Hosted by Profu, I attended a very interesting meeting of the Swedish EfW sector which had a specific focus on market conditions.
In 2014 it is expected Sweden will import 1.4Mt of Refuse Derived Fuel (RDF) – with half coming from Norway and most of the rest from UK/Ireland. In 2013 the figure was nearer 1Mt imported RDF in Sweden.
New EfW capacity continues to be brought on stream as Sweden looks to further decarbonise its economy. As a result, by 2020 Profu projects that total waste imports into Sweden could reach as much as 2.3Mt. However, Swedish operators are starting to become concerned as to whether they will be able to secure enough RDF – particularly if Norway becomes more self-sufficient and less reliant on exports to its neighbour.
In a competitive RDF market one would expect Sweden to have a winning advantage; plant economics (as a result of significant heat-related income) means that some EfWs have been able to offer gate fees to importers of around SEK290/tonne – less than £30/t.
However, for UK exporters, supply chain costs to Sweden are generally much higher than to the Netherlands. What’s more, from January 2015 these could rise further, if shipping costs reflect the expected bunker price rises following the designation of the North Sea as a Sulphur Emission Control Area. Operators are therefore looking very carefully at their supply chains to see how they can be further optimised. Volume, and economies of scale, of course help this.
For UK RDF exporters, whilst seasonality of Swedish demand remains a challenge, this is clearly a market which is not going away any time soon.
Author: Adrian Judge