Select Committee on European Communities Eleventh Report


APPENDIX 4

EXTRACTS FROM THE REGULATORY IMPACT ASSESSMENT

FOR THE LANDFILL DIRECTIVE

Department of the Environment, Transport and the Regions, 16 April 1999

BENEFITS OF THE LANDFILL DIRECTIVE

Waste reduction

One of the effects of various Directive requirements may be to increase waste management costs in particular for hazardous waste. A likely response is that businesses will attempt to reduce the amount and the hazardousness of their waste.

Diversion of biodegradable waste from landfill

The environmental costs of landfill include the economic value of damage caused to the environment through pollution of water by leachate, the emission of greenhouse gases from transportation and decomposition of the waste, and loss of amenity in the area surrounding a landfill site.

Many studies have tried to estimate the environmental costs of landfill disposal. For example a study by CSERGE (1993) suggests that existing rural landfill sites without energy recovery may have net environmental costs of between £1.58 and £9.15 per tonne. These estimates exclude disamenity costs which the study suggests could be significant.

The setting of targets for the reduction in the amount of biodegradable municipal waste going to landfill will require that a significant amount of waste be diverted from landfill. Thus, helping to reduce the environmental cost of landfill.

The Directive states that the baseline for targets is to be based on standardised data from EUROSTAT. This data is not yet forthcoming, and it is unlikely that EUROSTAT would be able accurately to calculate such figures given the disparity of approaches to waste statistics within the EU. In its absence, the targets would relate to Member States' own data for 1995 waste arisings. These will depend on a number of points; the interpretation of "municipal" and "biodegradable" waste and future trends in waste arisings. The DETR defines "municipal" waste as 'household waste and other wastes collected by a Waste Collection Authority, or its agents, such as municipal parks and gardens waste, beach cleansing waste, commercial or industrial waste and waste resulting from the clearance of fly-tipped materials' (Municipal Waste Survey). If this interpretation is taken, there were approximately 30 million tonnes of municipal waste produced in the UK in 1995. If however, a wider interpretation is taken to include commercial and industrial wastes similar to households which are not collected by a Waste Collection Authority, or its agents, this figure could rise to 90 million tonnes or more (based on estimates in Less Waste; More Value).

Initial research on the interpretation of the definition of biodegradable waste suggests that the biodegradable content is between 50% and 65% for household waste. Estimates of waste arisings trends are difficult since information from DETR's Municipal Waste Survey are only available for three years. For this exercise it is assumed that waste arisings will increase by 0% to 3% per year. If the Government's policies for waste minimisation set out in the forthcoming waste strategies are successful, growth in municipal waste arisings will be reduced. It is therefore estimated that the reduction in the amount of biodegradable municipal waste landfilled will be equivalent to the additional diversion of between 6 to 33 million tonnes by 2016[31], assuming that a narrow definition of municipal waste is applied.

The reduction in biodegradable municipal waste is likely to be achieved through the diversion to other waste management options. The range of different instruments to promote these options will be addressed in the waste strategies for England, Wales, Scotland and Northern Ireland to be issued later this year. This will be subject to separate consultation.

Recycling of biodegradable waste

The targets are also likely to result in an increase in the recycling of biodegradable material such as paper, card, and textile waste. The potential environmental benefits of recycling include the avoided environmental costs of extraction, processing and transportation of primary raw materials and avoided environmental costs of landfill disposal. In some cases, production and use of secondary materials can use less energy and have lower emissions than primary materials. A study by Coopers and Lybrand (1996) suggests that the net external benefits from recycling and the utilisation of secondary materials compared to landfill disposal of household waste can be significant for some materials. They estimate that for paper the net benefit is about £226 per tonne. However, this estimate is very sensitive to the assumptions used, so is only an illustration of the potential benefits of recycling paper compared to landfill disposal.

Composting of biodegradable waste

Part of the diversion from landfill may well be achieved through increased composting. This can be achieved through encouraging households to compost their own waste and/or collecting the waste and composting it at a central facility. In addition to the avoidance of the environmental costs associated with landfill, other benefits accrue from the displacement of other materials as soil conditioners such as peat. This helps avoid the environmental costs associated with peat extraction, including habitat loss in particular. Composting, particularly home composting, may also have an additional benefit in terms of reduced distances travelled.

Incineration for energy recovery

A proportion of the diversion will be achieved through incinerating the biodegradable waste for energy recovery. The Government's view is that, alongside a move to higher level of recycling, a move towards incineration with energy recovery is necessary in order to develop a more sustainable waste strategy. However, the Government in Less Waste; More Value stated that "incineration with energy recovery should not be undertaken without consideration first being given to composting and recycling".

The Consultation Paper on the Government's Renewable Energy Strategy also suggests the need to recover a higher level of energy from waste. Studies suggest that incineration with energy recovery can have net environmental benefits over landfill disposal due to reductions in emissions to air. This is in part because the burning of waste displaces the burning of fossil fuels in energy production. In addition, the distances over which waste is transported to incinerators may be less than the distance over which waste is transported to landfill sites, particularly in the case of waste from urban areas. In such cases incineration with energy recovery could be the Best Practicable Environmental Option (BPEO).

A study by CSERGE (1993) suggests that new urban incinerators may have net external benefits of up to £12.41 per tonne. However, the study assumes that the electricity generation displaced is that of a coal-fired power station, which might not be the case. This also does not reflect potential disamenity impacts of incinerators.

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TOTAL COSTS OF COMPLIANCE

Reductions in the amount of biodegradable municipal waste going to landfill of 25%, 50%, and 65% below 1995 levels by 2006, 2009, 2016 respectively (Article 5 (1)).

There is uncertainty about the impact of the targets on the reduction of biodegradable waste going to landfill as the cost of achieving these reductions will depend greatly on a number of factors. These include:

  a) the baseline figure for the targets;

b) the effect of the Producer Responsibility Obligations (Packaging Waste) Regulations on the diversion of biodegradable waste from landfill;

c) increases in recycling, composting and energy recovery arising from policies and instruments stemming from the waste strategies;

  d) the relative prices of different waste management options, including landfill; and

  e) the success of initiatives to encourage waste minimisation.

Although the targets for the diversion of biodegradable waste from landfill are set in the Directive as national targets, in practice they will have to be achieved through actions at a more local level. A mechanism to achieve the required reductions in biodegradable municipal waste going to landfill will be subject to consultation and the results will feed into a refined RIA for the Directive.

As in the CCA for the Commission's proposal for a Landfill Directive in 1997 a low, middle and high cost scenarios have been constructed by making assumptions about the variables outlined above. The Government is already committed to achieving a 25% household recycling and composting rate. For the purpose of this exercise a baseline composting and recycling rate of 10% by 2006, 20% by 2009, and 25% by 2016 has therefore been assumed. Any further diversion is achieved through incineration with energy recovery. It has also been assumed that the amount of municipal waste incinerated for energy recovery will increase anyway, in particular in the light of the Government's Renewable Energy Strategy and the Packaging Regulations. The amount of municipal waste incinerated for energy recovery has been assumed to reach 3 million tonnes by 2006, 4 million tonnes by 2009, and 5 million tonnes by 20016.

These are broadly similar to the assumptions made in the CCA. Therefore the estimates of the costs presented in this RIA can be compared with the cost estimates in the CCA to identify the effect of changes to the targets. These rates are only illustrative of the potential levels of recycling and composting we would expect without the Landfill Directive. Additional costs will be incurred to increase the recycling and composting rate from the current level of approximately 7%. The appropriate mix of options required to meet the Directive targets will be discussed in the waste strategies for England, Wales, Scotland and Northern Ireland.

The costs presented in table 1 are different to those presented in the CCA due to changes to the Directive. Again, these are only an indication of the potential costs as the estimates are sensitive to the assumptions about the variables outlined [at the beginning of this section], and the unit costs used. For example, a higher growth rate in waste arisings will result in a significant increase in costs.

Table 1 shows estimates of diverting biodegradable waste from landfill in order to meet the Directive targets. These figures are based on the assumption that a narrow definition of municipal waste is applied. The total costs are the additional annual costs associated with having to pay higher gate fees for incineration compared with the gate fee for landfill disposal. Therefore the total annual cost includes the annualised capital costs. The capital costs are the cumulative gross costs of building extra incinerators, these are included in the total annual costs but are presented separately for information. The number of new incinerators required is also presented in the table. These are based on incineration plants with a capacity of 200,000 tonnes per year. It is possible that the plants constructed will have larger capacities, which will reduce the number of plants and reduce operating costs per tonne. The estimates of additional capital costs are likely to be overstated as they do not reflect investment in landfill that would have occurred without the Directive. Also the number of incinerators needed will fall if a higher rate of recovery from other recovery options is achieved.

The UK has an option of a four year derogation for meeting the targets. The UK has made clear that it intends to make use of the derogations to spread the costs over a longer period and to establish more sustainable waste management options. For illustrative purposes the analysis in this RIA looks at the effect of making use of the four year derogation in 2016. Table 1 shows the effect of using the derogation is to spread the cost over more years if waste arisings stay constant. However, if wastes are increasing year on year, more biodegradable municipal waste will have to be diverted and further alternative facilities established.

Table 1: Cost implications of the diversion targets for biodegradable municipal waste.
Scenario
2006

(25% reduction)
2009

(50% reduction)
2016

(65% reduction)
2020

(65% reduction, with 4 year derogation)
Low cost[32]
Total annual cost (£m)
11
38
85
85
Cumulative capital cost (£m)
190
630
1,410
1,410
Cumulative number of extra incinerators
4
13
28
28
Middle cost[33]
Total annual cost (£m)
37
125
183
201
Cumulative capital cost (£m)
910
2,500
3,660
4,020
Cumulative number of extra incinerators
12
42
61
67
High cost[34]
Total annual cost (£m)
184
272
414
495
Cumulative capital cost (£m)
3,070
4,530
6,900
8,250
Cumulative number of extra incinerators
61
91
138
165

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SUMMARY AND RECOMMENDATIONS

It has not been possible to quantify the benefits. However, the main benefits will result from the diversion of biodegradable wastes from landfill in terms of the avoided environmental costs associated with such disposal. It is therefore estimated that the reduction in the amount of biodegradable municipal waste landfilled will be equivalent to the additional diversion of between 6 to 33 million tonnes by 2016[35], assuming that a narrow definition of municipal waste is applied.

The cost estimates only provide an indication of the potential impact, as they are based on numerous assumptions due to lack of data and difficulties in predicting future responses to the Directive. This needs to be borne in mind, in particularly concerning the diversion targets. The majority of the cost results from the targets for the diversion of biodegradable waste from landfill. It is estimated that to build the necessary incineration capacity (28 to 138 extra incinerators) a capital investment of £1.4 to £6.9 billion by 2016 will be required. This is only for illustration; similar investment would be required to construct additional recycling and composting facilities. This estimate of additional capital costs is only illustrative and does not take account of additional investment in new landfill capacity that would have happened anyway. The annual total cost (including annualised capital costs) of having to incinerate the waste rather than using landfill disposal is in the order of £85 to £414 million by 2016.

The costs of landfill disposal are also expected to increase, especially for hazardous wastes, as a result of the ending of co-disposal, methane abatement, and other operational and technical requirements. A study for DETR suggests that landfill prices for non-hazardous waste may increase by 15% in real terms over the baseline by 2020. It is expected that these costs will be passed onto the producers of waste (industry and householders). The costs of disposing of liquid and infectious clinical are also likely to increase. This is difficult to quantify due to uncertainties over the amounts currently landfilled and the combination of waste management options that will be deployed in the future. However, initial analysis suggests that the additional cost will be in the order of £18.5 million per year.


31   The range is derived from an estimate of UK Municipal waste arisings of 30 million tonnes, it is assumed that waste arisings will increase by 0% to 3% year, and that the biodegradable content is 50% to 65%. This does not include waste assumed to be recovered by alternative methods, see paragraph 9.i.iii.

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32   The low cost scenario assumes no increase in waste arisings, a biodegradable waste content of 50%. Back

33   The middle cost scenario assumes a 1% annual increase in waste arisings, a biodegradable waste content of 57%. Back

34   The high cost scenario assumes a 3% annual increase in waste arisings, a biodegradable waste content of 65%. Back

35   See footnote 1.

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