06/07/11 Latest Eunomia report advises on solutions to AD development constraints

A new report published today by Eunomia Research & Consulting at the annual Anaerobic Digestion and Biogas exhibition suggests that there is  6.5 million tonnes a year of available food waste in Great Britain (GB) which might be diverted from alternative management routes. If it can be successfully captured, this tonnage represents a major opportunity for AD project developers and investors.

Director of Eunomia, Dr Dominic Hogg, one of the authors of the report says:

“The report is underpinned by modelling which broadly quantifies the levels of source separated food waste actually available in GB at a regional level across the municipal, commercial and industrial sectors. This approach varies to other studies by focussing on available food waste rather than estimated arisings, which do not consider competing management routes to AD or realistic capture rates and therefore tend to paint an over optimistic picture of the market.”

Of the 8 million tonnes per annum (tpa) of food waste available across all sectors in the UK per annum, Eunomia’s modelling shows that 2.2 million tpa is from household sources, 5.2 million tpa commercial and 0.6 million tpa industrial.

In the report (available at www.eunomia.co.uk), existing food waste treatment capacity (both AD and in-vessel composting) has been modelled to estimate a food waste ‘capacity gap’ at regional level. This gap, estimated to be 6.5 million tpa for GB, represents a significant opportunity for investors and project developers, provided collection infrastructure is forthcoming and projects can secure feedstock under the right terms to enable funding to be raised for new facilities.

Dr Hogg continues:

“Unlocking this feedstock is a significant challenge, particularly as only around 12% of local authorities in the UK currently offer source separated food waste collections and commercial collections of food waste are only in their infancy. As a result one can readily appreciate that the quantity of food waste being captured is not currently sufficient to justify a rapid escalation in facilities. If there is to be significant roll-out of new AD infrastructure in the UK, collection and treatment systems must develop in tandem to avoid the current ‘chicken and egg’ situation which characterises the current market. Furthermore, developers will need to work closely with companies collecting commercial (and other) food wastes where they do not engage in this activity themselves.”

As well as gaining access to appropriate feedstocks, another major constraint to facility development identified in the report is raising the necessary finance for new plant. These two constraints are difficult to separate due to the fact that funding institutions generally seek to ensure that a specified proportion of a facility’s capacity is ‘guaranteed’ for a minimum time period.

Eunomia suggests that major lenders should work with project developers to reduce the level of transaction costs, This is because very few lenders are willing to look at projects with a capital cost below £20 million, which equates to a facility size of 80,000-100,000 tpa. This size is considered by Eunomia to be in excess of the optimum size for an AD facility fed by food waste. The report also explains that a significant proportion of industrial food waste is currently being managed through means other than landfill i.e. land-spreading, use as pet food and animal feed, at relatively low cost. A future revision of the waste hierarchy could be important if it was to imply, for example, that some widely land-spread wastes should be moved into management routes such as AD. Duty of Care obligations might then encourage large generators of food waste to switch feedstock to AD.

Download the report in full here   


ENDS

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Media Contact:
Emmeline Dacke
Eunomia Research & Consulting
37 Queen Square, Bristol, BS1 4QS
Office: +44 (0)117 9172250
emmeline.dacke@eunomia.co.uk
www.eunomia.co.uk


Notes:

Established in 2001, Eunomia Research & Consulting Ltd (‘Eunomia’) is a Bristol-based, employee-owned consultancy dedicated to adding value to organisations through the delivery of improved outcomes. Working throughout the UK, other EU Member States and beyond, Eunomia’s consultants have experience and expertise in environmental, technical and commercial disciplines. Eunomia’s main service areas include:

• Waste management;
• Low carbon and renewable energies;
• Resource efficiency; and
• Climate change adaptation