Barriers to Business Waste Infrastructure Development

Sarahjane Widdowson

Today’s presentation

Barriers and Solutions to Business Waste Infrastructure Development

• Introductions

• Project methodology

• Industry feedback – key barriers and solutions

• Next steps

European Pathway to Zero Waste

• A market based approach to landfill diversion in the South East of England

• Researching and piloting innovative ways to work towards a zero waste economy in the South East: sharing achievements and lessons across the UK and with relevant EU Member States

• 8 Work Streams - Support for waste sector infrastructure development – Action 5

• LIFE+ demonstration project running until March 2013

Support for waste sector infrastructure development

• To demonstrate how the development of waste infrastructure can be de-risked and supported through partnership working

– the means to create appropriate provision of high grade consolidation, recycling and recovery infrastructure and systems for business waste in the South East of England.

How much is landfilled? In 2009 businesses within L&SE regions sent 2.3 Million tonnes per annum (Mtpa) of business waste to landfill.

Source: Defra (2010), “Commercial and Industrial Waste Survey 2009”

Pushing waste up the hierarchy

The project

1. Desktop research

• Scale of the issue, documented barriers and solutions

2. Stakeholder engagement

• Industry consultation via workshops

• Barriers tested and potential solutions discussed

• Definitions debated – waste infrastructure

3. Final report to provide information for key decision makers in London & South East

• Suggest practical solutions and key actors

The workshops

• Attendees from all sectors

– EA, WRAP, GLA, LWARB, DEFRA, CIWM, DCLG, BIS, London Councils, Green Party, LCRN, SE7 planners, Confederation Paper Industries, etc.

• 17 Workshops

– Additional industry speakers

Type of Stakeholder Number registered

Public Sector Bodies 55

Waste Management 46

Technology Provider 16

Energy Sector 25

Industry Expert 73

Planner 13

Academic 5

Investor 31

Local Authority 26

Total 290

Workshop findings

• 5 themes – Public Perception

– Planning

– Finance

– Market Conditions

– Waste Technologies

• Selection of Barriers and Solutions

– All documented in the report

• Views dependent on sector role

Planning – still a barrier?

Contested: Kings Lynn EfW, Norfolk

Perceived barriers tested

• Adversarial planning system

– Clearly improved over the last two years

• Protracted process – high costs

– Small operators agreed costs prohibitive

– Large operators account for time and cost

• Frequency of appeal (planning for appeal)

– Still a concern but seen as a less relevant issue today

Is politics the biggest pressure?

• Influence of political pressure

– Populist local decisions agreed as an obstacle

• Public perception – NIMBY

– Early, transparent engagement reduces the issue

• Waste development plans

– Not aligned with other plans

– industry not sufficiently consulted, but also industry not engaging early enough

Potential solutions • Diligent application preparation, liaise with planning officers,

carefully assess site risk

• Provide a liaison and information support for planning committees

• Clearly understand the consequences of political refusal i.e. landfill costs

• Integrate waste plans with local plans to co-locate facilities for district heating

• Opportunities? – Developers, Industry associations, Planning committees and officers

– Training (member training, new technologies), Support for SMEs (planning applications), Partnership working (cross border co-operation)

Finance – is waste an attractive investment?

Perceived barriers tested

• Difficult to access funding – priority issue

– SMEs/new entrants don’t know where to go

• Waste projects perceived as high risk & low return by some funders

– Mixed views depends on technology & project

• Lack of debt finance available

– Fact of life – only equity available. Need to manage expectations

Will access to finance ease?

• Income uncertainty e.g. incentives (ROCs/FITs/RHI) and feedstock

– One of the biggest barriers

• Cost of due diligence – not scalable

– A barrier for SMEs

• Strong business cases required – favours existing players

– A barrier for new entrants

Potential solutions • Network opportunities required for funders/developers

• Different funding models –debt, mezzanine, equity, guarantees, crowd sourcing? – Need to manage expectations regarding access to debt finance

• Information/support on gaining access to finance

• Consistency preferred for incentives (assist business planning) Training/support for business plan development

• Opportunities? – Funders, operators, Government, industry associations

– Networking events – due in the Autumn

– WRAP Business Resource Efficiency Team – business planning support

– LWARB funding, GIB

Market conditions

Perceived barriers tested

• Varied and unstable feedstock (quantity, quality, composition) – key issue

– The lack of good quality data/info on business waste composition and arisings seen as a key barrier (Commercial confidentiality and data collection issues)

• Fluctuating gate fees and income

– Market turbulence is an obstacle, can make funders nervous

What role should LAs play?

• Global commodity markets

– The industry can always produce marketable products

– Overseas competition on recycling quality

• Inflexibility of some LA contracts around business waste

– Becoming less relevant since abolition of LATS

– Who takes the finance risk of additional capacity for commercial waste?

Potential solutions • Engage with manufacturers to communicate material specs for

high grade recycling, e.g. eliminate over-composite packaging

• Work with industry to expand End of Waste criteria, creating a greater variety of potential products

• Recognise waste as a product: sometimes it will have to travel to market beyond the boundaries of the proximity principle.

• Opportunities? – Operators, Wider industry and society

– Support/training on development of robust business cases

– Support for quality outputs

How do we unlock the barriers?

Infrastructure Delivery

Engage Secure contracts Build Operate

Application

Design Consultation Planning Permitting

Business Case

Identify Need Feedstock (market

identification) Site Technology Funding

Unlocking the barriers

• Overcoming barriers may require addressing multiple barriers

– Relative impact different for each facility type

– Common barriers across all facilities regardless of type, size and location

– Common solutions available – e.g. data

Summary

• Opportunities available

– Need to concentrate further up the hierarchy

• Recycling, reuse and prevention activities

– Develop partnerships to address challenges together

• Connections made during the workshops

– Training and engagement common themes

• Quick wins available

– Need to focus on tangible outcomes

Next steps

• Still time to give us your views

– EPOW - Professional Services Clinic in Hall 20

– AEA stand 20 L69

• Report to be peer reviewed

– Representative stakeholders

• Publication Autumn 2012

Thank You – Workshop hosts

• SCA/DS Smith MRF

• Closed Loop Recycling

• Agrivert AD Cassington

• WRG RE3

• Viridor Grundon Lakeside EfW

• WRG Allington EfW

• Veolia Marchwood EfW

• The City of London WTS

• SWEEEP

• Cory Riverside Resource Recovery

• Viridor Ford MRF

• Veolia Chineham ERF

• Bywaters MRF

• North London Eco Park

• Veolia Southwark Integrated Waste Facility

– Workshop speakers

– Ann Bartaby, Terence O’Rourke

– Dr Stephen Wise, Shanks Waste Management

– Peter Marshall, SITA

Sarahjane Widdowson

Principal Consultant, AEA

Sarahjane.widdowson@aeat.co.uk

www.environment-agency.gov.uk/EPOW