EWB Insight report: October 2022

This month: Another twist in Essex’s troubled waste-tendering process, EfW progresses towards EU ETS, UK twice rules out energy recovery moratorium and the waste company waiving levies totalling £4.75m (€5.45m)

Local authority Essex County Council temporarily halted its procurement process for a contract to treat and dispose of up to 350,000 tonnes of residual waste a year in the region, citing “technical issues”. 

The decision taken in October is the latest twist in the county’s ongoing waste-treatment saga, since it moved from a failed refuse-derived fuel production plant and export model. 

Essex's ongoing procurement process signals its intention to find an alternative solution to landfill diversion after the collapse of its deal with Urbaser Balfour Beatty (UBB) to build the RDF producing Tovi Eco Park in Basildon, which is now being knocked down.

The council had hoped to convert more than 400,000t/yr of waste to RDF at the plant which would be exported for recovery. But the facility never worked as expected.

However, the council's new tender system has faced controversy over it including carbon measurement and scoring element in the process – a  stipulation that could effectively hold suppliers responsible for the carbon impacts of their proposed solutions with potential penalties imposed if they go over their stated carbon emission figures.

According to a source involved in the bidding process, this means that each year the winning company would have to produce a report declaring how much carbon was produced. For each tonne over the stated amount originally submitted in the bidding process, the company could face the prospect of being penalised by £248 per tonne.

There are also further concerns within the sector that this may place an unfair burden on contractors. One source told EWB that the council’s recycling performance, particularly on plastics, would have a strong bearing on how much carbon was contained within the residual waste being supplied to treatment and disposal facilities.

Policy update  

EU member state representatives and Parliament’s negotiators held the first formal trilogue meeting on revising the EU Emissions Trading System (EU ETS), which is likely to include EfW during October.  The meeting covered the revision within the Fit for 55 package, which intends to bring the EU’s 2030 climate goals in line with the Paris Agreement and followed informal talks over the summer. The rapporteur in charge of the file German MEP Peter Liese highlighted two of the Parliament’s priorities. First, securing more funding for the Innovation Fund and second including the EfW sector in the ETS. 

The UK government announced a “landmark Energy Prices Bill” aimed at stopping currently high gas prices from increasing the cost of energy from renewable sources. The new bill introduces a “cost-plus-revenue limit”, which is effectively a revenue cap on currently high profits from low-carbon technologies. It will also hit big biomass-fired plants such as the wood pellet-fired Drax, which has 2,595MWe of biomass-fired capacity, but it is unclear how smaller EfW and biomass-fired plants may be impacted. 

EWB can reveal potentially £100m (€114m) in taxes is being lost annually due to waste criminals exploiting a perceived lack of enforcement around so-called trommel fines. Sources in the waste sector have told EWB unscruplious operators now consider it the “norm” to shred parts of waste they are planning to landfill in order to classify it as trommel fines and pay a reduced rate as a result. In the UK, landfill is subject to a tax of £98.60 a tonne for normal waste, but waste classified at a lower rate like trommel fines only gets charged at a rate of £3.15. Trommel can look similar to soil depending on the waste used to create it, and is often used for stabilising landfill, which is why it is charged at the lower rate. 

In an exchange during his first prime minister’s questions on 25 October, Rishi Sunak declined to back an EfW moratorium for England. Earlier in the month DEFRA had already ruled out the move. 

Natural Resources Wales (NRW) revealed plans to mostly increase charges for its work covering permitting compliance and monitoring. NRW said it was launching what would be “the largest review” of regulatory fees and charges since the organisation was created in 2013. The review of charges will “ensure they are more closely linked to the actual cost of delivering these activities and to ensure charge-payers, not the public, bear the expense”.

Waste association Dansk Affaldsforening urged the Danish government to rethink current policy blocking most waste imports and closing down older EfW facilities. Policies limiting waste imports to just Copenhagen’s Amager Bakke EfW facility and the planned closure of 30% of the country’s total capacity “make no sense” as Europe grapples with rising heating bills, said the trade body.

Market update

The North London Waste Authority (NLWA) is to waive levies totalling £4.75m (€5.45m) after its income rose “considerably” due to increased power prices from its Edmonton-based EfW plant. The NLWA said the seven London councils that own it would not have to pay the November charge for waste disposal, effectively delivering them a ‘windfall dividend’ due to its increased profits. 

In a similar move, Belgium-based Indaver’s Irish operations profited from rising prices of electricity. According to the company’s most recently issued financial results, revenues from the sale of electricity more than doubled to €19.3m. Indaver's operations in Ireland focus on its Meath-based EfW plant, which has been operational since 2011. 

Investor DIF Capital Partners has made another move into the EfW market after taking a stake in France-based Qair. The Netherlands-based investor said it would use its DIF Infrastructure VII fund to “invest in the company to accelerate its growth and portfolio build out. “Qair, which has operated in the wind, solar and waste sectors, only in September completed a deal to take control of UK-based Britaniacrest Recycling, again for an undisclosed fee. At that point, Qair said it intended to “diversify” Britaniacrest’s traditional recycling business and “complete the development” of the company’s EfW plant. 

State-owned waste-management company WasteServ says it has shortlisted five five “top consortia” to build its new EfW plant. According to the statement, the process will “now swiftly move to the next competitive stage”, the invitation to participate in dialogue (ITPD). In the summer, WasteServ said it had received 11 bids to build its new EfW plant and was in the process of shortlisting its top five. 

Spain-based Ferrovial revealed it has completed a drawn-out deal to sell UK-based business Amey without its waste-processing assets included. The deal sees funds controlled by investors One Equity Partners and Buckthorn Partners takeover Amey for £400m (€455m). The deal is subject to regulatory clearances, but Ferrovial says it expects it to be completed this year. 

Belfast-based start-up MOF Technologies landed an investment of £4.4m (€5m) to further develop its carbon capture technology. The company confirmed the news today, saying the funding had come from the Clean Growth Fund and Barclays through their Sustainable Impact Capital programme. According to the statement, an unnamed “existing investor” has also further invested in the company. 

The waste sector continues to be a major contributor to Ireland’s Environmental Protection Agency’s (EPA) National Priority Sites list, which highlights poor compliance and environmental performance. The EPA has carried out more than 1,049 inspections of licensed sites so far in 2022 and dealt with over 1,161 complaints. Sites are placed on the list if they fail to adhere to their licence conditions and pose a risk to the environment.

Neste is to supply the Air France-KLM Group with more than one million tonnes of sustainable aviation fuel (SAF) over a period of eight years, starting in 2023.The agreement, which represents one of the largest of its kind in the aviation industry, marks an expansion of both parties’ existing cooperation. The two companies have been working together for several years with KLM being one of the first airlines to use the fuel, known as ‘MY SAF’ for short.

Facilities update: EfW  

Local authority North East Lincolnshire Council revealed its first ever month with zero waste going to landfill. The council said in an average month it would only landfill about 5% of its waste with the majority, that could not be recycled, going to the Grimsby-based integrated waste management facility (IWMF). The plant started operating in 2003 and can take up 56,000t/yr. 

EfW plant developer Alternative Use Boston Projects should hear by “no later than 10 January” next year if it will be allowed to build a vast 1.2Mt/yr facility. The government confirmed the new deadline for the Boston Alternative Energy Facility (BAEF) yesterday, in a statement by business, energy and industrial strategy minister Jacob Rees-Mogg. However, he has since been replaced in the role, which could lead to a further delay. 

Local authority Lancashire County Council further pushed back a decision on plans for a medical waste-processing pyrolysis plant after complaints that opposition to the project was not being heard. The project, which EWB understands is being developed by Culzean W2E Ltd trading as Community Power, was put back until 19 October at a planning meeting in early October. However, the agenda for next week's meeting was published yesterday and the EfW plant was not listed as expected. A spokesperson for Lancashire County Council confirmed to EWB the meeting would not now take place next week and would be moved to 7 December. With the delay blamed on allowing people “enough time to prepare their presentation”.

Local authorities Derby City and Derby County councils are still yet to make a formal decision on whether to scrap or to start again with their failed EfW project. The authorities confirmed in information given to a Community Liaison Group that: “Following termination of the Long-Term Waste Management contract in August 2019, a Continuity Services Contract (CSC) was put into place with Renewi. As no determination has been reached on the long-term strategic options for the [EfW plant], the councils must put in place arrangements to allow the continued preservation of the [facility] beyond October 2022.”

MyGroup announced that the Environment Agency (EA) has approved its application for a permit to recycle clinical waste. The permit will enable the Yorkshire-based company to process a range of clinical waste items such as used syringes, surgical dressings and personal protective equipment (PPE).

Viridor’s Beddington-based EfW exceeded its environmental permit limit again following on from a series of breaches earlier this year, it has been revealed. Monthly figures published by the company for September showing line one “experienced a half hourly exceedance” of volatile organic compounds (VOCs) on 15 September. The figures were released only after EWB asked why they had not been published.

Enfinium has called into question the need for a rival developer’s project. The company asked to register as an interested party in the upcoming development consent order (DCO) hearing of the North Lincolnshire Green Energy Park EfW development. The facility is being developed by North Lincolnshire Green Energy Park Limited. Previously, the plans have referred to an overall capacity of 760,000 tonnes a year for the facility, but the current DCO application states 650,000t/yr. 

HVC says it will launch a tender for a carbon capture project on line four of its Alkmaar-based energy-from-waste and biomass-fired facilities next year. Currently, HVC runs a 0.5 tonne per hour pilot plant for carbon capture and liquefaction, which has been operating at the EfW plant for three years. However, while the notice does confirm that the company is ready to scale this up to capture about 45,000t/yr of CO2 from flue gases, it further states this could be from the EfW’s fourth line “and/or” HVC’s biomass-fired plant. 

Utility company Öresundskraft revealed testing is under way of new carbon dioxide separation technology at its EfW plant. Öresundskraft said the tests would “show the way for future separation” of up to 190,000t/yr of carbon dioxide. However, the statement explains that regardless of the success of the technology “the economy is a stumbling block” and the company “needs support” to develop it further. 

Cory’s planned carbon capture and storage (CCS) and hydrogen projects have been designated as nationally significant infrastructure projects (NSIPs). The UK government confirmed the qualification as Cory looks to accelerate carbon capture at its EfW facility in Belvedere, London.

Danish EfW producer ARGO entered into an agreement with Norway-based Geminor for the supply of RDF for energy recovery until 2027. Under the deal, which starts on 1 January 2023, Geminor will deliver 100,000t of RDF for use as fuel at ARGO’s district heating plant which is located in the city of Roskilde in Denmark.

Local authority Calderdale Council said sorry after an “error” meant it did not publish details of an appeal against its decision to reject an environmental permit for a small waste incineration plant (SWIP). The council confirmed Calder Valley Skip Hire has appealed to the Planning Inspectorate after its project at the Belmont Industrial Estate in Sowerby Bridge was refused. The facility, which is planned to process 10,000t/yr of RDF was consented by the council last year but the council later refused it a permit to operate. 

Local authority Scottish Border Council revealed it diverted the most waste from landfill of any council in the country. The council explained last year that only 0.3%, or the equivalent of 172 tonnes, of its waste was sent to landfill. The council, which has a deal with EfW business Levenseat, has previously said it sends about 42,000t/yr of non-recyclable waste to energy recovery. 

Developers behind the Lostock Sustainable Energy Plant (LSEP) EfW plant said they would “welcome the opportunity” to transport waste by rail to the site. Construction is currently under way on the LSEP at the Lostock Works site near Northwich in Cheshire, under existing planning consent. Last year LSEP submitted a section 36 variation application to the Department for Business, Energy and Industrial Strategy (BEIS) to increase the amount of waste treated at the EfW facility by 128,000t/yr. This would take the total waste capacity of the plant to 728,000t/yr while remaining within the overall consented power generating capacity of 90 megawatts. LSEP is owned by Denmark-based investor Copenhagen Infrastructure Partners (CIP) and FCC Environment.

Biomass update 

Majority biomass-fired power station Drax said its lawyers had written to the BBC and it is “considering further action” after a TV show claimed it was “cutting down environmentally important forests”. The BBC’s Panorama programme focused on the ongoing argument of whether it was environmental to burn biomass on a large scale for power. It also accused Drax of buying “logging licences to cut down two areas of environmentally-important forest in British Columbia”.

Shares in the world’s largest supplier of wood pellets were down 13.13% after the release of a “short-seller report” accusing it of inflating profits and greenwashing. US-based Enviva was the subject of the report by Blue Orca Capital, which states Enviva’s EBITDA “is inflated” and suggests the company “will cut its dividend”. Enviva denies the accusations. 

State-owned utility company Bord na Móna confirmed plans are being developed to allow its Edenderry power plant to process up to one million tonnes a year of biomass. Speaking last week at the Irish BioEnergy Association’s (IrBEA) annual conference, the company’s head of renewable energy Dr John Reilly said the plant would “increase its intake of biomass” to one million tonnes. 

The latest financial results for Aviva’s three struggling biomass-gasification plants revealed interest rates on its loans to the developments have been slashed to 0%. Aviva owns the three plants in Hull, Barry and Boston, which are officially named Biomass UK No.1 LLP, Biomass UK No.2 Ltd and Biomass UK No.3 Ltd respectively. The financial results were published separately for each facility last week, showing that the loans have been “derecognised and new loans recognised”. But the results also state the new loans are on “identical” terms, apart from the interest being cut to 0%. 

Emergency services fought a fire in the biomass-converted Studstrup station during October. As a result of the fire, the facility is no longer processing biomass, but is still supplying heat through coal processing. 

Serbia’s energy ministry welcomed the completion of a newly built biomass heating plant in the city of Novi Pazar. The facility marks the culmination of a €6.5m (£5.7m) project financed by German development bank KfW with the support of Switzerland.

Biogas update 

Biogas-producing giant Nature Energy is closer to getting a new owner, according to reports. The company was bought in early 2018 by a group of investors including UK-based Pioneer Point Partners and US-based Davidson Kempner along with Danish pension fund Sampension. No financial terms were revealed at the time.  EWB contacted the owners, but was told “no comment” on the sale. 

Also in October, Nature Energy opened its latest facility, the Køng-based anaerobic digestion plant. Overall, the plant is able to process up to 300,000t/yr of “biological waste from agriculture, industry and households” and produce up to 20 million m3 of biogas. 

Denmark-based investor Copenhagen Infrastructure Partners (CIP) secured a site for a “large industrial scale biogas plant” in Wallonia. CIP confirmed that together with Belgium-based developer Cryo Advise and Danish biogas technology provider Lundsby Biogas, the latter of which will be a “minority shareholder” in the development. A final investment decision is expected by the end of 2023.

The municipality of Copenhagen revealed a deal to send its food waste out of the city to produce biogas. The tender for the treatment of the food waste was won by Solrød Bioenergi. A three-year agreement has been entered into, which came into force at the start of October. 

Anaerobic digestion plant developer and operator EnviTec has agreed its first deal in the biomethane trading sector. It has struck a deal with Loick Bioenergie, which moves it away from solely developing plants for itself or customers.  According to the statement, the “total contract value is more than €100m” and it covers the supply of a total of 90GWh of biomethane a year from three biogas plants operated by Loick in Heiligengrabe, Hennstedt and Hünxe. Most of the biomethane supplied will be used “from 2024 onwards” at a bio-liquified natural gas (bioLNG) liquefaction plant operated by Balance and EnviTec in Berlin-Ahrensfelde, which was revealed last autumn. 

Finland-based engineering firm Wärtsilä revealed a deal to build a biogas upgrading and liquefaction facility in Latvia. Wärtsilä said the plant would be built in Tervete, Latvia, but it is not clear how much feedstock the plant will take, but it is planned to produce about nine tonnes of bioLNG a day.

Contracts for the development of two new biogas plants were both released In Norway in October. Bergan-based BIR and Skibotn-based Rå Biopark are both developing biogas plants. 

Flogas Britain says it has been granted planning permission to construct a gas pipeline from Bristol Port into a liquefied petroleum gas (LPG) storage terminal at Avonmouth. The storage terminal, which Flogas claims is the UK’s largest above-ground LPG facility of its type, was formerly owned by National Grid and previously was only able to store LNG (liquefied natural gas). The LPG gas supplier says the project will also have the capability to import bioLPG, providing access to emerging renewable fuels not currently manufactured or available in the UK.

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