Waste leaders call for GIB funding clarity in Budget
Chancellor George Osborne is being urged to release details on how Green Investment Bank (GIB) funding mechanisms will work in supporting the delivery of new waste infrastructure in his Budget announcement next week.
Industry leaders have called for greater clarity on the role of the GIB in unlocking capital, including the introduction of allowances for sustainable waste facilities that don’t qualify for any other form of tax relief.
Pressure is also growing for the Government to confirm higher packaging targets as outlined in its recent consultation linked to packaging note recovery (PRN) reform.
Other measures being called for are the introduction of a range of green fiscal incentives including VAT exemptions on resource-efficient goods and landfill tax revisions to drive better materials recovery.
Both the Environmental Services Association (ESA) and the Associate Parliamentary Sustainable Resource Group (APSRG) want to see clear GIB guidance and incentive – particularly as waste infrastructure has been badly affected by the removal of industrial building allowances.
ESA’s director of policy Matthew Farrow says that new residual waste treatment facilities could inject more than £1.1bn into the UK economy by 2020.
“This could provide over £500m in new tax revenues for the Exchequer,” he said. “The introduction of green infrastructure investment allowances could provide key support in bringing forward this investment.”
Independent waste consultant Paul levett echoed this, saying that UK businesses find it “difficult to obtain debt funding for waste infrastructure from the banks”. He added a further obstacle was the “flaw in PRN regulations” which currently provide greater financial incentives for exports.
Speaking to edie, he said: “The PRN system should be a prime target for the Government’s campaign to streamline and simplify red tape.”
Meanwhile the Resource Association is calling for the creation of a Resources & Circular Economy Commission to research and examine the potential for a range of green fiscal instruments.
These would include levies on virgin resource use and reduced VAT for recycled products. Its chief executive Ray Georgeson said this was an area “in need of some attention” having been overlooked by ministers in favour of energy use.
Waste consultant Peter Jones believes greater transparency is needed on green taxes and support mechanisms. He told edie that the Government should define a taper-based VAT exemption on all goods certified to be 100% recyclate content, down to a 10% rate on 50% recyclate content.
At local government level, Jones would like to see a reward scheme introduced for waste authorities who exceed their disposal targets through landfill diversion. This could be funded by penalising those who fail to do so, he added.
Earlier this week, the Environmental Industries Commission (EIC) called on the Chancellor to introduce resource efficiency targets for businesses during his Budget speech.