“The Future of Waste” – Looking Back to the 2011 Report

A couple of weeks ago I was invited to speak at a Norton Rose Fulbright event and was reminded that in November 2011 Norton Rose and Tolvik jointly surveyed the views of 60 waste executives as to the future of the waste industry.

Five years on and it makes very interesting reading. The stand out surprise was that in 2011 more respondents (53%) thought the 50% Household Waste recycling target would be met than those who were confident that the UK would meet its obligations under the Landfill Directive (40%).  As events have turned out the Landfill Directive targets are comfortably on course to being met, whilst the recycling rate remains “stuck” at 43-44% and DEFRA has acknowledged the challenge the 2020 target poses.

Looking back there was evidence that the Landfill Directive targets were likely to be met – as this was the Government’s justification for pulling credits from 7 PFI schemes – but this was a view which was not popular in with the market. On the other hand, respondents’ confidence in recycling was almost certainly informed by recent significant rises in recycling – rather than an analysis of the future changes needed to systems (and budgets) if the targets were to be met. A case of heart over head?

When it came to gate fees the survey results were remarkably prescient – with as many as 40% of respondents suggesting residual waste gate fees in 2016 would be around £80/t (a fair estimate for today’s market); furthermore a number of respondents expected that future UK gate fees would be influenced more by export markets than landfill prices.

The survey also identified that financing and feedstock were the most significant barriers to the development of merchant EfW capacity in the UK – and few developers would argue that this remains so today – although for those developers looking to CfD support would probably add this to the list!

However, unlike 2011, there are now a number of merchant projects which have been financed and the overall conclusion of the 2011 report that “in time, adequate treatment capacity will eventually be constructed” looks to have stood the test of time.