Stop, Sort, Burn, Bury - incineration in the waste hierarchy: independent review

3 Capacity To Manage Residual Waste In Scotland

Given Scotland's ambitions and current progress towards these, what capacity is required to manage residual waste in Scotland?

3.1 Introduction

The capacity analysis conducted by Ricardo^[10] builds upon previous work^[11] using information gathered through the Review. The purpose of this analysis is to establish future capacity requirements to treat residual waste in Scotland to 2050.

The analysis assumes that the facilities identified will only manage waste quantities generated within Scotland. This high-level analysis does not quantify any waste tonnages being managed that are from England or other areas and other waste types not included within the assessment such as small quantities of hazardous waste that may be managed using this capacity.

3.2 Waste Management In Scotland

3.2.1 Waste generated in Scotland

Scotland produced around 11.5 million tonnes (Mt) of waste in 2018 from households (2.4 Mt), C&I sources (3.2 Mt) and C&D activities (5.8 Mt)^[12].

Waste generated in Scotland has reduced by 4.2% since 2011. While there has been a general reduction in HH (7% between 2011 and 2018) and C&I waste (22% between 2011 and 2018), the amount of C&D waste generated fluctuates year on year.^{Error! Bookmark not defined.}

3.2.2 Waste management in Scotland

Producers and managers of waste have a duty to treat waste according to the waste hierarchy^[13]. This means avoiding waste generation is the first priority, followed by reusing products and materials. Where this is not possible, waste should be recycled. The majority of waste generated in Scotland is recycled. In 2018, 60.7% of waste from all sources was recycled. For HH waste specifically, 42.0% of waste was recycled in 2020^[14].

Residual waste is waste that cannot be recycled. This is often called 'black bag' waste since it includes the mixed materials generally collected in black bags or bins. Black bag waste often contains recyclable material; evidence suggests that around 60% of material in black bags is recyclable.^[15] However, material in black bag waste is often not recycled since mixing materials reduces their quality, and separation and cleaning is often not economically viable under the current market conditions.

The waste hierarchy gives preference to recovering value from residual waste, for example through incineration with energy recovery, with disposal (for example in landfill) being the least preferable option.

The total quantity of waste incinerated in Scotland in 2020 was 1.26 Mt, an increase of 0.38 Mt (3.1%) from 2019, consistent with the longer term trend of an increase of 0.86 Mt (208%) from 2011^[16].

Due both to a reduction in residual waste generated and in line with the increase in waste incinerated, the amount of waste disposed of to landfill has generally decreased steadily since 2007. In 2020, Scotland sent 2.6 Mt to landfill, a reduction of over 4.4 Mt (63%) since 2005^[17]. Figure 1 shows the arisings and fate data for 2014-18.

3.2.3 Current residual waste infrastructure

With waste policy^[18] generally diverting waste away from landfill (especially through application of the Scottish landfill tax and the forthcoming Ban) resulting in a general decrease in waste landfilled, the number of landfill sites in Scotland has decreased. In 2005 Scotland landfilled over 7 Mt of waste at 129 active landfill sites compared to 2.6 Mt at 41 sites in 2020^[19].

Scotland currently has 7 operational municipal waste incinerators (Table 1). There are two main technologies employed in Scotland: mass burn and gasification (a type of advanced thermal technology, ATT). Scotland also has several pre-treatment facilities. These are listed as MBT facilities in Table 1, although, some may operate only as mechanical sorting facilities while some will undertake biological treatment, such as composting or anaerobic digestion.

Table 1. Operational residual waste facilities in Scotland in 2022

Facility Name	Technology Type	Annual permitted Capacity/t	Operational Date
DERL (MVV Baldovie)	Mass burn	150,500	1994
Lerwick	Mass burn	26,000	2000
Levenseat	Pre-treatment and gasification	250,000	2018
Glasgow Recycling and Renewable Energy Centre	Pre-treatment and gasification	200,000	2019
Millerhill	Mass burn	189,500	2019
Dunbar ERF	Mass burn	325,000	2019
Dundee ERF	Mass burn	110,000	2021
Total Incineration Capacity		1,251,000
Moleigh	Composting / MBT	24,999	1998
Dalinlongart Compost	Composting / MBT	20,515	2001
Lingerton Compost	Composting / MBT	36,500	2001
Eco Deco Dumfries	MBT	70,000	2006
Total MBT capacity		152,014

3.3 Outline Of Methodology

A brief overview of the modelling is given here and more detail is available in the Incineration Review: Capacity Analysis report by Ricardo^[20]. Data and evidence gathered through the Call was used to update an existing Residual Waste Model.

3.3.1 Waste arisings

To forecast residual waste arisings, the modelling took the latest available data, which is for 2018^[21] (the 'baseline' year) and filtered this for specific waste streams. These were generally HH waste and C&I waste. In selecting these waste streams it was assumed that this would cover all of the waste that will be captured under the Ban in 2025, as well as the vast majority of waste captured under the Extended Ban^[22], should this be introduced.

The modelling also considered C&D waste as some sorting residues from C&D waste could well be biodegradable and therefore may be captured by a ban on landfilling of biodegradable non-municipal waste. However, while some stakeholders felt it sensible to include all possible waste which may be captured by a ban within the capacity analysis, some stakeholder feedback noted that much of these sorting residues is unlikely to be suitable for incineration^[23]. The model was therefore run both without and with C&D waste.

Best fit growth assumptions were then applied to each type of waste to assess how quantities may change in the future. Three scenarios were then modelled to assess the impact of a range of potential future performance scenarios:

• Business As Usual (BAU): This scenario projects historical trends forward into the future^[24], to examine what the future could look like if there are no significant changes to current trends.
• Meeting Targets (MT): This scenario amends historical trends in order to meet Scotland's waste reduction and recycling targets for 2025.
• Best Efforts (BE): This scenario examines what Scotland's future could look like if it improved its recycling rates in line with what has been achieved by some of the best performing European nations^[25].

3.3.2 Infrastructure capacity and pipeline

Once waste arisings data had been established, the infrastructure capacity of existing and planned ('pipeline') facilities was established. Although this is given in tonnes of waste, and this is the basis for planning permission and permitting, in reality the throughput limit for an incineration plant is set by its thermal capacity, and therefore the calorific value (CV) of the waste is crucial. Generally, the presence of more plastic will increase the CV and therefore reduce the tonnage that can be treated.

Residual waste infrastructure capacities for facilities were reported by a number of stakeholders. The permitted capacity for sites is unlikely to be the operational capacity and stakeholder estimates of operational capacity varied. For sites that are operational, a realistic capacity was established by considering recent waste data returns for these sites and sense checking this with stakeholder evidence. However, this approach also has limitations since some recently opened sites are unlikely to have been operating at their full capacity. For sites that are not yet operational, 85% of the consented or planned capacity was used as a proxy for the operational capacity^[26],[27]. Table 1 shows the permitted capacities of operational sites which were adjusted for modelling purposes. Table 2 sets out the pipeline facilities and their modelled capacities.

Table 2 - Pipeline facilities and their status, modelled capacity and assumed operational dates

Facility Name	Technology Type	Modelled Capacity (t/y)*	Status	Assumed Operational Date
Earls Gate	Mass burn	201,000	In Construction	2023
Aberdeen Recycling & Energy Recovery (NESS)	Mass burn	127,500	In Construction	2022
Westfield	Mass burn	212,500	In Construction	2025
Glenfarg (Binn Group)	Mass burn	71,400	Planning Granted	2025
Oldhall (Doveryard)	Mass burn	153,000	Fully Consented**	2026
South Clyde (Fortum)	Mass burn	299,200	Fully Consented	2026
Drumgray (FCC)	Mass burn	255,000	Fully Consented	2026
Avondale MRF/MBT	MRF[28] / MBT	60,000	Fully Consented	2026
Inverurie (Agile Energy)	Mass burn	170,000	Planning Granted	2027
Avondale EfW	Mass burn	127,500	Planning Granted	2027
Killoch EfW***	EfW	141,100	Proposed	2027
Levenseat 2	Mass burn	267,800	Planning Granted	2027

*This is an 85% weighting of the consented capacity. Where facilities do not yet have a permit, the expected capacity is used.

**Note, facility does not have a permit, but has achieved financial close and is therefore categorized as "fully consented" for modelling purposes

***This facility has planning granted for gasification and has put in a further application for mass burn. It has been included in the modelling on the basis of the new planning application.

These values are a source of uncertainty in the modelling. The Review sought additional feedback from relevant stakeholders on the estimates for capacity and the timelines for pipeline facilities to come online. Where the feedback commented on these numbers, it largely agreed with the suggested estimates; however, some estimated capacities were increased as a result of the feedback^[29].

A sensitivity analysis (using the highest and lowest capacity estimates from stakeholders for operational facilities and 80% and 90% availability for pipeline facilities) suggests that the uncertainty in the capacity estimates could mean that the total annual capacity for operational facilities could be between 140,300 t lower and 42,100 t higher. With pipeline facilities, with the 80% and 90% availability this would result in between 119,150 t lower and 119,200 t higher. This uncertainty is likely to be small in comparison to the uncertainty around which facilities may or may not be built in the future. It does not change the overall conclusions or recommendations of this Review.

3.4 Capacity Analysis Results

3.4.1 Overview

Figure 2 shows the results of the capacity analysis taking account of the full pipeline capacity, i.e. facilities at all stages of the development process. It includes all capacity in the pipeline, although it is unlikely that all facilities in the pipeline will be built, especially those that have not yet secured full financial backing ('financial close'), which in turn often depends on securing local authority 'anchor' contracts.

The assumed future waste quantities are shown for each of the modelled scenarios and projected forwards to 2050.

The infrastructure capacity is shown as stacked line columns. At the bottom of each column is the modelled operational capacity^[30]. Over the projected period, some of these capacities decrease as infrastructure is anticipated to close. Pipeline infrastructure is then categorised by the current development stages ('in construction', 'fully consented', 'planning granted', 'proposed'.) and each facility's estimated operational commencement date based upon the information available and the assumptions provided.

3.4.2 Capacity requirements

Figure 2 (which excludes C&D waste) suggests that there is likely to be insufficient residual waste treatment capacity in Scotland in 2025 by 590-680 kt where policy targets are not achieved. Where Scotland meets its policy targets, there would not be an expected capacity gap from 2024. If all the facilities that are categorised in the model as fully consented are built as anticipated, then there is likely to be overcapacity from 2027 in all scenarios modelled. An overcapacity could also exist in 2025, if Scotland meets its policy targets and all pipeline facilities scheduled to come online by then do become operational as planned.

Following an initial build phase, the infrastructure capacity is expected to reduce with the anticipated closure of some operational facilities in 2028, 2031, 2039.

In all three scenarios, facilities currently with a status of "planning granted" or "proposed" would not be required if the other pipeline facilities that are fully consented or under construction become operational.

3.4.3 Other capacity considerations

The Review considered the inclusion of C&D waste within the capacity analysis carefully, since the extended landfill ban could include sorting residues from C&D waste. Whilst the model was run with and without these streams, the final recommendations are based on the run without them. This is because most of them are unlikely be suitable for incineration, either because of their composition or because of their size (sorting residues are often in the form of fine particles that cannot practically be treated by a conventional moving grate incineration facility). Nevertheless, some sorting residues may be suitable for incineration. The analysis suggests that if all C&D sorting residues were captured by the ban and suitable for incineration then approximately an additional 50 kt of additional capacity in 2025 may be required.

Stakeholders also highlighted other opportunities in Scotland for processing waste, particularly incineration of waste (for example, SRF) at cement works, which would also support the decarbonisation of the cement industry. Dunbar Cement Plant (Tarmac) is a potential opportunity. Currently the plant treats around 12 kt of rubber waste each year and opportunities to burn other wastes could support Scotland's residual waste treatment infrastructure. The Scottish Leather Group also drew attention to its own facility, which processes tannery waste from their production processes, highlighting opportunities to treat specific waste streams with smaller facilities.

The existing and planned capacity shown in Figure 2 may also be filled by waste arising outside of Scotland. For example, CIWM suggested that around half of the capacity of the Oldhall (Doveryard) facility may be contracted to waste from Northern Ireland.

Finally, stakeholders also observed the need to allow additional capacity for unexpected circumstances such as unplanned maintenance or facility breakdown. There could be scope for some existing facilities (such as the Dunbar Cement Plant) to be re-tasked for a short period to help manage this through burning refuse derived fuel (RDF) or solid recovered fuel (SRF). In addition, in all scenarios modelled, there is likely to be more capacity available than needed for Scotland's residual municipal waste from 2027 onwards, which will reduce the risk from such unexpected circumstances. The Scottish Government and SEPA will need to consider how best to work with local authorities and industry to manage such eventualities.

3.4.4 Comparisons with other capacity estimates

Stakeholders provided some capacity estimates and recommendations. These capacity estimates were generally up to 2025, reflecting the timeline for the Ban. As with the infrastructure capacity, comparing capacity estimates is difficult due to the assumptions and scenarios used in each analysis. However, there was some broad agreement with the range of scenarios presented in Figure 1. For example, RMAS^[31] predicted a potential capacity gap in 2025 of 250-680 kt, while UKWIN^[32] and SESA^[33] identified a potential for either overcapacity (530-455 kt) or undercapacity (550-635 kt).

SEPA took a different approach to modelling the capacity requirements. SEPA used a 'bottom-up' approach, using data on the amount of waste landfilled in Scotland in 2020^[34]. This contrasts the capacity analysis above which starts with waste arisings data. The SEPA analysis suggests that around 1.05 Mt of waste that would be captured by the Ban was landfilled in 2020, resulting in a capacity gap of around 500 kt in 2025^[35].

In general, most stakeholders did not fundamentally disagree with the modelling approach. Industry stakeholders, while disagreeing with some assumptions, agreed with the outcomes of the original capacity analysis set out in the Call. NGO stakeholders generally considered that there would not or should not continue to be enough residual waste arisings to produce a capacity gap.

3.4.5 Limitations and areas for further development

In the time and with the data available, the Review has done the best it can to model residual waste supply and treatment capacity in Scotland. However, limitations remain. These include:

• Detailed consideration of the potential changes in the composition of the waste and its impact on capacity and appropriate treatment solutions.

An initial assessment has been made by Ricardo, however, there is a lack of data on the potential impacts of future policies, such as deposit return scheme (DRS) and changes to packaging recycling rule to produce a meaningful analysis. SEPA notes that Dunbar has applied to extend its permitted capacity, which has become possible due to a lowering of the calorific value (CV) of its residual waste. In contrast, FCC noted the opposite effect is possible, if the CV of residual waste increases.

• Uncertainty about whether some waste streams are suitable for incineration facilities. For example, some waste classified as sorting residues (EWC 19 12 12) may be unsuitable for incineration with the dominant moving grate technology.
• Inability of the model to shed light on the balance between larger centralised facilities and smaller decentralised facilities, such as the economics and carbon emissions of transporting waste.

3.5 Risk Of Lock-In And Stranded Assets

Lock-in is where the development of residual waste treatment infrastructure with a long operational life, such as incineration, limits the treatment of waste further up the hierarchy. This can come about nationally if more capacity is built than, over time, is needed as an economy moves towards a more circular model.

This emergence of excess capacity over time has been the experience of some northern European countries^[36]. This has been handled in many cases by importing RDF from elsewhere to make up volumes. However, doing this in Scotland would not be consistent with the overall resource and waste management policy.

It can also happen on a more local basis because, in order to finance the infrastructure, long term residual waste supply contracts with local authorities may have guaranteed minimum amounts with either financial penalties for not meeting them or bonuses for meeting them. If set at too high a level, this can constrain local recycling or waste prevention activities as the penalties (or missed bonuses) that might result are viewed as too expensive.

The Review received some stakeholder contributions that suggested there is a potential for lock-in effects, including examples where rising rates of incineration were accompanied by declining rates of recycling^[37],[38]. Others suggested that the market dynamics would mean that financiers would not invest where there was likely to be insufficient waste. However, where there are high guaranteed minimum tonnages, it is the local authority that carries the risk, not the financier, so this argument does not always stand.

One evidence contribution^[39] provided the results of some unpublished analysis of English data showing the relationship between rates of incineration and rates of recycling over the past ten years (a period of significant growth in incineration capacity in England). For most combustible materials, this shows an inverse relationship (that is, recycling is dropping and incineration is growing) which might be an indication of the impact of lock-in.

The Review was unable to analyse whether or not existing local authority contracts in Scotland contained guaranteed minimum tonnages (or other conditions) that might be problematic in terms of lock-in as it was informed that such contracts were commercially confidential and would not be shared.

Stakeholders generally associated lock-in effects with incineration. For example, one stakeholder suggested that MBT or biostabilisation would avoid lock-in associated with residual waste treatment facilities such as incinerators which cost hundreds of millions of pounds to build. However, the evidence received by the Review suggests that MBT facilities require a consistent feedstock to operate effectively and their costs can range from £50m to £125m, suggesting the potential for similar lock-in effects, or stranded assets if the composition of feedstocks does change.

Stakeholder feedback also raised concerns about the increased risks of lock-in or stranded assets with a reliance on expensive carbon capture and storage solutions to reduce the carbon impacts of incineration.

3.6 Conclusions On Capacity

Despite the uncertainties outlined above, the capacity analysis suggests that there is likely to be a residual waste treatment capacity gap in 2025, when the Ban comes into force. This will clearly be exacerbated if the ban is extended to include non-municipal biodegradable waste. While this capacity gap could be closed by Scotland achieving its waste and recycling targets, a few stakeholders raised concerns about the likelihood of achieving these targets, drawing on experience and comparisons with other nations as evidence of what could be possible.

The capacity analysis also shows there is a risk of long-term overcapacity beginning from 2026 or 2027, if all or most of the incineration capacity in the pipeline is built, notwithstanding the predicted closure of some facilities in the future.

The analysis demonstrates the difficulty in using infrastructure with long operational lifespans alone to treat residual waste. Scotland appears to have more than enough capacity (in operation and in the development pipeline) to manage its residual waste beyond 2025. Given the risks of overcapacity, Scottish Government should limit the amount of national capacity that is developed. Care will be required to ensure any limits are appropriate and waste can be managed during planned or unexpected events (e.g. from routine maintenance to pandemics) which temporarily reduce capacity or increase waste arisings. For example, additional 'buffer' capacity beyond the availability assumed in this model may be necessary.

The Review has considered whether it would be possible to comment on which of the pipeline facilities should be built and which should not, but has decided that in the time and, with the evidence available to it, is unable to do so with sufficient robustness. However, it would point to the discussion in Section 6 for some principles that might be applied.

Recommendation 4 Effectiveimmediately, the Scottish Government should ensure that no further planning permission (i.e. beyond that already in place) is granted to incineration infrastructure within the scope of this Review unless balanced by an equal or greater closure of capacity. The only exceptions to this should be those outlined in Recommendation 10. This change could be embedded in the final version of the fourth National Planning Framework.

The Review recognises that it is not straightforward to terminate or revoke planning permission once it has been granted. However, as a consequence of the Review and the acceptance of Recommendation 4:

• Developers of the schemes categorised as "planning granted" in the capacity analysis report should consider whether there will in fact be sufficient residual waste available to operate as currently foreseen.
• Local authorities should consider using the powers under section 61 of the Town and Country Planning (Scotland) Act 1997 or other powers to terminate existing planning permissions for incineration facilities that have not been pursued.

Finally, the Scottish Government should consider how best it can discourage undesirable imports of RDF to Scotland that might drive otherwise unnecessary infrastructure capacity development.

Recommendation 5 As part of an overall strategic approach to planning and deploying waste management capacity (see Recommendation 11), the Scottish Government should develop an indicative cap that declines over time for the amount of residual waste treatment needed as Scotland transitions towards a fully circular economy.

To do this, Scottish Government should:

• Consider what other options are available to manage waste (see Recommendation 7) and the regional demand and resilience of residual waste infrastructure (see Recommendation 10).
• Remain cognisant that there may be a justification for local or regional capacity, even where no national capacity requirements are needed.
• Define the scope of the Extended Ban carefully to consider the best management option for specific waste streams (e.g. C&D sorting residues)
• Develop its own modelling capabilities to rapidly update this modelling with new data.
• Work with SEPA, local authorities and the waste industry to improve waste data (for example, C&I waste arisings) and reduce uncertainty in future capacity analyses (see also Recommendation 2).
• Work more closely with developers of pipeline infrastructure to understand the timelines for development, capacity and other needs.
• Consider what buffer capacity may be required in the future and how to provide it.

This work should be carried out with stakeholders.

Some of the biggest problems in recommending a level for the cap are the uncertainties in the data and the lack of a clear understanding of the likely trajectory of residual waste arisings. This in turn depends fundamentally on the policy choices of the Scottish Government within the context of the whole resource and waste management system. It is to be hoped that the forthcoming Route Map to deliver Scotland's resource and waste management targets will provide greater clarity on this.

In the meantime, given the data and modelling issues noted earlier, it is hard to recommend a definitive figure. Clearly, though, it should be on a declining trajectory over time and be below the projected residual waste arisings in the BAU scenario.

Recommendation 6 When negotiating contracts for residual waste management treatment, local authorities should specifically address the risks of lock-in and ensure those contracts are aligned with meeting Scotland's current and future targets on resource and waste management.