Former Conservative environment secretary Lord Deben has recently added his weight to calls for policy in England to support food waste collections and recycling by calling for a ban on food waste to landfill from 2018.
This follows Defra’s recent publication of its Anaerobic Digestion (AD) Strategy and Action Plan annual report, which hailed the successes achieved in developing AD since the strategy was launched in 2011, but also highlighted the ongoing issues faced by the organics waste industry.
The report noted that, by September 2014, the number of AD plants in the UK had risen to 140, up from 68 in place in 2011. These had a reported capacity of 9.9 million tonnes, with around 2.3 million tonnes for the treatment of food waste from domestic and commercial sources. During the same period, installed capacity of electricity from AD increased almost four-fold.
But the report stated that “feedstock supply will remain a key issue”. Those in the sector agree, and argue that clear Government policy needs to be put in place to address this.
Julian O’Neill, chief executive of Biogen, which designs, builds and operates AD plants, says: “Feedstock will continue to be an issue, especially on a regional basis, until Government policy begins to address constructively the challenge of extracting food waste from the residual waste stream.
“The introduction of legislation in Wales, Scotland and Northern Ireland demonstrates what can be achieved (see box top opposite), and will undoubtedly underpin the continued growth of AD in these areas.”
Charlotte Morton, chief executive of the Anaerobic Digestion and Bioresources Association (ADBA), is in agreement: “The key to resolving the feedstock supply issue is through the facilitation of source-segregated food waste collections, which could increase industry potential by six-fold. According to WRAP’s latest audit of councils for 2013-14, Wales is leading the way with all authorities offering some form of food waste collection service; Scotland and Northern Ireland have three-quarters of their councils offering food collection; but England has only about half of councils offering any form of collection.
“This is therefore an important issue for the next Government. While the Liberal Democrats are committed to a Zero Waste Britain Act, in contrast, Labour appears to have abandoned its pledge to ban food waste from landfill under recent scrutiny, and the Conservatives have not announced any firm policy.”
Richard Gueterbock, marketing director at on-site AD specialist Clearfleau, has a different attitude to feedstock because it is not really an issue for plants co-located with organic waste generators. But he says: “For merchant plants, feedstock supply need not be an issue if the project has the right partners, with the ability to collect and supply feedstock. A greater concern for larger plants is the issue of digestate disposal – a significant cost for merchant plants.”
In fact, the report flagged up a possible future need for co-location, as well as the need for the AD sector to expand into new markets. It stated: “With gate fees reducing at the front end and costs associated with digestate at the back end, operators are challenged to maximise value from outputs and provide inputs. This means that AD plants may need to co-locate with other enterprises to maximise value. Very few examples of ‘biorefinery’ approaches have yet been implemented in the UK.”
Morton responds to this point, explaining that AD can close the loop in a number of sectors: “As a result, a range of factors influence the type, design and location of plants, including where the waste is generated; what the waste composition is; what energy demands can be met by the plant; and whether there is a local market for the digestate.
“Clearly, finding a market for your outputs – heat, electricity, digestate or even water – is crucial for maximising the income of any business, so supplying external properties can make a huge amount of sense in a rural or urban setting. ADBA changed its name last year to incorporate ‘bioresources’ and ensure that we work with our members to explore these new areas of potential growth.”
She adds that biorefineries “produce new, emerging high-value products, and many of these technologies are still at the R&D stage and in the process of being commercialised”. Indeed, the organisation will be exploring new developments at its R&D Forum, to be held at University of Southampton on 14-15 April.
Gueterbock adds: “The location of AD plants on industrial sites to treat the production residues generated on the site make sense and, as has been demonstrated with our plant at the Nestlé Fawdon confectionery site, can provide an attractive return on investment.
“On-site AD combines the feedstock and energy demand on the same site, with no requirement for feedstock transport. However, such plants tend to be smaller than is the norm for merchant plants, hence the development of the on-site AD sector has been severely undermined by Decc’s ill-thought out degression policy for feed-in tariff (FiT) incentives. This has resulted in a 40% cut in incentives in just two years for smaller AD plants of under 500kWhr electrical output compared with a 10% cut for larger plants of over 500kWhr.”
Gueterbock warns that the next Government should address this issue and “do more to stimulate this sector, otherwise a major opportunity for smaller on-site AD plants on farms, on SME industrial sites and in rural communities will not achieve its full potential for emissions reduction or generating significant amounts of renewable energy, which would help us achieve our 2020 goals”.
For O’Neill, maximising the value from inputs and outputs is a mainstay of most commercial industries, and AD is no different. He says: “Whether this is through innovation in technology, leading to reduced unit costs, or the adoption of alternative offtake routes, driving incremental unit revenue, the AD industry needs to continue to seek increasing levels of efficiency.
“The cautionary note here for operators and policy-makers is to ensure that the incentive mechanism is maintained as a level playing field and does not create ‘feedstock flight’from one technology to another.”
The role of subsidies was also raised by the Defra report, which stated that the Government’s long-term aim is to “remove subsidies for the energy sector and for renewable energy projects to operate on a level playing field with other sources of low-carbon energy”. It added that developers should be encouraged to look at increasing the value of AD and expand into new markets, “and to reduce costs through innovation, efficiencies and diversification”.
Morton from ADBA believes there are opportunities at home and further afield: “Not only are there new domestic market opportunities, such as wholesale and retail market options for the sale of digestate and innovative feedstocks, but there are also significant opportunities for UK exports in AD technology and expertise. Our research has unearthed £100m in current AD-related UK exports.”
She also calls for Government policy to recognise the non-energy benefits of AD, such as reducing greenhouse gas emissions in farming and waste treatment, for example by reforming the Emissions Trading Scheme.
Gueterbock adds “Of course the industry must seek to operate in a subsidy-free environment in the long term. But if the Government is serious about encouraging decentralised energy generation, that is production at the point of use, then it must find a way of providing greater regulatory and incentive stability.”
A separate report published recently by the London Assembly, called Bag It or Bin It?, on the barriers to collecting domestic food waste in the capital, says that the biggest barrier to collecting food waste is financial. This is often the same reason given for holding back commercial food waste collections.
Morton believes that, again, this is about getting the right incentives and legislative framework in place: “When you look at gate fees, AD is already a cost-effective treatment technology – and in Scotland, zero waste legislation has helped to drive the roll-out of collection schemes to support it.”
Gueterbock explains that Clearfleau’s business model seeks to achieve an attractive project payback for its plants, as firms will not consider investing in on-site AD otherwise. When developing its technology, one challenge was the expectations of many food processors for a return on investment in less than four years.
O’Neill adds: “With gate fees now normalising, the economics of segregated food waste collections should be compelling for most organisations, although this may often be offset by the margin expectations of any intermediaries within the supply chain. The more efficient operators will be able to provide both reasonable cost and a high level of customer service, underpinned by operational resilience.”
Around the UK
AD food waste treatment plants
There are 91 plants treating food waste in the UK, including plants using liquid effluents and solid residues from the food processing sector, as well as plants using food waste alongside agricultural feedstocks. The breakdown is:
Around The UK
Current organics waste policy: overview from ADBA
Scotland: AD industry is set to double in size during the next two years, fuelled by the rise in local authority food waste collections for businesses, which came into effect in January 2014. Participating councils currently pick up 8,000 tonnes of household food waste each year, but the introduction of the Scottish Government’s Zero Waste Plan could see that figure rise to 72,000 tonnes if all 32 councils roll out weekly food waste collection schemes.
Wales: Councils have formed collaborative procurement hubs to secure food waste treatment capacity, the results of which are highlighted in the latest WRAP data showing that 95% of Welsh local authorities offer separate food waste collections.
Northern Ireland: Landfill ban on source-segregated food waste from April 2015.
England: Despite the progress elsewhere in the UK, in England little advance towards increased uptake in source-segregated food waste collections has been made in the past few years. But last year a House of Lords Science & Technology Select Committee report recommended that “a long-term policy goal should be the creation of a more standardised system of waste collection across local authorities which views waste as a valuable resource”. In addition, the Department for Transport’s gas strategy for HGVs also recognised that providing biomethane as a low-carbon fuel requires a waste policy which supports AD.