House of Commons - Environment, Food and Rural Affairs

Select Committee on Environment, Food and Rural Affairs Written Evidence

Memorandum submitted by Professor Chris Coggins (X10)

WASTE AND EMISSION TRADING ACT 2003

IMPLICATIONS FOR RECYCLING/COMPOSTING AND THE LANDFILL ALLOWANCES TRADING SCHEME

Article 5(2) of the Council Directive (99/31/EC) on the landfill of waste sets targets for the diversion of biodegradable municipal wastes (BMW) from landfill. For the UK, with a four-year derogation due to its reliance on landfill, the targets from Article 5 are:

By 2010 biodegradable municipal waste going to landfills must be reduced to 75% of the total amount (by weight) of biodegradable waste produced in 1995 or the latest year before 1995 for which standardised Eurostat data is available.

By 2013 biodegradable municipal waste going to landfills must be reduced to 50% of the total amount (by weight) of biodegradable waste produced in 1995 or the latest year before 1995 for which standardised Eurostat data is available.

By 2020 biodegradable municipal waste going to landfills must be reduced to 35% of the total amount (by weight) of biodegradable waste produced in 1995 or the latest year before 1995 for which standardised Eurostat data is available.

Article 2 (m) : "biodegradable waste" means any waste that is capable of undergoing anaerobic or aerobic decomposition, such as food and garden waste, and paper and paperboard. The examples given are `indicative' and are not exclusive.

The Government published a Consultation Paper Limiting Landfill in October 1999 defining "Biodegradable Household Waste" and its Biodegradable content. More recent data, based on Defra Municipal Waste Management Survey 2001-02 by Parfitt for the Strategy Unit was published in 2002.

BIODEGRADABLE HOUSEHOLD WASTE

		1999	2001-02
Category	% of waste (% biodegradable)		% of waste (% biodegradable)

Paper and card 32 (32) 19 (19)

Textiles 2 (1) 2 (1)

Misc. combustibles 8 (4) 8 (4)

Misc. non-combustibles 2 (1) 4 (0)

Putrescibles 21 (21) 42 (42)

Fines (< 10 mm) 7 (3.5) 3 (2)

Others 28 (0) 22 (0)

Total 100 (62.5) 100 (68)

The overall figure of 68% has been used in the Landfill Allowance Trading Scheme Consultation for England. Note that in the above table, 1999 data refers to England and Wales and 2001-02 data refers to England. Scotland proposes to use a figure of 63% and Wales a figure of 61% or 65%—depending on final decisions concerning what to include under municipal waste.

At the Defra LATS Roadshows in July 2004, an additional category was introduced as biodegradable, partly replacing the figure for textiles:

Footwear, furniture, textiles 50% biodegradable

In the above Consultation Paper, a table summarises the Landfill Directive Targets for England and the Devolved Administrations, based on 1995 waste arisings. Reducing Landfill: A Landfill Allowance Scheme Consultation Paper published by the Scottish Executive Environment Group in December 2003 quotes BMW figure for the UK as 18.27 million tonnes. The 1995 waste arisings figure reported to Eurostat may refer to England and Wales rather than the UK. For England, the biodegradable municipal waste tonnages to be landfilled gives an overall diversion target between 2001-02 and 2010 of 2,680,000 million tonnes, based on 75% of 1995 tonnage.

The overall tonnage to landfill in England in 2000-01 was 22,317,000 tonnes (source: Defra Municipal Waste Management Survey 2001-02). The Consultation Paper quotes 13,880,000 as BMW landfilled in 2001-02, whilst 68% of the first figure gives nearly 15,000,000 tonnes. The growth in waste arisings has slowed from 2.6% per annum 1996-97—2000-01, to 2% and using this figure the overall figure projected to go to landfill in 2009-10 is over 26,000,000. Although simplistic, this emphasises the scale of the problem, with a potential decline in the percentage of waste to landfill but an increase in actual tonnage.

With reference to England, the table shows actual recycling and recovery targets for 2001-02 and aspirational targets for 2010.

WASTE TONNAGES FOR ENGLAND

	2001-02	2009-10	2013	2020
MSW	28,800,0001	33,000,000
Total landfilled	22,317,002	26,000,000
BMW landfilled3	13,880,000	11,200,000	7,460,000	5,220,000
BMW landfilled4	15,000,000	17,680,000
Recycled/composted	3,900,000	9,900,000
	(actual =13.6%)	(target = 30%)
Paper/card	1,899,000	4,950,000
+ putrescibles	(48.7% of total)	(at 50% of total)
Recovered	2,500,000	5,000,000
	(actual = 9%)	(target = 15%)
1 Defra Municipal Waste Management Survey 2001-02. 2 Defra Municipal Waste Management Survey 2001-02. 3 LATS Consultation Paper, and to be taken as the "maximum amount of biodegradable municipal waste to be taken as having been specified under Section 1 of the Waste and Emissions Trading Act for the year ending 30 June 2004" (from The Landfill Allowances Scheme (Scheme Years and Landfill targets) Regulations 2004.). Also published in Statutory Instrument 2004 No 1936 The Landfill (Scheme Year and Maximum Landfill Amount) Regulations 2004. 4 Calculated as 68% of 22,317,000 and 68% of 26,000,000.

NB With all figures in this Discussion Paper, caution is urged in their use and any extrapolation: baseline year(s), definitions of BMW, BMW v household waste, growth rates in waste arisings, data source(s) and any cross-referencing.

Provisional allocations for Local Authorities in England were published on 19 August 2004, with any responses/queries requested by 8 October 2004.

www.defra.gov.uk/environment/waste/localauth/lats/allocationsdata.pdf

The State of Composting in the UK 2001-02 was published by The Composting Association in December 2003. In order to meet the targets, it is estimated that based on an annual growth of 3% and no increase in incineration capacity, the UK will need to divert from landfill:

— 6 million tonnes of biodegradable municipal waste by 2010;

— 10 million tonnes of biodegradable municipal waste by 2013;

— 17 million tonnes of biodegradable municipal waste by 2020.

The figure for 2010 compares with 5.4 million tonnes quoted by an ODPM speaker at the Associate Parliamentary Sustainable Waste Group meeting on 2 December 2003. In work commissioned by the Waste Implementation Programme for the New Technologies Workstream "It is estimated that by 2010, depending on the rate of growth of the BMW stream, England will need to be diverting between 8.4 and 14.4 million tonnes of BMW". In each case these estimates are considerably higher than the figure of 2.68 million tonnes in the above table and the figure of 3.3 million tonnes in the table below.

The Landfill Allowances Scheme (scheme Years and Landfill Targets) Regulations 2004 provides the following data for England in discussing the options of introducing landfill allowances with or without trading, and with either straight line or back-end loaded trajectories. Note the differences with the earlier table, and the use of a 3% annual growth factor:

LANDFILL ALLOWANCES IN ENGLAND

	2004-05	2005-06	2006-07	2007-08	2008-09	2009-10
BMW arisings (growth of 3% pa)	19.8	20.4	21.0	21.7	22.3	23.0
BMW diverted for 2004 and 2005 start dates (million tonnes) BMW landfill—2004 start	14.5	13.8	13.2	12.5	11.9	11.2
BMW landfill—2005 star		14.6	13.8	12.9	12.1	11.2
Target BMW as percentage of 1995 BMW arisings BMW landfill—2004 start	97%	93	88	84	79	75
BMW landfill—2005 start		98	92	86	81	73
Target BMW landfill as percentage of actual BMW arisings BMW landfill—2004 start	73%	68	63	58	53	49
BMW landfill—2005 start		72	65	60	54	49

England will introduce the trading scheme with effect from April 2005, whilst the Welsh Assembly Government opted for an April 2004 (now to be October 2004) start and the Scottish Executive has proposed July 2004. England and Scotland propose to have a landfill allowances trading scheme, whilst Wales will not have such a scheme.

In the Consultation on Implementation of the Waste and Emissions Trading Bill including the Municipal Waste Management (Wales) Regulations for Wales, a table of data is given for 22 Unitary Local Authorities in Wales: total municipal waste arisings for 2000-01, municipal waste landfilled in 2001-01, landfill allowances 2004 and landfill allowances 2010. No such data has been provided for 40 two-tier Waste Disposal Authorities (including 274 Waste Collection Authorities) and 80 Unitary Local Authorities (having both waste collection and waste disposal functions) in England. Data is collected via the Municipal Waste Management Survey 2001-02, but is only published at a national and regional level. There is some concern that there is a greater range of growth rates in waste arisings in England than Wales, eg with North Somerset's 5.4% being criticised by the Audit Commission in January 2004 in comparison with the English average of 2.4%.

The provisional list of targets published for English Waste Disposal Authorities in August 2004 included several with significant increases in landfill allowances. The initial allowances, for 2005-06 are based on the amount each WDA landfilled in 2001-02, meaning that those sending waste to incinerators see an increase (rather than a decrease) during this period—thus being rewarded for having incinerators by having surplus allowances to potentially trade. The following table illustrates these allowances:

WDAS WITH INCREASING LANDFILL ALLOWANCES UP TO 2009-10

	Base year (2001-02)	2009-10
Birmingham	134,815	210,071
Coventry	13,349	71,480
Dudley	20,261	51,661
Greenwich	19,673	53,452
Hartlepool	6,594	19,601
Lewisham	12,561	49,955
Middlesbrough	6,410	27,047
North London	310,408	360,596
Nottingham	49,367	67,067
Redcar & Cleveland	24,013	31,198
Solihull	28,037	39,741
Stockton-on-Tees	3,433	36,597
Stoke-on-Trent	19,490	53,181
Westminster	62,147	88,329
Wolverhampton	46,987	62,149

East Sussex also sees its allowances rise, despite landfilling more than in the base year—due to the Pebsham RDF plant being closed in 2002.

In contrast, several WDAs must cut the amount of BMW it sends to landfill by 2009-10: Greater Manchester (by 300,000 tonnes), Merseyside and West London (200,000), Leeds and Western Riverside (100,000). The reductions facing many WDAS are in excess of 30%, because of the base year being 2001-02, whilst the Directive uses 1995. East London faces a cut of 100,000 tonnes but will send most of its waste to new MBT plants, due to open c 2007.

Landfill tax for active wastes will rise from £15 per tonne in April 2004 to £18 per tonne in April 2005. The annual escalator thereafter will be at least £3 per tonne in order to achieve a medium/long term target of £35 per tonne—by 2010, the first target year under the Landfill Directive to treat/divert 25% of biodegradable municipal waste away from landfill.

Important changes were made by HM Customs & Excise in March 2004 regarding the definitions of waste and re-processing and clarification/extension of landfill tax-free areas (see Annex 1).

With reference to proposals for the UK meeting Landfill Directive targets, waste management options using anaerobic digestion and/or in-vessel composting are being used to set likely penalties for breaching landfill allowances. The Welsh Assembly Government Consultation on Implementation of the Waste and Emissions Trading Bill including the Municipal Waste Management (Wales) Regulations quoted the figure of £200 per tonne as the penalty figure for failing to meet landfill allowances. This has been "chosen to exceed the highest likely cost of diverting BMW from landfill, eg through anaerobic digestion".

The Landfill Allowance Trading Scheme Consultation for England uses the term "twice the cost per tonne of the most likely established method of diversion from landfill", subject to further analysis and likely to be a waste management option such as in-vessel composting of kitchen waste. England will also use the figure of £200 per tonne.

In The Landfill Allowances Scheme (scheme Years and Landfill Targets) Regulations 2004, the penalty to which a Waste Disposal Authority is liable under Section 9(2) of the Act shall be the excess landfill for that waste disposal authority multiplied by the excess landfill penalty.

"Excess landfill" means, for a scheme year, the amount in tonnes by which biodegradable municipal waste sent to landfills by the waste disposal authority exceeds the landfill allowances available to the authority.

"Excess landfill penalty" means the cost per tonne of in-vessel composting of kitchen waste multiplied by two.

Supplementary penalties are allowed in The Waste and Emissions Trading Act, and will apply where a breach of allowances causes the UK as a whole to miss its Landfill Directive targets and are likely to be based on the fine the UK itself receives from the European Commission for missing the target. The supplementary penalty (SP) to which a waste disposal authority is liable under section 9(3) shall be calculated according to the following formula:

SP = F x (T/E)

Where for the target year

F is the proportion of any fine imposed on the UK which relates to England.

T is the amount in tonnes by which biodegradable municipal waste sent to landfills by the waste disposal authority exceeds the landfill allowances available to the authority.

E is the amount in tonnes by which biodegradable waste sent to landfills in the UK exceeds the amount specified under section 1(1)(a) of the Act.

The supplementary penalty (SP) to which a waste disposal authority is liable under section 9(4) shall be calculated according to the following formula:

SP = F x (T/E)

Where

F is, for the scheme year, the proportion of any fine imposed on the UK which relates to England.

T is, for the scheme year, the amount in tonnes by which biodegradable municipal waste sent to landfills by the waste disposal authority exceeds the landfill allowances available to the authority.

E is the amount in tonnes by which biodegradable waste sent to landfills in the UK in the scheme year exceeds the amount specified under section 1(1)(a) of the Act in respect of the last target year before the scheme year.

Some in the waste industry feel that the threat of fines is more likely than actual imposition, with any fines perhaps forcing a WDA to divert spending from other essential services. The commitment to impose penalties and/or fines on Local Authorities will be tested in terms of meeting Best Value Performance Indicators for recycling and composting for 2003-04 and 2005-06.

One issue that remains to be resolved is the definition of biodegradable municipal waste. The EU definition is based on the Landfill Directive:

Article 2 (b) : "municipal waste" means waste from households, as well as other waste which, because of its nature or composition, is similar to waste from households.

This means that municipal waste is based on composition and includes relevant wastes from households and commercial premises. This is the definition used in the waste strategy for Wales (Wise About Waste, June 2002) and for the calculation of recycling targets in Wales.

The Eurostat/OECD Joint Questionnaire 2002 states:

— municipal waste includes household and similar waste;

— the definition includes bulk waste (eg white goods, old furniture, mattresses) and yard waste (leaves, grass clippings, street sweepings, content of litter containers and market cleansing waste) if managed as waste;

— it includes waste from households, commerce and trade, small businesses, office buildings and institutions (schools, hospitals, government buildings);

— it also includes waste from selected municipal service (waste from park and garden maintenance, waste from street cleansing services—street sweepings, the content of litter bins, market cleansing waste);

— it includes waste from these sources collected door-to-door through traditional collection (mixed household waste) and fractions collected separately for recovery operations (through door-to-door and/or through voluntary deposits);

— municipal waste refers to waste defined as above collected by or on behalf of municipalities;

— the definition also includes waste from the same sources and similar in nature and composition which are collected directly by the private sector (business or private non-profit organisations) not on behalf of municipalities (mainly separate collection for recovery purposes) and which originate from rural areas not served by a regular waste service, even if they are disposed by the generator; and

— the definition excludes waste from municipal sewage network and treatment, and municipal construction and demolition waste.

In England the Strategy Unit Report, Waste Not, Want Not. A strategy for tackling the waste problem, November 2002 used the definition of municipal waste as in Municipal Waste Management Survey 2000-01, and yet also refers to "Failure the meet these targets (Landfill Directive targets for 2010, 2016 and 2020) could result in fines of up to £180 million per year".

Chapter 2, "Municipal waste—includes all waste under the control of local authorities, whether or not they have contracted out services. It includes all household waste (89% of municipal waste)". "Control" includes where a Local Authority uses its agent(s) to collect commercial waste. Local Authorities have a statutory duty to collect household waste, but no statutory duty to collect commercial waste—although if approached to do so it must make a reasonable charge.

The National Waste Plan for Scotland uses the same definition as England.

However in the Waste Emissions Trading Act, municipal waste is defined as:

"waste from households, and other waste that, because of its nature and composition, is similar to waste from households".

This definition is the same as that used in the Landfill Directive.

In Defra Roadshows on the Landfill Allowance Trading Scheme (LATS) in July 2004 (see Annex 2) [not printed, available at http://www.defra.gov.uk/environment/waste/localauth/lats/workshops.htm], there still appeared some confusion. The WET definition of municipal waste was used, supported by:

"Commercial waste collected by a Local Authority falls under the definition of municipal solid waste".

There appears to be some confusion concerning the issue of trade waste delivered to civic amenity sites—either illegally or where a site is licensed to receive trade waste with separate payment and data monitoring arrangements—and also fly-tipped waste picked up by a Local Authority and/or its agent(s).

There also still appears to be a grey area in terms of waste companies acting as agents of the Local Authority, either through formal arrangements or the Local Authority specifically referring any approach to collect commercial waste to a private waste management company not already acting as its agent (refer to the above Eurostat definition). With commercial waste representing c 11% of currently recorded municipal waste in England, some Local Authorities may divest contracts for commercial waste in order to reduce their obligations under LATS.

Such problems become more complicated when Waste Collection Authorities within a Waste Disposal Authority have different policies towards commercial waste, and supplying relevant data to the Waste Disposal Authority. Such commercial waste may be collected and disposed of by the private sector, without any formal "ownership" by the local Authority or its agent(s).

How these changes would fit with EU interpretations of the definition of municipal solid waste and diversion from landfill is very debatable.

In terms of tonnage, the figure quoted by DEFRA is c 28-29 million tonnes for municipal solid waste, but recent work by M-E-L Research Limited using Environment Agency data for industrial and commercial waste suggests this could be 18-33 million tonnes higher. On the other hand, as more recycling occurs with industrial and commercial waste (c 30% ?) the overall recycling rate would be much higher than the figure of 12.4% quoted for "household" waste and 13.5% for "municipal" waste for England in 2001-02 (using the English definition). Using this broader definition, but consistent with other Member States, might also raise the question of the UK's option to use derogation powers of Landfill Directive targets into question.

Other issues raised included the potential role that home composting may play in meeting diversion targets (see Discussion Paper by the author Home Composting: Definitions and Terminology), changes in biodegradable content through different MBT technologies, and weight loss in drying wastes in MBT plants would not count towards the diversion targets (unlike in incineration plants). See later section for a fuller discussion of MBT.

With reference to landfill allowances, the Roadshows also indicated that many Local Authorities would be risk-averse to trading such allowances and would instead bank them (at no financial cost to the Local Authority) in case of unforeseen events which would cause them to miss their targets. Defra had already announced that penalties may be waived due to qualifying "extreme circumstances" such as delays in obtaining planning consent, refusal of planning permission and facility breakdowns.

In moving towards meeting BVPIs, many Local Authorities have focused on collecting newspapers and magazines, glass containers and garden waste, as these constitute heavier wastes—in contrast to aluminium and plastics. Newspapers and magazines and garden waste also constitute biodegradable wastes, contributing to Landfill Directive diversion targets, with glass containers contributing to the Packaging Directive recycling targets.

As explained earlier, the Landfill Allowance Trading Scheme Consultation of August 2003, with specific reference to England, uses the figure of 68% as the biodegradable fraction of municipal waste.

Another definition issue is the use of various terms for the material actually being targeted. Most Local Authorities target garden waste, although sometimes referred to as "green" waste. Some Local Authorities target only garden waste (eg Luton) and specifically exclude all kitchen waste, given the potential implications of the Animal By-Products (Amendment) (England) 2001 and the EU Animal By-Products Regulation (EC 1774/2003). Some Local Authorities, however, include kitchen green waste but not cooked food. A minority also collect cardboard for composting and the Isle of Wight only collects food waste. It would seem much better to give the simpler message of targeting "garden waste only". Any comparisons with Europe should be treated with caution, with differences in waste definitions and the focus in Southern Europe of collecting food waste only—often five or six times a week.

A further complication is many household waste composition surveys until recently used the term "putrescible" to combine kitchen and garden wastes, making comparisons over time very difficult. Data by Parfitt, based on DEFRA municipal waste management data for 2000-01 is shown in the following table.

BIODEGRADABLE HOUSEHOLD WASTE IN ENGLAND

	Bin waste RCV residuals + kerbside		Civic amenity site waste Total CA site residuals + composting
	Kg/h'hold	%	Kg/h'hold	%
Garden waste	134	15.3	98	37.6
Soil + other organic waste	10	1.1	30	11.3
Kitchen waste	106	12.1	1	0.3
Non home-compostable kitchen waste	88	10.1	0	0.0

Most Local Authority collection schemes focus on garden waste, with best estimates being that this waste stream accounts for c 20% of municipal solid waste with kitchen waste being 17%.

DETR/Defra data indicate that kitchen and garden waste, but almost certainly dominated by garden waste, from civic amenity sites rose from 117,000 tonnes in 1995-96 to 731,000 tonnes in 2000-01. Whilst kerbside collections rose from 10,000 tonnes to 85,000 tonnes, the proportion increased from 8% to 11%. Centralised composting contributed 10% of overall recycling-composting in 1995-96 and 28% in 2000-01.

In England, although there are separate recycling and composting Best Value Performance Indicators, they are combined for reporting purposes. In contrast, both Wales and Scotland have both set minimum composting rates within this overall target.

Wise About Waste in June 2002, used the Landfill Directive definition of municipal waste, and set recycling/composting targets of at least 15% for 2003-04, 25% for 2006-07, 40% for 2009-10—in each case with minimum composting targets of 5%, 10% and 15% respectively.

The National Waste Plan for Scotland in March 2003 includes a combined target of 55% by 2020, comprising a recycling target of 35% and a composting target of 20%.

An item in MRW of 7 November 2003 quotes WRAP as predicting green waste recycling could quadruple by 2006, alongside problems posed by pollution from composting sites: the Environment Agency banned composting at Welbeck landfill site in Yorkshire following complaints from local residents, complaints about a site in Nottingham and odour problems at a site in Somerset.

Bringing these data together with reference to the landfill allowance targets for England, the following table shows progress between 1995-96 and 2001-02. The overall contribution from these materials has risen from 51% to 61%, but the major growth has been with putrescibles.

THE RELATIVE CONTRIBUTION OF PAPER/CARD AND "PUTRESCIBLES" TO HOUSEHOLD WASTE RECYCLING PERFORMANCE (THROUGH LOCAL AUTHORITY SCHEMES)

	England and Wales				England
	1995-96	1996-97	1998-99	2000-01	2001-02	2002-03
paper/card	39%	37	38	33	31	30
	507,000	555,000	874,000	910,000	981,000	1,125,000
putres	12%	16	23	29	30	32
	156,000	240,000	529,000	812,000	954,000	1,187,000
glass	21%	20	16	14	14	11
	276,000	299,000	368,000	396,000	426,000	471,000
Total recycling rate			9%	11.2	12.4	14.5

Sources:

1. 1995-96—2000-01 The environment in your pocket.

2. 2001-02, 2002-03 Municipal Waste Management Surveys.

3. 1995-96 Percentage figures from pie charts, and tonnages calculated.

4. Glass (packaging) has been included to show its decline in percentage terms, but growth in absolute terms. With revisions to the 1994 Packaging Directive, industry spokespeople indicate that the new material-based target for glass of 60% (from 15%) can only be met by expanding kerbside collections, and being heavy, increases in glass collection would also contribute to Local Authority BVPIs. Reported total glass recycling rates (including commercial sources) were 715,000 (29%) in 2000 and 869,000 (39%) in 2001. To meet 60% suggest a tonnage of 1.3-1.5 million tonnes.

With reference to markets, the following table illustrates the scale of exports of paper and plastics. Although paper packaging waste recovery figures for the UK were up in 2003, recovered paper consumption in the UK fell in 2003 for the second year running, suggesting that export Packaging Export Recovery Notes (PERNs) have been very important. The following table supports this assertion, although the data does not refer specifically to packaging, with data from the Environment Agency referring to Green waste as per Basel Convention definition:

TRENDS IN EXPORTS OF "GREEN LIST "WASTES FROM UK 1999-2003

(Source: Environment Agency)

Waste	1999	2000	2001	2002	2003
Paper	6,812	13,468	694,355	1,226,862	1,997,316
Plastic	48,227	81,293	86,919	109,543	195,888

GREEN LIST EXPORTS FROM THE UK FIRST 6 MONTHS OF 2004

(Source: Environment Agency)

	China	India	Indonesia	EU	Total
Paper	265,564	169,005	143,871	471,775	1,059,215
Plastics	99,824	8,731	n/a	18,377	126,932

Parfitt's work for the Strategy Unit also indicated the recyclable proportions of these materials, and the tonnages refer to total materials available in household waste in England for 2001-02 (based on a reported total of 25.6 million tonnes).

RELATIVE PROPORTIONS OF HOUSEHOLD, BIODEGRADABLE AND RECYCLABLE IN ENGLAND 2001-02

	Household Waste (%)	Biodegradable (%)	Recyclable (%)
Paper/card	19	19	12
	4,864,000	4,864,000	3,072,000
Putrescibles	42	42	38
	10,752,000	10,752,000	9,728,000

Comparing these two tables, the recognition/capture rates for paper and card (recycled) and putrescible (composted) in 2001-02 were 31% and 10% respectively, with an overall average of 15%.

These figures represent the total available materials in the household waste stream. Related to the table above they show that the "capture rates" are 31% and 10% respectively. With all kerbside collection schemes, the success will depend on household participation and the actual capture rate of targeted materials. Both will be influenced by the type of container used (re-usable bags, disposable bags or wheeled bins), the frequency of collection (weekly or alternate weekly, perhaps monthly in January/February) and the quality and effectiveness of education and publicity). As with the data quoted earlier, there is also evidence that these rates may increase over time, supported by on-going education, publicity and feedback to households, but adversely affected by residential mobility.

PARTICIPATION, RECOGNITION/CAPTURE AND DIVERSION RATES

Participation Rate	(%)	Recognition/Capture Rate (%)	"Diversion/Composting" Rate (%)
	90	90	81
	80	80	64
	70	70	49
	60	60	36
	50	24	12

Linking these data together with data reported earlier for biodegradable municipal waste (BMW) and household biodegradable waste (HW), shows the scale of change that is required, with the target percentages for 2005-06 and 2009-10 translated into tonnages.

POTENTIAL CONTRIBUTION TO TARGETS IN 2005-06 AND 2009-10 FOR ENGLAND

	2001-02	2005-06	2009-10
BMW arisings (growth of 3% pa)	19.6	20.4	23.0
HW recycling/composted	3.2	5.1	6.9
	(12.4%)	(25%)	(30%)
of which, HW paper/card + putrescibles	1.9	3.1	4.1
	(60%)	(60%)	(60%
energy recovery	2.5		5.0
	(9%)		(15.0%)
BMW diverted for 2004 and 2005 start dates (million tonnes)

BMW landfill—2004 start 13.9 13.8 11.2

BMW landfill—2005 start 13.9 14.6 11.2

A Strategic and Economic Overview of Municipal Waste Management

		Kerbside Provision Rate (%)	Recognition/Capture Rate (%)	"Diversion/Recycling" Rate (%)


2002	Paper/card	47	16	7.5
	Glass	15	19	2.9
	Compost	15	21	3.2
	Cans	21	2	0.4
2003	Paper/card	55	41	22.6
	Glass	33	53	17.5
	Compost	23	99	22.8
	Cans	37	35	13.0
2004	Paper/card	62	59	36.6
	Glass	52	62	32.2
	Compost	32	80	25.6
	Cans	54	47	25.4
2005	Paper/card	70	74	51.8
	Glass	70	67	46.9
	Compost	40	69	27.6
	Cans	70	64	44.8
2010	Paper/card	80	68	54.4
	Glass	70	71	49.7
	Compost	50	58	29.0
	Cans	70	58	40.6

Many Waste Collection Authorities are now moving towards a "three-stream" kerbside collection: co-mingled dry recyclables, green waste and residual wastes. This includes a mix of weekly and fortnightly collections to maximise capture rates and keep collection costs as low as possible, eg weekly collection of residual waste and alternate weekly collections of dry recyclables and green waste.

Residual Waste Management

Whilst most Local Authorities will develop policies based a three stream system of dry recyclables, compostables and residual waste, some will progress initiatives involving residual waste. These will involve one or more elements of Mechanical and Biological Treatment (MBT), best described as "technology systems":

municipal solid waste, household waste, commercial and industrial waste mixed (with no source segregation) or residual (with source segregation of dry recyclables and/or green wastes)

separating out bulky items

trommel for size separation

autoclaving/sterilising

dry recyclables (eg metals, glass, plastics)

wet fibre for biowaste treatment (eg anaerobic digestion, in-vessel aerobic

dry fibre for refuse derived fuel (RDF) or solid recovered fuel (SRF)

dry fibre for secondary raw materials

— residual waste for landfill

A Consultation Paper is expected from the Environment Agency in Autumn 2004 setting down methodologies and criteria as to when material outputs from such technologies meet standards for being accepted as "non-biodegradable" in terms of the Landfill Directive and LATS. Initial research undertaken by WRc for Defra indicate that "MBT" may make contribute significant diversion of biodegradable waste from landfill.

This covers tests on newspaper, corrugated paper, grass clippings, woody twigs, cotton sheets (75% cotton), wool (57% wool), nappies, processed tinned meat, mixed vegetables, green waste compost and commercial pure cellulose. In addition tests are being conducted on raw biodegradable municipal waste feedstock and output from MBT processes, with early indications from a 3-stage in-vessel batch system showing significant reduction in biodegradability

The tests include:

— Physical and Chemical tests

— loss on ignition

— dry matter

— Total Organic Carbon

— Biological Tests

— Anaerobic—Biochemical Methane Potential (BMP)

— Aerobic—Dynamic Respiration Index (DRI)

Additional guidance is required on future market scenarios, including land applications, landscaping and qualification for Renewable Obligation Certificates.

Annex 1

LANDFILL TAX-FREE AREAS

The landfill tax in the UK was introduced in October 1996 at £7 per tonne for active waste (wastes with the potential to undergo significant physical, chemical or biological changes, when deposited in a landfill) and £2 per tonne for inactive/inert waste. The rate for active waste was increased to £10 with effect from April 1999, and an escalator of £1 per tonne per annum to reach £15 with effect from April 2004. The escalator becomes £3 with effect from April 2005, with the medium/long term target to reach £35 per tonne.

On behalf of a client I raised the issue of landfill tax-free areas with HM Customs and Excise in April 1997, and the following is a transcript of their reply (I have the original correspondence):

"Where a Landfill site that is registered for the Landfill Tax (LFT) has our approval for a tax-free area to recycle organic/putrescible waste into compost; this is free from LFT at the time of disposal. It is only free from LFT because it is a Tax Fee Area and for no other reason. Once it enters into the `Licensed area' the original producers intention to dispose of the waste has been met, therefore with any subsequent removals from the tax-free area, it is the registered persons intention that counts. For example:

(a) When the wastes subsequently become compost due to a process which fundamentally changes its properties, eg aerobic or anaerobic composting they become a material and when this is removed from the tax-free area it will NOT be subject to LFT.

(b) Residues from the composting process (wood, glass, plastic, etc) removed from the tax-free area and taken to landfill are being discarded as waste and are therefore subject to LFT.

At present my Department has not defined `fundamentally changes its properties', therefore it is the responsibility of the registered person to prove such a change has taken place."

(Letter to P C Coggins from Peter Butt, Senior Officer HM Customs and Excise, Peterborough, 16 May 1997.)

A court case, Parkwood Landfill v Commissioners of HM Customs and Excise, resulted in a Court of Appeal decision in November 2002 concerning "discard", "disposer" and "waste".

A wholly owned subsidiary of Parkwood Landfill, Parkwood Recycling received waste from Sheffield City Council which was separated into waste for landfilling and recyclable material which was sorted into aggregates and fines which could be used as soil substitution. The waste went to a landfill site owned by Parkwood Landfill and landfill tax was paid. The company also bought a quantity of the recycled material for use as landscaping and road making at the landfill site. HM Customs and Excise claimed that this should be liable to landfill tax. Parkwood won an appeal before the VAT and Duties Tribunal, but this decision was overturned by the High Court.

The company appealed, and HM Customs and Excise argued that the use of an intermediary, as in this case, could avoid payment of landfill tax. The Court of Appeal considered in detail the provisions of Section 40(2) of the Finance Act 1996 which set four conditions for a landfill tax disposal:

(a) there is a disposal of material as waste;

(b) the disposal is made by way of landfill;

(d) the disposal is made on or after 1 October 1966.

Parkwood accepted conditions (b), (c) and (d) but disputed (a). The Court of Appeal took Section 64(1) of the Finance Act 1996 which provided a separate definition—"a disposal of material is a disposal of it as waste if the person making the disposal does so with the intention of discarding the material". They argued that Sheffield City Council was the actual disposer of the waste, that Parkwood Recycling crushed, sorted and graded the waste into saleable materials, the intention of the legislation was that landfill tax was a tax on waste deposited at landfill sites and not a tax on recycling. "The critical factor is the intention of the disposer. "The tax bites upon the person who discards not who recycles".

One notable feature of the decision was the extent to which the Court avoided getting embroiled in EU decisions on the meaning of "waste" and the term "discard". In the Parkwood case, the Court of Appeal treated the landfill tax provisions as a self-contained legislative structure which include as one of its aims the promotion of recycling—instead of primary raw materials.

(Sources: Wastes Management February 2003 and ENDS January 2003)

Regarding the following transcript, readers are advised to read the original documents on the HM Customs and Excise website.

In Briefing Note 10/04 published on 19 March 2004, HM Customs and Excise announced a change in policy regulating to material used on landfill sites.

BACKGROUND

For landfill tax purposes, material is disposed of as waste, if, when disposing of it or having it disposed on his behalf, the producer intends to discard or throw it away. The fact that someone else uses it or intends to use it, or would done so is irrelevant. It is the original producer's intention that determines if the material is waste. Only if the material is recycled is the original producer's intention no longer relevant.

DETAILS OF THE CHANGE

Up to now, for the purposes of landfill tax, Customs' guidance has been that material had to undergo a chemical change to be considered to have been recycled. With immediate effect, Customs will accept that if a material is processed, changing it to useable material, the process does not have to change the material's chemical properties in order for it to be considered to have been recycled.

The tax liability will now hinge on the intention of the recycler, as evidenced by the nature of the transaction. If a landfill site operator can demonstrate to Customs' satisfaction that the material he uses in site engineering is not discarded by its processor, it will not be subject to the tax.

Currently, one of the provisions for which landfill site operators can apply in order to operate as tax-free area is if they intend to carry out recycling of waste (which includes composting). Customs' revised interpretation of what constitutes recycling widens the scope of this qualifying use with immediate effect.

Further information from www.hmce.gov.uk and/or Customs National Advisory Service on 0845 010 9000.

HM Customs And Excise (May 2004) Notice LFT1 A general guide to landfill tax,See www.hmce.gov.uk/forms/graphics/lft1.pdf

2.2 What is waste?

2.2.1 General principle

For landfill tax, the original producer's intention determines if material is waste.

This is illustrated in the following decision table:

If . . . And . . . Then . . .

the waste producer disposes of waste when disposing of it, they intend to discard or throw it away the material is disposed of as waste: and

it is irrelevant whether you or someone else uses it, or would have done

somebody else, such as a waste carrier, makes the disposal on behalf of the waste producer (either under a contract with, or at the request of, the producer) when disposing of it, the original producer intended to discard it or throw it away the material is disposed of as waste; and the carrier's intention is irrelevant

2.2.2 Recycled material

If waste is processed before its disposal to landfill and the process changes it into a useable material, the original producer's intention is no longer relevant. The landfill tax liability is determined by the intention of the recycler, as evidenced by the nature of the transaction.

The following table gives examples of the processes that may discount the original producer's intention.

If waste is subject to . . . composting, crushing, bailing, sorting or screening

Then the liability to tax is determined by the intention of the . . . producer of the new material

18. Extract from The Landfill Tax (Qualifying Material) Order 1996

For reference with qualifying uses involving qualifying materials (see over).

Group 1 Rocks and soils including naturally occurring clay, sand, gravel, sandstone, limestone, crushed stone, china clay, construction stone, stone from the demolition of buildings or structures, slate, topsoil, peat, silt and dredgings

Group 2 Ceramic or concrete materials including glass (includes fitted enamel, but excludes glass fibre and glass reinforced plastic), ceramics includes bricks and mortar, tiles, clay ware, pottery, china and refractories), concrete includes reinforced concrete blocks, breeze blocks and aircrete blocks but excludes concrete plant washings)

Group 3 Processed or prepared (not used) minerals including moulding sands (excluding sands containing organic binders), clays (including moulding clays and clay absorbants such as Fuller's earth and bentonite), mineral absorbants, man-made mineral fibres (includes glass fibres, but excludes glass-reinforced plastic and asbestos), silica, mica, mineral abrasives

Group 4 Furnace slags including vitrified wastes and residues from thermal processing of minerals where, in either case, the residue is both fused and insoluble

Group 5 Ash comprising only bottom ash and fly ash from wood, coal or waste combustion, and excluding fly ash from municipal, clinical and hazardous waste incinerators and sewage sludge

Group 6 Low activity inorganic compounds comprises only titanium dioxide, calcium carbonate, magnesium carbonate, magnesium oxide, magnesium hydroxide, iron oxide, ferric hydroxide, aluminium oxide, aluminium hydroxide and zirconium dioxide

Group 7 Calcium sulphate includes gypsum and calcium sulphate based plasters, but excludes plasterboard. Disposed of either at a site not licensed to take putrescible waste or in a containment cell which takes only calcium sulphate

Group 8 Calcium hydroxide and brine deposited in brine cavity

Group 9 Water containing other qualifying material in suspension

TAX-FREE AREAS

7.1 WHAT IS A TAX-FREE AREA?

If you intend to carry out any of the following qualifying uses within the boundaries of your landfill site, you may wish to apply for part of your site to be designated as tax-free area. Waste stored in that area would not bear tax for either up to 12 months or up to three years, depending on the qualifying use.

Qualifying uses:

Recycle waste (which includes composting).

Incinerate waste.

Sort waste pending its use at a place other than a landfill site.

Sort waste pending its disposal.

Use waste (but it is not for use at a landfill site).

Period that waste can be stored for before bearing tax:

Up to 12 months.

Qualifying uses:

Store qualifying material for subsequent use in restoring the landfill site.

Sort material to obtain qualifying material for subsequent use in restoring the landfill suite.

Period that waste can be stored for before bearing tax:

Up to three years.

When you place waste in a tax-free area at your site the original producer's intention to dispose of the waste has been met. When you remove the waste from the tax-free area it is your intention that counts.

Note: Waste for subsequent use on any of your sites or any other landfilll site which is not qualifying material for use in site restoration cannot be placed in tax-free area unless you are sorting it and accounting for tax on its final disposal. Any residue of material which is unsuitable for restoration purposes will incur tax if not removed from your site within the relevant period, as set out in the conditions of your tax-free agreement.

We recommend that you contact your environmental regulator to ensure that any changes you propose to make to your site, or the running of it as a result of the introduction of a tax-free area are acceptable under the terms of your waste management licence. You may also require planning permission.

You will need to keep a temporary disposal record of wastes entering and leaving the area. Where you store bulk waste in the tax-free area and you cannot get at or identify the earliest stored waste we will treat removals from the area as movements of that earliest stored waste.

Important: you cannot operate a tax-free area without our written approval and approvals cannot be backdated.

7.2 Applying for a tax-free area

You can apply:

— for more than one tax-free area (to allow storage of different types of waste or different activities such as sorting and recycling);

— to use a tax-free area for one particular qualifying use; or

— to use a tax-free area for a number of qualifying uses.

You must, however, be able to clearly identify the quantities and types of waste which relate to the different qualifying uses.

Your application should include:

1. The landfill site concerned (you must submit individual applications for each site).

2. The date you want the tax-free area to come into operation.

3. The qualifying uses for which waste temporarily deposited in the area(s) will be put.

4. The types of waste you expect to deposit in the area(s).

5. The length of time wastes will remain in the area(s).

6. The proposed boundaries of the area(s).

7. Note: any application to allow for storage of materials for use in restoration should be made no earlier than three years before the planned commencement date of restoration of the site or (where phased restoration is planned) the commencement of the first phase of restoration.

7.3 Boundaries

In any application to operate a tax-free area you will need to identify its boundaries. We do not require you to fence the area, but it must be clearly idenitifiable within your site. For example, boundary markers, site roads, buildings or landscape features may help you to identify the area. More than one tax-free area may be approved ion a site.

You may also wish to change its boundaries periodically as your landfilling operations progress. So long as the temporarily stored waste is clearly identifiable we would not normally object to this, but you will require prior written approval from us before you can change the boundary of your tax-free area.

7.4 Weighing waste

To operate a tax-free area you will need to weigh waste entering and removed from the area. If you have weighbridge you must use it. If you do not, you may use a specified method or propose an alternative method for pour approval.

5 October 2004