Renewi’s contracts to send East London’s waste to two energy from waste (EfW) facilities in Europe are “under review”, following the introduction of the Dutch RDF import tax, it emerged this week.
And, a report which went before the East London Waste Authority (ELWA) yesterday (February 10) said that landfill capacity is in place if the authority’s waste cannot be moved abroad or to an alternative offtake within the UK.
The actual need for landfill was only identified as a “potential risk” in the report and it records that Renewi has managed to maintain a 99% diversion from landfill rate for the ELWA in 2018/19.
Renewi has had to seek alternative offtakes after the Dutch Parliament (pictured) passed the RDF tax last year
Successes
The Renewi report assessed its preparations for future waste management arrangements in East London.
It began with a review of 2019/20 so far, where the company said it has “demonstrated positive improvements in its performance on diversion and recycling”.
“The recycling performance has showed improvement on a year-on-year basis at a level of 27% of total household waste in 2018/19 and an anticipated 29% in 2019/20,” Renewi explained.
Challenging
However, the Dutch-owned firm said, according to the ELWA report, that 2019/20 has been a challenging year in regards to the offtake market for RDF, described as the main residual material produced by the two MBT sites in East London.
“This [the RDF tax] has clearly impacted on waste exports of RDF and capacity within countries that have no tax is at a premium. These market forces have led Renewi to consider alternative outlets,” the report said.
This led to the business saying it is “currently exposed on a number of waste streams to the applicable spot-market”, whereby contracts are for minimal lengths. Whilst this can potentially offer short-term financial benefits, it can also represent long-term risk due to price fluctuations.
The Dutch parliament passed the RDF tax last year, which saw a €32.63 per tonne tax become effective from 01 January 2020 (see letsrecycle.com story). While this is thought to have been absorbed by the incinerators so far, its full effect has been tipped to take place later in the year.
Arrangements
As Renewi looks to source other options, it confirmed that it is currently in negotiations with a UK based energy-from-waste facility that is looking to receive RDF material for power generation.
ELWA is the waste disposal authority responsible for the East London boroughs of Newham, Barking and Dagenham, Havering and Redbridge
However, the specification of the material is different to the requirements worked to for the EU energy from waste facilities. Trials are underway to ensure production is viable.
ELWA’s contractor said it has also agreed a head of terms with London Energy – the company owned by the North London Waste Authority to operate both the current and the redeveloped Edmonton plant – regarding any third-party capacity they have outside their current contracted volume.
Renewi will have first option to place material into the facility, it said.
Onerous
Earlier this year, Renewi said that its contract with the ELWA was ‘onerous’ in a trading update, and the report yesterday said that this has been the case “for a number of years”.
Despite this, the Dutch-owned business said it continues “to strive for improved recycling there is not a risk to the continuation of service to the ELWA.”.
There is also no risk of the service being discontinued, the documents added.
Confidence
Going forward, Renewi and ELWA have said they are working together on a “more collaborative basis”, in order to achieve and exceed recycling targets.
The ELWA added that while it recognises that there are some significant challenges to overcome, “we are confident and excited about our new working relationship”.
“We have some exciting and very challenging times ahead”
ELWA is the waste disposal authority responsible for the East London boroughs of Newham, Barking and Dagenham, Havering and Redbridge.
The authority has seven years to run on its 25-year contract it signed with Renewi in 2002 (see letsrecycle.com story).
Kevin Bell, ELWA contract director at Renewi, said: “We have managed to divert 99% of total contract waste (with the exception of asbestos) from landfill successfully for over 12 months, even in the event we had an export ban imposed on us last year for over 3 months.
“We have some exciting and very challenging times ahead as we work hard in a tough trading market to continue diverting waste from landfill. Brexit related issues will arise and be mitigated to prevent seeing any issues in the service Renewi provide to ELWA.”
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Source: letsrecycle.com Waste Managment
