Digesting the benefits

Councils considering using anaerobic digestion will need to give some thought as to who will prosper from its outputs. Adam Davidson and Ben Sheppard explain

Anaerobic digestion (AD) is currently the technology of the moment, at least in waste policy terms. National government, in the coalition agreement, has stated its desire to see a "huge increase" in AD. It is notable that this is the only technology explicitly mentioned in the coalition's agreement on waste and energy.

The Welsh Government launched its Towards Zero Waste strategy in June, and AD features as a key technology for achieving Wales' 2050 waste targets. The strategy, and the consultation that is currently ongoing in Wales on the strategy, states that food waste should be sent to AD plants to generate valuable renewable energy and fertiliser. Again, the technology gets a specific mention, as it does in the national coalition agreement.

Finally, the Scottish Government launched Scotland's first Zero Waste Plan in June as well, under which the aspiration is that all waste is seen as a resource. In relation to AD, the plan notes that over 2M tonnes of food waste is produced every year from all sectors in Scotland. If just half of this food waste was captured and treated through AD, the electricity generated could power a city the size of Dundee for six months, provide heat for local homes and businesses, and produce enough fertiliser for 10% of Scotland's arable crop needs.

In addition to the increased focus on AD in terms of policy, there are also financial incentives for the technology. Power generated from AD plants will benefit from a feed-in tariff and biogas produced in the AD process will also benefit from the proposed Renewable Heat Incentive, due to come into place on 1 April 2011 (although the new Government has yet to confirm that this is still the case). In the food waste projects currently being tendered in Wales, financial assistance is available for solutions that involve AD technology.

Policy is now heading in the right direction, seeing the benefits AD brings as it diverts waste that would otherwise go to landfill and turns it into valuable resources - i.e digestate and biogas. With the revised EU Waste Framework Directive having to be transposed into UK law by 12 December 2010, local authorities will have to introduce separate collections of materials by 2015.

Defra is currently consulting on the implementation of the directive and the consultation indicates that Defra supports kerbside sorting for household recycling collection. This will result in separated food and green waste collections having to be disposed of and AD technology is an efficient means of maximising the outputs from the treatment of those waste streams.

Local authorities considering the use of AD technology in the mix of solutions for their waste streams will need to give some thought as to who gets the benefits flowing from the various outputs. How do councils ensure their proposed solutions maximise the benefits of AD and its various outputs - for example, by building the AD facility close to businesses or other premises that can make use of the heat generated by the process?

Where revenue is available from feed-in tariffs and/or the Renewable Heat Incentive, to what extent does the local authority share in this? In addition, revenues (if any) from the digestate and biogas produced may vary from facility to facility. How should the local authority contract be structured such that the AD facility operator is incentivised to maximise this revenue, and should there be some form of gain-sharing arrangement with the authority?

The answer to many of these questions will depend to what extent the local authority is underpinning the investment in the AD facility and therefore how much pressure it can bring to bear on the AD provider. Clearly, anaerobic digestion will be a key feature of local authority waste arrangements in the coming years.

Adam Davidson and Ben Sheppard are directors at Walker Morris

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