Composters have predicted that anaerobic digestion (AD) will attack the in-vessel composting (IVC) market as competition for food waste inputs grows fiercer, writes Siân Barton.

Trelawney Dampney, the managing director of Dorset-based composting company Eco Sustainable Solutions, told letsrecycle.com: "AD will aggressively attack the IVC market."

In the past there has been concern about the viability of using AD to process municipal waste (see letsrecycle.com story), but in recent months the Government has increased incentives for organic recyclers to use the technology.

Defra has given AD 'double ROCs' (Renewable Obligation Certificates), a system which makes the technology more economically attractive, and also re-classified the digestate it produces from a waste to a product as part of the Waste Protocols Project (see letsrecycle.com story).

There are currently only four large AD facilities in the UK but composters expect this number to rise significantly.

However, despite this, Charlie Trousdell, managing director of TJ Composting and chairman of the Association for Organics Recycling (AFOR), disagreed with the assertion that AD would attack IVC markets and said the two technologies would "complement" each other.

Some companies, such as Suffolk-based Greenview Environmental, are already working on dual-AD/IVC facilities and Mr Trousdell expected this trend to continue during 2009.

Competition

Meanwhile, others in the sector agreed that competition between facilities would become greater as the sector grows.

The managing director of AFOR, Jeremy Jacobs, said that he expected to see a "three- to five-fold increase" in the number of facilities, particularly those that use IVC or AD technology.

Composters agreed that landfill diversion targets and landfill tax prices, which will rise to £40 per-tonne in April this year, were the biggest factors "pushing" councils to look towards recycling even more organic waste.

Such a view was endorsed by Harry Waters, sales and marketing director at Chipping Norton-based composting company, Agrivert. He said: "In 2009, failure to meet LATS targets will start to have financial consequences for many local authorities.

"It is therefore inevitable that the UK will see a step change increase in the demand for organic treatment capacity," he added.

The rise in IVC and AD processes is due to the ever-increasing number of food waste collections being introduced by local authorities.

Competition

Mr Jacobs said he expected more facilities would be built to meet demand for food waste treatment. He said: "As more facilities come online there will be pressure on AD and IVC. People will have to sharpen their pencils to ensure their prices remain competitive."

Others in the sector believed agreed it is going to be a "tough" year. Mr Dampney predicted that "competition is going to hot up".

Consensus among operators is that a greater number of facilities will mean lower gate-fees and one industry insider expected to see gate fees to treat food waste "level out" over the next year - currently there are a wide range of gate fees for food waste, depending on location and demand for food waste recycling in a particular area.

Mr Jacobs expressed concern that greater capacity for AD and IVC in the sector could drive gate-fees down to very low levels. He said it was important the sector worked together to keep prices "healthy".

Finance

Financing the new AD and IVC facilities is another concern for the sector. The economic downturn is "making it harder for everyone to get funding", said Mr Jacobs.

And, Agrivert's Mr Waters said the "difficult financial environment will restrict and delay the rapid roll out of new facilities".

He added: "Local authorities looking to issue tenders in 2009 should think carefully about if the contract is bankable. A sensible length of contract and minimum tonnage guarantees are essential for bank finance and will greatly aid swift delivery of facilities."

Further comment on the financing situation came from Stephen Wise, head of organic waste development at Shanks, who said: "People will struggle to get investment and the cost of investment will go up."

While, there was no doubt among composters that the current economic difficulties will slowdown the development of the organic waste recycling network, not everyone saw this as a negative.

One industry expert said it would help prevent over-capacity becoming a major issue for the sector because the "crisis will prevent over saturation".

Outputs

Although inputs into the organic recycling sector are set to increase over the next year; many in the sector expect the markets for outputs to reduce due to the economic downturn.

A major market for compost is the construction sector, which has been hard hit by the recession, and this has affected demand for compost from this area.

Mr Jacobs said: "The loss of the housing market is concerning but a growing demand from the agricultural sector is helping to offset this."

Mr Dampney agreed that the loss of the housing sector was a concern but he felt that it would affect operations in the Midlands and the North of England the most.

But, he warned that the growing agricultural market - which was boosted by high oil-based fertiliser prices last year - could be affected by a recent fall in the price of oil-based fertiliser.

Last year farmers turned to compost as a cheaper alternative to nourish their soil after high oil prices meant that oil-based fertilisers were too expensive for them to use.