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UK to see residual waste treatment ‘overcapacity’

Waste management consultancy Eunomia’s latest report

indicates that the UK is on track to see a 12 million tpa shortfall in the amount of waste needed to feed residual waste treatment plants, while the Global Alliance for Incinerator Alternatives (GAIA) has warned that some EU states, including the UK, have the capacity to burn ‘more than the non-recyclable waste generated’

UK to see residual waste treatment ‘overcapacity’

03 June 2013 by Annie Reece

Image from Eunomia’sResidual Waste Infrastructure Review

The UK is on track to see a 12 million tonne per annum (tpa) shortfall in the amount of waste needed to feed the growing number of residual waste treatment facilities, new data from waste consultants Eunomia reveals.

According to Eunomia’sResidual Waste Infrastructure Review’, released today (3 June), if the residual waste treatment plants – including incinerators, gasification and biomass facilities – that have received planning consent but have not yet commenced construction come online, and residual waste arisings remain at current levels, there will be a 12 million tpa shortfall in the amount of waste needed to fuel them. This is almost double the ‘overcapacity’ figure Eunomia had predicted in November 2012.

However, it is unlikely that residual waste arisings will remain steady, as there has been a growing trend of falling residual waste and increasing recycling rates. Further, Eunomia predicts that total waste arisings will be two million tonnes lower in 2020/21 than in 2009/10 (depending on economic growth and structure, and the ‘effect of drivers such as the Landfill Tax in incentivising further waste prevention efforts’, amongst others).

Eunomia has conceded, however, that it is ‘unlikely’ that the UK would ever reach such a level of overcapacity, as each time a ‘merchant’ facility begins construction in a given locale, the ‘likelihood of nearby merchant facilities reaching financial close decreases significantly’.

The report continues: ‘At the same time, the lead-times involved in the development process, and the level of inertia associated with this, imply that the speed with which the system responds to the emergence of overcapacity is unlikely to be rapid.

‘As a result of limitations in the ability of waste to be moved significant distances at low cost, and the fact that capacity is unevenly spread across the UK, the situation of overcapacity my occur sooner in some geographical regions than in others.’

Increasing reliance on incineration

Currently, the UK has around 18.2 million tpa of residual waste treatment capacity from 92 treatment facilities either ‘operating’ or ‘under construction’, with a ‘capacity gap’ of 9.3 million tpa (based on residual waste arisings from local authority collected and commercial and industrial (C&I) sources in 2012/13).

However, Eunomia’s report has found that in the past six months, one million tpa of treatment capacity has moved from being ‘consented’ to becoming either operational or under construction, with an additional 2.7 million tpa of treatment capacity being granted planning consent (but still awaiting financial close).

Further, planning consent is being sought for a further 2.1 million tonnes of waste treatment capacity, and 250,000 tonnes of capacity is currently ‘appealing a refusal of planning permission or being judicially reviewed’.

The largest proportion of residual waste treatment facilities currently in operation or waiting to receive consent is incinerators. This is despite increasing calls from environmentalists for the UK to phase out the energy-from-waste plants, with Friends of the Earth saying that by 2020, with increases in recycling and improved technology, these incinerators will be ‘almost as polluting in terms of CO2 emissions as new or refitted coal fired power stations, and 78 per cent worse than new gas power stations’. It argues that the government should be encouraging other, more climate-friendly technologies, such as mechanical biological treatment (MBT).

Residual waste treatment ‘investment trap’

It does appear, however, that the increasing awareness of ‘overcapacity’ has led some to rethink their investment policies.

According to Eunomia, the fact that 21.3 million tonnes of residual waste processing capacity has received planning consent but has not yet commenced construction is indicative of an ‘investment trap’, with the market seeing ‘difficulty [in] raising finance, rather than obtaining planning permission’.

The review reads: ‘The difficulty of raising finance appears to be having an impact on the number of projects being initiated. Only 0.6 million tonnes of new capacity entered the planning system in the last six months, resulting in a net reduction of 3.1 million tonnes in the amount of capacity seeking planning permission.’

Eunomia Principal Consultant Adam Baddeley, lead author of the review, said: “The development pipeline for residual waste treatment is becoming increasingly complex, and the picture is changing – not least because of the information that we are making available through our review.

“With a lack of long-term bankable feedstock contracts to meet tight lending criteria, along with strong competition from incinerators on the continent, the prospects for reaching financial close on pure merchant plant have worsened.

The risk of overcapacity remains, in some regions more strongly than others; but at a national level, these influences suggest that we may not reach full capacity until around 2017/18.”

The slowing of projects being brought to completion, Eunomia claims, has been compounded by Defra’s recent withdrawal of PFI credits from three major local authority projects, after finding that the 29 residual waste treatment projects that already have funding are ‘sufficient’ to meet the EU’s 2020 landfill diversion targets.

The slowing of the market drive has also been highlighted by incinerator specialist Covanta UK’s announcement that, unless a buyer or partner is found to fund its energy-from-waste facilities, it will have to withdraw from the UK market and make ‘the majority’ of its 30 staff redundant.

Speaking to Resource, Baddeley said: “This certainly indicates that government is less supportive of spending vast sums on large EfW plants. What we need from government now [to promote a circular economy] is greater support for higher recycling targets, which could perhaps be achieved by revamping the producer responsibility system to direct funds to local authorities.”

Read Eunomia’sResidual Waste Infrastructure Review’.


We already have incineration overcapacity

Submitted by shlomo.dowen on 3 June 2013 – 3:47pm.

If one accepts the notion that incineration should be limited only to genuinely residual combustible material (and many would go further to say that incineration should not be allowed at all), then the UK already faces incineration overcapacity. Even if we stick with Eunomia’s approach to calculating residual waste treatment requirements, if one uses the Government’s central waste arisings trends for England in 2015 and 2020 (from Defra’s Forecasting 2020 paper) then we can anticipate that by 2015 there will be more residual waste treatment capacity than residual waste to treat.

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