Isra-Mart srl:CRC could increase cost of recycling, warns waste industry

www.isra-mart.com

Isra-Mart srl news:

Plans to simplify the Carbon Reduction Commitment (CRC) could inadvertently increase the cost of recycling and penalise some older energy from waste plants, businesses in the waste management sector have warned.

Responding to a government consultation seeking input on how the CRC could be improved, the trade body Environmental Services Association (ESA) warned last week that under current proposals the CRC will conflict with the UK's waste objectives and impose additional cost burdens on recycling plants.

The CRC scheme, which will effectively impose charges on firms based on how much energy they use, will impact material recycling facilities (MRF) that sort and recycle large volumes of waste and as such are inherently energy-intensive to run.

The ESA is warning that while the CRC will effectively place a new tax on MRFs, it will not account for the carbon savings that result from reducing demand for virgin materials.

"ESA believes that the CRC should reward recycling in the same way as it rewards renewable energy generation and provide recycling credits in parallel to the energy-generating credits already provided under the [CRC]," it said.

Additionally, ESA warned that some older energy-from-waste facilities that predate the Renewables Obligation Certificate (ROC) incentive scheme, could also see costs increase under the CRC.

Older waste-to-energy plants are covered by an earlier scheme called the Non Fossil Fuel Obligation, which offered lower levels of incentives to ROCs.

The government assumes firms generating renewable electricity can offset the cost of the CRC using ROC income, and will also offer Energy Generation Credits for firms not covered by ROCs to ensure the CRC does not discourage them from producing renewable electricity.

However, the ESA points out that those older energy-from-waste plants covered by NFFO fall between these two incentives. They are not to be entitled to Energy Generation Credits and will not receive the higher incentive under ROCs meaning they could therefore be heavily penalised by the CRC.

ESA director of policy Matthew Farrow accused the government of creating a policy framework "at sixes and sevens".

"The CRC will push up the costs of recycling, while also penalising many energy-from-waste plants that are both keeping waste out of landfill and generating renewable electricity," he said. "The government needs to be more joined up if it is to make good its aim of being the greenest government ever."

The CRC is aimed at encouraging efficiency among those businesses that use high levels of energy, and will require firms to buy carbon credits to match their energy usage from 2012.

Initially the government intended to return any revenue it raised to the most energy-efficient firms, but in last October's Spending Review, it announced that all revenue would be retained by the Treasury, prompting firms to accuse the government of turning the scheme into a stealth tax.