Waste infrastructure: planning to fail

Why isn’t merchant residual waste infrastructure getting built? Millions of tonnes of non-recyclable commercial and industrial (C&I) waste is being landfilled each year when it could be moved up the hierarchy. Meanwhile there is enough capacity with planning consent to treat 5 million tonnes per year more waste than we landfill, but many facilities remain just blueprints.

Back in June, my colleague James Fulford offered a cogent analysis of the problems that stand between obtaining planning consent and actually breaking ground, but I’d like to offer a full case history to explain how I think we arrived at this bizarre situation. And while James prescribed a national waste plan to cure the problem, my diagnosis is that we will have to look elsewhere for the right medicine.

Breaking the landbank

The planning system has failed to deliver merchant facilities because it was simply never designed to do so. Our ways of determining what facilities get approved have instead evolved from their origins in the landbank system for mineral resources. Each area of the country is responsible for maintaining a landbank of permitted mineral extraction to supply sufficient aggregates and other materials to meet expected demand for seven years ahead. This approach was carried through to landfill capacity.

The system works to clear targets, which enables planners to give the green light to development that is required, while refusing permission where there is not enough need. This provides much-needed clarity – but it is aided by the fact that mineral extraction and landfill sites are an almost universally unpopular necessity, which can only be located in a very limited range of places. It is a truism for minerals (and to an extent landfill) that they can only be worked where they are found. You can only mine (or fill) the minerals (or void) where they exist.  Merchant waste facilities present a different challenge because they can be sited more flexibly, so the opportunities to propose new facilities are greater.

A further headache for planners comes from the way rising landfill costs have changed the dynamics of demand. When landfill was a £10/tonne, the relative cost of transport was high and so waste didn’t travel far. Today, with many treatments costing around £100/tonne, transport is a smaller consideration, and facilities can compete with one another over greater distances (even across national boundaries). This expands the catchment area within which commercial and industrial waste travels to facilities. Eric Pickles’ recently upheld the refusal of planning permission for Covanta’s proposed EfW plant in Middlewich, Cheshire; but the decision confirmed that planners needed to take into account municipal and commercial waste over a wide area when making such choices. This hugely increases the complexity of determining need compared with the landbank model.

Middlewich muddle

Planners’ work is made all the more difficult by having to take account of all consented capacity, but having to adjust it down to reflect the probability of it becoming operational – not easy to estimate. The Middlewich decision makes reference to “other facilities with planning permission or under construction,” and concludes that allowing Covanta’s facility would introduce a risk that MSW would not go to appropriate facilities. While the Secretary of State did not consider that the Middlewich proposal “would necessarily undermine the sustainable approach to waste management” for C&I waste, he concluded that any negative impact “would depend on factors including whether all sites are built”. It looks rather as though the Secretary of State, even while ruling against Middlewich, has himself dodged the tough task of deciding the probability of each planned facility being built.

A planning system designed for quarries has got waste management into a hole… Picture by Nigel Homer, via Wikimedia Commons.

When planners give consent for them, mineral workings and landfill sites are almost always built; and in the unlikely event that excess capacity is permitted, this rectifies itself as the minerals are worked out or the void is filled. Planners have sought ways to ensure that consented merchant facilities are also constructed, but even a “build it or lose it” time limit on a permission can often be circumvented, for example by commencing a minor part of the project such as an access road.

The end result is a planning system that offers something of a false hope to would-be developers, who see obtaining consent as a major milestone in uplifting the value of a site. But after overindulging they’re facing a grey dawn and the inevitable hangover. Investors are far more interested than planners in whether there is an economic case for a new plant. They take careful account of other consented facilities when evaluating a business case, and baulk if confronted with unquantifiable risk of competition. As a result, only a few companies with deep enough pockets to finance construction off their balance sheet can really contemplate breaking ground on new merchant plant.

To conclude the diagnosis: counter-intuitively, it isn’t planning restrictions that are now preventing waste infrastructure being developed. Instead, an excess of planning permissions is making it harder, not easier, for facilities to be built. As a result we have many millions tonnes of merchant incinerator capacity gathering dust on the planning books; perhaps Middlewich simply avoided adding to this landbank of white elephants.

A change of plan

What, then, can be done to heal the situation? While the problem originates within the planning system, changing it is not the way forward. Supposing a National Waste Plan was drawn up, indicating what facilities are needed in each area. This would be a guide to future planners, of course, and might have averted the problem if introduced ten years ago. But permissions now granted won’t easily be withdrawn, no matter how remote the prospect of development taking place. Even if, as I suspect, some big players become discouraged and leave the market (remember in the ‘90s US firm Waste Management Inc selling off UK Waste after several of its projects failed to get the go ahead?), the stifling legacy of permissions will remain.

What the patient really needs is a dramatic intervention on a completely different level. For example, government could give Waste Disposal Authorities (WDAs) the power to direct where C&I waste arisings are sent, as they do with LAC waste. WDAs could then plan how best to manage waste in their area. Just as securing a local authority municipal waste contract helps to pull in finance for a project, obtaining WDA approval would act as a gateway for funding, giving investors confidence and gradually improving C&I residual waste treatment.

Such an intervention may seem pretty improbable, but with planning consent increasingly seeming an irrelevance we need to look elsewhere for an effective remedy that will get investment flowing again.