Sector in mixed response to budget as some welcome landfill tax rise

While the 2p cut in National Insurance dominated the news headlines in the chancellor’s budget yesterday (6 March), there was little room for waste and recycling policies.

Jeremy Hunt, chancellor of the exchequer

The standout policy from the waste sector’s point of view was a 21% rise in landfill tax, (see letsrecycle.com story), which will now rise to £126.15 in 2025/26, with the lower rate increasing to £4.05 per tonne.

While this move has been welcomed by many, a lack of other measures which impact the sector has been highlighted by both Suez and Veolia.

ESA says plastics tax should include ‘all packaging’

ESA’s executive director, Jacob Hayler, welcomed the announcement of a rise in landfill tax, saying that it “will help to ensure waste material does not fall down the hierarchy and will incentivise investment in alternative circular economy infrastructure”.

He explained: “Recent inflation spikes have not been accounted for in determining the rate of landfill tax, which has eroded the competitiveness of alternative waste treatment and recycling facilities. Today’s budget corrects this calculation and is very much welcomed by the Environmental Services Association.”

Jacob Hayler is executive director of the Environmental Services Association

Mr Hayler argued however that more can be done to achieve a more sustainable circular economy: “Correcting Landfill Tax rates – while hugely welcome – was just one half of ESA’s asks of this budget.

“To achieve a more sustainable circular economy and decarbonise waste treatment, the UK needs additional fiscal policy measures that don’t just stop waste falling into landfill, but which actively drive material up the waste hierarchy by stimulating market demand for recycled materials. That is why an escalator on the plastic packaging tax, and perhaps a widening of this tax to all forms of packaging, remains a crucial policy instrument for future budgets.”

Encyclis CEO welcomes landfill tax rise

The chief executive of energy from waste operator Encyclis has welcomed the move to raise landfill tax rates. 

It is hoped the move will accelerate the shift of waste away from landfill and up the waste hierarchy to recovery.

Owen Michaelson, chief executive officer of Encyclis

Owen Michaelson said:  “The significant increase in Landfill Tax will ensure the UK continues to encourage a more sustainable approach to waste management. The realignment of Landfill Tax with RPI, which was the original intention of this policy mechanism, supports the waste hierarchy by encouraging recycling and recovery of resources. This particular tax was introduced to help divert waste from landfill and has historically been hugely impactful . The rebalancing announced by the Chancellor will ensure that this positive effect continues.

“The Spring Budget also contained ongoing support for decarbonisation. We remain committed to decarbonisation projects that will help the UK reach net zero while continuing to recover resources from waste that cannot be recycled, using the UK’s network of energy-from-waste facilities. Additional funding for the Green Industries Growth Accelerator (GIGA) will enable the energy-from-waste industry to play its part in supporting the drive to net zero.”

ADEPT says place-based services are struggling

Anthony Payne, president of ADEPT, said that while Adept “welcomes any new investment”, there is “no escaping” the fact that the place-based services Adept members are responsible for delivering are struggling”.

He added: “A budget focused on cutting tax and a patchwork of investment will do nothing to help local authorities deliver the essential services people rely on every day.

“Councils across the country are making extremely difficult decisions based on painful choices that will impact everyone but fall hardest on the most vulnerable in our communities.

“Place-based services exist to support local economies, waste collection and recycling, the road network, housing and sustainable development, green spaces and many other essential programmes and schemes all linked to delivering better, healthier places for local communities.

“Without adequate resource and mitigation to alleviate inflationary pressures, these cannot be delivered. ADEPT wants to work with government to ensure the continuation of services on which everyone depends, but we cannot continue to deliver for local places without the certainty of long term funding settlements.”

Budget ‘doesn’t reflect urgency’ of Net Zero, says REA

The Association for Renewable Energy and Clean Technology (REA) has said it is “disheartened by the lack of sector wide measures” introduced by Mr Hunt.

Frank Gordon, director of policy, REA, said: “This is a political budget above all that does not reflect the urgency of Net Zero, and while we welcome the CfD budget announced alongside the Spring Statement today, and extension of the windfall tax on oil and gas excess profits, this is disappointing overall.

“In particular, the chancellor had promised the sector a response to the US investment in green supply chains and manufacturing at the last fiscal event and to see very little once again on how we can ensure the UK does not miss out on the vital green jobs and investment up for grabs is very disappointing.”

Suez says budget shows ‘a lack of clear policy direction’

Dr. Adam Read, chief external affairs and sustainability officer at Suez, said: “We are deeply disappointed to see the waste and resources sector overlooked once again in the budget.

Dr. Adam Read, chief external affairs and sustainability officer at Suez

“Today represented a real opportunity for the chancellor to lay the groundwork for the seismic reform needed to make green growth a reality, yet the reality is there was nothing encouraging on offer for the sector from today’s announcements.

“The waste and resources sector underpins green transitions across a number of other industries including manufacturing, agriculture and food and drink. Yet we continue to face challenges due to a lack of clear policy direction from government. Today was no different. This makes it difficult to deliver the green skills vital to our sector and in turn the skills that we need to deliver the transition to a more circular and resource efficient UK economy.

“For years, there has been warm enthusiasm for green job policies from both politicians and industries. Today, we are once again reminded of the urgent need for concrete action, not just platitudes.”

Veolia says budget ‘doesn’t do enough’ for the environment

Gavin Graveson, Northern Europe’s senior executive vice president of Veolia, said the budget is an example of green policies “fall off the top of the agenda”. 

He said:  “Almost 60% of UK adults think the Government isn’t doing enough to tackle environmental issues and today we have seen green policies fall off the top agenda again – even though many of them are popular with the electorate and can stimulate economic growth.

Gavin Graveson, Veolia

“The clean energy transition will be the biggest area for economic growth between now and net zero targets in 2050. Today’s Budget is a missed opportunity to take bigger strides towards decarbonised, local energy to bring down energy bills and carbon emissions.

“The UK needs to back the right horse as we transition to a green economy, where decarbonisation, and circular solutions for materials, will be the foundation.”

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