MEMORANDUM BY UNITED WASTE SERVICES (DSW
24)
INTRODUCTION
United Waste Services, part of the international
utility company Tractebel, holds two of the five long-term PFI
waste management contracts to have been awarded thus far in England
(Kirklees and South Gloucestershire) and has been involved in
practically all the major integrated waste management proposals
over the past six years. The Company is currently working with
many local authorities at various stages of developing their long-term
waste management strategies and procuring services to deliver
them. This considerable experience of providing comprehensive
waste management services to local authorities and in tendering
for long-term integrated waste management contracts underlines
the company's credentials and demonstrates its authority to provide
informed comment on the Strategy and its deliverability.
United Waste Services is primarily a provider
of waste management services, particularly to local authorities.
The Company does not therefore sell, promote or advocate the use
of any specific technique or technology, but rather selects the
most appropriate methods of waste management to satisfy local
and regional objectives and circumstances. In the case of management
of local authority waste, the Company procures technology and
delivers a waste management service to satisfy the needs of an
authority, in response to that authority's preferred output requirements.
The comments in this memorandum should complement those of local
government, as United Waste Services' business is to work in partnership
with local authorities to achieve common objectives. The comments,
which United Waste Services would be happy to amplify by presenting
oral evidence to the Committee, are therefore independent of any
vested interests in particular waste management techniques.
As one of the most experienced contractors in
tendering for and providing a full range of municipal waste services,
United Waste is therefore in a position to provide informed, objective
and constructive comment on the deliverability of the Government's
waste strategy. The strategy should ultimately deliver the Government's
objectives, providing that there is full commitment from the Government
and other stakeholders and that the considerable existing barriers
to its successful implementation, addressed in this memorandum,
can be resolved.
ACHIEVABILITY OF
THE OBJECTIVES
The Sub-committee wishes to examine whether
the strategy will result in a number of outcomes, which are commented
on briefly as follows:
More efficient use of resources and reduction
in waste production
There are a number of measures outlined in the
strategy which, if implemented successfully, should lead to a
reduction in waste arisings. Whilst it is reasonable to expect
that the growth in municipal waste arisings can be slowed, waste
arisings are a function of many factors, including wider social
and market forces, which can only be influenced in a limited way
by the measures set out in the strategy.
An increase in recycling
An increase in recycling is ultimately dependent
on the availability of markets for recycled goods. The increase
in recycling and composting proposed by the strategy would result
in an extremely sharp increase in the quantity of recyclate to
be placed into historically volatile markets. It is questionable,
even with the proposed measures, whether sustained markets for
such material could be established within sufficient time to meet
the earlier target dates.
The levels of recycling and composting required
by the strategy will necessitate joint working arrangements between
all collection and disposal authorities. Where these are the same
authority the task should be easier, subject to existing contractual
arrangements, although economies of scale may still result in
Best Value being achieved through joint working arrangements with
authorities in neighbouring areas. In two-tier authority areas
joint working is essential if the recycling targets are to be
met, and the existing functional and financial allocation of the
services represents a major obstacle. The mandatory establishment
of waste management authorities with responsibility for both collection
and disposal may well be the way forward, although the establishment
of such authorities is unlikely to be consistent with the target
timescales.
A fundamental concern regarding the current
divided responsibility is the bankability of waste management
contracts and the satisfaction of Best Value requirements where
access to different elements of the municipal waste stream cannot
be guaranteed by the disposal authority, due to the independent
activities of the collection authorities. This leads to considerable
uncertainty over both the quantity and composition of waste which
is to be subject to the contract. The consequent uncertainty over
the nature and size of facilities required to fulfil contractual
obligations means that Best Value cannot be demonstrated and the
uncertainty over contractor's revenues is likely to represent
an unacceptable financial risk to project funding.
The exclusion from the recycling targets of
recycled bottom ash from waste to energy facilities, raises doubts
as to whether the national recycling targets can be met. Currently,
the best performing authorities, with mature recycling and composting
schemes in the most amenable circumstances, rarely, if ever, achieve
these targets. It therefore seems more than optimistic to expect
such targets to be achieved nationally, in the proposed timescales,
without the inclusion of bottom ash. The recycling of bottom ash
is certainly desirable, as it is consistent with one of the fundamental
objectives of the strategy, and therefore measures to increase
the level of this activity should be actively encouraged by including
it within the recycling target. In many circumstances, the recycling
of bottom ash may represent the BPEO for satisfying the requirements
of the landfill directive and may almost certainly offer the best
value option from a financial perspective.
The different circumstances of local authorities,
recognised in the initial and interim recycling targets (2003,
2005 and 2010), should be recognised in the ultimate targets.
Increased use of incineration for waste recovery
The recovery of energy from a proportion of
municipal waste is unavoidable if the strategy targets and those
of the landfill directive are to be achieved. Whilst the degree
of waste to energy necessary to achieve the targets can be assessed,
it is not clear how and if this represents the Best Practicable
Environmental Option. There is an considerable element of confusion
in the meaning and application of BPEO and a tacit implication
in the strategy that, nationally, the BPEO is achieved through
meeting the various targets. Detailed guidelines regarding BPEO
are required if this principle is to be applied in determining
the most appropriate level of waste to energy provision.
There are considerable doubts about the ability
of the present planning system to deliver the necessary infrastructure,
despite the publication of PPG 10. Realistically, planning appeals
can be expected in many cases and a regional planning influence
may reduce such instances.
The consequent period required for the planning
process means that the timescales for the achievement of the targets
set out in the strategy must be called into question. Of particular
concern must be the target of 40 per cent recovery by 2005. It
is almost certain that this will require an increase in the recovery
of energy from waste, over and above the capacity which is currently
planned. Many local authorities have yet to develop a waste management
strategy, therefore the combined timescales for producing a strategy,
letting an appropriate contract, obtaining planning permission
and constructing a facility must cast serious doubt over whether
the necessary capacity to reach this target is achievable.
The continued availability of "green energy"
support for waste to energy projects is essential to help mitigate
the inevitable increased costs of municipal waste management and
the exemption for waste to energy from the Climate Change levy
is consistent with this and appropriate to achieving the objectives.
Current public perception of waste to energy
may be a significant factor in the development of the infrastructure
necessary to deliver the strategy. There is a need for informed
and rational debate, with conclusions regarding the true environmental
impact of new generation waste to energy plants. These conclusions
need to be independent and objective, such that they engender
public confidence. There is much attention being paid to new energy
recovery technologies, including pyrolysis and gasification, which
can appear to have greater public acceptability. Whilst such technologies
certainly have potential, it is doubtful whether they are sufficiently
developed to be a deliverable alternative to established municipal
waste combustion technologies. It is therefore likely to be a
number of years before these new technologies are sufficiently
proven and cost effective enough to satisfy Best Value requirements.
There is a temptation to delay long term waste management decisions
until it can be demonstrated whether such technologies represent
reliable alternatives. This may be defensible in certain circumstances
but, if this approach were widely adopted, it would almost certainly
result in the strategy targets not being achieved in the necessary
timescales.
A reduction in the amount of waste sent to landfill
Assuming that the potential barriers to achieving
the recycling and recovery targets, as described elsewhere in
this memorandum, can be overcome, this will consequently decrease
the amount of municipal waste sent to landfill. Municipal waste
represents only a fraction of the total amount of waste landfilled
and to reduce the total amount going to landfill, further measures
will be needed.
Amongst these measures is the landfill tax,
which applies equally to municipal and non-municipal wastes. The
original intention of this tax was to increase the cost of landfill
such that recycling and recovery alternatives could be more competitive.
This may have been the consequence in some cases, but this has
not yet translated into the significant increase in diversion
from landfill which might have been predicted. The implication
is that the economic balance is still significantly in favour
of landfill.
A major factor seems to have been the lack of
long-term visibility over the level of landfill tax to be levied;
in assessing long-term waste management options, the costs of
integrated alternatives can be predicted with accuracy, subject
to legislative changes and volatile markets for recyclables, however,
comparison with a landfill alternative cannot be made given the
unknown future value of tax to be levied. The landfill tax escalator
has provided some medium term certainty, although the proposed
future increases appear to have done little to shift the economic
balance, and some long-term indication of future tax levels may
precipitate decisions by those with the ability to invest in and
develop the infrastructure necessary to deliver the strategy.
The landfill tax credit scheme has had some
success in making funds available to environmental causes, however,
greater use of this scheme to help increase diversion from landfill
could have been made and measures to use more of the funds in
this way will be welcomed.
Reduction and better management of hazardous waste
The measures outlined in the strategy should
result in better management of hazardous waste. Hazardous waste
arises largely through industrial activities and the ability of
the strategy to deliver a reduction in the quantity of such wastes
lies primarily in promoting cleaner technologies and waste recovery.
Investment in the necessary infrastructure and equipment is likely
to be an issue and the Government will need to demonstrate its
commitment to the strategy objectives in order to encourage such
investment.
Significant action in "green" procurement
policies
As outlined elsewhere in this memorandum, the
market demand for recycled products will determine whether the
reprocessing infrastructure will be available to satisfy the supply
of recyclable material which will be created in achieving the
recycling targets. If demand cannot be stimulated the recycling
targets cannot be achieved. National and local government, with
their considerable purchasing power, can influence demand and
set examples by establishing policies of procurement in favour
of goods which stimulate recycling markets. However, it is likely
that additional demand will be needed and the Government will
need to help create this through a mixture of legislation, taxation
and other incentives. The support of key industry bodies will
be critical in achieving this.
Education of the public in sustainable waste management
Comment has been made elsewhere in this memorandum
regarding the education of public in waste management, in order
that people can make informed judgements about different waste
management options with sufficient understanding of the social,
political and financial and technical consequences. As important,
if not more so, is the education of the public to understand and
accept their own roles and responsibilities in delivering the
strategy.
Whilst centralised treatment of mixed municipal
waste, for example to recover energy, requires little or no public
participation, the level of recycling and composting required
to achieve the strategy targets will be dependent, to a great
extent, on a level of public participation entailing significant
behavioural changes for the vast majority of the population.
The conclusion to be drawn from experience in
the UK and overseas is that the quantity and quality of segregation
necessary to satisfy the recycling targets can only be achieved
through significant segregation at source, that is, by each individual
householder. Various methods of centralised segregation have been
employed, some at considerable cost, with differing degrees of
success for different materials. However, having been collected
from the householder in a mixed state, much of the recyclable
fraction is too greatly contaminated to be marketable.
The degree of public participation necessary
will only be achieved through a concerted and sustained programme
of public education at all levels, and if the public can be confident
of the necessity of the approach and that it represents Best Value.
As mentioned elsewhere in this submission, even with the most
optimistic results from such a public education campaign, there
remains some doubt as to whether the recycling targets are achievable
in the timescales required.
FINANCIAL IMPLICATIONS
It is almost universally recognised that the
future costs of waste management, whatever strategy is adopted,
will need to increase. Depending on the future levels of landfill
tax, it is quite conceivable that the current arrangements, which
rely heavily on landfill, could become more expensive than a solution
based on recycling and recovery in the long term. However, local
authorities will need financial support to help them move away
from a landfill-based strategy.
Waste management costs in the UK have been very
low in comparison to many parts of Europe, thus the short term
increases required will be more pronounced. Consequently, local
authorities will certainly need to address an increasing financial
burden. The limited amount of additional resources so far announced
by Government will need to be supplemented by the council tax
payer and Government should recognise this situation by suitable
adjustment of the Standard Spending Assessments.
More PFI funding for appropriate municipal waste
management contracts should be provided, with sufficient funds
being ring-fenced to enable local authorities to meet their obligations
under the strategy.
CONCLUSIONS
As one of the few organisations with the ability
and experience to implement the municipal waste management elements
of the strategy, United Waste Services supports the Government's
approach and trusts that it will be given full commitment from
all stakeholders. Failure to achieve the objectives will not be
an option, and therefore the strategy needs to be acceptable and
deliverable from the informed perspective of those charged with
its implementation.
A number of significant issues need to be addressed
if the strategy is to be deliverable:
1. The quantitative degree to which waste
reduction can contribute to the strategy needs to be recognised
and a pragmatic approach to the likely pattern of waste growth
adopted.
2. The dependence of successful recycling
on the availability of sustained markets needs to be recognised
and action taken, including procurement policies, to help stimulate
markets.
3. The major obstacle of divided functional
and financial responsibility for waste management in some local
authority areas should be resolved to satisfy bankability and
Best Value needs.
4. The achievability of the national recycling
targets need to be reviewed for different types of local authority,
and bottom ash from energy recovery should be included in the
calculations if the targets are to be met and diversion from landfill
optimised.
5. Guidelines on the application of BPEO
and its relation to the targets needs to be developed.
6. The planning process should be streamlined
so that lengthy and costly appeals are avoided.
7. The 2005 recovery target needs to be reviewed
given the likely development timescale.
8. "Green energy" support should
be continued for waste to energy.
9. The timescales for new energy recovery
technology to be proven should be recognised.
10. Longer-term visibility over landfill
tax should be given and the credit scheme used to a greater extent
to help fulfil the strategy objectives.
11. A major public education campaign will
be necessary to explain the need for the strategy and its associated
costs, provide confidence in technical solutions and to encourage
the direct participation in recycling which will be critical to
achieving the targets.
12. Significant additional local authority
expenditure will be incurred and Standard Spending Assessments
will need to be adjusted accordingly.
13. PFI funding should be increased so that
local authorities can meet their obligations.
September 2000
| 
