Never Mind The Gap

 Simone Aplin and David Woolford at Ricardo AEA say it’s time for the waste sector to stop arguing about the waste treatment capacity gap and speak with one voice, saying this annual debate is distracting, unhelpful, undermines the aims of the industry.

There has been a great deal of renewed debate recently regarding the UK waste treatment capacity gap. Eunomia is singularly arguing that we have sufficient capacity whilst other key players in the sector, including Suez, Veolia and Biffa, state that from their own calculations and methodologies a significant gap exists and urgent action should be taken to resolve the issue with the delivery of the right suite of waste infrastructure.

Ricardo Energy & Environment undertook a capacity study for CIWM in 2014 and concluded that a capacity gap existed. Little has changed to alter our view. The capacity debate is not new and Jacob Hayler, Executive Director of the ESA, rightly pointed out that, had Eunomia been right when it first started publishing its estimated capacity gap, the UK would have already reached treatment over capacity. Clearly we are still some way from this position.

This annual debate is distracting, unhelpful, undermines the aims of the industry, makes it difficult for Government to set clear policy, damages confidence of investors and makes it more difficult to provide the right infrastructure in the right place at the right time.  Building waste treatment facilities is challenging enough without funders being made more nervous by such contradictory positions from with our own sector.

It is important as the overprovision of capacity would put pressure on waste re-use and recycling activities that are higher up the waste hierarchy.  However, if there is a real need for additional capacity, it must not be constrained by poor data that makes it difficult to secure funding or means that the wrong type or scale of facility is delivered.

The questions we should be asking are how do we agree on the UK capacity gap? How is this debate moved forward? And what data do we need to make a robust assessment?

The reason it is difficult to get a consistent assessment of the capacity gap is that the data on which any assessment is made is limited and requires many assumptions to project waste arisings in the future.

This ambiguity is fuelled by the absence of any primary data on waste arisings (other than municipal and hazardous wastes) in the UK.  At present, unless there is a regulatory duty to provide information on waste produced, moved or managed no data exists.

This means that there is no primary data on arisings of commercial, industrial, construction and demolition wastes and unless waste is managed at a permitted waste management site it also ‘disappears’ from the available data.

Defra has to rely on a complex methodology to estimate how much commercial and industrial (C&I) waste arises in the UK based on available data and some assumptions that are based on little or no evidence.

This has recently come to the fore as the most recent estimates by Defra reduced arisings by almost half compared to the previous year, causing great concern amongst the industry and advisors, including Ricardo.

Defra proactively engaged with the industry to discuss the changes that have been made to the methodology that has resulted in the reduction and agree a way forward, but unfortunately this adds to the uncertainty.

Building on these rocky foundations, the amount of waste arising must be projected forward to understand how much waste will require treatment in future years. This is where the different approaches make a significant impact as assumptions must be made about whether waste arisings are likely to rise or fall, and if so, by how much.

Additionally, there is uncertainty about how much can be re-used and recycled and the different approaches can make the results start to look very different. One thing that most people can agree on is that whatever the forecast they are more than likely to be wrong in the end. What appears to be most important is getting the right direction of unified travel and this relies upon good data and industry intelligence.

It is not only the forecasted waste arisings that are important but also the available waste treatment capacity in the UK. The capacity of sites can be difficult to determine as permitted capacity can be significantly above operational capacity and therefore is not always a reliable indicator.

There is also the question of sites in the development pipeline.  Ricardo holds its own ‘FALCON’ tool which is a long-maintained database of waste infrastructure projects from inception through planning, permitting, commissioning and operation.

This gives us a good understanding of new capacity in development and, by looking at a series of data and bespoke information, we can estimate the likelihood of that capacity being built and reaching the operational phase. But this is based on track record rather than future issues that could change the relative success of projects.

Call To Action

We owe it to the industry to move this debate forward, so how can this be done?  Ricardo would like to see a more collaborative approach to estimating the capacity required in the UK involving Defra, the waste industry and commensurate advisors.

Each group is an important and integral part of our sector and can make a vital contribution to the debate and provide useful data to help develop some of the current assumptions.  This is particularly true for this industry and can provide insight into new infrastructure in the pipeline and some of their data could make estimates of C&I waste arisings more accurate.

Defra is already engaged with the challenges around waste data having established the Waste Data Panel earlier this year, which was one of the recommendations of Ricardo’s report on the future of waste data that was delivered for the RWM Ambassadors in 2015.  This group includes senior representatives from Defra, the waste sector, trade associations, regulators and advisors, including Ricardo.

Our recommendation would be to use this suitable vehicle to address the capacity debate and develop an approach and methodology that could garner support from across the sector.

This is surely a better approach to the capacity debate, and if the time, expertise, data and money used to develop the numerous studies that are undertaken can be combined then the results and subsequent impact for the sector could be better informed and more powerful.

With central Government distracted by Brexit and other priorities there is a significant policy vacuum in the waste sector.  If we are going to deliver what is needed to manage waste sustainability and deliver a circular economy, the waste sector must come together and speak with one voice.

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