In a new report entitled Beyond landfill: Using green taxes to incentivise the waste hierarchy the Environmental Services Association (ESA) rightly says there is a need for more taxes to encourage management of waste at the top tiers of the waste hierarchy. However, the ESA unfairly dismisses an incineration tax as one of the means to achieve this.

As a trade body for incinerator operators and other companies that form part of the incineration industry it is perhaps unsurprising that the ESA wants to tax virtually everything other than incineration, but not incineration itself.

The fact that the ESA devotes an entire page to “The drawbacks to incineration taxes” indicates that they consider the prospect of an incineration tax to be serious enough to have to try and critique it, as otherwise they would not  dare to  mention it at all for fear of further shaking investor confidence.

UKWIN views an incineration tax as a sensible measure to encourage the investment in collection, sorting, education and processing needed to recycle, compost and anaerobically digest suitable material, and to discourage the incineration of materials that would be reduced, re-used, recycled or anaerobically digested if the appropriate infrastructure were in place.

Some of this investment in environmentally-friendly alternatives to incineration will be expensive, and to make this economically viable it may be necessary for incineration to be made more expensive. Money raised through an incineration tax can and should be pumped back into measures to reduce the quantity of residual waste that requires treatment.

UKWIN submitted evidence to the Environmental Audit Committee on the case for an incineration tax, and incineration taxes have been recognised by the Environmental Audit Committee earlier this month as an environmental tax that would “embed the ‘polluter pays’ principle into the cost of waste disposal and encourage the reduction or recycling of waste materials”, and that would help fulfil the Coalition Programme intention to increase the proportion of green taxes.

One problem with the ESA’s argument is that increasing recycling often requires investment. An incineration tax would not be aimed at keeping separately collected recyclate out of incineration (because that should be happening as a matter of course), but to encourage the re-use and recycling of the significant quantities of material that would not otherwise be re-used or recycled.

An incineration tax would encourage people, local authorities and businesses to go further in terms of collecting, sorting and actually recycling recyclable material. This would entail (potentially using tax revenue raised from an incineration tax) investing in more education, better sorting technologies for mixed waste, the acceptance of a much wider range of materials (rather than the bare minimum) for recycling, and measure to ensure that recyclable material sent for recycling, e.g. via MRF sorting facilities, were actually recycled rather than rejected. These measures, along with increased (kerbside) segregation, would reduce MRF rejects and result in higher recycling rates and better quality recyclate. This would yield both environmental and economic benefits, and would represent prudent resources management.

The recent Defra statistical release for Local Authority Collected Waste Management Statistics for England (Final Annual Results 2011/12. Defra, November 2012) acknowledges that: “At Local Authority level, individual recycling rates ranged from 14 per cent to 69 per cent…lower rates could result from an authority focusing on avoiding landfill by investing in incineration and targeting its waste management policies on that treatment solution, rather than poor recycling awareness or initiatives.”

Whilst the ESA does recognise the potential merit of a tax on the incineration of material that is “recyclable and non-renewable”, this kind of misses the point. The types of material that can be viably recycled will increase over time, and this process of extending the range of recyclates should be incentivised. Some material might only be considered ‘non-recyclable’ because the investment has not been made to ensure that it was collected separately. The current situation encourages the incineration of recyclable materials because, as Defra acknowledge, incinerators “are creating GHG emissions without paying the relevant price” (Source). Furthermore, the desirability of recycling is not reflected in the price of incineration.

Various trade bodies and many respected waste professionals certainly see the potential for under-priced incineration to encourage the burning of material that would otherwise be recycled, with many speaking out against the incineration of waste, for example:

  • “…what we strongly object [to] is incineration of paper. Our raw material is far too valuable to be burned” – Roberto Villaquiran, FEFCO, an umbrella organisation representing European associations of corrugated board manufacturers. (Packaging boss: ‘Paper for recycling is short in Europe’. EurActiv, 23 May 2012. Available from http://www.euractiv.com/sustainability/packaging-boss-paper-recycling-short-europe-interview-512881)
  • “Subsidies for Energy from Waste and large scale energy only biomass should be phased out as they put at risk supplies of the Paper Industry’s basic raw materials – recycled fibres and wood pulp” – the Confederation of Paper Industries (UK Paper Industry Calls for U-turns in Manufacturing Policy. CPI, 18 September 2012. Available from:http://www.paper.org.uk/news/2012/CPI%20Party%20Conference.pdf)
  • “Most local authorities that started incinerator projects, often with government PFI support, did so with a clear commitment to burn only what couldn’t be recycled, but then found themselves tempted by a business case that stacked up better for a big plant than for a small one. Once the incinerator is built, they have to keep it supplied and rapidly the economic logic of return on investment trumps concerns about recycling.” – Eunomia Managing Director Mike Brown (The tax that dare not speak its name. Mike Brown, September 2012. Available from: http://www.isonomia.co.uk/?p=1250)
  • “…There are two major objectives we need to pursue. Obviously, landfill rates must go down as quickly as possible, but it is also important to switch from energy recovery to increased recycling. Plastic recycling rates are far too low across Europe with an average of just 24 per cent. Today, even in countries with high recovery rates, there is simply not enough plastic available for recycling because most of it goes to energy recovery. A dominance of energy recovery over recycling is not acceptable in the medium-term…” – European Environment Commissioner Janez Potocnik (Any Future for the Plastic Industry in Europe? Janez Potocnik. European Commissioner for Environment. 21 September 2012. Available from:http://europa.eu/rapid/pressReleasesAction.do?reference=SPEECH/12/632&format=HTML&aged=0&language=EN&guiLanguage=en).
  • “…[Incinerators] must demonstrably avoid competing with upper levels of the waste hierarchy – waste prevention, reuse and recycling/composting – by avoiding creating a demand for waste that could otherwise have been returned to the economy. In an increasingly resource constrained future it makes little sense to burn materials which can be reused or recycled elsewhere…It is important that bans are not restricted to landfill but also consider diversion from energy from waste plants designed to treat residual waste. If the resource value of priority materials are important enough to divert from landfill it is important that they are diverted to the appropriate treatment and recycling technology.” – The ADS, British Glass, British Plastics Federation, Confederation of Paper Industries, EEF, Packaging Federation, UK Steel, Metal Packaging Manufacturing Association, Institute of Environmental Management and Assessment, Friends of the Earth, the Resource Association, Professor Steve Evans (University of Cambridge, Institute of Manufacturing) and the North East Sustainable Resources Board (From Waste to Resources: Recommendations for Developing the Resource Security Action Plan. August 2012. Available from: http://www.businessgreen.com/digital_assets/5734/From_waste_to_resources.pdf)

Furthermore, it is telling that the ESA’s comments only cover ‘non-renewable’ recyclable material, because they know full well that food waste can be separately collected for anaerobic digestion and is therefore recyclable.  Food waste is too often used as incinerator feedstock rather than being separately collected, even though Government policy encourages the separate collection of food waste for Anaerobic Digestion. In England, the separate collection of food waste for AD requires investment that may not be forthcoming if local authorities are incinerating that waste instead.

Charlotte Morton, the chief executive of the Anaerobic Digestion and Biogas Association (ADBA), has cited incineration as a “really worrying” threat to the separate collection of food waste. Minutes of Nottinghamshire’s Joint Waste Officer Board meeting of November 2007 record how Nottinghamshire County Council claimed that the reason separate collection of food waste was not even being considered was that the Council was instead investing in incineration capacity as part of a Waste PFI Contract.

The ESA’s argument that an incineration tax would be bad because it could undermine the case for investment in domestic incineration capacity is equally flawed. If there is insufficient genuinely residual waste to warrant increased domestic capacity at a price that reflects the true costs of incineration and the desirability of recycling then the market has spoken. Furthermore, as UKWIN and Eunomia Principal Consultant Adam Baddeley highlighted in October 2012, the case that it would be better to build more capacity domestically rather than send waste as RDF to European countries facing overcapacity is pretty weak (especially when one considers the potential for reduction, re-use and recycling and the ESA’s apparent reliance on domestic overcapacity to compete with European overcapacity).

In UKWIN’s submission to the Environmental Audit Committee we provided evidence to support our call for fiscal measures that will help to promote the efficient management of waste.

To encourage reduction, re-use and recycling the Government should:

  • Eliminate/restrict existing subsidies to incineration, e.g. to avoid [further] overcapacity.
  • Introduce an incineration tax that fully internalises environmental externalities and that reflects the environmental benefits of reduction, re-use and recycling.
  • Introduce measure to further support the management of discarded material at the top tiers of the waste hierarchy, including anaerobic digestion (AD).

To encourage reduced GHG emissions from landfill the Government should:

  • Introduce a lower landfill tax rate, i.e. a middle band, for bio-stabilised waste.

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