Rise of energy recovery? – Brexit and RDF Exports

Summary of Adrian Judge’s viewpoint as featured in ENDS Waste and Bioenergy – May 2017

Concerns around Brexit, incineration capacity and the impact on recycling rates are clouding the energy-from waste landscape in the UK.

When the UK leaves the EU – which has traditionally restrained EfW enthusiasts – it may mean an independent UK can embrace incineration as never before. Adrian Judge, director of Tolvik Consulting, says “on balance Brexit looks like it will be better for the EfW industry”. But he also warns that it is a finely balanced situation, given the complex relationship between the UK, its waste policy and the rest of the EU.

Refuse-derived fuel (RDF) exports from the UK to the EU have seen a dramatic rise over the past five years but they are likely to take a hit from Brexit. England now exports 3.1 million tonnes of RDF a year to mainland Europe. But the likely prospect of a hard Brexit, could subject RDF to new trade agreements, which could prove prohibitively expensive.

Trade could also be affected more generally because the UK’s export supply chain is driven in part by “economically favourable transport costs” between the UK and Europe, according to Judge. “This requires a balance of trade between Europe and the UK to be such that waste can go back in the same lorries that have brought in imports,” he says. If this balance is upset, the logistical costs for waste to get to Europe could be inflated, making exports more expensive.

From a European perspective, Judge argues that EfW operators across the channel may not want to have “all their eggs in one basket” given these trade risks. The volatile exchange rate, including a plunge in the value of the sterling in the aftermath of last year’s EU referendum, makes UK exports more expensive. The prospect of long-term flux in the value of sterling is one risk EfW operators do not wish to take, says Judge, no matter if it is a waste producer that is trying to export from the UK or an EfW operator in Europe.

As a result, as Judge points out, there are signs that exports have “reached their peak” and may be levelling out.  For the full article please go to http://www.endswasteandbioenergy.com/article/1433912/rise-energy-recovery