Clear The Air News Blog Rotating Header Image

DEFRA cancels PFI support for Hatfield incinerator

Simon Inglethorpe

20 October 2014

DEFRA has withdrawn £115m of private finance initiative (PFI) support from Hertfordshire County Council’s residual waste infrastructure project.

Veolia is proposing to build a 380,000-tonne capacity energy-from-waste (EfW) plant near Hatfield as part of an £800m, 25-year contract with the council.

The waste management giant said it was “very disappointed” by the news.

“This shortsighted decision will increase the UK’s reliance on landfill to treat our residual waste,” a spokeswoman said. “Veolia believe that DEFRA’s decision points to a lack of government support for new waste infrastructure and fails to address the 17 million tonnes of waste that currently goes to landfill.”

State support for the proposed EfW plant is not warranted, DEFRA claims, because the treatment capacity it would provide is no longer needed to meet landfill diversion targets.

A spokeswoman for the department said: “DEFRA’s responsibility is to ensure public money is used appropriately and as we expect to meet EU landfill diversion targets with the existing infrastructure we now have in place in England, we cannot justify continuing to fund this project.”

DEFRA justified its decision by releasing an updated forecast of waste arisings and treatment capacity prior to the announcement.

Member states need to reduce the amount of biodegradable municipal waste sent to landfill to 35% of 1995 levels by 2020 under the EU Landfill Directive.

But there is now a 99.9% likelihood this target will be met without the Hertfordshire EfW project, according to DEFRA’s latest forecast. The department now predicts that the EU target will be exceeded by about 6.6 million tonnes by 2020 without the project’s contribution.

Other independent forecasts broadly corroborate this prediction, it claims.

“Although conclusions vary regarding infrastructure requirements in general, there appears to be a consensus of results showing sufficient capacity to meet the requirements of the 2020 landfill target,” says DEFRA.

Recent infrastructure capacity reports by the Green Investment Bank, Veolia and Sita and are all consistent with the government’s latest forecast, in the department’s view. This is surprising given that Veolia’s report is highly critical of the “dangerous” assumptions used in DEFRA waste forecasting.

Criticisms of the withdrawal of PFI credits by trade body the Environmental Services Association (ESA) echo Veolia’s concerns.

Its economist, Jacob Hayler, said it was a “wrong” and “short-sighted” decision that would increase the UK’s reliance on landfill and exports of refuse-derived fuel.

Hayler also accused the government of changing its waste composition assumptions to make the landfill diversion target easier to meet. DEFRA’s latest forecast assumes a much lower biodegradable content for waste (50%) compared with the figure used in its previous capacity forecast in October 2013 (65%).

Mounting project woes

The cancellation of government PFI support adds to the difficulties facing the controversial Hertfordshire project.

Communities and local government (DCLG) secretary Eric Pickles blocked Veolia’s application to build an EfW plant on a 12.6-hectare site south of Hatfield over the summer.

Veolia reacted to the planning refusal by launching a legal challenge and has pledged to continue this fight.

A spokeswoman said: “The decision has not affected Veolia’s belief that an in-county treatment solution for Hertfordshire is needed, and Veolia will continue with our legal challenge to the secretary of state’s refusal to give planning permission for the recycling and energy recovery facility at New Barnfield, due to be heard in December.”

The government has withdrawn £1.3bn in PFI support from a total of 12 waste infrastructure projects so far this parliament.

The latest cancellation comes less than a year after the axing of £91m in PFI support for Norfolk County Council’s EfW project.

This followed the removal of £217m in PFI support to three projects in 2013 and the 2010 scrapping of £926m of PFI support for seven projects.

Despite the cutbacks, DEFRA will spend £100m – nearly 80% of its waste and resource budget – on PFI projects in 2014/15.

MPs attacked the government’s “appalling” management of PFI support for waste infrastructure in a report last month

Leave a Reply

Your email address will not be published. Required fields are marked *