Carbon reduction plans ‘will push up cost of recycling’

Under plans which are set to come into force in April 2012, the Carbon Reduction Commitment (CRC) will require businesses and organisations over a certain size to purchase allowances from the government to cover their carbon emissions.

The Commitment, which also requires them to measure and annually report their carbon emissions, aims to reduce the carbon emissions from non-energy intensive sectors of UK industry.

But, the Environmental Services Association (ESA) has used its response to a consultation on changes to the administration of the scheme to question whether the way it applies to materials recycling facilities (MRFs) and energy-from-waste (EfW) facilities contradicts the governments waste policy aims.

In particular, the ESA called for the system to be reformed to allow MRFs to use the carbon savings they achieve through recycling to offset the energy use they will be taxed on under the CRC.

The Association said that, while MRFs are inherently energy intensive to run, by recovering materials from waste their processes save far more energy that would be otherwise be used to make new products from virgin materials.

Allowing these savings to be offset against MRFs liabilities in the scheme would avoid penalising recycling at a time when the UK has legal recycling targets to meet, it said in a statement.

EfW facilities

At the same time, the Association warned that the current proposals for the CRC penalise older EfW facilities which to not receive the ROC subsidy because they predate the schemes introduction and instead receive a lower incentive under the older Non Fossil Fuel Obligation.

Claiming that the CRC assumes firms generating renewable energy will be able to use ROC income to offset the cost of CRC allowances, the ESA said these older facilities will have their costs increased unless they are made eligible for an alternative credit scheme.

This scheme, known as Energy Generation Credits, involves credits being issued to organisations covered by the CRC who are generating renewable electricity but are not receiving income from the sale of ROCs.

Sixes and sevens

Commenting on the situation, the ESAs director of policy, Matthew Farrow, said: The Government sensibly wants to reduce both the amount of waste sent to landfill and the level of carbon emissions. We support both these aims, but all too often the policies to achieve each are at sixes and sevens.

The Carbon Reduction Commitment will push up the costs of recycling, while also penalising many energy-from-waste plants which are both keeping waste out of landfill and generating renewable electricity.

Mr Farrow added that the government needed to be more joined up if it was to achieve its aim of being the greenest government ever.

The ESA also noted that the governments announcement as part of its October 2010 Spending Review that the money paid for allowances would be kept by government rather than redistributed to CRC participants meant it was a significant cost to businesses.