The final confirmation of the landfill tax status of ‘trommel fines’ following nearly two years of debate is expected this year. All the signs are that when this comes, Her Majesy’s Revenue & Customs (HMRC) will stiffen its position and enforce the legislation for the disposal of these fines, resulting in a serious hike in costs for the waste management industry.
The lower rate tax will only be applicable if the producer can demonstrate the trommel fines comprise predominantly of glass, ceramics, concrete or naturally occurring rocks and soil. Although HMRC is still refining its definition of “naturally occurring rocks and soil”, it is most likely that the presence of anything other than minor amounts of other contaminants will result in the fines being taxed at the standard rate.
For most operators this means landfill tax bills for this type of waste will increase from £2.50 per tonne to £80 per tonne during 2014 – a 32 fold increase. An operator producing 40 tonnes per day of trommel fines could see their landfill tax bill increase from £25,000 a year to £800,000 a year during 2014.
So what’s the answer? Unable to pass the full additional cost of this tax bill onto customers, this development will spur many to take a closer look at ways of further separating the fines. After all, trommel fines typically comprise 80% material that, if separated, would qualify for the lower tax rate. So, simply separating this from the other “non-qualifying material” could dramatically reduce landfill tax bills.
The good news is the technology for such separation is already out there. Trommel fines can be further treated to remove these “other contaminants” ensuring that the resultant material is comprised predominantly of qualifying materials.
As the material has already been sorted by size, the removal of the other contaminants can only be achieved using a combination of magnetic/eddy current separation (to remove both ferrous and non-ferrous metals) and density separation (to remove fragments of paper, plastic, food waste, etc).
While the capital outlay is not insignificant, the potential savings in landfill tax will be huge once HMRC insist on rigorous compliance with this legislation. Assuming trommel fines typically comprise 80% of naturally occurring rock/soil, fragments of concrete, brick or other ceramics, simply separating these from the other “non-qualifying material” could reduce the landfill tax bill to £160,000 a year - a tax saving of £640,000 a year.
Furthermore, the publication of the revised WRAP Protocol now allows mineral recovered from the mechanical (and/or biological) treatment of trommel fines and other waste streams to be used in the production of aggregates. This means a significant proportion of the trommel fines currently being landfilled can be sold as recovered aggregate.
This is yet another incentive for the waste management industry to start reviewing now how it handles this waste stream.
Richard Coulton, chief executive of Siltbuster