17 October 2014 by Tom Goulding

Veolia’s Herts EfW in PFI withdrawal blow

Veolia’s plan to build an energy-from-waste facility in Hertfordshire was dealt a further blow today (October 17), as Defra opted to pull £115 million in PFI credits from the project.

The decision comes after communities secretary Eric Pickles decided not to uphold planning consent for the Hatfield plant in August, which if completed would treat up to 380,000 tonnes of residual waste per year on behalf of Hertfordshire county council under an £800 million contract.

The £800 million Hatfield EfW was rejected by DCLG in August

The £800 million Hatfield EfW was rejected by DCLG in August

Now, Defra has also pulled its support for the proposals, after amending its forecast for waste treatment overcapacity from between 54-56% to 65-67% by 2020.

Commenting on the shock announcement, Veolia said that it will still continue to pursue its statutory challenge against the DCLG decision.

A spokesperson for the firm said: “We are very disappointed that Defra have chosen to withdraw PFI credits from the Hertfordshire waste infrastructure contract.

“This shortsighted  decision will increase the UK’s reliance on landfill to treat our residual waste and will not help to grow the circular economy. Veolia believe that Defra’s decision points to a lack of Government support for new waste infrastructure, green investment and jobs, and fails to address the 17 million tonnes of waste that currently goes to landfill.”

“The decision has not affected Veolia’s belief that an in-county treatment solution for Hertfordshire is needed, and Veolia will continue with our legal challenge to the Secretary of State’s refusal to give planning permission for the Recycling and Energy Recovery Facility at New Barnfield, due to be heard in December.”

Capacity

Defra, which last revised its 2020 forecasting for waste arisings and treatment capacity in October 2013, has claimed that the amount of biodegradable municipal waste (BMW) sent to landfill in 2012 was already at the level required to meet the Landfill Diversion target.

The target, set out under the Landfill Directive, sets out a reduction of the amount of BMW landfilled to 35% of what was produced in 1995.

The government department argues that the level of BMW present in residual waste is also lower than previously estimated – meaning a smaller proportion of waste treated at energy-from-waste sites counts towards meeting the landfill diversion target.

Defra goes on to claim that were the Hatfield project to go ahead, operational capacity in the UK would rise from 65% to 67% above the required target.

However, the amount of BMW sent to landfill would only decrease by an estimated 100,000 tonnes – from 3.5 million to 3.4 million tonnes by 2020.

Defra’s responsibility is to ensure public money is used appropriately and as we expect to meet EU landfill diversion targets with the existing infrastructure we now have in place in England, we cannot justify continuing to fund this project

Defra spokesperson

ESA

Jacob Hayler, economist at the Environmental Services Association, criticised the move as ‘short-sighted’.

He said: “ESA is of the firm view that Defra would be wrong to withdraw yet more PFI credits from outstanding waste infrastructure projects. Such a decision would only serve to increase the UK’s reliance on a combination of landfill and overseas plants to treat our residual waste.

“Defra has changed its assumptions on waste composition to make the targets easier to meet, but this short sighted view of meeting the targets but going no further fails to address the 17 million tonnes of standard rate material which we continue to send to landfill.

“Defra’s analysis also fails to account properly for the risk that the millions of tonnes of residual waste exported as Refuse Derived Fuel will fail to find a home in the future, when the European economy recovers and spare overseas capacity dries up.”

Mr Hayler added: “The undermining of yet more local authority projects would only reinforce the industry’s view that the Government is unwilling to help support new waste infrastructure, which has been identified by the European Commission and many others as a key source of green investment and jobs.”

‘Justified’

Defending the decision to withdraw PFI funding from the project, a Defra spokesperson said: “Defra’s responsibility is to ensure public money is used appropriately and as we expect to meet EU landfill diversion targets with the existing infrastructure we now have in place in England, we cannot justify continuing to fund this project.”


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