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Eunomia maintains surplus prediction despite Air Products exit

Consultancy Eunomia has maintained that the UK is set to reach a surplus of residual waste treatment capacity, despite raising questions over larger gasification plants following Air Products’ withdrawal.

The consultancy’s most conservative estimate now indicates a surplus capacity by 2020-21, the same as predicted in its previous analysis.

Its latest Residual Waste Infrastructure Review also analyses the situation across northern Europe, predicting a surplus capacity in the region by 2030.

Refuse-derived fuel (RDF) exported from the UK to be treated in Europe in 2015 reached 3.4 million tonnes, according the report, up from 2.6 million tonnes the previous year.

It says that initial Environment Agency data suggests this figure is likely to be surpassed in 2016, with Eunomia making a “conservative” prediction of 3.7 million tonnes this year and flatlining thereafter.

The capacity gap between residual waste arisings and available treatment capacity will decrease from 12.9 million tonnes to a capacity surplus by 2020-21, according to the company’s analysis, presuming the UK will reach its 50% recycling target by 2020 and potential 65% target for 2030.

According to the report, 4.9 million tonnes a year of effective treatment capacity is currently under construction or has reached financial close.

“It seems reasonable to state that the UK is unlikely to reach very high levels of excess supply because each time a facility begins construction, the likelihood of nearby facilities reaching financial close falls.

“However, the lead times involved in the development process, and the associated level of inertia in the system, imply that the pace at which it responds to the emergence of overcapacity may not be sufficiently rapid to prevent it.”

Air Products’ recent withdrawal from the energy-from-waste (EfW) sector means its two planned Tees Valley plants have been removed from the analysis, and it “has raised more questions about the technical capability of advanced conversion technologies (ACT) to treat residual waste”.

“With eight ACT facilities either currently being built around the UK or scheduled to begin construction soon, and a lot more trying to reach financial close, there is a continued interest on the success of these eight projects.

“While the specific technologies being employed at these facilities differs from the technology that Air Products was using, ACTs using residual waste as a feedstock appears not yet to have been fully proven.”

Eunomia’s report broadened its scope to analyse the situation across 11 northern European countries this time around.

It found the 104.2 million tonnes a year of treatment capacity across the region will exceed the 90.4 million tonnes of residual waste expected to be produced in 2030.

The review’s lead author Adam Baddeley said: “The emergence of an international market for RDF will continue to influence the way in which countries manage their residual waste.

“Proper planning of residual treatment facilities now demands that a pan-European perspective is taken. This can allow each country to make choices that are economically sound, by avoiding sinking capital into facilities that might not be fully utilised or which may be more expensive.

“Equally importantly, it makes environmental sense to focus efforts on waste prevention, preparation for reuse and increasing recycling, especially in those nations with significant scope for further improvement.”

The report also says there could be implications for the export of RDF from the UK if the country were to vote to leave the EU on 23 June.

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