Memorandum submitted by the Waste Recycling
Group Limited (X2)
1. INTRODUCTION
1.2 Waste Recycling Group is one of the
UK's leading waste management companies and handles in excess
of 15 million tonnes of household, commercial and industrial waste
each year. More than 50% of Waste Recycling's business is accounted
for by waste management contracts with around 70 local authorities
across England, Scotland and Wales. The Company operates facilities
for the reception, recycling and disposal of waste, including
a network of waste transfer and recycling centres and nearly 70
strategically situated landfill sites, and is one of the largest
operators of civic amenity facilities on behalf of local authorities
for use by the general public. The Company operates an energy
from waste (EfW) incinerator at Nottingham and is building a further
EfW facility at Allington in Kent, which will substantially reduce
that County's dependence on landfill.
1.3 Waste Recycling Group has gone from
strength to strength since its founding in the early 1980s. In
1994 Waste Recycling was floated on the London Stock Exchange
and was a member of the FTSE250 Index until July 2003 when the
Company was acquired by the private equity investment organisation,
Terra Firma Capital Partners Ltd. In June 2004 Terra Firma acquired
the UK waste disposal and electricity generation business of the
Shanks Group plc and has integrated it into the Waste Recycling
Group.
1.4 The Group is Europe's leading generator
of electricity from landfill gas, with an installed capacity of
some 170 MW (enough electricity to supply the needs of around
170,000 homes) and, together with power generation from waste
incineration, Waste Recycling now contributes very significantly
to the Government's renewable energy targets and climate change
objectives.
2. INDUSTRY SECTOR
AND WASTE
POLICY OVERVIEW
2.1 The UK waste management industry is
marked out by its fragmentation—half a dozen large companies
operating alongside a very substantial number of much smaller
regional and local operators. As the waste business and regulatory
framework has become increasingly demanding, few companies have
the capital to respond to both business opportunities and ever
higher regulatory standards. Consequently, consolidation of the
industry has been taking place, with some larger companies seeking
to exit the sector altogether.
2.2 Current political focus is on meeting
short- and medium-term objectives; to deliver more sustainable
waste management through increased levels of waste prevention,
recycling and re-use, and to divert substantial proportions of
biodegradable municipal waste (BMW) from landfill. However, there
is a danger that the Government will miss the longer-term picture:
that there is a continuing need for safe and effective incineration
and landfill disposal capacity to cater for non-value waste residues.
2.3 Technologies such as mechanical biological
treatment (MBT)—which appear attractive because of high
landfill diversion capabilities—themselves produce a final
residue that has to be dealt with—either as a refuse derived
fuel (RDF) for incineration or by landfill disposal. There is
currently very little thermal capacity for RDF in the UK and prospects
for significant additional capacity are limited.
2.4 Waste disposal through incineration
with energy recovery is in danger of becoming a lost opportunity.
Incineration is the one waste management option that offers the
best possibility of assisting the Government to meet its Landfill
Directive commitments, yet its growth remains beset by low levels
of public acceptance. This is based on a perception of human health
risk that is not supported by latest scientific and epidemiological
evidence, as well as an inefficient planning system.
2.5 It is reported[1]
that capital investment of the order of £10 billion is likely
to be required over the next 10 years to meet the Government's
waste targets. The private sector is eager and prepared to play
its part in delivering what the Government requires by engaging
itself in this investment programme. However, those that underwrite
such investment—invariably banks and financial institutions—demand
to understand the level of risk that is involved in such investments.
Currently, in some areas of Government policy (hazardous waste,
for example), there are levels of uncertainty in the implementation
and proper enforcement of regulation that are not helping the
industry and its financial supporters to make the investment decisions
that are required.
2.6 Public sector procurement—the
process by which the industry can engage in meaningful and productive
partnership with local authorities—is also becoming increasingly
inadequate. The process of bidding for Private Finance Initiative
(PFI) and PFI-type tenders is now cumbersome, costly and overly
bureaucratic and constrained. This means that there will be few
large waste management companies willing, or able, to bid for
major tenders (the "pool" of companies capable of delivering
such long-term and wide-ranging contracts is already quite small),
which is consequently posing serious challenges for contracting
local authorities, including the potential for not achieving "best
value" for Council tax payers.
3. HAZARDOUS
WASTE
3.1 The banning of co-disposal of hazardous
and non hazardous wastes was first proposed in the 1980s and after
much deliberation in Europe it was agreed as part of the EU Landfill
Directive in 1999.
3.2 During a protracted period of negotiation
government departments, their staff and agencies and MPs with
responsibility for environmental matters all changed. While the
Landfill Directive was agreed, the definition of what was hazardous
waste was at the same time undergoing change, and was not finalised
in its current form until 2002. Test protocols to determine what
hazardous wastes could be landfilled (in a dedicated site) were
not agreed until December 2002, and the actual tests to be used
in the UK (which, for the most part, were published in the spring
of 2004) have still to be completed. There is now the position
where legislation is in place referring to test methods which
are still drafts under development—Landfill Regulations
2004 SI 1375.
3.3 It has been a long and involved process
that has allowed little time for waste producers and waste management
companies to prepare. The Environment Agency, although involved
in the negotiations, has also been poorly prepared resulting in
delays to the permitting of hazardous landfills. At the same time
standards are developed with a high degree of arbitrariness over
what conditions are placed in permits, and as a consequence there
has been a lack of uniform interpretation and enforcement across
the Country.
3.4 As a whole there seems to have been
little regard to the need of industries to have a disposal outlet
for their wastes—wastes are unfortunately inevitable from
some processes. Notwithstanding these issues, with the sensible
approach of delaying the full implementation of the "waste
acceptance" provisions of the Directive until July 2005,
capacity has been available (in 2004) for the disposal of those
hazardous wastes needing to be landfilled.
3.5 There is a belief that on a wide scale
hazardous wastes are still being co-disposed. This is in part
due to a lack of knowledge by waste producers (of the legislation
and of their wastes) and by Environment Agency staff "on
the ground", as well as deliberate illegal practice by some
companies which the Environment Agency is poorly equipped (in
terms of staff skills and numbers) to tackle.
3.6 The lack of confidence in the Environment
Agency to enforce the new standards will prevent waste management
companies investing in the technologies required to meet the even
more stringent rules that come into force in July 2005. As a result,
the period after next July could prove to be very difficult and
challenging.
3.7 Industries such as steel manufacture,
waste treatment, oil processing and clinical/municipal waste incineration,
also face serious issues in July 2005 with regard to meeting the
requirements for wastes to be disposed. Without a rapid change
in approach it is quite possible that some of these industries
will be required to close or stockpile significant quantities
of waste until suitable treatment facilities are established—a
process which is likely to take longer than a year (even where
planning permission is present).
3.8 While the establishment of bodies such
as the Hazardous Waste Forum potentially offers a means for discussion
and resolution of issues it would seem that the onus has been
on talking rather than implementing real solutions. There is an
urgent need to develop practical solutions and if this is to be
undertaken by industry it requires a climate of confidence that
the standards to be achieved are identifiable and robust, and
that all parties will be required to adhere to them. Even with
this scenario, time is very short, and it is unlikely that the
capacity required will be available.
4. LANDFILL DIRECTIVE
Regulatory Guidance Notes
4.1 Regulatory Guidance Notes have no legal
status. They are the Environment Agency's interpretation of Directives
and Regulations, often for internal use by Agency officers. They
are not subject to peer review or any formal adoption process
such as there exists with Waste Planning Policies. They do however
assume a level of importance within the Agency to the effect that
they become waste policy, which binds officers in their decision-making
capacity. The most recent example of this is in respect of RGN
6 "Interpretation of Landfill Regulations Engineering
Requirements".
4.2 This Guidance Note attempts to interpret
the engineering requirements of the Landfill Regulations. For
new landfills this is relatively straightforward, in that all
landfills where generated leachate presents a hazard to groundwater
must have a specified geological barrier to base and side slopes
and a basal artificial sealing liner. In respect of older landfills
the issue is less straightforward as the guidance states that
"any attempt to produce separation (between old non-compliant
landfill and new compliant landfill areas) through engineering
a barrier overlying previously deposited waste would not be acceptable".
As well as being contrary to the design by risk assessment principle,
which is embodied in the IPPC regime, additional consequences
may be:
— adverse and unsustainable environmental,
management and land-use impacts due to partially completed sites;
— the loss of strategically important
sites where there are no other waste management facilities to
deal with arisings, particularly municipal solid waste from local
authority contracts; and
— the significant loss in value of
industry assets.
4.3 There is a clear need for Agency guidance
to be subject to peer review to ensure that it does not "gold
plate" European Directives and that the consequences of rigorous
implementation are properly understood and not contrary to other
Government and land-use planning policy.
The planning system
4.4 The biggest challenge for the Government
lies in the huge increase in waste management infrastructure that
will be necessary in order to send less waste to landfill and
to recycle and recover more. A major report published by the Institution
of Civil Engineers (ICE)[2]
in June revealed that up to 2,300 new waste management facilities,
large and small, would be required by 2020 in order to avoid a
crisis. ICE claims that the introduction of these facilities—which
could cost up to £30 billion, create thousands of jobs and
take five years to come on-line—are being stalled by a combination
of public animosity, Government prevarication and industry nervousness.
Other bodies, such as the Environmental Services Association (ESA)
and the Environment Agency, have also said that large numbers
of facilities are urgently needed.
4.5 It is becoming increasingly difficult
to secure planning permissions for the range of facilities necessary
to deliver the Government's Landfill Directive objectives. A recent
example of this relates to the provision of facilities to serve
a local authority waste contract. Permission for the principal
facility, an energy from waste incinerator, was refused on appeal
while an application for a secondary facility, a materials recycling
facility (MRF), has been withdrawn on two occasions in order to
prevent refusal and currently remains undetermined. Even the provision
of civic amenity sites (where members of the public can become
actively involved in recycling and recovering their own household
waste) is problematical with some local councillors bringing pressure
to bear to have "unpopular" applications withdrawn.
While this case may be to a degree extreme, it is by no means
an isolated example and the experience is mirrored to a lesser
degree elsewhere in the country.
4.6 The introduction of the new planning
system in the Planning and Compensation Act should assist in ensuring
the flow of necessary planning consents; however it is unlikely
that the necessary Local Development Frameworks will be in place
before 2007 and this creates a hiatus at a crucial time. Similarly,
if land-use planning policy is to deliver the necessary step-change
in waste management practice, there is an overwhelming case for
extending municipal waste management strategies to cover all controlled
wastes.
23 September 2004
1 The ENDS Report No 354, July 2004, pp 24-27. Back
2
State of the Nation 2004, an assessment of the state of
the UK's infrastructure by the Institution of Civil Engineers,
June 2004. Back
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