In this episode, hosts Will Richardson and Charlie Luxton dive into a pressing issue within the construction industry – pallet waste.  

Each year, the industry uses around 20 million pallets, yet only 10% are recovered or reused. The rest end up in landfills, contributing to significant waste and environmental damage.  

Joining the discussion is Paul Lewis, Founder of Pallet Loop, who is on a mission to transform how pallets are used, tracked, and reused in construction. Paul shares how his innovative approach is set to tackle this issue.  

Key Highlights: 

The Pallet Loop Initiative: 

• Discover how Pallet Loop is pioneering the first reusable, trackable, and returnable pallet specifically for construction, potentially cutting pallet-related emissions by 40%.  
• Paul compares the construction industry to the fast-moving consumer goods (FMCG) sector, where reuse rates reach 98%.  
• Learn about the deposit-based model inspired by Germany and Norway’s bottle recycling schemes, designed to maintain the value of pallets.  
• Explore the innovative logistics system Pallet Loop has developed, featuring Radio Frequency Identification (RFID) technology to efficiently recover pallets.  

Economic and Environmental Impact:  

• Paul reveals shocking statistics: 6000 acres of forestry are felled annually to produce single-use pallets for construction.  
• Hear how poor design contributes to waste and how Pallet Loop promotes standardisation from the outset to combat this issue.  
• Understand how Pallet Loop not only reduces waste and carbon emissions but also offers a cost-effective solution for the supply chain.  
• Paul discusses how Pallet Loop has helped suppliers like British Gypsum meet their Environmental Social and Governance (ESG) goals, addressing Scope 3 emissions without increasing cost for clients.  

Overcoming Industry Resistance:  

• The discussion highlights the challenges of persuading a traditionally change-resistant industry to adopt sustainable practices, often hindered by economic pressures and procurement processes. 
• Paul outlines his vision to overcome these barriers by extending reuse principles throughout the entire construction supply chain, with plans to expand the loop system to include other materials like cement bags and bulk packaging. 

Resources:  

Pallet Loop  

British Gypsum  

Fast-Moving Consumer Goods (FMGC) Industry 

Germany’s bottle recycling system 

Norway’s recycling program 

RFID technology  

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A big thank you to our sponsors!  

This episode of Sustainability Solved is sponsored by Business Declares, a not-for-profit business network who inspire, encourage, and accelerate action within businesses to address the climate, ecological, and social emergency.  

They are an active network of 100+ businesses who back our commitments to reach net-zero, restore and protect nature, and advocate for regulatory change.  

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He's created the first reusable. trackable and returnable pallet for the construction industry. Welcome Paul.

Paul: Hi there. Good afternoon, Will and Charlie. Thank you for having me on.

Charlie: Great to have you. So can you, can you tell us a little bit about your background and why pallets have become your, well, become your thing?

Paul: Yeah, I guess, sadly, I was, I was kind of brought up in nappies around pallets. So we, we, my father, um, was a time study engineer, so he was very much focused on, on time and motion. I worked. Uh, there's a kind of full circle thing here. He worked for, uh, Jewsons who were a timber merchant based in Great Yarmouth, where we're originally from.

He sucked me into the family business and, uh, and that was it. You know, the next thing is we, we kind of grew from a business that was, that had 40 people to over 350 people over 15 years. And, uh, and we were manufacturing, you know, 150, 000 pallets a week for industry. And that wasn't just construction industry.

That was, that was pharmaceutical. That was agricultural food, a chemical. 50%, I would say of what we were manufacturing was ultimately for construction product manufacturers. So through that, I guess I just, you know, I was, I was seeing the, the waste, um, that, that, and the problems that, um, the first hand and the complexity of the specifications that we were, that we were pushing in from, from the front end, you know, upon the request, you have on.

Charlie: So it sounds like it's quite a simple idea. You, you make a pallet. You know where it goes and you get it back. I have a feeling it's far more complex than that because no one has done it. What are the complexities and what other kind of, um, barriers you've got to this seemingly fairly obvious change?

There's nearly 200 million movements a year around the. FMCG, so the fast moving consumer goods, the retail grocery sector, and they achieve a 98 percent reuse rate on, on those pallets. So as you said, you know, construction, 20 million, less than 10%. And, and that makes you ask the question, well, why, what, what, what's, what's going on there?

And that was probably ultimately the starting challenge was to, to speak to manufacturers and understand. Can they standardize so standardization was key

here. Um, but then it was a case of getting the, the key stakeholders in the industry to buy into the thought processes of actually doing something different.

And yeah, let's face it. The construction industry will admit themselves, they're not the best sector, uh, uh, at change. And so definitely trying to get people into a different mindset for that change has been, has been a challenge.

Charlie: Because you say there are 3, 000 different specifications and that's literally just to do with the fact that people just go, I want it to carry this amount of weight, I want it to be, because the sizes are fairly standard, is it, am I correct or?

Paul: No.

Charlie: No, nothing standard. Oh, okay.

Paul: No, that's no problem. You know, so, so.

Charlie: Absolutely nothing standard.

If you don't use it, don't supply us, or we'll fine you for making our supply chain inefficient because we've got standardization throughout our supply chain, the construction industry have never had that challenge. You know, there's never been that challenge from the end users back up saying that this, this doesn't work for us.

And I guess this is what we're inviting the industry to consider is actually, is there a better way, but that has to. That has to ultimately be driven by the manufacturer for them to make the physical change onto the power. But of course they want to know that the customers are open to that, to that change as well.

and took on the first employees. And we've just. 10 weeks ago, supplied our first pallet.

So his pin, it's been quite a long time to coax all the stakeholders along, whether it's the, the end users, the principal contractors, the house builders, the merchant sector, or, and in turn, then the manufacturer to, to get everyone lined up. And it's, it's, that's been really difficult because people in this sector I've found are working in silos.

And so breaking that down has been a challenge.

Because or are there downsides? Because if someone thought it was to be better than the downsides are, it's not as good as the one before.

Paul: You know what, Will, I don't, I just don't think anyone's ever been challenged. So I, I, you know, if you, if you go into a manufacturing business and say, what, why ask the question, why are you using that specification?

And of course the answer to that is, is always no. And, and the starting point of that is always, we need to become more standardised in, in, in our approach.

Will: It reminds me of that wonderful Facebook meme that's, um, explains why an American railway is the gauge it is, and it goes back to trams. And then it goes back to carts.

No one asked the question, well, why are we doing this? It was just that it was, it's not a big deal in many people's worlds. It's a big deal in my world. I'm very passionate about getting this right. But. You know, for some people it's just a pallet. And I think that, you know, this industry, this sector has been literally stepping over this problem for 20 or 30 years. And it's become just a part of the furniture. You know, you go to a, you go to the back of a supermarket and everything's stacked up neatly. You go to a building site and there's a, there's a pallet graveyard in the corner somewhere, and that's just acceptable.

Charlie: I mean, that's the thing. If you went to, went to any building site and said, how much of a pain in the arse are all of these different pallets that you then have to try and get rid of in the old days, you'd just burn them, but now no. So then you're paying for skips to take them away as having paid for them to be delivered.

Paul: Yeah, no, good question. I think that, yeah, you just touched on bottles. So, so, let's take Germany and Norway and their recycling rates. So Germany and Norway are both achieving 98 percent recycling of their plastic bottles. Take that into the UK, I think the figure is something just north of 50%. In the US it's just under 30%.

What's the key fundamental difference between the systems Norway and Germany offer a deposit back on their, on their bottles? So when we, when, when we came up with, you know, the, the whole idea of, of Pallet Loop, first

and foremost, always front and center was we need to maintain a value in that asset, in that pallet.

Um, and again, you know, there's lots of other examples of this, you know, I'm going to the Latitude Festival this weekend down in Suffolk. And last time I was there, there's, You know, there's, the kids are all walking around with their, with their snakes of, of depositable gases and collecting them all up as they do at this big sporting event.

Why? Because there's a value to it. And so, so it just induces a behavior and. My vision is that, that if we can adopt that, if we can put a value on 20 million assets in the supply chain, that, well, you know, who knows, we might get a different behavior on the back end of this.

Was make pallets and send pallets around the world. And I remember chatting to him and he said, we've just come across a company that 10 percent of their assets. I lost, they don't know where they are. And I mean, he was obviously thinking about it from a financial point of view, that that's 10 percent of the business if all that business is.

So is that quite normal, that scenario? And is that one of the reasons why you're doing, you're doing if companies lose, because I mean, Charlie was talking about pallets going in skips and there being no value. Of course, there's a value to them. Someone must own them somewhere or manufactured them. Yeah.

But with regards to the, the, the number of pallets that are lost, that. Definitely one of the things that was, was important for me to, when I was looking at the, uh, the Pallet Loop model was to make sure that it's a, it's an equitable system for the supply chain. So some of the existing pallet pooling systems will be, it's, you know, it's a, a penalty if you lose.

So, so if you lose 10 percent of the assets that you're meant to have under control, then they will bill you. At the end of the year, when they do an audit for that 10 percent loss at, you know, 20 a pallet and, you know, that can smart quite a lot when, when that comes through. And of course no one budgets for these losses.

You haven't got to complete any paperwork. You haven't, it's literally the model is around that pallet just maintains a value and so if someone signs up and becomes a, a a member of our loopback system and they comply with with the requirements of loopback then we will pay them back up to four pounds a pallet.

And it's as simple as that, really. So it's only, so we're removing the negative and trying to create it as just a positive behavior for return.

Charlie: So just to cut, so your pallets are made of wood or are they made of plastic?

Paul: Yep.

Charlie: Made of wood? Yep,

Paul: made of wood.

Charlie: Standard, standard pallet sprayed a specific color that relates to your loop, the green?

safer and standardised to a level that they would be, you know, for example, we've got our, our first pallet that was issued for British Gypsum to put their bagged plaster onto.

That pallet of course can also carry bagged cement, bagged aggregates, bagged sands, and lots of other stuff. So we believe actually just, just that single specification could Could account for 25 percent of the whole of the construction industry's volume.

Charlie: And then am I paying a premium to come and buy your pallet?

But actually, when you take that into account, once we've paid that back, It reduces the cost to the supply chain.

Charlie: So if I, I'm British Gypsum, I've got your brand new, lovely green pallet. I've loaded it up with gypsum plaster. I've sent it out to a building site. They unload it and do, how does it get back to you? Or does it go back to British Gypsum and then eventually come back to you?

Paul: No, that's the, that's the big thing with, uh, you know, the biggest challenge, you know, talking about challenges at the start of the conversation, the biggest challenge with Pallet Loop the real, the real, differentiator that we've done is, is create a, a logistical system at the back end to recover the pallets back.

You know, where do you think about again, the current, the existing pooling solutions, existing pooling solutions only gets to the supermarket and then go back again. So it's very closed loop. And that was the, one of the challenges with Pallet Loop was the fact that Yes, the pallet could end up on a Morgan

Sindel site, it can end up on a Barrett Homes site, it can end up in a Travis Perkins yard, but it could also end up on your doorstep because you will have, you know, but you don't order a pallet of baked beans, well, you may, but not many people I've met have, you know, so the pallets don't leave the retail network.

Pallets do leave. Really spread out across the construction. So hence that's why you know that monetary driver and, you know, we've had to set up a bit more of a diverse logistical recovery program to ensure that we can get the pallets back in.

Will: And how do you know where all the pallets are?

Each pallet has got RFID, so ra, the, the radio frequency. Identification tags. So we know through that, through that tag, when the pallet was issued and who it was issued to. And then for, as far as Pallet Loop is concerned, that's the last information we know on the outbound. Then we'll know when it was collected.

So a date it was collected and where it was collected from. So, so we'll, that's as much information as we'll get, but that will still give us a load more information than actually is that we're gathering today. So we'll be able to. assess through that what the recovery rates are in the house builders compared to the principal contractors or compared to the merchants to the retailers.

Charlie: So are you assuming that let's go back to your British Gypsum model, British Gypsum pay an extra fiver nominally, I'm sure I'm getting this very crudely. Do they then hand that extra fiver on to the customer and then the customer then gets paid by you when it gets recovered or does it go straight, how does that sort of that, that's the handing on.

Paul: Yeah, in the case of British Shipsman, there's no on cost. They've started using Pallet Loop. There's been no change of pricing to their customers. So it's just, you know, really been seen as just a swap for a white pallet. And so there's

Whereas the cement sector, the roof tile sector, others have kind of gone to very much away from it. So I would say that. You know, less than 10%, probably 5 percent of the industry are using deposit that, you know, even then that causes the merchants a real challenge because it, you know, if you're a manufacturer A, B, C, D and E, and you're all using your own depositable pallets, well, you have to stack them separately in your yard.

You know, a lot of merchants are very tight for space in yards. So it becomes, and then, and then you'll find that, you know, the manufacturer of concrete blocks, they're not a pallet recovery experts. When they deliver in. They may have another delivery to go on to, so they can't collect the pallets this week.

So we've worked with the top four roof tile manufacturers and we've been able to create a standardised pallet that they've all tested and could work for the 1. 2 million pallets that are being used to ship roof tiles out. So we believe that with about eight specifications, we can cover between 75 and 80 percent of the construction supply chain requirements.

Um, so, but through that standardization process.

Correct. Exactly that. And does it, and from the carbon analysis you've done, driving vans around, I'm assuming they're vans or small lorries, to collect pallets, does that still have a sort of a climate change benefit?

That was the third, that was really the starting point. Yes. To make sure that actually what I foresaw as being a solution was a genuine solution. Now, you know, when it comes to carbon, yes, absolutely. It would, it reduces by up to 40, 50 percent the carbon requirements of, of, of shipping pallets through the supply chain.

Yeah. You know, they're made of timber and I still think that timber is the right product to use. It holds the carbon within it. And it's very repairable. I always say, you know, they're a bit like triggers brew. You can, you can get, get that in and you can tear one component off that's broken and you can repair it and it's back out again, ready for reuse.

Once a plastic pallet is broken, it's, it has to be completely ground down and then remade again. And that makes it very, very inefficient and very expensive. Um, and so this is always. You know, the challenges with, with, with any sustainable solutions right now are making sure that they are cost effective for a supply chain, for the users.

Charlie: And what, what do you perceive is, is, is really in it for the supplier? I mean, did they, they get to sort of tick off a line item on their ESG, on their scope three, one assumes it's almost a consumable item in this, is that, is that where you're getting the traction with the, you mentioned British Gypsum with

the larger suppliers that they're going, right, actually, this is going to really help us with that kind of you know, uh, carbon modeling.

Paul: Yeah. We sit for, we, we sit very much within the scope three. Um, uh, being able to deliver a, a net zero solution for, for that, for that element of packaging, um, for those guys, but, uh, and of course, in, in, you know, we're future proofing away from packaging taxes, which are absolutely going to come down, down the track, we've seen it within plastics.

Uh, by, by, uh, you know, really promoting the use of, of, of Pallet Loop within across , because without, without this, that kind of sustainable leadership and people say, well, we're just going to go with this, then we don't ever get the chance to put the wheels on the track and start to learn. And that's always been a challenge for, for Pallet Loop.

It's that chicken and egg is, is, well, we've got this great idea, but, and everyone's telling me it's a no brainer, but actually, how do we now get it to, to work, you know, work in the supply chain and how are we going to learn? Where the pitfalls, do I think that this is a silver bullet right now for the construction sector?

Will: Can I just ask, what's, who's Saint-Gobain?

Paul: Saint-Gobain own British Gypsum, so they're the ultimate holding company of, um, of British Gypsum and a number of other manufacturers across the, uh, across the supply chain of construction.

Charlie: I think it's fascinating.

You, the statistic you mentioned, was it, was it £8 to get rid of us, get rid of a pallet in a skip? Yeah. £8. Yeah. I mean, I think if you, I think most builders would say, well, it takes up no space. It's just a tiny bit in the bottom of the, but £8 sort of changes.

Paul: Well, you think, you know, a skip in central London now is 400 pounds.

Have you ever tried to shove pallets in a skip? They don't.

Charlie: Yes, I have.

Paul: They just don't fit very well, do they? Exactly, you know. They're not, they're not very spacious.

But it, it, And I've hand pulled them apart and made, made some of the, the, the, made furniture and buildings. And actually my entire plant room is made out of stillage from windows that I took apart because they're easy to take apart and pallets. Yeah. Yeah. But you know, it's always been this, this incredible resource coming through a site that just is very hard to access and actually ultimately ends up just keeping off and keeping people warm, you know, back in the day, keeping them warm in winter, they just burn them, which is, is, is a ludicrous use of a, of a, of a, of a material.

Paul: Yeah, yeah, yeah, absolutely. And I think that that's, that's a good point because, because we've been challenged on the fact that, you know, well, growing trees is a good thing.

Well, if we keep just burning it, because, because it's a, it's much easier to do that, then we won't have the fibre available in the future.

Um, to help us deal with some of the other challenges we've got coming down the track. So yeah, I think being, being resourceful with, with our natural resources is, is, is key.

Charlie: This is what I work with a kind of a very experienced sustainability consultant, a building sustainability consultant. He says, yeah, the thing is you can't log your way out of a climate crisis.

And we're trying to be as efficient as we can yet. You're getting lumps of wood onto a site and chucking it in a skip and, and off it's going. And as you say, it, it does need to, to change. What do you think the biggest barriers to uptake are going to be? You know, obviously you've managed to get a large, you know, a large, almost household name supplier to get on board because they've obviously got a breadth of talent in their sustainability department and, and the ear of significant leadership.

Do you think you are going to have the ability to grow this at scale and speed in the way that we need?

I think it would have just been adopted roll forward three years and, and volumes are down margins are under pressure. And, you know, as much as I want to push Pallet Loop as quickly as possible, you know, the, the finances

need to be, need to stack up for the whole of the supply chain, but the manufacturer at the front end is the challenge for us.

Will: Reusable pallets. Do exist in other industries the blue pallets have belonged to CHEP now if that's the case in other industries. Are you only? concentrating on construction and what's you what's the difference between you and say CHEP and What actually is the environmental? impact that you have, are you, what you did a life cycle analysis on it?

If you were to extrapolate that data out, what are those kinds of figures?

Paul: The key difference between us and a, and a, uh, you know, an existing pallet pool of a CHEP. Would be that their ambitions, I believe for growth are in new markets because there's big volumes in new markets for them to go after with their existing model.

You know, I was at, I was up at, uh, in Burson on Trent yesterday at our, one of our key recovery sites and seeing Pallet Loop pallets coming back in along with other pallets from, from building sites. Yeah, they're quite, they're quite messy. So the last thing you want to do is, is, is bring them in and, and they've got a lot of cement dust, et cetera.

our system, but, um, you know, as opposed to, to, to a, uh, a pallet pool of where if you lose their asset, they will charge you for that.

Will: And what is that environmental impact? The environmental savings? I know you've, have you extrapolated out in best case scenario? This is what we will achieve within the building industry.

Paul: Yeah, we do. I mean, with regards to, well, we, we can save 6, 000 acres, I think Charlie, you started with that. So, you know, 6, 000 acres of forestry every year is being felled just for us to manufacture pallets for the construction sector. So that's a, you know, it's about, you know, about 275, 000 tons of, of, of, of lumber.

Um, so I think the, the life cycle analysis suggested that we would save 1. 82 kilograms of, of carbon per pallet trip that Pallet Loop makes over an existing. So again, depending on the volume that you have in your, you know, that the manufacturer has, you can extrapolate that out and, and show that. And through the RFID technology, we can really.

You know, officially record that, that, that physically that pallet has come back from British Gypsum and document that so that they can report that within their ESG sustainability figures as a business.

Paul: I mean, ultimately RFID is. It's just a, a digital barcode.

So everyone is, is, is very welcome to use that RFID label within their manufacturing, within their stock taking, you know, with, within their yards. But yeah, no, I think. It's, it's, it's, it's exciting for me to, to consider how we can

report back for the first time ever to, to businesses, actually their, their exact sustainability credentials for, for their pallet movements.

And, and I think that that again, drives targets and behaviors and, and conversations within businesses to increase that year on year, whereas today they're figures that we don't necessarily know.

Charlie: Is there, is there a kind of, is there a minimal viable number? I mean, you're obviously you've, you've got your first good scale customer and you, you know, you're up and running, but do you need to get to a certain kind of market saturation so that the pickup efficiency gets to a point that you're like, right, this is, we're really cooking on gas here.

Paul: We've kind of forecast that we believe a, uh, our forecast is that within the, by the end of year three, we can deliver 5 million issues a year. So that'd be 25 percent off the construction sector today with the contract that we've started with, with British ships, and that could equate to about 1.

5 million off that five. You know, the bagged cement sector on their own is 1. 8 million pallets, you know, the roof tile sector, 1. 2 to 1. 4 million pallets. So you can very quickly get, if you can get the engagement of the, of these key manufacturers.

Will: I've just looked up what 6, 000 hectares looks like and a hectare is a sports field.

So 6, 000 sports fields. That's actually quite a lot

Paul: per annum, you know, cumulatively just every year.

Paul: Well, I was again, you know, if, if today the current rate is, we believe six to 8%, My challenge to the industry would be, well, if we achieve 10 percent as a reuse, would that be a win? You know, if we get 2 percent increase in, in, in Figbook, absolutely. You know, why can't we achieve 90, 90 plus percent? I

think a lot of that will come down to, you know, mass adoption of the scheme, because, you know, the more we have out there in the field, the faster they stack up more problematic, they quickly become for people.

And the quicker people will be phoning us to get them back through. Already we've seen, again, yesterday, I, I saw six loads of loop pallets. You know, we only started 10 weeks ago, we'd forecast that a pallet would, you know, we'd estimated that a pallet would be, it would take about 180 to 200 days when we're forecasting this for a pallet to, to come back through.

Charlie: So effectively one pallet could probably replace five, six, seven pallets because quite often on a building project, the plasterboard pallets will come and they'll sit there in a corner until almost the end of the job.

And when they do the big cleanup. Traditionally, there would have been a bonfire, but nowadays it'll go into a, you know, a wood skip or a, you know, a normal skip. Yeah. So, you know, it's amazing that if you get that thing churning, you can probably reduce the number of pallets full stop over the entire market.

Paul: Yeah, absolutely. I mean, we, we, we, when in our previous manufacturing business, we, we operated a, a repair facility for a major pooling business. And you would see pallets coming through that, that system that were 10 years old. You know, they'd been repaired. You probably get three or four trips a year within that retail sector.

Charlie: Obviously you're focused on pallets, but is there in the conversations that you're having with these large suppliers and manufacturers, are there other areas of the construction industry, which is notoriously wasteful?

Where this kind of moving beyond single use, do you think there are great opportunities out there for wider, wider adoption?

Paul: Yeah, no, the culture within Pallet Loop and the team is, is we are looking at anything that would be classed as packaging. In this, the whole of the supply chain, we are looking at go, how can we make that reusable?

Is, can we make that reusable? But why can't you create reusable cement bags? Why can't you create, you know, reusable strapping? Why can't you create

Charlie: paint, paint pots,

So, you know, one for me would be the, the bulk bag, you know, the, the, the one ton single use big lump of plastic and I think, well, why, why can't we, why can't we create that into a reusable system? Yeah, we're going to have lorries going into. Every single collection point across the UK, well, why don't we look at that?

You know, so, so, you know, these are things that we will, you know, I think that the Pallet Loop was the start. I, I firmly believe that the future will be loop. And we will be looping other consumable assets and, and delivering a service to, to the construction industry, because again, if the lorry's on site, why can't we help them dispose of their gypsum waste or their glass wool waste, et cetera.

You know, it's just collaborating with, with the supply chain and see, see where it goes.

Everything else was leftover materials. Absolutely everything else was leftover materials. And on most building sites, that would just go in a skip because builders move from site to site and they do not keep half boxes of screws and it's just, it's just, they just don't. The amount of material going out on skips is enormous.

Eye watering. And it does seem to me as though you might be, you know, sort of starting to, to crack that problem that once you've got a lorry appearing on site at the end of a job to take something back, there is an awful lot of stuff that

could go back into the top end of the system. So it's, you know, absolutely incredible. I can see it's taken a lot of work and a lot of ambition and, uh, full respect. I think that's an incredible achievement.

Well, that's it for this episode of Sustainability Solved. Next month, another form of innovation within the building industry. We're going to be talking to two of the judges from the Housing Design Awards about this year's winners.

Will: For questions and more information on sponsorship opportunities, email [email protected] and if you've enjoyed what you've heard today, please do leave us a review in your podcast app. It would be really appreciated.

Charlie: Thanks for listening. I'm Charlie Luxton.

Will: And I'm Will Richardson.