Indications are that steps by EU member states to implement tougher standards on greenhouse gas emissions will have an impact on UK exports of refuse-derived fuel (RDF)
One of the biggest RDF importers, Sweden, has published the results of an inquiry into its industrial emissions, and a tax on incineration is on the cards. This could have a knock-on effect in the UK. Figures released by the Environment Agency (EA) have already revealed a potential slow-down in the RDF export market as overseas markets become harder to identify.
Between January and August this year, exports of RDF and other associated material from England were down by nearly 17,000 tonnes compared with the same period in 2016 to just over 2.1 million tonnes. It has been seen as an indication that the rapid growth in RDF exports in recent years is easing off. From England and Wales, exports stood at around a quarter of a million tonnes in 2011 compared with just under three million tonnes in 2015.
Speaking at RWM in September, Suez chief executive David Palmer- Jones said exports could become more challenging due to expectations of a Swedish tax. Suez is one of the biggest RDF exporters to Sweden.
Since then, the company said it was looking to close its RDF facility at the port of Tilbury. The facility was opened in 2015, and hailed at the time as Suez’s first plant able to process both RDF and solid recovered fuel.
According to EA data, 19,637 tonnes of RDF was exported to Sweden in September this year by six companies: Suez, Associated Waste Management, Bertling Enviro, FCC, Geminor UK and Totus Environmental. This was around 10% of the total from the UK in that month.
Keith Riley, a partner in the consultancy EnergyGap, said: “If Sweden does impose a tax, I have no doubt that exporters will seek to pass the cost back to the waste producer – and that will increase the cost of exporting to that country.
“Whether this [affects] the quantities exported to Sweden depends on the alternatives – and if the alternative is a UK-based energy-from-waste (EfW) which is price-competitive, the preference will be to send it there.
“However, EfW capacity will tend to become available in discrete ‘chunks’ so, if there is cost-effective means of disposal in another country, it may well attract it in that direction.”
Tom Musgrove, head of Biffa Fuels, said: “Biffa and our Swedish partners are looking at ways to share any burden these proposed taxes may bring. We run an open book with regard to operating costs, working openly with recovery sites and hauliers. This is central to our way of working, and the supply of fuel must fit with all the parties involved.”
He added that Biffa expected to grow its RDF exports during 2018.
James Maiden, UK manager for Geminor, said the European market was “levelling off ”, but that opportunities were there for businesses that were innovative in meeting customer demands.
Incineration tax unlikely to be high
A colleague in Copenhagen is keeping tabs on Sweden, and it seems the country is well on the way to making specific recommendations around the design of an incineration tax.
The Swedish government decided to have the equivalent of a house of commons inquiry led by someone with a judicial background to make recommendations. It is wider than the role of incinerators and looks at industrial emissions too. Proposals include a tax of around £9 per tonne on all non-hazardous waste incinerated. It is not clear if this will apply to RDF imports.
If the objective is to reduce emissions associated with Sweden’s waste, then that will focus on their own waste. In that situation, you might well not want to tax waste from somewhere else. If the UK was outside the EU, they could have a differential approach.
We also do not know whether a tax would focus on biogenic carbon emissions, which might lead to more pre-sorting for material to remove, say, plastics.
The experience from elsewhere, where the tax has been introduced such as Norway, is that it is not generally high, at around e10-15 (£8.80-£13.20) per tonne. And there is no outcome where Sweden shuts down its incinerators overnight – they are still building new ones.
Peter Jones is a senior consultant at Eunomia