Local authorities and waste management firms have raised questions over the long-term future of the Landfill Allowance Trading Scheme after suggesting that Landfill Tax has now "overtaken" the system in driving council diversion rates.

Many in the sector have claimed that Landfill Tax is now a bigger influence on councils' landfill diversion efforts than LATS

The comments come in the wake of Defra confirming that the current value Landfill Allowance Trading Scheme (LATS) system permits was just £0.10 per allowance for 2008/09, a fall from the previously audited average price of £0.35 per permit for the period April 1 to September 30 2008.

A combination of plans to develop waste infrastructure by 2013, the low value of permits and the announcement in the Budget 2009 that Landfill Tax is set to increase beyond 2010/11 (see letsrecycle.com story) has led to claims that the importance of the LATS system in council's waste diversion plans has diminished.

Paul Borrett, head of waste at Norfolk county council, said: "We always knew that there would be a cross over point, and the assumption was that Landfill Tax would go up but now we have certainty up to £72 per tonne."

"And, when we add the cost of landfill itself that brings into play a number of determining factors, such as the fact that LATS is aimed at a proportion of biodegradable waste and it is now more cost effective for local authorities to divert as much waste as possible," he added.

Echoing Mr Borrett's comments, Gev Eduljee, technical director at SITA UK, said: "The LATS fine only applies to the biowaste landfilled over and above the LATS allocation, whereas landfill tax applies to all waste landfilled. So I say at the moment, all other things being equal, this is probably exercising local authorities more than having to hit the next landfill diversion target year, which is another three-to-four years away."

Review

As a result, it has been suggested that a review of the future of the LATS system might be needed after the next Landfill Directive target year of 2013.

Mr Borrett said: "The next crucial point will be after the 2013 deadline and everyone is working towards that. We have got to have that trading mechanism and the next target after is 2020, and if we are to remove the LATS system it would be at that point".

"After 2013 would be the opportunity to remove it as it would give local authorities seven years and most are moving towards delivery of treatment facilities around 2012. Or, the cost of landfilling is going to meet the cost of landfill and, from a best value point of view, the treatment will have overtaken landfill in terms of the cost and it is difficult to see how councils can justify that as use of taxpayer's money."

However, others have claimed that some long term trading of allowances already undertaken by councils could potentially limit any major changes to the system.

Andrew Craig, principal policy officer at the Local Authority Recycling Advisory Committee (LARAC), said: "As a rule I am not anticipating that the government will remove LATS, even though its importance in diverting waste from landfill has diminished and will continue to diminish compared to the rise of the Landfill Tax escalator."

"I would be surprised if the government decides to remove LATS and I think some local authorities have made long term arrangements at agreed prices and I think the government will be called into the courts if it removes the LATS," he added.

Malcolm Ward, chief executive at waste management company Cory Environmental, added that LATS still held a valuable, medium-term importance as a back-up in case of delays in construction of new infrastructure and could be used to complement the Landfill Tax.

He said: "Landfill Tax is certainly the primary driver in the short term. The UK is set to meet its 2010 diversion target through existing and developing infrastructure. The LATS regime will augment the Landfill Tax as we approach 2013. That is likely to be the pinch point for the UK due to delayed procurement and difficulties in securing timely planning consents."