have I addressed all of the questions posed?
I have one further issue. How can the Minister for Environment, Climate and Communications, who is the leader of the Green Party, support and protect a company that is in receipt of 100% of the levy while only having to reach a collection target of 70%? The Minister admitted that it did not even reach that target in an email dated 22 September 2020. It should be noted that these targets were set by the Government. Surely it is the Green Party's belief that they should be made to work. What are Mr. Fitzgerald's thoughts on that?
Mr. James Fitzgerald:
Those particular targets are dated. They have not evolved to take account of the current environment or the changing scenarios in which we find ourselves. In terms of a solution, we need to re-examine the legislative basis. Why not aim for 100% with the co-operative model of IFFPG and independent farm plastic contractors working together? That would be a model to aspire to but reform is required. The original Waste Management Act under which this was constituted needs to be updated to take account of issues such as the European Green Deal and the sustainable use directive as well as the current context. It is a complex matter but it can be resolved in the round. In terms of the IFFPG aspect of it, we should consider reorganising the role of the group in a way that would be more co-operative for all of the players involved.
I welcome Mr. Fitzgerald and thank him for his quite detailed presentation. What amount of plastic does Mr. Fitzgerald believe is around the country? Has he seen figures on it? People talk about 20,000 tonnes of plastic lying in farm yards. In the context of the market and the levy, does Mr. Fitzgerald believe the issue of the volume of plastic in yards around the country must be addressed? I have been told that 20,000 tonnes would be a conservative estimate of the amount of plastic out there. China has stepped back from the market and Wales is our main option at the moment. What is required to clear the backlog? How big is that backlog and how do we ensure that a similar backlog does not build up again in the future? Mr. Fitzgerald has referred to the requirement to collect 70% which is based on legislation that was drafted in the early 2000s and which is now totally out of date. His comments regarding the legislation are well noted and will be put to the next group of witnesses to appear before the committee.
Mr. James Fitzgerald:
I thank Senator Lombard for his questions which were on the market, the amount of plastic in the country and the backlog. I would estimate that there are approximately 20,000 to 25,000 tonnes of plastic out there and that may even be a little conservative. Anecdotal evidence from yards suggests that is what is in the system at the minute. A multi-strand approach is required to clear the backlog. We must deal with the green versus amber debate in the context of the transfrontier shipment of waste. We could be in a position where there are markets for farm plastics as green waste. We could ship a certain amount of plastic in that manner, or at least facilitate the moving of farm plastics, thus reducing our stockpile.
Deputy Fitzmaurice raised the issue of a recycling facility and my comments in relation to that may not be orthodox. If we were to consider developing such a facility in Ireland, with State support, the first thing it would need is a base operating load. The 25,000 tonnes could be looked at as an asset or a liability. If one is setting up a recycling facility, one needs a base load and 25,000 tonnes of farm plastic would not be shocking. There have been up to 4,000 tonnes of plastic in my own yard at times so having 1,500 or 1,600 tonnes in stock in a really difficult market situation would be well within our remit. We can examine the recycling facility option but the most immediate action that could be taken to deal with the 25,000 tonnes in 2021 is the facilitation of exports.
The Senator also asked about future reforms. We should revisit the statutory model, consider the designation of farm plastic as an amber material and look into the development of a recycling facility for the country as a whole. I hope that addresses the questions posed.
I thank Mr. Fitzgerald for giving us such a detailed presentation. First and foremost we must acknowledge the enormous efforts of farmers in this area. Farmers are facing a lot of challenges and are under a lot of pressure. When plastic was first introduced to farming, it was a blight on the countryside and townies derided this. Hand on heart, though, one would find it hard to drive down a country road now and find a piece of plastic which is testament to farmers and the efforts they are making.
The world is changing, as is the economy. We are now aiming for a circular economy. In his opening statement, Mr. Fitzgerald referred to the Chinese, who really cornered this market, as well as the paper market. Indeed, they cornered so many markets and were ahead of every other economy in this game. However, when they had what they wanted, they shut the door.
We have a number of challenges in this country in terms of recycling. Used paint, for example, is next to impossible to recycle. It is very difficult to recycle paper, particularly newspaper, because the Chinese are closing the door or are dropping the price such that recycling companies here cannot afford to collect it. This is putting pressure on Repak. There are some positive recycling developments including a very successful tyre recycling business in County Longford. Tyres are being recycled and made into a synthetic plastic that is used in sand arenas.
We are placing enormous demands on farmers and the Climate Action and Low Carbon Development (Amendment) Bill will increase such demands significantly. It is important that we do not burden them with additional costs. Realistically, 25,000 tonnes in the context of recycling overall is not a big figure. It is a very manageable amount. That said, the recycling of farm plastic cannot operate in a silo. It can only operate in a campus where other materials are also being recycled, including paper and newspaper. The recycling companies themselves argue that we need to be recycling such waste on Irish soil rather than exporting it.
In terms of the academics out there, who has Mr. Fitzgerald linked up with? In a lot of the universities, but particularly in our institutes of technology, there are specialists in the area of plastic. Has Mr. Fitzgerald linked up with any of them? In the context of the just transition, has he had discussions with Bord na Móna and the ESB?
Bord na Móna, as Mr. Fitzgerald rightly said, has a semblance of a plan. It has a track record in recycling. Has Mr. Fitzgerald had any discussions on a joint venture with it? Those are two questions for Mr. Fitzgerald.
Mr. James Fitzgerald:
In relation to the academics, I am aware that there is some plastics expertise, both in Athlone Institute of Technology, IT, and in Galway. However, we have not linked up with them in relation to exploring a solution. What appears to happen when we speak about plastics is these institutions are working on other types of possibly more lucrative plastics or more interesting materials in their own way. We have not come across the right person in relation to that particular issue.
In relation to Bord na Móna, we did link up with it. We visited Littleton looking at the possibility that it might take a supply of farm plastics from us but its sheds were already full and it was having problems with its machinery. Its machinery was letting it down. It had a good process line and superb facilities - buildings, layout, etc. Much of the investment was already there. We discussed it with it and we had to wait. As a result of the mechanical issues in relation to it, we have had to go back to it because its facility is not able to cope with what is in front of it at the minute.
I thank Mr. Fitzgerald. As a follow-on from that, has nobody in the Department said it will give funding for a research project to see what is the alternative or if this can be recycled on Irish soil? If that is not the case, possibly one of the actions for us arising out of this is that we ask the Department to undertake that research project because it seems pertinent. If we are serious about climate action, it would lead to the type of housekeeping that we need to tidy up and be effective.
Mr. Fitzgerald, you said you visited the Littleton plant and the machinery there was not robust enough. The plant is not yours but I have two questions. There was significant investment in that plant. I was present the day that this project was launched amid much fanfare but, obviously, it has not operated successfully. What kind of capital would be required to make Littleton a successful recycling plant for our plastic? It would have a good central location near the motorway. It would be an excellent central location if the plant could operate successfully.
There is a second question I want to ask and if Mr. Fitzgerald wants to refrain from answering it, that is okay. Irish Farm Films Producers Group, IFFPG, had a number of good years dealing with plastic. While I can understand how private merchants have a stockpile of plastic in their yards, why has IFFPG stockpiled plastic? Why has it not taken a hit? It has collected the levy and in most cases, charged farmers for delivering it into its depots. What excuse has it for stockpiling plastic and not exporting it to one of the two plants that are operating in the UK?
Mr. James Fitzgerald:
I will address the Chairman's first question. In relation to the capital requirement, we would estimate funding of the order of €4 million to €5 million to get a facility up and running with robust equipment fit for purpose. In relation to the farm plastics, it is not only about the facility. There is also an issue in relation to the marketing of the granules that are produced and of the product for that. If we think on a more global basis in relation to plastic marketing, the global situation in processing is owned by large conglomerates, some of which employ up to 50,000 people. We would need possibly to team up or in some way link in with a large external outfit that is already involved in this. There is much to be said for that rather than reinventing the wheel or that particular model.
I am sorry, Chairman. I missed your second question there on the stockpiling by IFFPG.
It has collected a levy and has charged farmers for dropping it at its depot. It had lucrative years exporting it in the past. If it had to take a loss now and export it to the UK, why is it stockpiling it?
Coming back to the third question I asked, Mr. Fitzgerald was saying that a publicly supported private collector model would have advantages. Can he outline what advantages it would have for the environment and for farmers?
Mr. James Fitzgerald:
From the farmers' point of view, it would be convenient and it would be local. Those would be the two. At present, the IFFPG model has depots. It has only five or six depots in the country. That means that there are large parts of the country that are not covered with any service. The second part of it is that farmers are bringing in plastic by tractor and trailer and there is an outer limit to how far they will travel with the tractor and trailer. That is another aspect to it.
The situation has evolved, with contractors leaving the collection of farm plastics and with others staying in it. Gaps have now opened up in the market where areas are not viable to service because of the distance and location. A public service model would fall in a good bit there in relation to that. If one was going to Connemara, for example, one would be travelling quite a distance to get farm plastics. That is where the model breaks down on economics.
On the environmental side, the balance that is not collected by IFFPG is collected by us and maybe there is merit in the support of the private individual in places. There will be 30% left out there if IFFPG has not the reach within the market to collect it all. There would be an environmental benefit from that point of view.
I thank Mr. Fitzgerald. I am from Roscommon. Listening to Mr. Fitzgerald, he has opened my eyes to this matter. I would have known about it but, to be honest, I would not nearly have the grasp that he has of it. The difficulties that exist there are quite serious. I was called away to take a phone call but I have two questions. I am sorry if Mr. Fitzgerald has been asked them already. Would Mr. Fitzgerald accept, because of its seriousness, that there is a far greater need for the State to become involved to sort this matter out as a matter of urgency? After all, we are talking about improving the environment. It has already been mentioned by Deputy Flathery that farmers have in recent years cleaned up their act in relation to plastic along roadways and even around their farmers and they do not want it, but if we have this problem of not being able to get rid of it, it certainly causes a problem for the farmers on the ground. That is the first question.
The second question is on whether any research is being done in any of our institutions - and I am thinking of the status of Athlone Institute of Technology, AIT, changing to university status - or are universities coming up with a model with which we could deal with this matter? We definitely have to get involved and sort this matter out.
I thank the witness for his address. I found it very good and I would like to communicate with him more on the issue.
Mr. James Fitzgerald:
I thank the Senator. Previously, there has been reluctance on the part of the State to get involved. Its representatives would point immediately to the Acts on this. Because of state aid concerns, they would be afraid that they would be supporting a business in a way that would constitute state aid. We believe, however, that with a bit of thoughtfulness the matter could be dealt with. Covid has taught us about the State's need to intervene in certain small businesses to maintain certain coverage and so on.
On university research, I must admit that I have not had a whole pile of time to look at what was happening out in the universities. I am aware there is a strong plastics aspect to Athlone Institute of Technology and maybe we have to reach out and make contact with some people who may have an interest in further developing their research in this area or to assist them in any we could to develop that particular space.
On the third point-----
I am not sure I made a third point but I am quite satisfied with those two answers. Perhaps people like me could follow up with the institutes of technology or the universities to see if they would be interested in getting involved in a solution to this problem. I will take this on board and I will get back to Mr. Fitzgerald. I thank him.
Athlone Institute of Technology is doing a lot of research on polymers and plastics. It would be worthwhile talking to them.
To synopsise, to solve this Mr. Fitzgerald has stated there are three different things the committee will want to look at. I was jotting them down. Should the legislation be looked at? Should we look at an amber to green system instead of vice versa? Should the Minister set up a body made up of the private collectors, the IFFPG, and the Department to try to resolve this issue? Going by my telling, over the past ten to 12 years, at least €40 million has been paid out by farmers. We have what is near an industry out of it. It is basically like being salespeople, we are getting the plastic and we are trying to fob it off to somebody, but it is the farmer who is paying at the middle. Would Mr. Fitzgerald agree?
Mr. James Fitzgerald:
Yes. It is a combination of all three or four aspects of what Deputy Fitzmaurice has just said there. The legislation has to be examined. On the amber versus green matter, we believe that something simple for now might get that moving such as a statutory instrument or a ministerial order. We should have a body made up of the private collectors and the IFFPG to attempt to resolve the issue together. We could put it together with the Department, with a view to pulling together all the aspects and issues involved to have a solution and most definitely to look at having a facility in Ireland, if that was at all possible.
We could look at areas such as the just transition in the midlands. There could be an opportunity in the midlands, under the just transition, to create employment and to have a facility, as referred to by Deputy Flaherty earlier, so we can recycle our own plastics instead of talking about it. Setting up something like that, with the funding that would be there, could be a great opportunity in the midlands area.
I thank Deputy Fitzmaurice. On behalf of the committee I thank Mr. Fitzgerald for engaging with us on this topic of farm plastics. I know it is his business but I appreciate him coming in to give us a very frank explanation for us on the issues.
For this second part of our meeting I welcome from the Irish Farm Film Producers Group, Mr. Liam Moloney, general manager; Ms Geraldine O’Sullivan, director and company secretary; and Mr. Tom Dunne, chairperson. Mr. Dunne has not yet joined the call, we are trying to connect with him now and he may join us as we progress the meeting.
The witnesses are all very welcome to the meeting. We have received the group's opening statement, which has already been circulated to members. As we are limited in time, due to Covid restrictions, the committee has agreed that the opening statement can be taken as read in order that the full session can be used for questions and answers. All opening statements are published on the Oireachtas website and are publicly available.
Witnesses are protected by absolute privilege in respect of their evidence to the committee. However, if they are directed by the committee to cease giving evidence on a particular matter and they continue to so do, they are entitled thereafter only to a qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable.
Participants in the committee meeting from a location outside the parliamentary precincts are asked to note that the constitutional protections afforded to those who are participating within the parliamentary precincts do not extend to them. No clear guidance can be given on whether, or the extent to which, the participation is covered by the absolute privilege of a statutory nature.
I now invite questions from members.
I thank the witnesses for coming in. I will ask a couple of quick-fire questions. Could the witnesses clarify that, from our understanding, the group gets approximately €1.5 million to €2 million per year from levies? Is that correct?
Right. Different people around the country are making us aware of things. Is there an intention to reduce the number of bring centres around the country this year? Are there large stockpiles with the IFFPG's collectors around the country?
Mr. Liam Moloney:
On the first question, we intend to run the same bring centre programme again this year. Typically, we run a bring centre programme that consists of 220 to 230 bring centres. They are provided in each county throughout the country. The average county has around eight or nine bring centres. Unless Covid stops us doing so we expect to provide a similar service this year. On the stockpiles in our contractors' yards, they probably have 10,000 or 11,000 tonnes at the moment but we are very confident that material will move in the next 12 months, along with whatever we collect this year. To put the thing in some perspective, last year we collected 34,000 tonnes of material from farmers throughout the country but we also sent 34,000 tonnes for recycling. However, we carried material from previous years because the market is so difficult. It is a difficult market situation but we are seeing improved demand. We supply a lot of material to Irish recyclers, we are committed to supporting Irish recyclers where possible and we are very confident that whatever we collect this year, along with what we are going to carry over, will be recycled in the next 12 months or so.
Has the amber to green been a problem, as the previous witness stated earlier? It was changed from amber to green. Would it be an advantage to the likes of the IFFPG, or any other body, if that were changed back again?
Mr. Liam Moloney:
The classification of the waste we export is under the authority of the National TFS Office; it is the body that interprets the legislation. Some seven or eight years ago, it decided unprocessed farm plastic waste was amber-listed, not because it is hazardous but because of the high contamination level. That contamination is largely rainwater and small particles of silage, clay, etc. We have no issue or problem with that. Having said that, if the office were to revert to classifying it as green-listed we would of course work with that new arrangement and it would be an easier one to work with.
There is basically no statutory remit under the legislation for the charges imposed on farmers. We must understand that, going by figures from the last ten years, at least €30 million or €40 million, maybe more, has been paid upfront by farmers in this. This was supposed to be a case of pay upfront and have it collected free. On what basis does the IFFPG claim to be able to impose charges? How does it add them up or come to the conclusion a farmer must pay a second time for the plastic he or she brings to the bring centres? When one looks at the legislation that was initially brought in, it was basically pay upfront and a person was actually supposed to get money back, never mind pay. Where does it give the authority to the likes of the IFFPG to go charging farmers?
Mr. Liam Moloney:
The regulations allow an approved body, which the IFFPG is, to fund itself through a levy if it sees fit and also we have the leeway to charge collection charges. At the moment, we make up around 70% of our income through the recycling levy and the remaining 30% comes from collection charges to farmers which are weight-based. We have gone with this model because the weight-based charging encourages farmers to bring in plastic that is less contaminated. For that reason we have gone with that model. If we were to abolish collection charges to farmers we would have to increase the levy because there is a certain amount of funding we need to operate each year and we also think it would negatively impact on the quality of the plastic we bring in at our collection points.
Under the agreements, the IFFPG gets 100% of the levy to collect 70% of the plastic, which is not a bad deal I must say. How come that if there is a private operator there that has collected plastic that it can give the numbers because I am a contractor myself and we know on a line of baling one must have the number to give at the different centres? If that plastic is legitimate why is that not handed on to those people in the private side of it who collect it in different parts of the country, in order to reduce the amount of plastic hanging around? The second part of that question follows on from that. I am going to be straight and blunt here with Mr. Moloney. We would have heard anecdotal evidence that the IFFPG was less than co-operative if companies wanted to secure all the plastic to go into a venture setting up in this country. If a company was prepared, or, under the just transition if something could be worked with the Department, to set up a recycling facility with the proper machinery like there is in England, would the IFFPG be supportive of that and would it guarantee them all the plastic it has?
Mr. Liam Moloney:
On the first part of the question, yes, we collect 100% of the levy and, as the Deputy said, the recycling target is 70%. However, last year we collected 80% of what our members placed on the market so we collect in excess of the target. As the Deputy is aware, the last few years have been very difficult in the recycling market. It has been extremely expensive to send the plastic for recycling so we had use all that money to cover those additional costs. We have a track record of passing any cost savings we achieve because of a good market situation back to farmers and members in the form of reduced charges. For example, in the period 2011 to 2013 we reduced farmer charges by 40% and I think we reduced the levy almost 30%.
On the collectors operating outside our scheme, we do not support them because they are operating outside our scheme and it would be counterproductive for us to support them. One of the essential elements that contributes to the success of our scheme is the fact we contract our collectors. They collect exclusively for us and do not compete with each other so they can concentrate totally on quality of service provided to farmers. I should say any collector can participate in our tendering process which takes place every five years but the fact we have contracted, approved collectors means we can guarantee the same quality of service from one county to the other, from one year to the next and also that farmers are charged the same price. For example, a farmer in County Donegal will get the same quality service and be charged the same price as one in County Wexford.
On the Deputy's last point about supporting Irish recyclers, last year we sent over 34,000 tonnes of material for recycling and over half of that went to Irish recyclers. We have a policy of supporting Irish recyclers if they are fit for purpose and if they are in any way competitive on price. It makes sense for us to support Irish recyclers and we want to support the development of an Irish recycling infrastructure.
The Irish Farmers' Association, that is okay. How much moneys were received in the form of the levy? I think Mr. Moloney said €3.3 million, but he might correct me if I am wrong. How much did bring centres generate on, say, an annual basis?
Mr. Liam Moloney:
I am afraid the product has no positive value so we do not get any income from selling it. Indeed, a very significant cost is incurred. As the Deputy is aware, that cost has escalated in the last few years due to the decision by the Chinese to stop importing plastic waste in 2017-2018. It caused a flooding of the global market.
That resulted in our costs increasing from €4 million in 2018 to €6 million last year.
Why did IFFPG not operate the tried and tested REPAK model where significant subsidies were passed directly back to the recyclers? If that had happened, the industry would be self-sufficient in terms of recycling.
Mr. Liam Moloney:
The REPAK model works for REPAK. The IFFPG model works very well for IFFPG. As was mentioned, we are achieving an 80% recycling rate at the moment, even though the target is only 70%. To put that into perspective, an 80% recycling level for plastic waste is extraordinary. No other plastic waste stream in Ireland is achieving an 80% recycling rate. Our scheme would be seen as one of the highest achievers in Europe. The system that we operate works very well for us. The system that REPAK operates works well for REPAK.
Earlier, we spoke about 70% of the levy along with the other income sources. When costs increase, so does the levy. Therefore, the annual excess of 30% of the levy should be available in its entirety for each year. If it is not available, where is it?
Mr. Liam Moloney:
As I mentioned, last year we achieved an 80% recycling rate. We collected 80% of what our members put on the market. The rest of that money was used to move material to recycling facilities at a time of very high cost. When things improve, as we hope they will in the future, we will pass any significant savings we may make back to farmers and members in the form of reduced charges.
It would be a great relief to farmers if that were to happen. Was the 30% used to subsidise cost-cutting in order to try to eliminate independent contractors in the way of fees to KPMG and other companies that are administering the tender applications?
I welcome the witnesses. Mr. Moloney indicated earlier that more than half the 34,250 tonnes sent for recycling in 2020 was supplied to Irish recyclers with the rest going to European firms. In 2018, China ceased importing all waste, which flooded the European market resulting in higher recycling costs. Bearing that in mind, how are plans to increase our recycling capabilities progressing? What is the position with regard to the plant in Littleton increasing its capacity?
Mr. Liam Moloney:
I visited the plant in Littleton a few weeks ago. That plant has dramatically improved and it hopes to start operating commercially in the coming weeks. Bord na Móna is very hopeful that the plant will deliver and we are obviously hopeful as well. We will give it whatever volume of material it requires from us. It makes good sense for us to supply to a recycling facility in such a central location. We have also recycled significant quantities of material through other recyclers in the past year. I refer, for example, to Walker Recycling Services in Portlaoise, which is a pre-treatment facility. We hope to put 6,000 or 7,000 tonnes of material through the ADN Materials plant in Carrickmacross, County Monaghan, this year. We are absolutely committed to supporting Irish recyclers wherever it is viable to do so.
On the issue of self-compliance among the suppliers and the fact that no companies are offering collection and recycling services for their customers, is that having an impact on the costs being borne by the farmers?
Mr. Liam Moloney:
I do not think so. No companies which are putting farm plastic products on the market are offering self-compliance because it is so onerous. It is very difficult to arrange for the collection of waste from customers and send it on for recycling. The scheme that we operate represents an easier option for them. That is not having any impact on costs.
Mr. Liam Moloney:
A company putting farm plastic products on the market can comply in one of two ways under the regulations. It can offer a deposit and refund scheme, which nobody is doing currently. The other way is to pay a recycling levy into our scheme and we use that along with the waste collection charges from farmers to fund recycling.
Mr. Liam Moloney:
At the moment, the key stakeholders, the farm plastics industry and the farmers, are doing well because the farm plastics industry gets cost-effective compliance. We would like to think that we give a very comprehensive service to farmers. We provide bring centres in every county. We also provide a year-round farmyard collection service and I believe the results speak for themselves. We are currently achieving an 80% recycling rate. It is unfortunate that we have had to increase charges to farmers and to members in recent years, but that was unavoidable. As has been mentioned a few times already, we are more than happy to pass any significant savings back to farmers and members in the future through charge reductions.
Mr. Liam Moloney:
We have no issue with the independent collectors operating. They are out there doing their own thing. Some of them were previously IFFPG contractors. However, they are responsible for any waste that they collect. It would be counterproductive for us to support independent collectors because in effect they are competing with our collectors. The levy and the collection charges that we collect are there to fund IFFPG exclusively. Unfortunately, although we sympathise with the position in which independent collectors find themselves now, it is not for us to assist them.
I thank the witnesses for their very helpful presentation. I congratulate the IFFPG achieving the 80% recycling rate. It is a significant milestone to think that 80% is being collected. That is only the IFFPG side of the coin. Has there been an independent audit of the entire figure for collection rates last year, including independent operators and IFFPG? If IFFPG achieved 80%, what did the private operators collect?
We have set up a scheme but we do not know the amount of plastic that is being collected. Even though IFFPG has done a phenomenal job to achieve 80%, that figure could be 90% or higher, but no independent body can verify what the actual figure is.
Mr. Liam Moloney:
It is made into a range of plastic products, including refuse sacks and construction film. Some of it goes into garden furniture. In the longer term, we would like to see some of it going into new farm plastic products, which would result in a true circular economy situation.
That is something we are trying to bring about working with the various stakeholders. For the moment, however, most of it goes into refuse sacks, construction film and garden furniture.
Regarding Mr. Moloney's figure of €35,000 for collection last year, and please correct me if I am wrong in my figures, what actual charge per tonne did the IFFPG have at the recycling gate? Can Mr. Moloney could give me the charge per tonne for 2021, 2020 and 2019 in order that I can get an indication of where the charge per tonne has gone over the three-year period?
Mr. Liam Moloney:
At the bring centre this year, we are going to charge the farmer €50 per tonne. Last year and in 2019, it was €40 per tonne. It is, therefore, a €10 per tonne increase. As the average farmer probably brings in 800 kg or 900 kg, he or she will probably pay €34 or €40 at the bring centre this year.
Regarding the question of the amount of plastic that is actually stockpiled, am I correct in stating that Mr. Moloney reckons the figure from his side of the house is anything up to 10,000 to 12,000 tonnes, which would be one third of the product and of the yearly supply?
A previous witness stated the actual amount in the State could be anything up to 20,000 tonnes. Obviously, that is not verified by anyone; it is a statement that was made at committee. What does Mr. Moloney believe is the solution regarding this amount of plastic we have around the countryside? How can we find a solution to make sure this plastic can be sent to recycling rather than stockpiled in yards around the countryside?
Mr. Liam Moloney:
Of course, we are primarily and only concerned with the plastic we collect ourselves. As I mentioned earlier, we see the market improving so we are very confident that we will recycle all we collect this year, as well as what we carried over from previous years, in the next 12 months.
The big push to manage plastic resources in a more sustainable way will see increased demand for plastic waste over the coming years. Manufacturers of plastic products now are increasingly being asked to put recycled content in their products and in time, this will see an increase in demand for plastic waste, including farm plastic waste. For the moment, however, it undoubtedly is a difficult enough market situation. That is where we see things, however.
Following on from Senator Lombard's questioning, Mr. Moloney said only the plastic collected by the IFFPG concerns him. The IFFPG collects a levy on 100% of the plastic. Independent operators have collected because, in fairness, it is recognised that very little plastic is thrown in farmers' yards around the country. The vast majority of it is collected. Whether an extra 15% or 18% of the market has been collected, therefore, they have collected that without any levy. They collect it on the basis that they hope the market will improve. Is Mr. Moloney saying the IFFPG does not have any responsibility to help those independent operators to offload that plastic given fact that it collected the levy?
Mr. Liam Moloney:
We feel a lot of sympathy for the situation in which these people find themselves, through no fault of their own. It is due to a global market change but it is not our responsibility to make the levy available to them. The levy is there for the running of this scheme, which works very successfully. I am afraid we are not, therefore, in a position to offer any assistance in that regard.
Why is it not the responsibility of IFFPG? It collected the levy on it. The plastic is there and must be recycled. How does that responsibility change with the fact that it is in an independent collector's yard rather than a farmer's yard?
Mr. Liam Moloney:
I would look at it from another viewpoint. The independent collectors made a commercial decision to go out into the market and provide a second service to farmers, as they were well entitled to do. They collected the plastic and now they have an obligation to move it on. When the market is good, obviously, we do not hear from the independent collectors but now the market has gone into a difficult position and they are seeking assistance.
If we were to give funding to independent collectors, in effect, we would be paying our competitors. Those guys are out there competing with our contractors, which would make our own contractors very unhappy as they have exclusive rights to collect in particular counties. It would also leave us open to a legal challenge as our contractors have contracts with us to be exclusive collectors in their areas. For those reasons, therefore, unfortunately, we would not be able to assist the independent collectors, although we very much sympathise with their position.
A significant amount of plastic is stockpiled. Mr Moloney said himself the IFFPG has some of it stockpiled. A significant amount of it is stockpiled by independent operators. Does Mr. Moloney believe the stockpiling of plastic poses an environmental challenge? Would he be confident that it is all stockpiled safely?
I wish to pursue a little further the line of questioning the Chairman was going along with Mr. Moloney. Based on some of his answers, I am finding it hard to get my head around the situation. We will give Mr. Moloney the benefit of the doubt. The IFFPG's target is 70% and it collected 80%, therefore, 20% is left out there. Mr. Moloney admits that. The IFFPG is paid for collecting, however. That 20% of the plastic is 100% of the problem. That is the plastic that is not accounted for.
The IFFPG is prepared to take State money. Mr. Moloney is running what he calls a not-for-profit organisation, which is State-funded, to alleviate a problem. The solution was designed in the 1990s, which was actually ahead of the curve when it came to environmental issues that are the order of the day today. In fairness, we were ahead of the curve on this one. We set up a system and the IFFPG was formed, which was getting money from the farmer to solve the problem of his or her finished plastic. IFFPG took 100% of the money and is proud today to say it handled 80% of the problem. I do not know how anyone can appear before a State Oireachtas committee and hold his or her hand up and justify that argument. As I said, 20% of a balance is 100% of the plastic that is out there with a potential environmental catastrophe for the country. The only reason that 20% is not creating mayhem within the environment and in every bog hole, ditch and laneway of the country is thanks to the individual sole traders who stepped into fill the void, and Mr. Moloney cannot see why they would not be entitled to a piece of the pie for the service they are providing for the country and the environment.
The IFFPG calls itself not-for-profit yet said it is sitting on thousands of tonnes of plastic. How can it do its sums or know what reserve is it carrying? When it fixes its charge to the farmers this year, the way the global markets are going, how does it know it is not going to cost ten times that to dispose of the plastic if it does not dispose of it there and then? How does the IFFPG come up with the figures?
Its submission highlights with great clarity the fact that IFFPG reduced the prices by 29% and 40% during 2011 to 2013. In the past three years, however, it has increased them by 45% and 66% for collection off a higher base. It is not giving much back to the farmer other than the problem of the disposal of the additional 20% of plastic, which the IFFPG is getting paid to take away. Will Mr. Moloney please tell me how this can be a good system for the Government and explain why we as politicians should not be going back to redress this issue from the roots up? The current system is not working.
Anything I pay for out of my own pocket, whatever the commodity might be, I expect to get 100% and not 80% of it, or else I would say that I am being done. I do not get Mr. Moloney's argument whereby he keeps justifying what a great achievement it is to collect 80% of the plastic for 100% of the money.
Mr. Liam Moloney:
The escalation of costs is the reflection of a very difficult market situation. Unfortunately, the only way we have been able to deal with that situation in the last few years is to increase costs. We spend everything that we collect in a given year on collecting and recycling farm plastics waste.
Incidentally, this particular scheme does not cost the taxpayer a cent. It is a self-funding scheme. Again, I must go back to the point on the service that the farmers are getting. Every year, we collect a massive volume of plastics from farmers throughout the country. Farmers support the service. We have the support of the farm plastics industry. As I have said, we are sympathetic to the situation in which the independent collectors find themselves. However, we cannot assist them, because if we do, we are working against our own scheme.
Mr. Tom Dunne:
I thank the committee for having us today to explain what is going on. In listening to the discussion and the arguments made, I note that there seems to be a misunderstanding that somehow the money we are collecting is public money. Our scheme operates independently. All of the industry is represented on the board, of which I am the independent chairman. We should think about why we have this scheme. If we did not have this scheme, that is robust and is able to take the massive fluctuations in the market which we have to deal with, no plastics would be collected in this country at all. We are a non-profit organisation. We are set up in such a way that we can take the difficulties as well as the good times. Our company has really stabilised the market. If we were not in operation, no plastics would be being collected. There would be a massive problem. Therefore, the committee must take it in the round and understand the situation. We sympathise greatly with those who find themselves in a difficult market situation. However, they took a commercial decision. When they took that decision they knew the way the system operated.
One of the members - I believe it was Senator Daly - asked how we figure out the charges. Each year, with all of the industry representatives on the board, we do a balancing exercise. We look at how much it is going to cost us to recycle the plastics that we are managing. We set our charges at the minimum level possible. The reason the system is set up as it is, and the reason there is a charge for the farmer at the bring centre, is because of the nature of the plastic. The nature of the farm plastic is that it is a most difficult product to deal with and it has 50% contamination. Therefore, the reason for the charges at the bring centre is to encourage the farmers to ensure that the plastic is as clean as possible, because they are charged on a weight basis. This has led to a much better product over the years because the farmer is incentivised to keep the plastic clean. This means that we can move the plastics up a category from amber to green and that is it worth more money.
We are striving to make this plastic worth more money so that the costs are reduced back to the farmer. At the end of the day, we all know that it is the consumer who pays the price. The producers pay the levy, but in the end the consumer has to pay. We are trying to make this service as cheap as possible for the farmer. If 100% of the plastic comes to us, we will recycle it 100% of it.
I have a few quick questions. Mr. Dunne spoke about public money. Let us be very clear that it is farmers who have paid for this scheme. The organisation should not regard itself as a hero. It is farmers who pay at the beginning and the end. I am a contractor. I know that when they one buys plastic, there is a levy on it. When that farmer, for whom we go baling, goes to the bring centre, he or she has to pay again. Therefore, those farmers are paying twice for the so-called great service being provided by the Irish Farm Film Producers Group, which itself is getting paid the full levy to collect 70% of the plastic. That is the reality. There are no "ifs" or "buts" about it. The Irish Farm Film Producers Group collects 80% of it at most. That is the bottom line.
I have a question for Mr. Moloney. In respect of recycling, he mentioned that the company does recycling in Laois. Is that correct?
I have a question on plastics. The witnesses have talked about 70% and 80% of plastics being collected. What tallying has been done in respect of the plastics coming in from Northern Ireland? Does the Irish Farm Film Producers Group know how much comes in?
So, the witnesses cannot say, hand on heart, that the Irish Farm Film Producers Group has recycled 80% of the plastics used in Ireland? It could be 50%. I can tell the witnesses that vast amounts of plastics have been coming across the Border for years.
Mr. Liam Moloney:
We can say with certainty that last year, we recycled 80% of what our members put on the market. If the Deputy is asking me to guess the size of the illegal market, and there is an illegal market problem, I would say between 5% and 10% of what goes on the market might be illegal. We work very hard with the local authorities that have an enforcement remit in this area to try to address that problem.
So, as Senator Lombard stated earlier, we do not know the amount of plastics that is in the country in total. The Irish Farm Film Producers Group is working on figures that it has compiled with the industry. We are turning a blind eye to everything else. It is using those figures because it looks good for the organisation. However, in fact, in respect of recycling and the amount of plastics in the country, straightaway we are down 10%. It could be 20% or 30% - we do not know. Is that fair to say?
I wish to make one final point. Mr. Moloney and a previous contributor both spoke about private operators. It was stated that they are in competition with the Irish Farm Film Producers Group. That is fine. For all the years when plastic was good and the private operators were sending plastic out of the country, the Irish Farm Film Producers Group was getting paid money to do nothing with a lot of plastic. The Irish Farm Film Producers Group took that money for years while the plastics industry was good and private operators, which was not subsidised, sent the plastic out of the country. The Irish Farm Film Producers Group received subsidies from industry and did not have to do anything. It did not have to collect the plastic, but received the subsidy for it.
There are now 10,000, 12,000 or 14,000 tonnes of plastic to be dealt with and, after so many years of getting money for jam, to be quite frank about it, when the private operators got plastic out of the country and received no subsidy, the Irish Farm Film Producers Group, IFFPG, is not prepared to call an amnesty and do something not only for the farmers, but for Ireland Inc. to address the amount of plastic that is hanging around. Mr. Moloney should go back and have a rethink of what he has said to us. I will follow up on the tonnage that was taken out of the country by the private sector and for which the IFFPG was paid by the industry. I know everything about competition. Are our guests saying to me that the IFFPG should be the only entity in this country with a monopoly, that it should get a subsidy and forget about the private people?
-----and correct me if I am wrong, is that when this scheme came out, farmers were to pay when they bought a roll of plastic. They were then to get a rebate when the plastic was brought to the centre. That never happened. Let us not be glorifying this as a great deal for farmers.
Farmers are paying at both ends. I ask Mr. Moloney and his board of directors to go back and have a rethink about where they are going. It is fine if the IFFPG gave money back but at the end of the day, the farmer is still paying. Farmers around the country are being shafted because they are paying at both ends in this scenario.
Mr. Liam Moloney:
Under the regulations, if a producer of farm plastic products, a company that is putting farm plastic products on the market, wants to self-comply, there is a deposit and refund scheme. I think that was the scheme to which the Deputy referred. We do not offer a deposit and refund scheme and we never have. In our system, companies that put products on the market pay a recycling levy and that is how they meet their obligations.
We are a self-funding and not-for-profit body. We generate what we need to operate and must also have an appropriate reserve. As mentioned, many times in the past when we have found ourselves in a position of having more money than we needed in reserve, we made significant charge reductions to members and farmers. That is something we hope to do in the future.
The Deputy talked about what it is costing the farmer. The average farmer pays €35 at our bring centres. That farmer has also paid a levy of perhaps €30, which has probably been passed down the supply chain. We are talking about something in the region of €60 or €65 and the farmer is getting a good service for that price. That is not only my opinion. The results every year support that. Over 40,000 farmers used our service last year and we collected 34,000 tonnes of material, the equivalent of 17 million silage bales and an 80% recycling level. That does not suggest to me that farmers feel shafted or unhappy with the service.
Mr. Liam Moloney:
We have carried out research on that matter and our database supports it. Farmers typically come out on a two, three or four-year cycle. They do not come out every year. The Deputy will also be aware that many of those farmers with herd numbers are not necessarily wintering cattle, or they are wintering such small numbers of cattle that they are only generating minimal amounts of plastic. The majority of livestock farmers in this country use our service.
People in my part of the country are quite happy to have the service and get rid of the plastic. They do not do it every year, to be fair. I want to ask three simple questions that our guests may have answered already. Did I hear correctly that the ownership of the Irish Farm Film Producers Group comprises the Irish Farmers Association and the members? If so, how is that made up? Are they shareholders?
Mr. Liam Moloney:
The plan is always to break even but it is generally impossible to hit the nail on the head. If we make more than we need and a significant surplus builds up, we give it back. If we find ourselves moving into a situation where we do not have enough to keep going, unfortunately, we have to look at increasing the recycling levy and collection charges.
I understand the IFFPG needs to have a reserve. That is only proper. Mr. Moloney also said that with some of those profits, the group reduced the levy and I understand that. However, farmers did not get a rebate, even though they were promised one. Can Mr. Moloney answer that for me? If a deal is made and farmers are supposed to get a rebate but do not get one, it does not look credible. Farmers have not been saying that to me but, to be honest, it is not very credible if farmers who go by the rules and gather up the plastic that is then taken away do not get the rebate they are supposed to get. What is the explanation for that?
Mr. Liam Moloney:
The IFFPG never promised farmers a rebate. Companies that are self-complying, of which there are currently none, would be offered a deposit and refund scheme. Our scheme does not fund itself that way. We never offered a rebate. We charged the levy, initially, and then charged the levy and a collection charge. We introduced a rate-based collection charge to try to improve the quality of the plastic coming in to us. In good times, we have given significant price reductions to farmers. As I said, in the early part of this decade, the price went down from €70 to €24 per tonne for farmers over a two or three-year period. If we can get ourselves into a better financial position in the future, we will be happy to do something similar.
Mr. Moloney has mentioned the five-yearly review the IFFPG has with the Department. The group is licensed by the Department and the approval of that licence is renewed every five years. Is it a formality or is it an advertised, open tender. Could I decide I wanted to take on the role and submit a tender or is it a formality whereby the group and the Department sit down informally, or whatever, every five years and go through the contract? Is there a guaranteed roll-over or is there a competitive side to it? Can anybody else come in and apply for that licence?
With that in mind, and given the IFFPG was established in 1998 and, it has had four renewals of its licence. What changes were made to the licence as a result of any of those four reviews over the past 23 years?
Mr. Liam Moloney:
The relevant regulations, which are the farm plastic regulations, allow for any organisation to apply for an approval to the Minister at any time. Any organisation that is interested can apply to the Department of the Environment, Climate and Communications at any time. The Department will assess the application and it is up to the Minister to grant or reject it.
When the IFFPG licence is up for review, is it advertised? When the licence has run its term and is going to be renewed, is it advertised at that time that a new licence is up for issue? Are people other than the IFFPG given the opportunity to tender or apply for that licence?
Mr. Liam Moloney:
It is not advertised because the regulations do not oblige that. The regulations are very clear for anybody who looks at them that anyone can apply at any time. We are the approved body and, therefore, must go officially for reapproval every five years. As I said earlier, last year was the most recent time we did that. It is a very extensive process that took six months. We submitted a detailed application to the Department in terms of our operational, financial and corporate governance performance over the past five years. We had to map out the coming five years under the same headings and consider how we are going to perform. It is an extensive process.
Some of the changes are worth mentioning. I have been with the IFFPG for 13 years. When I started, the recycling target was 50% and it has gone to 70% over that period of time. The name of the game is to increase the recycling level. We are here to provide a comprehensive service to farmers to recycle as much as possible and do it all within the context of good financial well-being and corporate governance.
I thank the Chairman for facilitating me. I welcome our guests and thank them for their contributions. I do not have a question but wish to make an observation. What the witnesses are doing is a very good example of the circular economy in practice. It is an industry-led initiative and the fact that they are achieving 80% recycling is a testament to their hard work. We have come a long way from the situation some years ago when plastic littering the countryside was the bane of rural Ireland. I commend the witnesses on that. The line of questioning from some of my colleagues suggesting that the IFFPG should be required to bail out private contractors who have taken a commercial decision to get into this area and for whom it has not worked out, is absolutely absurd. I am quite satisfied with Mr. Moloney's answers. He has been very thorough and comprehensive and has dealt very clearly with what could be called an interrogation. I certainly do not agree with that line of questioning. What the IFFPG is doing is very good, more power to it and I would urge the witnesses to keep it going. The group should strive to reach 100%. Well done to Mr. Moloney and Mr. Dunne, the chairperson, and keep it up.
My apologies, I had to attend another meeting. I had hoped to be here earlier. I thank our guests for being here and I look forward to reading the transcript of the meeting. I would make a general point that may be surprising to outsiders. I have been struck by the number of people I have spoken to in the past year who said that they paid the levy for silage covers and wrap at the point of purchase on the understanding that the collection of same would be facilitated for free. When did that concept change? Is there something we can do here? Deputy Leddin spoke about the scourge of plastic being left in the countryside in the past but I must say that in some parts of the country, I am beginning to see that again. It is really important that whatever we do, we ensure that we do not see waste plastic polluting the environment, entering watercourses and so on. I thank the Chairman for facilitating me.
Ms Geraldine O'Sullivan:
I wanted to follow up on what Mr. Moloney said. It is a service that is working very well for farmers. I rang around and spoke to members of the environment committee of the IFA and nobody is aware of plastic in the yards. The way the service is structured allows for consistency. It is very evident, having listened to other witnesses earlier, that we are dealing with a very volatile market which has only been exacerbated by Covid. Having stability there and assuring farmers that a consistent service is available is very important. As Mr. Moloney outlined, it is a not-for-profit service. The collection charge covers the additional and increasing costs of the service. It is not a double charge but is designed to cover the cost of collection. As Mr. Moloney pointed out, it is a difficult market and it is not a high-value product.
From the farmer's perspective, it is important to know that the bring centres are there and that there is the opportunity to avail of collection. While it may not happen every year, when farmers do a clear-out it is very important that the service is there for them.
I thank the witnesses. We have had a very good exchange of views. I wish to acknowledge the fact that the IFFPG is doing a very efficient job in collecting plastic throughout the country. I am a farmer and have seen the collection points. I know that the service operates very efficiently in my county. Nevertheless, there is a problem. We can argue about the exact amounts involved but at a conservative estimate, 30% of the plastic used on farms is lying in stockpiles in the yards of independent operators. Depending on how much is imported, the figure could be higher than 30%. That is an environmental concern. Farmers have paid a levy on the plastic and have paid for it to be collected but now it is lying in yards. I am not saying it is the responsibility of the IFFPG to collect that plastic but it has collected a levy on a proportion of it. Farmers have played their part and we do not want the plastic on which they have paid a levy to cause environmental problems. They have paid for it to be collected in the vast majority of cases but there is a significant amount of it lying around. We know that county councils are getting worried about it and issues are arising.
This is an issue that must be resolved. Plastic cannot be allowed to cause any environmental issues given that the primary producer has stuck to his or her part of the bargain, paid the levy and paid for it to be collected. If the market for plastic improves, the problem will probably resolve itself but, as legislators, we cannot wait around in the hope that the plastic market improves. Legislation is on the Statute Book to protect the Irish environment from pollution arising from farm plastic and it would be an absolute disaster if stockpiling of same caused issues that are completely outside the control of farmers.
I again thank the witnesses and fully acknowledge the role the IFFPG is playing in the environmental control of plastic waste. We will suspend now and resume in private session on MS Teams at 5.50 p.m.