Air Products is quitting the energy-from-waste (EfW) sector and has pulled the plug on its two gasification facilities on Teesside.
A statement from the company’s base in Lehigh Valley, Pennsylvania, said that leaving the sector would cost between $900m and $1bn (£700m) in writing down its EfW assets.
The initial facility in the north-east, TV1 (pictured), was expected to be completed this year while the identical plant TV2, believed to be 72% complete, was mothballed in November, attributed to the first plant taking longer than expected.
Now the company has decided “it is no longer in the best interest of the company and its shareholders to continue the Tees Valley projects”.
It said testing and analysis indicated that “additional design and operational challenges would require significant time and cost to rectify”.
The firm said it “will work to optimise the cash value of its investments” but does not specify how this will be done.
It hopes that exiting the EfW sector “will allow the company to direct its resources to its core business of industrial gases”.
Chief executive Seifi Ghasemi said: “We pushed very hard to make this new EfW technology work and I would like to thank the team who worked so diligently.
“We appreciate the hard work of our employees and contractors at the site, and certainly understand their disappointment in this decision. We are also disappointed with the outcome.”
The company said there are currently around 125 employees on-site and in offices, along with approximately 20 contractors.
Unite union regional officer Steve Cason described the announcement as a “massive surprise”, and was hoping to find out more at a meeting with facility manager Andrew Connolly.
In March, the company denied Unite claims that the TV1 site had been mothballed, saying ”Air Products continues to work on starting up the TV1 facility, targeting the end of this year for commercial operation. Some contract workers have been released, but this is consistent with the type of work currently being carried out at TV1.
”As previously stated, we have identified learnings that are being implemented into the TV1 facility and we are currently in a period with higher engineering, design and procurement activity and less activity in the field. We expect the activity in the field to again pick up in a few months.”
Both facilities have been designed to generate 49.9MW of renewable electricity a year, using 350,000 tonnes of non-recyclable residual waste.