Report highlights marked decline in MRF rebates

Local authorities may have received markedly less for dry recyclate sent to MRFs under contracts signed in 2012/13 than the previous year, according to findings in the Waste & Resources Action Programmes annual gate fees report.

The report claims that although councils were receiving around 26 per tonne on average for dry recyclables delivered under contracts signed in 2011/12, those signed in 2012/13 may have been worth around 7 per tonne.

A MRF gate fee is a fee paid either by a local authority to a MRF operator for processing its dry recyclables, or a fee paid to a local authority by a MRF operator for the dry recyclables.

And, according to WRAP, the reason for the decline is likely to have been an overall fall in the value of commodities across the year.

Meanwhile, it also appears to show that there is some geographic variation in gate fees across the UK, with the average fee for Northern Irish MRFs at around 0 per tonne, 8 per tonne in England, 15 per tonne in Wales and 17 per tonne in Scotland.

WRAP claims that the range in gate fees paid by local authorities may be due to a variety of factors including local authority share of recovered materials sales, contract duration, the year in which the contract began, quality and quantity of materials received, operating costs and the market value of the materials when sorted.

‘Volatility’

Commenting on the findings, Steve Creed, WRAPs director of market economics, said: WRAPs gate fees report provides a simple accessible resource for the waste industry and local authorities. It is regarded as a respected source of information that helps organisations to make better informed decisions regarding the cost of waste management options open to them.

Take MRF gate fees for example, while the median gate fee is 9 per tonne we know that around 40% of the local authorities surveyed receive income from MRFs for their dry recyclables rather than paying gate fees.

This market has seen some volatility recently. Based on a small sample of contracts (10) struck in 2012 it seems that there has been a reduction in what some MRFs are paying local authorities for dry recyclates in the last year, due to a range of factors including lower materials prices compared to 2011. But the big picture trend over the last few years indicates a decline in MRF gate fees paid by local authorities partly as competition has increased.

Composting

Elsewhere the report outlines that the median gate fee for open-air windrow composting has fallen by 1 per tonne from its 2011 level to 24 per tonne, while the median in-vessel composting (IVC) gate fee for green waste was found to be the same as that charged by OAW facilities.

According to WRAP, the most significant change in IVC gate fees has been the decrease in charges for food waste, which have decreased from a median of 49 per tonne last year to 39 per tonne this year.

Meanwhile, the average gate fee charged by operators of mechanical biological treatment (MBT) facilities has fallen, down from 79 per tonne in 2011/12 to 76 per tonne in 2012/13. This is thought to be in part due to quality of MBT outputs, with low quality process residues having to be landfilled.

Other key findings include:

• The median gate fee reported by local authorities for the treatment of food waste at AD (anaerobic digestion) facilities has remained unchanged since last year at 41 per tonne.
• The median UK gate fee charged to local authorities for the onward management of wood waste collected from Household Waste & Recycling Centres (HWRC) has risen marginally since last year.
• The median gate fee for landfilling non-hazardous waste has remained unchanged since last year, but the annual increase in landfill tax has meant that overall the cost of landfilling has increased by 8 per tonne.
• With the rise in landfill tax, the median gate fees paid at energy-from-waste (EfW) or mechanical biological treatment (MBT) facilities are now slightly cheaper than landfill.