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Business cost of waste recycling continues to fall

Posted on 11 July 2012

The cost to businesses and local authorities of recycling their waste
has gone down in the last year, as the cost of sending it to landfill
has increased.

The median ‘gate fee’ charged by materials recycling facilities (MRF)
has reduced from £15 per tonne to £9 over 2011-12. This figure compares
to the median landfill gate fee for non-hazardous material, which
includes the standard rate of landfill tax, of £85 per tonne.

“MRF gate fees have continued to fall and are substantially lower
than reported in our previous surveys. Many local authorities say that
they are either not paying gate fees, or are receiving payment for their
recovered materials,” said Steve Creed, director of market economics at
WRAP.

The figures come from the fifth annual report
on gate fees charged for different types of waste disposal to
businesses, as collected by WRAP. The survey covers England, Wales,
Scotland and Northern Ireland, and was conducted between November 2011
and February 2012.

As the report also takes a peek into what the future may hold for the
costs of different types of waste disposal, businesses and councils are
able to plan so they can reduce their waste costs and the total amount
of waste thrown into the ground.

Gate fees for similar waste management options vary substantially,
both across and within regions, dependent on a complex range of factors,
which include the nature and duration of contracts, the age of the
facility, the level of revenues generated from the sale of recovered
materials and other outputs (such as energy, compost and digestate), and
management charges for process residues.

After recycling, the next cheapest form of waste disposal in terms of
average costs is for composting organic material in an open-air windrow
system, at £25 per tonne. IVC costs £44 while AD costs £41 per tonne.
This is the first time that anaerobic digestion has become cheaper than
in-vessel composting.

For separately collected food waste, the median AD gate fee is
slightly lower than that for IVC, and when it is mixed with garden waste
or card.

The AD industry is still developing and the above figures are based
on a small sample. Operators of such facilities reported that in future,
competition for the revenue-generating products of their processes,
which include animal feedstocks and energy, will affect future gate
fees.

However, in-vessel composting fees vary considerably depending on the
material to be treated. The cost of treating garden waste has come down
by between £10 and £25 per tonne. Mixed food and garden waste has a
median charge of £44 per tonne, with food waste alone costing on average
£49 per tonne. The highest median gates free is reserved for garden
waste, food waste and card mixed together, which is £55 per tonne.

The median gate fee charged for wood waste varies widely around the
country, depending on the demand and supply rate for the material. The
median gate fee for that collected from Household Waste Recycling
Centres is £26 per tonne. In the south-east, supply has exceeded demand
for so long that gate fees are higher, but up in the north-east of
England and Scotland the reverse is the case, and gate fees are lower.
Indeed, biomass facilities are understood to be paying for wood used as a
fuel, rather than charging a gate fee.

The median gate fee for energy-from-waste (EfW, or incineration with
energy recovery) facilities is £65 per tonne (with a range from £32 to
£101 per tonne). Older, pre-2000, facilities tend to have lower gate
fees (median of £64 per tonne) than those constructed after 2000
(median: £82 per tonne). EfW gate fees are comparable to landfill gate
fees inclusive of the standard rate of landfill tax.

Mechanical biological treatment (MBT) covers a wide range of types of
facilities and treatment processes, so a median figure for MBT is not
strictly comparable; however, last year it was £79 per tonne. This
figure takes account of the costs associated with the disposal of
residues from processing, some of which may have to be landfilled, and
revenues from the sale of recovered materials.

As there is now so much competition from other types of waste
treatment, some landfill site operators continue to reduce their gate
fee to remain competitive. However, others are increasing their fees in
line with inflation, while some have remained unchanged.

"This year’s Gate Fees Report highlights the growing number of
cost-effective alternative waste management opinions to landfill,
underlining the economic and environmental savings we can make if we do
not bury our waste in the ground," said Steve Creed.