Review of Funding for a Mass Burn Incinerator
Report carried out for Herefordshire & Worcestershire Action Group.
Worcestershire County Council (WCC) and its’ contractor, Mercia Waste Management, are proposing to increase the waste budget at a time when waste disposal costs nationally have fallen dramatically.
The 25 year incinerator contract has failed to adequately respond to, or assess Value for Money, given the substantial changes in waste policy, legislature and technology of recent years.
The Council’s Review of its’ 15 year old PFI contract did not aim to find an optimum approach to waste management and has not considered the economic and environmental benefits of a more flexible and higher recycling option.
1. INCINERATOR COSTS EXPENSIVE: Government statistics show that the average gate fee including finance and operation of a new incinerator is around £101 -131 per tonne (ref 1). This is more expensive than any other waste treatment, including landfill with landfill tax. It is for this reason that ratepayers in Herefordshire and Worcestershire will have to pay at least an extra £6,000,000 (six million pounds) per year on top of what is already a very expensive waste contract, should the incinerator proposal proceed.
2. FOOD WASTE COLLECTION CHEAPER: Half of English councils have begun separate food waste collections in the last 3 years. Food waste comprises around a third of all residual waste and can be treated more cheaply and further up the waste hierarchy by Composting or Anaerobic Digestion; both of which cost around £40 per tonne.
Up to 68% of the waste to be burned could be treated for a third of the cost. By determining to burn food waste Worcestershire County Council is risking a future legal challenge as it has a statutory duty to treat waste as high up the waste hierarchy as possible.
The new Waste Hierarchy has now been incorporated into UK law through the Waste (England & Wales) Regulations 2011. Under this Law food waste should be identified as a waste stream and Councillors are obliged to apply the waste hierarchy in their approach to waste management. The proposal therefore presents a real risk to the Council.
3. CLEANER RECYCLING MEANS MORE RECYLING: When organics are collected separately, the remaining other materials are much cleaner and recycling capture rates increase. In Wales, where food waste collections are being rolled-out to all households, recycling is already 10% higher than in England (at an average of 53%) and there is a realistic target of 70% in the near future (some councils are already achieving over 60% recycling). The separate collection of food waste allows recycling to increase and the costs to fall as the waste becomes ‘clean’. If the council funds the incinerator, the cost of increasing the rate of recycling will then become so high that the level of recycling is suppressed and future targets are likely to be missed. This may have additional financial implications.
4. LOSS OF REVENUE THANKS TO PFI FLAWS: Many Councils are paid for recyclable material at an average £26 per tonne for co-mingled, and far higher prices are obtained when households separate paper, plastics, metals and glass (ref 2). Unfortunately, WCC does not receive any value for their recyclate and in fact pays an additional recycling supplement to the PFI contractor of almost £6 million per annum, in addition to a base fee in excess of £8million per annum, which means recycling costs would be around £95 per tonne and as a result more expensive than the charge for landfilling (this could be why recycling figures have stagnated for the last three years). This is currently a cost which ought to be a substantial saving of potentially £9 million per annum if both the recycling supplements and the revenue from the sale of recyclates are considered.
5. MORE RISKS GOING FORWARD: Although Worcestershire County Council’s PFI contract has only 10 years to run, (after which time the Council would be able to enjoy the income from recycling and be able to access the cheapest waste treatment alternatives available,) they have already declared that an ‘energy from waste’ plant is the preferred option. This demonstrates a fixation with single site, single plant operation, rather than examining a more modular flexible approach. This blinkered thinking is not in the public interest and is prejudicial to achieving a balanced waste management process that is responsive to changing environmental, cost and legislative pressures.
The EU Waste Directive is proposing to ban the incineration of all recyclable and organic material by 2020. Further, EU waste reduction levels have already been reached, meaning PFI Projects like this one are no longer needed. Such a shortfall in waste in simple terms means that there will not be enough waste to run a 200,000 tonne per year Incinerator during its’ 30 year life.
The Council’s own reference document ( West Midlands Waste Alliance Report ) clearly states that the Incinerator Bottom Ash that is not recycled is currently disposed of fairly cheaply to landfill, but there are two main threats to this. Firstly, it may yet be re-classified as hazardous waste under rules covering waste description. Secondly, because of this, it might also cease to be classified as inactive waste under the Landfill Tax regulations. If both of these come to pass, this could push the landfilling of Incinerator Bottom Ash to £100 per tonne or more, and although different contract provisions apply, it is nevertheless the Authorities who have contracted for the EfW Plants who will largely bear the financial burden.