The EU Landfill Directive (LFD) requires significant quantities of biodegradable waste to be diverted from landfill by 2020, escalating through from 2010. Municipal Authorities will be fined if they do not meet these targets.
The UK’s Department of Environment, Food, Rural Affairs (DEFRA) has estimated that 170-220 new MSW and 145 commercial waste facilities will be required. This represents £5-7 billion of infrastructure by 2020 – a timescale insufficient for public procurement to deliver, as quoted in the second Kelly Report (2006)
The UK’s Landfill Tax is becoming an increasingly important incentive with collection companies needing sustainable infrastructure to properly divert from landfill. The Tax is rising annually by £8 per tonne to £80 per tonne in April 2014.
The UK government’s target is that by 2020, at least 15% of the UK’s energy should come from renewable sources and 30% of electricity from renewables by 2020 (currently 5.5%). This is one of the highest and most challenging targets of any EU country in relation to the EU Renewables Directive’s statutory requirements.
The indexed value of Renewable Obligation Certificates (ROCs) is a significant market driver for producers of quality biomass fuels to meet the growing demand from utilities with statutory obligations . Since the April 2009 ROC banding measures, biomass (i.e. >90% biogenic content) will qualify for 1.5 ROCs when using conventional combustion technologies (or 2 x ROCs if good quality CHP or advanced thermal conversion). ROCs prices are ‘grandfathered’ up to 2037.
Co-Firers (i.e. coal power stations that burn biomass with coal) are the main existing operational facilities of scale and are permitted to use up to 12.5% biomass so the feasibility of paying for imported biomass (e.g. olive paste, pine kernel expeller, sawdust, etc) puts pressure on sourcing competitive and sustainably sourced alternatives.
The EU Renewables Directive (RED) and Fuels Quality Directive are focussing more on sustainability, sourcing quality and consistency. Since April 2009 Co-firers get 0.5 ROC, down from 1.0 ROC previously. UK proposals are to also lift the 12.5% cap to encourage more rapid, large scale displacement of coal, although some stations are now converting 100% to biomass pellets, such as Tilbury B near London, Ironbridge in the Midlands and potentially Drax in Yorkshire. Others are considering following suit.
Climate change Levy Exemption Certificates (LECs) are available to end users of biomass fuel and renewable energy, who can also obtain Rates exemption and potentially other Tax relief incentives.
The increasing cost, security and replacement timescale issues for ageing coal and nuclear plants is expected to increase power prices over the next 2-10 years. Management are exploring options to partner with new biomass power plant developers and operators.
The market opportunity for Biocentre® facilities is significant when combining all of the above factors and as more landfill sites shut and capacity diminishes. The commercial competitiveness of Biocentre® facilities against high capital cost incineration plants can also enable Local Authorities and UK businesses to save financially and in their Carbon footprint.