Tolvik Consulting has today (23 February) released “RDF Exports: Here for Good?”, a briefing report that considers the future of the combustible waste market to 2025, with a particular emphasis on the future of refuse derived fuel (RDF) exports and imports.
Whilst the report primarily focuses on the core markets of Germany, the Netherlands, Sweden and the UK, it also considers the potential impact of developments in the wider European market on these countries.
The report found that in the UK, current trends suggest that at least 8Mt of combustible waste will continue to either be landfilled or exported as RDF.
The UK will continue to remain a market for RDF exports but it is unlikely that on a sustained basis volumes will rise to much above the current level of 2.5Mt per annum.
Assuming no net decommissioning of incineration capacity by 2020, the report found the total overcapacity for Germany, Sweden and Netherlands could rise to between 6.6m tonnes (Mt) and 9.3Mt.
“The UK will continue to remain a market for RDF exports but it is unlikely that on a sustained basis volumes will rise to much above the current level of 2.5Mt per annum”
Five neighbouring markets are expected to be a source of a further 2.5-3.6Mt of overcapacity.
The single most significant factor with the potential to influence the market is the rate at which existing incineration capacity is decommissioned.
At one extreme the report estimates that if all incinerators over 36 years of age in 2020 were to be decommissioned then the projected overcapacity in these markets would disappear; at the other the figure is 48 years. This is relevant as the design life of an incinerator is typically around 40 years.
The probability significant volumes of RDF will be exported from Italy, Poland and other new EU states with a historic reliance on landfill looks to be low.
It is estimated on average that the energy efficiency of Swedish incinerators means that they have a €30/t gate fee advantage over incinerators in the Netherlands and Germany. This is more than enough to offset the additional RDF transport costs from the UK to Sweden.
Whilst prices have risen of late and there will always be exceptions, £65/t is projected to be the lowest cost “ex works” RDF export price from the UK to Sweden; the equivalent figure for Germany is £84/t.
Given the projected supply/capacity balance in the UK, these costs do not necessarily need to be competitive with gate fees at UK waste incinerators.
Tolvik is an independent provider of commercial due diligence and market analysis services to the European waste and bioenergy sectors.
For the full report CLICK HERE