This Article first appeared on MRW Website 15 Dec 2022
There has been a lot of noise recently about a possible moratorium on EFW capacity in England, similar to that progressed by Wales and Scotland, based on an oversupply of EFW capacity in the market.
Commentators are starting to converge on a similar position, which is a very narrow overall capacity gap by around 2030. Indeed, there is already a clearly predicable oversupply in some regions and, depending on your view on growth in waste, recycling rates, and life span of current plants there is a very limited remaining capacity on a national basis. So, I can understand the lobbying approach taken by some to introduce an EFW moratorium, but there are three fundamental flaws to this argument, as I see it.
The first is that it would be entirely possible to build too much capacity with the currently consented capacity, so stopping new consents doesn’t stop overcapacity being delivered.
Secondly, there may be a strong argument (i.e. industrial heat use) for more new capacity to be consented in a regional geography where there isn’t any infrastructure at present, thereby reducing waste miles to deliver to that facility rather than an alternative.
Thirdly, the planning framework will struggle to control the ‘proximity principle’ – if a plant needs tonnage it will want to source it from wherever it is available to ensure its commercial viability. This also means that larger plants, if they can’t source in their local region, may have to draw from far larger areas to service their capacity – and that might include import from outside the UK.
Right now there is a shortfall in EFW capacity, but is there really a risk of overcapacity and import of waste in the future? Well, there are probably three main drivers for potential import.
The first is that investors need to get comfortable with the availability of feedstock and future ‘supply and demand’. Other countries import and export RDF, so why not the UK in the event that it has ‘spare’ capacity and the ‘commercials’ work?
The second is the recently announced ‘legally binding targets’ for a halving of residual waste by 2042 to landfill and EFW. Simple calculations (70.4m people by 2042 forecast by ONS at 280kg per person) results in 19.8mt of residual waste by 2042, with current operation and in construction EFW on target for c.20mt of capacity by 2042. If we don’t have enough residual waste of our own by meeting this target, do we import it to fill spare capacity?
Finally, the recently announced implementation of the EU ETS for EFW has the potential to increase cost in EU EFW plants. If the UK ETS doesn’t then follow suit, it would create a commercial imbalance that would encourage import.
So, in answer to the question ‘is it a possibility?’, I can’t help but think that unless the UK makes specific policy and fiscal decisions to prevent it, it is almost inevitable.
