Could An Incineration Tax Spark Future Investment?

Neil Grundon, deputy chairman of Grundon Waste Management, says plans announced in the Budget for a possible tax on the incineration of waste are to be welcomed – but action is needed sooner rather than later.

Listening to last the recent Budget I was heartened by several of the measures planned for the waste industry.

The proposed new tax on plastic packaging which contains less than 30% recycled plastic should provide a much-needed wake-up call for the manufacturing industry both at home and overseas.

Consultation will be key and I’d like to see producers sitting around the table with ourselves and other experts in the waste sector to hammer out solutions – driven by the forces of supply and demand – that work for all of us and for the environment.

A very welcome fillip was the Government’s recognition of the important role incineration plays in waste management in the UK.

One answer may be to introduce a levy on the maximum tonnage each plant could handle, making sure waste stays local – in other words, the larger the incinerator the higher the tax would be set.

True, it has only said it will consider the introduction of a tax on the incineration of waste, but it is at least a step in the right direction.

The idea of an incinerator tax is one I have mooted for some time, not least because it can be the first step towards dealing with the scandal of the four million tonnes of Refuse Derived Waste (RDF) that this country sends abroad every year.

My fear is that at present, there is nothing to encourage local authorities (LAs) to move away from sending waste to landfill or exporting it overseas. If an incinerator tax was introduced and that money given to local authorities to invest locally on environmental and education projects, then surely it would be an incentive to make this work.

That’s without considering the benefits of the ‘green’ energy produced from Energy from Waste (EfW) and Energy Recovery Facilities (ERF) which is exported into the National Grid.

Local Investment

Imagine if tax was set at £2 a tonne for each of the 4,000,000 tonnes of RDF exported annually. That would give LAs a massive £8 million a year to invest in local infrastructure.

And although I recognise the Government is saying it wants to maximise the amount of waste sent to recycling before considering other options such as an incinerator tax, no magic wand will suddenly convert this RDF into recyclable material.

Perhaps one consideration is a short-term tariff on exported waste with the monies going to LAs to help them set up public/private partnerships to build those new incinerators to both tackle the waste problem and generate an income.

What we mustn’t do is let this proposed tax fall foul of the law of unintended consequences.

This is what happened with the landfill tax (also incidentally introduced by the Conservatives). As the tax rose, it simply became cheaper to ship the waste overseas rather than develop the UK infrastructure to deal with it at home.

My biggest concern is that some may see this potential tax as a way to gain maximum financial incentives, building ‘mega-incinerators’ capable of handling huge capacity simply to reap the rewards.

Waste Tourism

In my view, EfWs and ERFs need to be built according to the size of local populations and the money raised through these proposed taxes must be spent for the benefit of local people.

One answer may be to introduce a levy on the maximum tonnage each plant could handle, making sure waste stays local – in other words, the larger the incinerator the higher the tax would be set.

We cannot afford to get this wrong, because we could end up effectively creating a new waste tourism industry with tonnes of non-recyclable material being trucked for miles across the country to the biggest incinerator available.

With the Resources and Waste Strategy due out very soon, I very much hope that Government will give an incineration tax more consideration.

If it is serious about its proposal, then decisions need to be made now – incinerators aren’t built in a day and the RDF issue won’t go away on its own.

Why not seize the opportunity and give the waste industry the metaphorical two sticks it needs to rub together to turn glowing embers into an effective and fit-for-purpose incineration infrastructure.

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