Costs compared for waste treatment options

15 August 2008

A study outlining the relative cost of different waste treatment options and how they are expected to change in the future has been published by the Waste and Resources Action Programme (WRAP).

The Gate Fees Report 2008 is based on a survey carried out in late 2007 and uses information from councils and waste management companies to try to create more transparency.

The study aimed to increase price transparency and improve efficiency in the waste marketAt present, there is little publicly-available information about varying waste treatment costs, which makes it hard for some councils to compare the different options and puts the sector at risk of making inefficient economic or environmental choices.

The survey, which was carried out across a broad regional distribution in England, Scotland and Wales, will be repeated on an annual basis to ensure that the market continues to have timely and accurate data.

Writing in the report, WRAP said: "The aim of this study is to increase price transparency, and, through improving the flow of information, to enhance the efficiency with which the waste management market operates."

Variation

In the report, WRAP points out that gate fees for similar waste treatment options can "vary substantially" across regions and can depend on if they are paid under contract or on the spot.

In line with expectations, it found that gate fees at MRFs and landfill were "substantially lower" than those for incineration and that gate fees for open windrow composting were lower than for in-vessel composting and mechanical biological treatment (MBT).

The report added: "There is, as yet, little data available for some emerging technologies, including anaerobic digestion."

Treatment

Grade/material/type of facilityMedianRange
MRF

Cans/plastic/paper/card

The above plus glass

£21

£28 

-£4 - £70

n.a.

Composting

Open-air windrow

In Vessel

£22.50

£40

£17-£33

£20-£69

Anaerobic digestion n.a.£30-£60
Landfill

Gate fee only

Gate fee plus landfill tax

£21

£45

£11-£40

£35-£64

Incineration

All facilities

Post-2000 facilities

£71

£80

£31-£136

£65-£136

MBT £53n.a.
Wood reprocessors

Grade A

Grade B

Grade D

£8

£23

£37

£0-£16

£16.50-£30

£27-£47

Source: WRAP Gate Fees Report, 2008

MRFs

For materials recycling facilities, WRAP found that gate fees varied "considerably" and appeared to be lower in the South East than elsewhere.

The report added: "Demand for MRF capacity is likely to grow as the trend towards commingled continues. Indeed capacity is increasing at a rapid pace and market anecdotes suggests that gate fees in some areas have fallen since this survey was undertaken."

Landfill

For landfill, pre-tax gate fees were found to have been relatively static for a number of years, but had sharply increased with rises in tax.

Gate fees were higher in Wales and the South of England than in other areas, in line with how much capacity is left.

Pre-tax gate fees were expected by respondents to remain broadly stable.

Incineration

For incineration, WRAP found that information on gate fees was "blurred" because of the integrated nature of many contracts under which they were operated.

In general terms, however, it found that older facilities had a lower gate fee than newer ones, possibly reflecting the nature of contracts and inflation.

It added: "There is some evidence of economies of scale in costs - i.e. larger scale facilities exhibit lower unit treatment cots per tonne but the evidence that this implies lower gate fees is weaker."

Wood Reprocessors

For recycled wood, respondents felt that board mills still represented one of the best prospects for a long-term supply contract at an agreed price.

All reprocessors surveyed were sending some of their material for energy recovery, which seemed to have no obvious link to gate fee. However, it was felt that, over time, demand from biomass would put downward pressure on gate fees as competition for material grows.

Future

Looking forwards, survey respondents felt that rising landfill costs would continue to exert upwards pressure on gate fees, particularly where there was limited treatment capacity. However, they also noted that increased competition might restrain gate fees.

The report said: "At some stage, for some facilities, competition for material may become a more important determinant of price than increasing landfill cost, at least for the material that is not "locked in" to longer-term contracts.

"As competition increases, there may be greater potential for local authorities to ‘shop around' to find the best deal."

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