June 2015

Residual Waste Capacity Gap Continues to Close

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Eunomia’s Eighth Residual Waste Infrastructure Review, out today, shows that the UK remains on track to exceed the required level of residual waste treatment capacity by 2019/20 (or by 2018/19 when export of RDF is included).

Facilities either currently operational, being built or planned and expected to be operational by 2019/20 are collectively capable of processing 23.9 million tpa of residual waste. Fully utilised, this will exceed the 21.6 million tonnes of residual waste expected to be produced in the year.

 

 

The long lifespan of facilities such as incinerators, and the lengthy periods needed to pay back capital costs, mean that over-capacity may leave councils and contractors grappling with some difficult choices. The Local Government Association (LGA) has already written to the EU to urge the case that councils’ committed investments in waste infrastructure make “a suggested 70 per cent recycling target unachievable”.

Writing on the Isonomia blog, report lead author Adam Baddeley has suggested alternative ways that Government and the LGA could help local authorities respond to the challenge of overcapacity, including:

  • supporting improvements in the recycling rate for commercial and industrial waste;
  • supporting collaboration or trading between councils to allow waste to be matched with capacity;
  • helping renegotiate councils’ incinerator contracts to enable exit from any requirements that commit them to supplying a guaranteed minimum tonnage.

 

Investors may need to exercise more caution in their expectations regarding the availability of feedstock and the expected resilience of gate fees in a more competitive waste treatment market.

Adam Baddeley said:

“It is encouraging to see the LGA taking note of the concerns raised in the RWIR, when others in the sector – such as the GIB – appear not to be doing so. However, the lessons the LGA draws from the study are not those we would encourage local authorities to adopt.

Calling for less ambitious EU targets may seem like an obvious solution to the problem we have long been predicting, but many cheaper and more creative ways of dealing with the challenge of local authority incinerator overcapacity are available.”

The report draws upon data from local authorities’ annual WasteDataFlow returns, Defra’s latest C&I data and Eunomia’s in-house Facilities Database, which holds information on all residual treatment facilities in the UK (both operating and under development). Data is analysed on both a national and regional basis, to provide a detailed picture of where insufficient or excess capacity is anticipated.

The report focuses entirely on waste which is suitable for treatment by residual treatment plant, including incinerators, mechanical-biological treatment (MBT) facilities, and gasifiers, but excludes C&D and other unsuitable wastes which have been included in some other estimates of national capacity requirements.