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Updated: Industry calls on Osborne ahead of Budget

Chancellor George Osborne has been urged to preserve the Landfill Communities Fund (LCF) and allocate money for anaerobic digestion (AD) research and innovation ahead of this week’s Budget.

The Government’s response to a consultation last year on the LCF included the removal of the arrangement whereby third parties contribute the 10% shortfall in landfill tax payments to community projects. From 1 April, operators themselves will have to pay the difference.

Now the Environmental Services Association (ESA) has renewed its call for Osborne not to make the change, which it previously said would cost the industry around £4m annually and could jeopardise its future.

According to ESA executive director Jacob Hayler, the fund has supported more than 50,000 community and environmental projects across the UK with funds totalling £1.2bn.

“Bringing in these changes now would provide landfill operators with little time to budget, particularly when their planning timescales tend to be around five years in advance and when some individual operators are facing unforeseen annual costs of almost £1m,” he said.

“The ESA has urged the Treasury to retain third party contributions as part of the LCF, which would preserve the future of the scheme and ensure that local communities continue to benefit. We hope that the Budget includes a positive announcement to this effect.”

The Anaerobic Digestion & Bioresources Association (ADBA) called for at least £25m of the Department of Energy & Climate Change (Decc)’s increased innovation programme to be allocated to demonstration projects, such as power-to-methane and digestate processing.

Announced in November’s comprehensive spending review, the programme is worth £500m during the next five years.

Justifying the allocation of funds, ADBA chief executive Charlotte Morton said the potential export value of AD technology is “more than £2bn a year for a decade”, with UK exports currently estimated at just £50m-£100m.

“Supporting such new technologies through industry could bring ways of sustaining the sector with reduced reliance on financial mechanisms, allowing AD to remain the most cost-effective method of producing home-grown green gas and electricity, and contributing to the UK’s 2020 renewable energy, recycling, decarbonisation, and climate change targets,” she said.

She also called for centrally driven support for separate food waste collection schemes.

Morton recently voiced concern about Decc’s review of the Renewable Heat Incentive (RHI), which proposed reducing or removing support for energy crops used in AD and ending support for digestate drying.

Osborne announced increased funding for the scheme to £1.15bn by 2020-21, from £430m for 2015-16, in his November spending review.

ADBA said in its December market report that there could be 180 green gas plants in operation by 2021 if a reasonable proportion of the RHI budget was allocated to AD and the scheme’s structure was workable.

Meanwhile, the Aldersgate Group urged the Government to confirm ”that it will keep the UK’s carbon reporting requirements for listed companies in place”, which it said have been “essential” in driving productivity and investment.

It said it hoped ”to see greater clarity on the support that will be made available to improve the energy efficiency of the UK’s building stock”.

And Lee Hopley, chief economist of the manufacturers’ association EEF, called for the removal of plant and machinery from the calculation of business rates, saying this “could help tip the balance for some companies”.

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