According to reports, the average contracted and gate fee prices for food waste have shown a steady decline over the past two years. The main reason for this is the over capacity caused as more AD facilities come online.

Anaerobic digestion is used for industrial or domestic purposes to manage waste and/or to produce fuels. The number of AD facilities in the UK rose from 68 in 2011 to 140 in 2014, with Defra reports in February forecasting that AD capacity will increase fourfold by 2017, with around 200 plants likely to be online.

The growth in the number of plants comes alongside severe pressures on local authority budgets which could result in fewer new food waste programmes will be rolled out.

Food waste is the largest feedstock for AD, of the 9.9 million tonnes of total capacity in the AD sector; an estimated 2.3 million tonnes of capacity is for the treatment of food waste from domestic and commercial sources. Therefore it is of great importance for measures in England such as mandatory local household food waste collections and a landfill ban on biodegradable waste to be introduced.

Organics Recycling Group (ORG) Technical Director, Jeremy Jacobs said:

“Upwards of six million tonnes of food is still going to landfill, so we need mandatory drivers to make sure food waste is collected by local authorities in the UK.”

There seems to have been a more pronounced drop on gate fees lately as several operators have reportedly offering gate fees at or below £20, in some cases AD operators were even offering to take in food waste for free in order to feed capacity.

ORG Technical director Jeremy Jacobs said:

“It is very important that from an investment perspective that if AD operators are horizon-scanning that they know where the Feed-in-Tariff and other incentives are – and where the feedstock’s are. It is very much about proximity because hauling food waste is very expensive.”

Harry Waters, commercial director at Agrivert, said that he was aware of some companies dropping their spot gate fees for food waste very low.

However, he said that while Agrivert and other companies with longer term contracts and more efficient AD energy plants were protected from the scrap over food waste feedstock, the industry could see some businesses leave the sector over the next year or two.

“It is certainly the case that, because a lot of capacity is coming online very quickly a lot of people are scrapping around for waste. Personally I don’t think that is sustainable because plants need to make a profit. To offer very low gate fees you have got to be very efficient at producing energy, and not all plants are, which will make them unprofitable.”

Tony Baker of GPT Waste added:

“Rapid expansion of the AD market, like the planned increased numbers of EfW incinerators is only sustainable if there is adequate feedstock in the first place, we would suggest the reported volumes of waste are in fact over inflated due to the multiple handling of waste streams by those collectors reporting tonnage handled”

A waste solution should feel organic and adaptable to the surrounding practices. Forcing a solution could have hidden costs and further issues, in this case, increasing collection frequencies to gather sufficient feedstock thus increasing Co2 emissions.

GPT Waste is the largest independent provider of waste management solutions across the UK, providing sustainable waste services for its clients.

Backed by an approved register of service providers located nationally, we deliver fully compliant waste management for all waste streams.

To find out how we can help your business manage waste more effectively for less phone 0844 854 5000 or email us.

References:

• WRAP
• Let’s Recycle
• Business Green
• Comparing the costs of alternative waste treatment options