3.2 The Department uses information on the progress of projects to forecast performance against the landfill targets. We examined the assumptions and operation of the model the Department uses to predict landfill levels.
3.3 Assuming a prudent annual waste growth at the current level of around 1.5 per cent, the 2010 target for landfill reduction in England will probably be met, principally due to increased levels of recycling. The 2013 and 2020 targets are, however, challenging. They are capable of being met if the Department's plans for improving timescales for procuring projects and bringing them into operation are achieved.
3.4 The Department expects new infrastructure to be in operation by 2013 capable of treating seven million tonnes of waste. Contracts already let or in procurement account for the majority of the new infrastructure expected to be in operation by 2013 (FIGURE 20).
3.5 Figure 21 Overleaf sets out the Department's base projection for waste to be sent to landfill in 2013 and 2020 with two alternative scenarios. Taking account of the additional treatment capacity that it expects to come into operation the Department's base projection shows as follows:
■ 2013: The Department's baseline scenario for 2013 shows a modest shortfall of 52,000 tonnes against the EU target. However, with a two year delay to developing projects and bringing them into operation (which a number of projects have previously incurred) it is possible that over 2.4 million more tonnes of waste could be sent to landfill than permitted by the EU target (Scenario Three).
20 | Estimated additional treatment capacity of waste by end 2012 | |||||
|
|
|
|
|
|
|
|
| PFI projects |
| Other projects |
| |
| Signed | In procurement | In development |
| Total | |
Capacity of infrastructure planned by end 2012 ('000s of tonnes)1 | 3,021 | 2,000 | 424 | 1,353 | 6,798 | |
Percentage of total | 44.4 | 29.4 | 6.3 | 19.9 | 100 | |
Source: Defra's waste capacity model | ||||||
NOTE 1 Other projects include local authority projects not funded via PFI. | ||||||
21 | Delivery against the landfill directive targets for England in three scenarios as at June 2008 | ||||||
|
|
|
|
|
| ||
Year | Waste Growth Per Annum | BMW to landfill (tonnes '000)1 |
|
| |||
| Waste growth rate | Scenario One | Scenario Two | Scenario Three | |||
|
| The Department's base projection | Mid-range shortfall against base projection | High-range shortfall against base projection | |||
|
| (no delay to future projects, plants operating at 90% efficiency3) | (1 year delay to all future projects, plants operating at 80% efficiency3) | (2 year delay to all future projects, plants operating at 70% efficiency3) | |||
| -1.0% | 5,427 | 6,768 | 7,814 | |||
| 0.0% | 6,224 | 7,564 | 8,610 | |||
| 1.0% | 7,070 | 8,410 | 9,456 | |||
2013 |
|
|
|
| |||
| 1.5% | 7,512 | 8,853 | 9,898 | |||
Allowance: 7,460 thousand tonnes | Excess use of landfill compared with EU allowance | 52 | 1,393 | 2,438 | |||
| 2.0% | 7,968 | 9,308 | 10,354 | |||
| 3.0% | 8,920 | 10,260 | 11,306 | |||
| -1.0% | 1,583 | 2,358 | 3,125 | |||
| 0.0% | 2,866 | 3,641 | 4,407 | |||
| 1.0% | 4,326 | 5,102 | 5,868 | |||
20202 |
|
|
|
| |||
| 1.5% | 5,130 | 5,906 | 6,672 | |||
Allowance: 5,220 thousand tonnes | Excess use of landfill compared with EU allowance | (90) | 686 | 1,452 | |||
| 2.0% | 5,988 | 6,763 | 7,529 | |||
Key | 3.0% | 7,875 | 8,650 | 9,416 | |||
|
|
|
|
| |||
■ Target missed |
|
|
|
| |||
Target Met |
|
|
|
| |||
Source: Defra | |||||||
NOTES 1 Assuming recycling at 40 per cent in 2013 and 50 per cent in 2020 in line with Waste Strategy 2007. 2 Based on all currently known diversion capacity as at June 2008. It will be possible to include further capacity as the Department receives more information from local authorities currently developing projects. 3 Plant efficiency takes into account down time caused by maintenance and other limits to effectiveness such as waste composition. | |||||||
■ 2020: It is harder to assess whether the 2020 target will be met. The likelihood of meeting the target will depend on the successes of the investment programme being managed by WIDP as well as continuing efforts by local authorities and consumers to produce less waste and recycle more. The current forecast shows that this target may also be at risk if there are delays to the programme.
3.6 The Department has made a number of assumptions in developing this scenario analysis. Our assessment of the level of risk associated with each of the main assumptions, which is based on our assessment of the programme to date, is shown in Figure 22.
22 | Assumptions and risks in projected amounts of BMW to landfill | ||
|
|
|
|
| Baseline assumption made | Level of risk associated with this assumption | |
A delay to the programme
| The programme of projects are all delivered on time
| High A delay of two years (which a number of projects have previously incurred) may lead to local authorities significantly exceeding the 2013 and 2020 landfill allowances. Around 20 per cent of waste treatment is due to be through non-PFI contracts which are currently outside the Department's control as there is no central funding support. The Department's projected timetable for contracts to be completed and for facilities to be operational could be put at risk if the current problems in the finance market continue. | |
Recycling rates
| Recycling at 40 per cent in 2013 and 50 per cent in 2020 in line with Waste Strategy 20071
| Medium In 2006-07 the rate of municipal waste recycling was 31 per cent. Although this rate represents a substantial increase from the 12 per cent achieved in 2001 further substantial increases are required if the assumed rates are to be met. | |
Waste growth
| Annual growth of 1.5 per cent
| Low - Medium The amount of waste sent to landfill is sensitive to this figure. The Department's baseline figure of 1.5 per cent is, however, reasonable - waste growth in 2006-07 was 1.4 per cent and for the five years to 2005-06 was less than one per cent. The Waste Strategy Board has commissioned WIDP to carry out further modelling work on the waste growth assumptions. | |
Operating efficiency
| Plants are 90 per cent efficient when fully operational | Low It is unlikely that treatment plants can be used to one hundred per cent capacity all the time. Routine maintenance, fluctuations in the flow of waste available and accidents may reduce the capacity of the plant. The Department's assumption is reasonable.
| |
Source: National Audit Office | |||
NOTE 1 Defra (2007) Waste Strategy for England 2007. | |||
3.7 The Department is continuing to monitor the assumptions underlying these projections. It is carrying out an ongoing detailed review of the assumptions and the risks to delivery on a project by project basis. This ongoing review includes the expected impact on the programme arising from the problems in the finance markets. As at 30 November 2008 it does not foresee any significant change in the likelihood of achieving the approaching 2010 and 2013 targets from that shown by its June 2008 projections (Figure 21) and our analysis of the associated risks (Figure 22).
3.8 It is expected that the EU will levy fines on the UK if its total allowance is exceeded, although the EU has yet to announce the rate of such fines. Any shortfall against the targets by individual authorities will lead to substantial financial penalties being levied on them by the Government. Local authorities in England will be fined £150 for each tonne over their allowances (Figure 23). As the figure shows, penalties imposed on local authorities could range from around £8 million per annum to as high as £365 million per annum.
23 | Potential fnancial penalties for local authorities for missing the 2013 targets |
| |||
|
|
|
|
| |
Assumption regarding project delivery and operational efficiency | Shortfall of diversion of waste from landfill compared with target (tonnes '000s) | Financial penalty (at expected rate of £150 per tonne) (£ millions per annum) | |||
Small improvement in project delivery or operational efficiency compared with Department's current projections | Nil | Nil | |||
Scenario One | 52 | 7.8 | |||
Scenario Two | 1,393 | 209.0 | |||
Scenario Three | 2,438 | 365.7 | |||
Source: Defra | |||||
NOTE Assuming fines of £150 per tonne, 1.5 per cent annual waste growth and 40 per cent recycling. Plants are unlikely to run at 100 per cent efficiency due to maintenance and fluctuations in the waste flow. In Scenario One plants are assumed to operate at 90 per cent efficiency, in Scenario Two they operate at 80 per cent efficiency and in Scenario Three at 70 per cent efficiency. |
| ||||