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Defra drops funding for final three waste PFIs

The Environment Agency has now belatedly published their 2011/12 Report on the Landfill Allowance Trading Scheme (LATS). This was shortly followed by the Government withdrawing funding from the three remaining PFI projects that have yet to reach financial close, on the grounds that they were not needed to meet EU landfill diversion targets.

As reported on, the three PFI projects were:

  • Bradford and Calderdale. £62.1m of waste infrastructure credits had been allocated for a £300m 25-year PFI, which included building a 193ktpa incinerator on Bowling Back Lane. The plant was granted planning permission in November 2012, and according to a Bradford Councillor: ” The Government had not given us any indication that these PFI credits would not be available and we are just a few months away from starting construction on site”.
  • Merseyside and Halton. £90m of waste infrastructure credits had been allocated for a 25-year PFI, which could either have included the 600ktpa tonne RDF fluidised-bed incinerator at the Ince Marshes site in Cheshire (which was part of Covanta’s final bid) or the 400ktpa incinerator at the Wilton 11 site in Middlesbrough depending on who had won the bid – the preferred bidder was due to be announced in early 2013.
  • North Yorkshire and York. £65m of waste infrastructure had been allocated for a 25-year PFI, which would have included a 260ktpa incinerator at Allerton Park Quarry in Knaresborough. The plant was approved by the planning committee on the 30th of October 2012.

Explaining their decision, the Government said:

“We are investing £3.6 billion in 29 waste infrastructure projects. This will reduce the amount of waste sent to landfill, promote recycling and stimulate economic growth. We now expect to have sufficient infrastructure in England to enable the UK to meet the EU target of reducing waste sent to landfill. Consequently the decision has been taken not to fund the remaining three projects.”

“This does not necessarily mean the three projects will stop. That will be a decision for the Local Authorities concerned. We will continue to provide commercial and technical advice to those projects that continue with their procurement process”

In October 2010 the Government withdrew funding for seven PFI projects that had yet to reach financial close, which resulted in the removal of PFI subsidies for six incinerators, explaining that: “on reasonable assumptions, will no longer be needed to meet landfill diversion targets set by the European Union”.

The EA’s 2011/12 LATS report shows that local authorities are more than 4 years ahead of their LATS allocations, although it was announced in the 2011 Waste Review that the scheme will end after the 2012/13 scheme year in England.

According to the LATS report: “Nearly all of the trades that occurred for the 2011/12 LATS year were priced less than 50p per allowance”  (which is far lower than the rate of £150 per allowance assumed for some waste PFI projects) and: “In 2011/12, English waste disposal authorities (WDAs) sent 6,401,199 tonnes of BMW [biodegradable municipal waste] to landfill. This is 1,369,913 tonnes less than the previous year and 2,305,468 tonnes less than the 8,706,667 original allocation for 2011/12. English waste disposal authorities used 74% of this year’s allocation.”

You can look up how your own council is doing in the LATS Waste Disposal Authority Register:

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