UKWIN welcomes the Environmental Audit Committee’s call for the Treasury to set out its plans on the future of the Landfill Tax and how the Treasury intends to support further investment in recycling, and UKWIN is calling for HM Treasury to extend the Landfill Tax into a Residual Waste Tax that pushes waste from the ‘residual’ stream into reduction, re-use, recycling and composting.

The Environmental Audit Committee’s (EAC’s) report on Sustainability and HM Treasury, released today (17th November 2016), states that:

“The Treasury has, through the landfill tax, played an important and positive role in diverting waste from landfill. Businesses have had confidence in the long-term certainty of the tax and invested accordingly. The landfill tax is, however, a ‘blunt instrument’ and is not sufficiently nuanced to drive continued increases in recycling rates. We have seen no evidence to suggest that the Treasury has been working with DEFRA – which has lead responsibility for waste and recycling policy – to find new ways of boosting recycling to achieve our EU targets. The Treasury should set out in its response to this report its future plans for the landfill tax and how it plans to support further investment in the waste and recycling sectors in the future.”

Commenting on the report, UKWIN National Coordinator Shlomo Dowen commented that:

“It is great that the EAC recognise that there is a problem that needs to be addressed with regards to ensuring the Waste Hierarchy is implemented in practice. UKWIN is calling for HM Treasury to tax incineration rather than just landfill so as to provide a clear financial incentive to recycle that can drive innovation in collection, sorting and treatment technologies and infrastructure as well as to reward investment in education.”

UKWIN gave evidence to the Environmental Audit Committee, and stated that:

In their June 2011 Waste Review the Government pledged to “provide the necessary framework to address market failures and deliver the most sustainable solutions”.

However, five years on from that promise, HM Treasury has yet to address the [environmental] externalities identified by DEFRA [such as the CO2 released from the incineration of plastics], and has failed to ensure that the relative benefits of recycling and dis-benefits of incineration are comprehensively reflected in the price of treatment, e.g. by introducing an incineration tax and by providing more financial support for recycling.

In stark contrast to the Government’s commitment, the Treasury’s provision of additional subsidies and other forms of financial assistance for incineration is exacerbating the unfair and environmentally harmful financial advantage of incineration over recycling, and thus holding back recycling rates.

The Treasury’s policy of providing financial support for incineration and their failure to introduce an incineration tax has resulted in incinerators competing for feedstock with both recycling and composting (including anaerobic digestion) facilities, and has led to recycling and AD projects (including separate food waste collections) being abandoned or never taken up.

The Green Investment Bank also came in for criticism in evidence given to the EAC, with the Chartered Institution of Water and Environmental Management commenting that:

“The Green Investment Bank has been a failure in relation to recycling, focusing the majority of its lending on energy from waste schemes (which may hinder rather than enhance recycling), and which are lower in the waste hierarchy.”

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