Despite some significant advancements in the thinking behind waste management and its relationship with sustainability, as well as a revolutionary tender by Hampshire County Council, Portsmouth and Southampton in 1994, most waste in the UK continued to find its way into landfill. Following the change in emissions regulations in 1996, most of the incinerators closed, leaving only a handful still operating, including Eastcroft (Nottingham) and Sheffield, both of which had district heating schemes attached.

That’s not to say that thermal treatment of waste did not advance. It did, but only very slowly. 1993 had seen SELCHP commissioned, followed three years later by Tyseley in Birmingham and then Billingham in 1998. In 1989 Staffordshire had started a procurement process that ultimately ended with a rebuild of the  EfW at Hanford (Stoke on Trent). Dudley and Wolverhampton followed, and a new plant opened in North-East Lincolnshire. Most of these, however,  replaced old 1970’s incinerators and some were even on the same sites. They simply replaced the existing disposal infrastructure with no significant change to the underpinning waste management system. Recycling was still an afterthought if considered at all. In the late 1990s Surrey County Council (SCC) issued a tender for waste management services. Kent also started a process. These two closely copied Hampshire in their approach and included EfW, but both took some years to be realised. Cardiff City and Berkshire - then a shire county - also issued tenders but these dissolved into nothing following local government reorganisation.

The first incentive to adopt EfW arose from the Non-Fossil Fuel Obligation (NFFO), which was a policy introduced under the Electricity Act of 1989 and funded by the Fossil Fuel Levy applied to all electricity consumption. Its primary aim was to support electricity generation from non-fossil fuel sources, particularly nuclear and renewables, but waste has a non-fossil fraction, so could also benefit from the scheme.

Electricity suppliers were required to purchase a certain amount of non-fossil electricity through a series of competitive bidding rounds where renewable energy generators submitted offer prices for the non-fossil power. Between 1990 and 1998 there were five rounds of NFFO contracts with contracts-for-difference (CfD) providing financial support through the electricity price. A number of the existing and new EfWs developed during the period benefited from the support, including those in Hampshire, Tyseley and Nottingham. The scheme finished in 1998 but set the foundation for a later scheme.

On 1st October 1996, the UK Government in its Finance Act 1966 introduced the first environmental tax in the UK, Landfill Tax.  The objective was to reduce landfilling of waste by making it more expensive and encourage waste producers to seek alternative disposal methods – recycling and energy recovery incineration. The fact was it had no choice. The EU Landfill Directive (1999/31/EC), although not implemented in the UK until 2002 was the writing on the wall. This directive demanded reduced reliance on landfills by encouraging alternative waste treatment methods, including EfW. The directive mandated reductions in biodegradable municipal waste (BMW) sent to landfill, implying that local authorities had to explore EfW solutions.

Initially, there were two landfill tax rates: Standard Rate of £7 per tonne for biodegradable and hazardous waste and Lower Rate of £2 per tonne for inert wastes. Despite being much heralded, the industry adjusted gate fees accordingly, the tax was paid - and life carried on. It was necessary to do something else if the shift from landfill to recycling and energy recovery was going to happen.  

To provide a policy basis for the shift that was needed, the Government issued Waste Strategy 2000, which emphasised waste minimisation, recycling, and recovery using EfW. The Renewables Obligation (RO), introduced in 2002, also claimed to support EfW by offering incentives for energy generated from biodegradable waste. It would, however, prove to be a “faux amie”.

Something else was needed. The Government had no control over private sector waste and the landfill tax was just passed through to the customer. It could, however, influence the local authorities. In 2004 the Landfill Allowance Trading Scheme (LATS) was introduced in England and the following year in the devolved administrations. This was an innovative initiative introduced by Government to address head-on the reluctance of local authorities to move away from landfilling BMW.

Under LATS, waste disposal authorities in England were allocated landfill allowances giving them the right to landfill a specific amount of BMW.  The authorities could trade these allowances with other authorities, bank them for future use, or borrow from future allocations. Authorities using thermal treatment and avoiding landfill had surplus allowances, whilst those whose waste disposal was entirely to landfill had a shortfall and had to trade with the authorities holding surplus LATS. The scheme in combination with what eventually became an increasing landfill tax proved very successful in encouraging recycling schemes and turning many disposal authorities towards EfW. After just one year (2005/06), the amount of BMW sent to landfill in England was 18.5% lower than the allocated allowances.

LATS caused administrative and political issues within the local authorities, however, and was discontinued in 2013, and replaced by a Landfill Allowance Scheme in Wales, Scotland, and Northern Ireland. It had been a great success nevertheless and proved to policy makers that market-based trading mechanisms were effective. LATS also helped raise awareness about the environmental impact of landfilling and created the shift required toward recycling and sustainable waste management practices. LATS was a stick. Now carrots were required.

By the turn of the century, the integrated waste management approach based on the waste management hierarchy had become accepted. The issue for local authorities was how to fund the new infrastructure that was required to enable recycling and build EfWs to replace landfill. Private Finance Initiative (PFI) and Public Private Partnerships (PPP) proved to be the answer.

PFI is a means of procurement wherein private sector entities finance, build, operate, and maintain public infrastructure projects in exchange for payments over a contract period - typically 25-30 years. Combined with a change to the expenditure rules that capped local authority spending, PFI allowed the authorities to partner with private companies to develop the facilities required. Local authorities were able to access private sector funding whilst reducing the immediate financial burden on their budgets. PPP was a similar but wider concept, with often greater involvement of the local authority in the waste management decision making process. The local authorities started to issue tenders for recycling and waste disposal facilities and the number of EfWs under development increased year-on-year. It was never an easy ride, however, and both public and political opinion against incineration caused disruption in some cases – Norfolk probably being the most notable.

PPPs and PFI were not the only reasons for this expansion in waste thermal treatment projects. The Government needed to continue the expansion of renewable energy as it was inevitable that the coal and oil burning power stations had to close. Following the demise of NFFO, a new scheme was launched called the Renewables Order (RO) in 2002 to incentivise renewable energy generation. Like NFFO, the RO also required electricity suppliers to source a set percentage of electricity from renewable sources. The renewable energy target for each year was determined by an RO quota, which gradually increased over time in line with EU targets. Renewable energy producers could receive Renewable Energy Certificates (ROCs) for every MWh of renewable electricity generated, the number of ROCs depending on the technology deployed. A ROC was a tradeable instrument that could be sold to generators who did not produce their quota of renewable energy for the year. It meant that some generators using the more difficult-to-develop technologies could receive up to 3 times the wholesale price for electricity.

The scheme was not open to all EfWs, however. Combustion EfW plants could not receive ROCs unless they operated in CHP mode. Only pyrolysis and gasification plants - referred to as Advanced Conversion Technologies (ACT) - qualified. The result was an explosion of ACT plants being proposed, with arguably insufficient engineering development to ensure they could work successfully with a difficult fuel such as mixed waste. The net result was that by 2014 there were over 100 pyrolysis and gasification plants being proposed – although most of them failed to be realised.

With the expansion of EfW well underway, in 2010, the Government began to rethink its approach to PFI and PPPs, and in the 2010 Spending Review, the Department for DEFRA withdrew funding support from seven waste management PFI projects - claiming that the projects concerned had made insufficient progress in contract procurement and obtaining planning permissions. This heralded the end of PFI so far as waste management was concerned.

In 2017, the RO was phased out to be replaced by a Contract for Difference (CfD)  scheme similar to that under NFFO, but with more conditions attached. Whilst this claimed to continue support for EfW with CHP and ACT, the fact was that it was aimed at establishing the offshore wind industry and has not to this day been an effective means of support for EfW.

In December 2013, DEFRA issued a table showing over 100 waste-related projects in operation or being developed. Whilst PFI and PPP were not confined to waste projects, it had certainly facilitated a growth spurt in the development of EfW. Not all PFI and PPP contracts included EfW, but the majority did. The list indicated that under PFI, PPP and private sector arrangements some 95 EfW projects were under development or in operation.

The age of incentive was over, what would happen next? Was there too many EfWs? Would the UK run out of waste to burn? What about commercial and industrial waste? What about climate change? Read Part 3 to find out.

If you haven't read Part 1 yet, find it here.