Waste markets study: full report

Conclusions

When the ban takes effect in 2021, there will be insufficient treatment capacity available in Scotland to receive the material diverted from landfill. The scale of the capacity gap will be significantly influenced by the rate at which Scotland is able to meet recycling rate targets. It is therefore essential for alternative treatment and disposal routes to be found outside of Scotland, at least as a short-medium term solution. In the longer term, Scotland could reduce its reliance on exports by building additional residual waste treatment capacity.

The results of this work indicate that, under the two selected recycling scenarios, there is likely to be an initial shock to the market resulting in a short term gate fee increase for exports. This is likely to level out in the medium to long term.

The level of preparation for the effects of the ban vary considerably, both amongst local authorities and private waste collectors. However, a significant proportion of both do not yet have suitable alternative arrangements in place.

For those authorities and private contractors that have already secured solutions that will be operational at the point at which the ban comes into effect, financial investment has already been made and therefore there will be no impact upon marginal gate fees. For all other waste collection operators, the extent to which their costs per tonne increase (in cash terms) will largely be influenced by the timescales within which they need to seek a solution, with organisations that ride out the market until others have committed to new treatment facilities perhaps being exposed to lower costs than those whose existing commitments may result in them needing new interim contracts at an unfavourable time.

The ban will have a negative overall economic impact on the Scottish economy, as it will result in more waste being exported, which reduces economic activity in Scotland and would lead to a significant reduction in the revenue from Landfill Tax to the Scottish Government. It will also have some environmental impacts due to the additional haulage required for export solutions.

These impacts can be mitigated by building additional thermal treatment capacity necessary to provide a long-term solution, rather than relying upon export to either Europe or England, as this will retain more revenue in Scotland. However, the capacity of new thermal treatment facilities to be developed should be limited to that required once targets have been met to avoid creating excess capacity that will not be needed in the future.

It should be noted that this study focuses on the impact of the ban on the cost and benefits of the disposal of residual waste. The impact upon waste reduction, reuse and recycling is not considered. The likely substantial economic and environmental benefit that might be expected from the increase in reuse and recycling is therefore not reflected in these results.