The Waste and Emissions Trading Act 2003 ushers in a permit trading mechanism to meet landfill diversion targets required under the EU landfill Directive. In England, each disposal authority is to be issued with a set of allowances for biodegradable municipal waste disposal, one for each year between 2004 and 2020. Similar arrangements will apply in Scotland, Wales and Northern Ireland.
The Act also places penalties under the UK emissions trading scheme for greenhouse gases on a statutory footing.
The operation of the landfill trading regime was the subject of a consultation by the Environment Department in August (ENDS Report 344, pp 49-51 ). A likely start date is July 2004, although Ministers have taken powers to allow the scheme's first year to span less than 12 months - so keeping open the possibility of commencement in October.
In November, DEFRA issued a second consultation, with draft regulations setting out trading scheme rules.1 The devolved administrations will also be consulting shortly. The consultation paper also reopens the question of how to set penalties for breaches of landfill allowances. DEFRA had previously favoured setting them to reflect the most costly established waste-diversion option, which officials believed to be in-vessel composting. Now they are not so sure.
A further set of regulations, concerning co-operation arrangements between districts and counties, is expected in the New Year.
The original Bill left out any provision to require the preparation of a joint strategy for such areas, but at Committee stage in the Commons Ministers pledged to think again (ENDS Report 340, p 40 ).
At Report stage on 28 October, the Government introduced amendments to require waste authorities in two-tier areas to produce a joint municipal waste strategy by April 2005, in accordance with forthcoming guidance from the Secretary of State. A related amendment repeals the existing duty on councils to prepare recycling plans.
The Act leaves unitary authorities with no statutory requirement to prepare a municipal waste or recycling strategy.
In two-tier areas, authorities with a good track record will also be exempt from the requirement to prepare such strategies. The approach fits wider Government policy to avoid unnecessary strictures on local government, and allow freedoms for good performers.
In the debate, Environment Minister Elliot Morley confirmed that he intends to exempt all councils with an "excellent" comprehensive performance assessment. Councils "whose performance on waste is satisfactory with regard to defined targets" will also be exempted. MPs failed to tease out which targets are to be considered - but it is likely that they will include the existing statutory recycling targets.
"We have tailored the new clause to ensure that it targets the authorities and areas that most need to improve their performance on waste," Mr Morley said.
When the Lords considered the Commons amendments on 3 November, Environment Minister Lord Whitty clarified how the regime would work in two-tier areas where some, but not all, councils were deemed to be performing satisfactorily. It would, he said, have to be judged on an area-by-area basis. The Secretary of State would judge whether to disapply the requirements to all or only some of the authorities. The issue will be tackled during next year's consultation on the regulations, he said.
In the Commons, Norman Baker (LibDem, Lewes) questioned whether the Act's provisions will be sufficient to get districts and councils to co-operate. "What mechanisms will deal with circumstances in which forward-looking districts such as Lewes and Wealden, and Rother for all I know, want to formulate a good strategy, while an antediluvian authority such as East Sussex does not?"
In response, Mr Morley pointed to statutory targets on recycling and landfill - and the new duty of co-operation. He also noted that disposal authorities will have powers of direction over collection authorities concerning the separation of waste, "and they will be binding".
Mr Morley said that no appeal mechanism was planned, but in extremes "the collection authority could refuse the direction from the disposal authority. That would mean going to court for the matter to be resolved."
Mr Baker complained that the Bill gave the "whip hand" to disposal authorities. But the Minister said he wanted discussion and consultation to take place between all those involved. Challenged on the situation where a disposal authority had an existing incineration contract, Mr Morley said that collection authorities "will have to work with the waste [disposal] authority on a joint strategy that takes that into account."
Bill Wiggin (Con, Leominster) suggested it was bizarre that, once a council has a waste management strategy that works, it will be "allowed to ignore it". Mr Morley said that excellent authorities would probably have their plans, and would continue to act independently of Whitehall.
However, Mr Morley said: "I do not see the Bill in itself as a driver for more incineration." The legislation would not remove the existing statutory targets for recycling. "This year's target is 17%, and all the indications are that we will meet it," he claimed.
The Minister noted that there would be a review of the recycling targets, which "will be driven up to about 33%." He added: "It should not be thought that 33% is necessarily the highest figure for which we are aiming."
"Nevertheless, we should all be honest about the fact that there may well be a case for incineration in certain circumstances."
MPs persisted with the topic of incineration. Mr Baker said that "once landfill is eliminated there are perverse incentives to incinerate." "Local authorities will be tied into what the European Union now officially calls a disposal technique - not a recovery technique - for 25 or 30 years because they have to enter into long-term contracts."
Jonathan Sayeed (Con, Mid Bedfordshire) said that incineration was already cheaper than recycling thanks to "perverse tax breaks". He believed that some incineration would be necessary, but that tests concerning the higher end of the waste hierarchy should be undertaken first.
The Minister said he did not accept "that the wonderfully easy route to incineration that has been spelled out will exist." "Understandable local concerns will put enormous pressure on local authorities to up their levels of recycling and reuse rather than going down the road of incineration and landfill."
In rounding up, Mr Morley noted that "the best environmental solution may not always be the most popular one." "The Government are not advocating incineration or any particular approach, apart from stressing the importance of minimisation and recycling in the hierarchy."
Mr Morley said her proposed amendment was unnecessary. "Mechanical and biological treatment is a perfectly legitimate operation in respect of meeting the requirements of the [landfill] Directive when it reduces the biodegradable activity in the waste."
Operations that merely reduce the water content of the waste but leave the biodegradable activity unaltered would not be legitimate, he added. But disposal authorities should "get the benefits of any reduction in biodegradable content of the waste in landfills" when legitimate mechanical and biological treatments have been carried out. "Although such treatments may not result in zero biodegradable activity, they can make a considerable reduction."
He said that the proposed mass balance monitoring system for enforcement of the landfill allowance regime - set out in last August's consultation - will be designed to pick up that reduction. A research project will establish the reduction of biodegradable content achieved by each treatment type.
"If a waste disposal authority can then demonstrate that its residual waste was subject to a particular treatment, it will be credited with the biodegradable content reduction assigned to the treatment." Biodigestion would, for example, be "perfectly legitimate in respect of meeting the target."
The Minister's statement leaves the industry with uncertainties at a time when councils are drawing up waste strategies to comply with landfill targets. The Government will need to make it clear whether residues from well run biological treatment processes are considered to have BMW content - and if so how much.
In the Lords debate on 3 November, Lord Whitty clarified that some of the research could take more than a year, but the immediate guidelines on biodegradable content - based on current knowledge - will come out next spring.
"There may be a case for variable charging, and we are considering how it could possibly be applied," Mr Morley said. "My personal concept of variable charging is not to impose additional charges on people who are already paying for waste disposal through their council tax, but there could be discounts for people who change their behaviour."