OFT encourages competition in organic waste treatment

Recommendations contained in the Office of Fair Trading (OFT) 'Market Study into Organic Waste', published today, are designed to promote competition between water and sewerage companies, therefore "driving efficiency and innovation in the sector".

The study was sparked by a request from water industry regulator Ofwat, who have worked closely with the OFT throughout the study. The process “identified a number of barriers to competition related to aspects of economic, environmental and planning regulation, and to the apparent corporate culture of some water and sewerage companies,” said the OFT.

The recommendations include proposals to change the economic regulation of water and sewerage companies to create a more level playing field between them and other suppliers and methods of organic waste treatment, news that has been welcomed by organisations such as the Anaerobic Digestion and Biogas Association (ADBA).

Commenting on the study’s findings, ADBA chairman Lord Redesdale said: “The study recognises that competition for sewage sludge as a feedstock for digestion is very limited, that water companies are largely not connected to the wider organic waste treatment market and that changes have to be made to make water supply and treatment sustainable.

“The OFT recommendations could help lead to a huge rise in investment in Anaerobic Digestion from the water sector, which will help the industry as a whole, and open up new opportunities for treating sewage sludge.”

Speaking yesterday, OFT senior director of the services, infrastructure and public markets group Sonya Branch said: “Our market study, conducted with Ofwat’s support, identifies that there is greater scope for competition in the treatment of organic waste, however the current economic regulation, environmental protection and planning regimes are barriers to this competition developing.

“We have therefore today made a number of recommendations to Ofwat and other government bodies that have the potential to tackle these barriers to competition, benefit consumers and drive efficiency and innovation in organic waste treatment.”

Further information, including the full scoping document, is available from the OFT market study page.

Will Parsons

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