Why an incineration tax would be a burden on local authorities

Association of Directors of Environment, Economy, Planning & Transport (ADEPT) member, Ian Fielding explains how ADEPT believes the potential introduction of incineration tax would be ineffective, a burden on local authorities and completely unnecessary.

ADEPT’s position comes after announcement in Budget on 29 October that government may consider a future tax on incineration as means to encourage increases in the recycling. This announcement sits alongside an announcement on a future tax on plastic packaging with less than 30% recycled content, and contrasts with the lack of taxation proposals from government to deal with single-use plastics, which would target the manufacturers of plastics that are difficult to recycle, including black plastics and single-use items such as coffee cups.

Currently, two-thirds of the UK’s plastic packaging waste is exported. China, previously a mass importer of UK waste, has placed a ban on importing it, costing the UK’s local authorities up to £500,000 extra a year. A recent survey by the Local Government Association (LGA) reported that over 50 councils in the UK have been financially impacted by the China ban as they battle to manage their waste.

One of the primary concerns for ADEPT is that an incineration tax would create an unacceptable burden on local authorities and the communities they serve, with the public picking up the costs. It is encouraging to see that the Chancellor recognises in the budget statement that there could be impacts on local authorities, but the devil will be in the detail as to if, how and when the inevitable financial impacts on councils will be addressed. Perhaps most encouraging is that Treasury appear to have listened to calls from Adept, the LGA and Industry to await the delivery of the Government’s Resource & Waste Strategy, which has ambition for the UK to be a zero avoidable waste economy by 2050.

In practical terms, the priority focus to divert waste from incineration will not be on plastics. Plastics are relatively bulky but light weight, and any waste operator or Council wanting to reduce its incineration tax burden is more likely to focus attention first on the heavier items, and those that make up the largest proportions of waste.  Again, this is where a comparison with the landfill tax falls down as broadly speaking, the environmental impacts of waste landfill are analogous to the mass of the materials.  If the intention is to encourage more recycling of plastics then an incineration tax is not the way to do it.

Landfill tax has undoubtedly been successful in redirecting waste to other facilities, including recycling and incineration but an incineration tax is not comparable. With landfill being universally recognised as the worst option for our waste, any tax implication was always going to lead to a better outcome. Conversely, an incineration tax risks landfill becoming a more economically viable option again – surely that can’t be right? An incineration tax will need to be considerably more sophisticated than the landfill tax in its application if it is to be effective.

Incineration is widely recognised as having an important role to play in a sustainable waste management strategy.  It is a legitimate and environmentally beneficial alternative to landfill and is the chosen technology for the treatment of waste for a significant number of local authorities.  Councils have been supported by Government to enter into long term contracts for the incineration of waste using Government sponsored investment programmes such as PFI, which use Treasury approved ‘standard form’ contracts that in most cases are likely to see the costs of an incineration tax passed through to the local authority client. An incineration tax would therefore be a perverse outcome for an otherwise prudent local authority who assumed Government support for the delivery of its future waste services was provided in good faith.

Although ADEPT do not agree with the introduction of an incineration tax, the organisation is fully behind the Government’s ambitions on waste and environment and working with DEFRA to realise them.

ADEPT believes that an increase in recycling can be achieved through placing an emphasis on greater producer responsibility and the reforming of our packaging regulations. The current system means that local authorities pay for the costs of dealing with packaging and other materials thrown away by householders. Adept welcomes proposals to implement the ‘polluter pays’ principle through new Extended Producer Responsibility legislation and is keen to ensure that those people responsible for putting these materials into the supply chain are then liable for the costs of recycling and disposal. Tighter measures and taxes on non-recyclable packaging at the start of the supply chain will promote positive recycling behaviours and minimise waste, without the need for an incineration tax at the other end of the system.

The delivery and success of the Government’s circular economy ambitions, including bans on single-use plastics will mean a tax on incineration would, in fact, be unnecessary.

We believe that an incineration tax would have a detrimental effect on local authorities and actually end up being counterproductive and costly to the public. The current pressures on councils are exceptional and it is hard to fathom how we would explain to residents the inevitable reductions in core services resulting from having to pay an incineration tax.

ADEPT is concerned that the consideration of an incineration tax indicates a lack of confidence or commitment by Government in the delivery of its waste management aims, but are encouraged that there seems some recognition from Treasury that an incineration tax may not be necessary if DEFRA do what they say they are going to do. We are committed to working with all of Government to help deliver improvements in recycling and to demonstrate a more appropriate and sustainable alternative to an incineration tax is viable.


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