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Green Investment Bank identifies waste treatment capacity gap

Up to 10 energy-from-waste (EfW) plants a year until 2020 could be built to bridge a residual waste treatment capacity gap in the UK, the Green Investment Bank has indicated.

The bank is the latest organisation to predict that the UK will have insufficent infrastructure to divert waste from landfill, after Sita UK, Veolia, and Chartered Institution of Wastes Management (see table below) put forward similar warnings. On the other hand, Defra and the consultancy Eunomia have separately argued that UK will have enough infrastructure to treat residual waste and meet landfill EU-set landfill diversion targets by 2020.

The GIB, in ‘The UK residual waste market’, a report written in partnership with Tolvik Consulting, forecasts residual waste to be 22.4 - 26.5 million tonnes by 2020, down from 27.7 million tonnes in 2012.

But it still identified a potential gap of between 4 million tonnes and 7.7 million tonnes in EfW treatment capacity. Such a shortfall represents a £5bn investment opportunity in energy recovery infrastructure, the equivalent of 10 facilities a year until the end of the decade, the GIB said.

The bank stressed its analysis concentrated on commercial and industrial waste and the development of merchant facilities. It is intended to reassure investors backing developments in the commercial sector.

“The project pipeline is increasingly focused on processing commercial and industrial waste, often using advanced conversion technologies. We are confident that this changing landscape can continue to provide attractive investment opportunities,” said Chris Holmes, managing director at the UK Green Investment Bank.

“We stand ready to back the next generation of UK waste projects, many of which we hope to see using some of the exciting newer technologies that have come to the market in recent years.”

Much of the UK’s household waste is already being managed through public-private partnership contracts with local authorities, he added. The bank forecast that such contracts will result in some 11.9 million tonnes EfW projects coming online by 2020.

The GIB said its findings were in line with some “leading waste market participants’ reports”, such as Sita’s, which predicted a 11.7 million tonnes gap by 2020.

The main difference between the two studies, according to the bank, is that the GIB assumed more “conservative” recycling rates. Sita also considered merchant facilities that are currently being planned, which were excluded from the GIB review. The Veolia and CIWM analysis considered a wider range of treatment options and different geographies.

Capacity gap comparison

Readers' comments (7)

  • But if we simply recycled more then the gap would fall too.

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  • Until such time as more reliable C&I waste data is made available, GIB's view is just that - a view - extrapolated from dodgy existing numbers.

    On the other hand, if GIB has fresh, corroborated intel (say from the 'big six' WM firms) which includes C&I actuals/projections in order for them to determine future demand, then these should be aggregated (in line with competition rules) and publicised; otherwise it's simply further 'tail on the donkey tit for tat' stuff.

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  • Adam Read

    no surprises, we said much the same 12 months ago with CIWM research report!!

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  • SITA UK Mind the Gap report said much the same thing - based upon their own C&I data

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  • What's the damage on a UK C&I composition study these days - £500k+?

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  • Unlike the Eunomia reports which anticipate residual waste treatment overcapacity based on conservative assumptions, the GIB report seems to seriously underestimates the capacity that currently exists / is under construction, whilst significantly overestimating the quantities of residual waste that would require treatment.

    When properly considered, the GIB report could actually confirm that we already have more incineration capacity (existing and under construction) than we would have genuinely residual, combustible waste available to burn.

    The GIB has not published all of their underlying data and assumptions, so the report's conclusions are hard to assess, but it seems that they may be missing some major projects such as Ferrybridge C (850ktpa).

    There is a sensitivity for 70% household recycling, but not for 70% C&I recycling - despite the clear economic benefits for businesses associated with recycling.

    Both the "low availability" and "high availability" waste arising scenarios seem to assume increased residual arisings from 2012, despite the UK Government's Bioenergy Strategy position that: "The amount of residual waste from municipal and commercial sources is expected to decline gradually [from 2012] to 2030 as policies to encourage better environmental and energy outcomes succeed (i.e. waste prevention, reuse and recycle)".

    The GIB report states that nearly 21m tonnes went to landfill in 2012 (at the standard rate), but according to HMRC the quantity sent to landfill was less than 19m in 2012, falling to around 17m in 2013. Thus, there appears to be a 4m tonne gap in the GIB's landfill assumptions.

    As we know from the North West Study, carried out for the Environment Agency: "…the recorded data suggests that up to 97.5% of the C&I waste landfilled in the [North West] region could be recycled if the correct facilities and services were available".

    Furthermore, as Veolia found in Sheffield, there was far less C&I waste available for incineration than they had anticipated a few years earlier. In 2010 Veolia gave evidence to show that only between 5% - 10% of the C&I generated in and around Sheffield was available for their Sheffield incinerator.

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  • Are we really going to plan on the basis that our best efforts will leave us having to burn between 24 and 26 Million tonnes of resources - most of which is capable of being recycled? This is surely the worst type of predict and provide. We need to ask the question, what do we want to happen and what do we need to do to bring it about?

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