“There are three kinds of lies: lies, damned lies and statistics.” This quote of unconfirmed origins could fit the waste industry well, a sector where limited and patchy sets of statistics have often been used to back various arguments.
For example, a recent report from consultancy Ricardo-AEA, commissioned by the Chartered Institution of Wastes Management (CIWM), concluded that, by 2020, there would not be enough waste processing capacity in the UK.
But earlier this year, a Defra report and a review by Eunomia, another consultancy, had indicated that, in the next seven years, the UK would be over-equipped with waste infrastructure.
How do we make sense of such different predictions?
Before exploring how respectable industry players have put forward such apparently contrary views on the basis of the same available data, let’s a look at existing datasets (see box below).
Industry insiders share the feeling that they provide an incomplete and scattered picture of the amount of waste arisings in the UK.
Steve Lee, CIWM chief executive, points out that more than just lacking figures, there is no system in place to interpret them in a meaningful way. “We are an industry awash with numbers but incredibly short on information,” he told MRW.
Limited information on waste arisings and treatment capacity can have widespread consequences on policy making and investment decisions. For example, Norfolk County Council is the latest victim of Defra’s sudden withdrawal of Private Financial Initiative (PFI) funding for energy-from-waste (EfW) projects on the basis of a revised forecast of 2020 waste arisings and treatment capacity.
That was the most recent in a series of U-turns on PFI credits granted to such plants, with more than 10 projects affected by similar decisions.
It is not only the Government that needs accurate data. Waste management giant Veolia has commissioned academics at Imperial College London to draw up their own report on capacity.
Mark Wilson, a partner at Catalyst Corporate Finance, said: “As an industry, where large amounts of money are being invested in infra-structure, we could really benefit from more granular, realtime data.”
Aside from waste arisings, investors are interested in secondary commodity price trends as well as residual waste offtake pricing ahead of a scheme because they help to establish whether new ventures would be profitable.
To cope with the lack of reliable data, investors often commission market research from private consultancies.
As well as publicly accessible datasets, information is also gathered in ad-hoc studies, often on regional or specific waste streams. But even if consultancies were asked to surrender their preciously hidden data treasure chests, that would not be enough to paint a comprehensive national picture.
“Regional or location-based analysis is the way to really understand the waste market,” said Maria Vinogradova, senior consultant for waste management and resource efficiency at Ricardo-AEA.
“As soon as you zoom out at a national level, you start falling into the trap of lots and lots of assumptions.”
And different assumptions may well be the reasons for Eunomia and Ricardo-AEA putting forward divergent forecasts in their reports on future waste arisings and treatment capacity.
In its Residual Waste Infrastructure Review published in May 2013, Eunomia estimated that there were more than 27.5 million tonnes of residual waste arising from local authority and C&I sources in 2012/13, with the UK having a “capacity gap” of around 9.3 million tonnes.
But given an increase in the number of waste treatment facilities expected during the next seven years, the UK would potentially have 12 million tonnes of excess capacity by 2020.
In the report produced by Ricardo-AEA for the CIWM, published in October, the consultancy estimated that, this year, some 52.8 million tonnes of waste required thermal, organic or sorting treatment. But the UK can provide less than half that amount, leaving a potential shortfall of 33.6 million tonnes.
The shortfall would reduce in the future as a result of new waste treatment facilities coming online. But by 2020, there would still be some 15.3 million tonnes of capacity gap.
So why do the consultancies diverge so significantly?
Ricardo-AEA’s Vinogradova said its report considers a wider range of processing technologies, including anaerobic digestion and sorting, while Eunomia focuses mainly on thermal treatment.
“We included all waste streams that would need to be processed,” she pointed out.
She added that different assumptions on how much waste materials would be recycled were used, and that also applied to how many facilities currently under construction would reach completion by 2020.
“Ultimately, all our assumptions have been reviewed by the stakeholders we have been speaking to [including Sita, Veolia and Viridor] and the CIWM, and they agree with us.”
Dominic Hogg, chairman at Eunomia, believes the two reports are more similar than it would seem: “Beneath the headline figure, there appears to be a substantial level of agreement between us.”
First of all, both studies conclude that, as of 2013, the UK has not enough capacity to treat residual waste, and they forecast an increase in the amount of waste treatment facilities becoming operational by 2020.
Hogg noted that Ricardo-AEA’s report indicates that, by 2020, the capacity for treating residual waste from C&I waste and local authority collected waste will be 800,000 tonnes less than the residual waste available in 2020. But this assumes no additional recycling of C&I waste between 2011 and 2020.
“If you assume there will be more recycling of C&I waste, or that C&I waste growth is less than Ricardo-AEA claims, then the report seem to be saying similar things [to Eunomia’s],” says Hogg.
Despite the different outlooks, there is a point the industry strongly agrees on: the importance of the upcoming shift to the Electronic Duty of Care (edoc) system.
Set to go live in January 2014, EDOC will allow operators of regulated facilities to report the amount of waste they handle electronically instead that with paper-based Waste Transfer Notes.
According to the Environment Agency, edoc will modernise the way that waste data is collected in the UK, and enhance the ability to extract good quality data for businesses, regulators and the Government.
But, almost unanimously, the industry urges the Government to make the system mandatory and not voluntary, as currently envisaged.
In any case, CIWM’s Lee is optimistic that the product will “sell itself”.
“At the minute, people are generating something like 20-25 million pieces of A4 paper in Waste Transfer Notes a year,” he said. “The industry has a vested interested in getting away from such an old fashion approach to generating and managing information and in being more in control of their own data on waste.”
Data sources include:
The Environment Agency: On the basis of waste operator returns, the EA compiles annual reports of waste managed in England and Wales. According to the latest, in 2012 regulated facilities handled some 166.4 million tonnes of waste.
Her Majesty’s Revenue & Customs: HMRC publishes monthly bulletin on the amount of waste that is declared as subjected to landfill tax.
WasteDataFlow: Since 2004, local authorities report the amount of household waste they collect through this web platform. Environment agencies use the data to produce quarterly or annual statistics.
Defra’s surveys on C&I waste: The most recent estimate of commercial and industrial waste arising was completed in 2009 through a survey of more than 6,000 businesses. [UPDATE: Defra has said these surveys will not be repeated “in the foreseeable future”.]
WRAP: produces market specific reports, often containing statistics on waste streams. Its 2008 research “Updating data on construction, demolition and excavation waste” include one of the very few estimates on Construction and Demolition waste.