The Green Investment Bank has reiterated its call for investment in waste treatment infrastructure in the UK, predicting that the country is heading for a shortfall in treatment capacity of up to 7.7 million tonnes by 2020.
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According to the Bank, an additional 5bn may need to be pumped into projects to treat residual waste, if the gap between the amount of non-recyclable waste and the infrastructure available to process it is to be addressed.
The GIB was set up by the government in 2012 with around 3.8 billion in public funding to invest in environmental projects and to attract private sector investment in areas including energy-from-waste and anaerobic digestion.
Its waste market report, published today (July 16), was produced in partnership with Tolvik Consulting and sets out investment opportunities in the UK waste market.
Investment
It claims that as most of the household waste generated in the UK is already being treated through existing public private partnership (PPP) contracts, investors are sceptical as to whether there is enough waste remaining to finance the development of new facilities.
However, the GIB has added its weight to the argument that as the market evolves particularly around merchant commercial and industrial (C&I) waste a widening gap between the amount of waste and treatment capacity available will develop.
Waste firms and local authority chiefs have argued that the UK is in danger of sleepwalking into a position where it will miss 2020 landfill diversion targets due to a lack of available waste treatment facilities (see letsrecycle.com) but an opposing view is offered by waste consultancy Eunomia, among others, which claims that the UK could have too much capacity by 2018/19 (see letsrecycle.com story).
Future
In its report, the GIB has modelled a low and high case scenario to estimate the total amount of waste that is likely to be available by 2020, and an assumption of recycling rates by the same date.
It claims that following recent declines in waste arisings driven by the recession and improved resource efficiency, future economic and population growth is now expected to lead to modest increases in waste arisings.
As a result of this it predicts that a total of between 66.4 to 73.3 million tonnes of waste will be created in the UK by 2020, compared to just 64.8 million tonnes in 2012.
Treatment
‘Energy from waste infrastructure remains an attractive asset class, offering good financial and environmental returns and a strong project pipeline over the coming years.’
Chris Holmes, Green Investment Bank
Of the waste generated in 2020, the GIB claims that up to 26.5 million is likely to be non recyclable waste. While this is less than the 27.7 million tonnes of residual waste produced in 2012, less of this will be sent to landfill. As a result, GIB predicts that further investment in treatment capacity will be required.
Commenting on the findings of the report, Chris Holmes, managing director of waste and bioenergy at the Green Investment Bank, said: There is clearly a capacity gap in the UK waste market. We stand ready to back the next generation of UK waste projects, many of which we hope to see using some of the exciting newer technologies that have come to the market in recent years. Energy from waste infrastructure remains an attractive asset class, offering good financial and environmental returns and a strong project pipeline over the coming years.
Much of the UKs household waste is already being managed through PPP contracts with local authorities. The project pipeline is therefore increasingly focused on processing commercial and industrial waste, often using advanced conversion technologies. We are confident that this changing landscape can continue to provide attractive investment opportunities.
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