Does the AD industry understand how important gate fees are to local authorities and is it doing enough to bring prices down?

It does appear that gate fees are reducing and they are dropping towards the critical point of £45 a tonne. Either the industry understands the importance of costs to local government or the market is moving in that direction. It is an emerging industry but in terms of the gate fees it is certainly going in the right direction from a local authority perspective.

What is your role on the ADBA board?

My role is to assist the AD industry to understand what local authorities need. We want plants in sensible places, a sensible gate fee and an appreciation of the material we can provide as feedstock in terms of quality and volume. From the local authority perspective, we need to understand there are growing opportunities to collect organic waste separately.

For how much longer will food waste continue to be treated as recycled?

We have spoken to Defra and it is clear that there will come a stage where the PAS100 and PAS110 quality protocols will be the deciding factor. At the moment as long as organic waste has been through an appropriate process we can classify it as recycled.

In the next two or three years the time will come where you can only classify it as recycled if you use a PAS compliant processor. There will be a cost, but we believe this will not be so high a cost as to be serious.

What prevents a local authority converting to AD?

The problem is local authorities have to make the link between the potential additional cost of collection versus the savings from diversion from landfill. In Bromley we are a unitary authority, so this is straightforward.

By changing residual waste collection to every other week and introducing a weekly food waste collection, one can make savings by diverting the waste from landfill, even though collection costs may increase. You have to bear in mind that landfill tax is now at £72 a tonne.

In two-tier authorities, the district council may have to pay more for collection costs, but the disposal authority benefits from reduced disposal costs. This is not insoluble but it can stretch the timescale out a bit.

Do you think complex procurement processes and long contracts are obstacles for local councils?

Not necessarily. What is happening is that industry is building AD plants. Councils could build their own plants but generally they don’t have the volume to justify it. An AD plant works on around 45,000 to 55,000 tonnes a year which is probably three or four local authorities working together.

The churn is such that at any time there are probably a reasonable number of local authorities procuring and there will be another set procuring in the near future. That gradual turnover is helpful as it allows the market to develop, simply because it can’t all happen overnight.

The market is changing with bigger companies starting to develop national networks of AD plants. How is this impacting on local authorities?

It now looks like a more mature market. Beyond a certain distance transport costs go up along with increased environmental costs and more plants mean the greater chance of a plant being within a sensible distance. For a local authority the important thing is proximity.

Next it’s having a backup facility so if something goes wrong there is another one within 20 or 30 miles. Also, if you allow for the standard local authority procurement methodology, it is important to be able to choose between four or five suppliers and to be able to go for a combination of price and quality. It is patently difficult to be making a choice when there is only one facility to choose from.

Do you feel the Government is providing enough support for the AD industry?

The strange thing is that we are taking rubbish that goes to landfill and turning it into electricity and gas at a time when the media is constantly telling us that energy costs are high. Here is a growing network of relatively small, odour-free facilities, which take rubbish and turn it into power.

The media seems silent on it and the Government appears not to have a firm idea about what economic levers they can apply to help to incentivise these plants. Surely it is a good news story. I feel support from government could be more coherent, and the AD industry could be more buoyant with more certainty on renewables subsidies.

How optimistic are you about the future?

I am very optimistic. There are now over 100 AD plants; there is obviously feedstock enough for them. There is a slight concern in the industry that because plants are developing faster than the feedstock, there may be a quality issues in that the plants need the feedstock and so are being generous about what they will allow in, thinking “Let’s get the tonnage in and deal with quality later”.

But that’s a symptom of a growing industry. As landfill tax rises local authorities have to find better places to send their waste. From the local authority perspective it is very positive.

From the AD industry perspective they want certainty of feedstock. While local authorities can appear to be slow because of their procurement process, local authority contracts will ensure you have certainty of supply.

Stuart Spear is a freelance journalist

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