Assessing the costs of meeting Scotland's zero waste targets: report

1: Introduction

1.1 The Scottish Government's Waste and Pollution Reduction Division commissioned SQW Ltd to carry out this study to assess the costs associated with the introduction of new waste management infrastructure to meet the EC Landfill Directive and Scottish Government Zero Waste Targets. The Scottish Government ( SG) wished to develop a series of costed waste management scenarios to enable them to assess and prioritise investment for delivery through local authorities.

Legislative and Policy context

1.2 Scotland's waste management targets for Municipal Solid Waste ( MSW) fall into two main categories. The statutory waste management targets laid down in EU legislation and the more ambitious national targets set out by the Scottish Government.

European legislation

1.3 Scotland must ensure that it meets its share of the statutory UK Landfill Directive targets (required under EC Landfill Directive 1999/31 ⁷) and the EU's Waste Framework Directive (2008/98/ EC). In effect this means that collectively local authorities in Scotland must meet the following targets:

• by 2010 no more than 1.32 million tonnes of biodegradable municipal waste ( BMW) can go to landfill;
• by 2013 no more than 880,000 tonnes of BMW;
• by 2020 no more than 620,000 tonnes of BMW; and
• 50% reuse/recycling of household waste and similar by 2020.

As a devolved responsibility this means that Scotland must deliver its own strategy, ensuring the avoidance of infraction procedures from the EU for missed targets.

Waste Planning in Scotland

1.4 In compliance with the landfill directive, Scotland produced its National Waste Strategy Scotland (1999) followed by the eleven Area Waste Plans which were then integrated into the National Waste Plan (2003) ⁸.

1.5 The Scottish Government has recently reviewed the 2003 National Waste Plan for Scotland and produced Scotland's Zero Waste Plan and associated Strategic Environmental Assessment for consultation ⁹ (20 ^th August - 13 ^th November 2009), with a view to introducing a new waste strategy for Scotland in 2010.

1.6 In developing this new Zero Waste Plan, the Scottish Government are mindful of the overarching context of sustainable development as set out in "Choosing our Future: Scotland's sustainable development strategy", December 2005 ¹⁰. This means that the waste infrastructure requirements and costs will not only be viewed from the economic standpoint but also the environmental and social.

The Government Economic Strategy

1.7 In November 2007 the current administration signalled a step change in policy with The Government Economic Strategy ¹¹. This refers to the government's overarching aim, to focus the Government and public services on creating a more successful country, with opportunities for all of Scotland to flourish, through increasing sustainable economic growth. To deliver this the Government has identified five strategic objectives: a wealthier and fairer Scotland, a smarter Scotland, a healthier Scotland, a safer and stronger Scotland, and a greener Scotland. These are described in more detail through the fifteen national outcomes which aim to clarify the focus of government, enable priorities to be clearly understood and provide a clear structure for delivery.

1.8 The Zero Waste Strategy falls within the National Outcome which aims to reduce the local and global environmental impact of our consumption and production. The government's role in this will be to 'Vigorously pursue our zero waste policy, setting challenging targets for reduction in municipal waste sent to landfill; allocating £150 million to the Zero Waste Fund and consulting on a range of potential legislative measures'. ¹²

1.9 Progress against this Outcome will be measured against the National Indicator to reduce our BMW sent to landfill to 1.32 million tonnes by 2010. It will be achieved in partnership with local authorities, who have responsibility for deciding which facilities and services to fund that are capable of diverting municipal waste from landfill. The Scottish Government has responsibility for monitoring progress through local authority Single Outcome Agreements.

Single Outcome Agreements

1.10 The Single Outcome Agreements, between the Scottish Government and each council, are based on 15 key national outcomes that contribute to the Government's five strategic objectives. The Agreements set out how each council is working locally to progress the 15 national outcomes. On 30 June 2008 all 32 Local Authorities in Scotland finalised their Single Outcome Agreements ¹³. Within these agreements the local authorities set out the detail of how they will deliver the National Outcomes including those related to the Zero Waste Strategy.

Progress towards zero waste

1.11 The Scottish Government's commitment to a zero waste society is a key component of the Scottish Government's work on addressing climate change. In summary, zero waste means reducing the unnecessary use of raw materials, re-using products where possible and recovering value from products when they reach the end of their lives through recycling, composting or energy recovery.

1.12 The zero waste vision for Scotland is one that follows the approach illustrated in Figure 1-1:

Figure 1-1 Zero Waste Approach

Source: SQW

1.13 In January 2008 the Cabinet Secretary for Environment and Rural Affairs announced tough new targets to stimulate and increase the levels of recycling and composting in Scotland whilst reducing the amount of municipal waste going to landfill. A cap on Energy from Waste ( EfW) was also announced. In summary, the targets announced were:

• stop the growth of municipal waste by 2010;
• recycling/composting rates of at least 40% of municipal waste by 2010, rising to 50% by 2013, 60% by 2020 and 70% by 2025;
• by 2025 no more than 5% municipal waste to landfill (assumes all municipal, not just BMW); and
• 25% cap on the amount of waste used to produce energy.

These targets in conjunction with the landfill directive targets form the basis of the Zero Waste Strategy and the parameters for the assessment of infrastructure requirement costs that are the subject of this study.

1.14 The Sustainable Development Commission ( SDC) Scotland undertook an assessment of progress by the Scottish Government against sustainable development targets including waste in December 2008 ¹⁴. In summary they considered progress on recycling was strong and noted that waste arisings had fallen, however, on the latter it was too early to determine a trend. In terms of overall progress towards sustainable development SDC concluded that there was 'much to be done to deliver a zero waste society'.

1.15 SDC also welcomed Scottish Government's move to link action on waste to its National Outcome on sustainable production and consumption and advocates more action on waste prevention and business waste.

Energy from Waste

1.16 The Government's priorities to achieve zero waste are resource efficiency, waste prevention, re-use and high levels of composting and recycling. However, it is recognised that recovering recyclate and energy can play an important role as long as it does not compete with the other priorities. In developing the Zero Waste Strategy it has been necessary to review and revise the detail on how the 25% will apply to Energy from Waste ( EfW) facilities. Additional information was issued in July 2009 ¹⁵.

1.17 In summary the 25% cap applies to:

• collected municipal waste
• each local authority as well as Scotland as a whole
• incineration, gasification, plasma and pyrolysis plants taking residual municipal waste (where no further material for recycling and composting can reasonably be extracted)
• the inputs going into the EfW process
• infrastructure which had planning permission and/or a permit on 24 January 2008 but was not operational on 24 January 2008 is subject to the cap at both local and national level.

1.18 The cap does not apply to:

• Waste treatment plants other than incineration, gasification, plasma or pyrolysis
• Non- MSW commercial and industrial waste

1.19 In terms of calculating the cap for residual waste infrastructure in the short term this should use the total municipal waste arising per authority in the financial year 2007/8. In the longer term this may be reviewed to account for changes in waste arisings.

1.20 A further key point in Annex J is that bottom ash from EfW can count towards composting and recycling targets (and EfW as input) or in the case of bottom ash to landfill, the landfill cap (and EfW input).

Landfill Allowance Scheme

1.21 Landfill Tax legislation is currently under review with a consultation having taken place in July 2009. The existing Landfill Allowance Scheme was introduced to drive delivery of the targets set to reduce the amount of BMW sent to landfill. Under this Scheme, local authorities exceeding allowances could be subject to penalties, such as fines. Local authorities could trade allowances if they wished and at a price, to avoid penalties. However, Government and the Convention of Scottish Local Authorities ( CoSLA) have reviewed the Scheme and it is suspended in principle until May 2011. ¹⁶

Research context

1.22 In delivering this project SQW drew on existing bodies of knowledge where appropriate to inform our research. A full bibliography is contained at the end of the report. However, a list of the reports and studies that were of particular use in this study is shown below:

Data Modelling

1.23 To develop the research context with regard to modelling waste flow and forecasting the study referred to:

• Eunomia Research and Consulting (2007b) Scoping New Municipal Waste Targets for Wales. Report to the Welsh Local Government Association.
• Caledonian Environment Centre (2009) Scottish Recycling Study.

Infrastructure and Technology

1.24 To develop the research context with regard to infrastructure and technology the study referred to:

• Eunomia Research and Consulting (2008) Meeting Ireland's Waste Targets: The Role of MBT.
• Scottish Environment Protection Agency (June 2009) National Waste Capacity Report for Scotland 2007

Cost Benefit Analysis

1.25 To inform the cost benefit analysis and identify the costs for infrastructure, processing and collection the study referred to:

• Eunomia Research and Consulting (2008) Food Waste Collection: Update to WRAP Biowaste Cost Benefit Study
• Eunomia Research and Consulting (2007a) Managing Biowastes from Households in the UK: Applying Life-cycle Thinking in the Framework of Cost-benefit Analysis.
• Eunomia Research and Consulting (no date) Costs for Municipal Waste Management in the EU. Final Report to Directorate General Environment, European Commission.
• Caledonian Environment Centre (2008) Financial Exposure of Scottish Local Authorities Arising from Reductions in Recyclate Material Prices.
• WRAP Improving the Performance of Waste Diversion Schemes: A Good Practice Guide to Monitoring and Evaluation
• WRAP (March 2009) Materials Pricing Report.
• WRAP (2008a) CO2 impacts of transporting the UK's recovered paper and plastic bottles to China.
• WRAP (2008b) Kerbside Recycling: Indicative Costs and Performance.
• WRAP (2008c) Market Situation Report: Realising the value of organic waste.
• WRAP (2008d) Gate Fees Report: Comparing the Cost of Alternative Waste Treatment Options.
• WRAP (2006a) MRF Costing Model.
• WRAP (2006b) The Costs & Operational Implications of Kerbside Glass Collections.
• Waste and Resources Action Programme (June 2008) Kerbside Recycling: Indicative Costs and Performance Technical Annex

Abbreviations used

1.26 The following abbreviations and acronyms have been used in the report.

• AD - Anaerobic Digestion
• BMW - Biodegradable Municipal Waste
• CBA - Cost Benefit Analysis
• EfW - Energy from Waste
• EU - European Union
• IV - In Vessel
• LA - Local Authority
• MBT - Mechanical Biological Treatment
• MHT - Mechanical Heat Treatment
• MSW - Municipal Solid Waste
• NPC - Net Present Cost
• NPV - Net Present Value
• R+C - Recycling and Composting
• ROC - Renewable Obligation Certificate
• RWT - Residual Waste Treatment
• SDC - Sustainable Development Commission
• SEPA - Scottish Environment Protection Agency
• SG - Scottish Government
• TWA - Total Waste Arising
• UK - United Kingdom
• WRAP - Waste and Resources Action Programme