Market Report on the Composting and Anaerobic Digestion Sectors

Published: May 2009

EXECUTIVE SUMMARY

This report examines the current economic conditions of the Composting and Anaerobic Digestion Market on the island of Ireland. The report looks at the key factors influencing the market for organic waste as well as new initiatives and the environmental benefits from processing organic waste in composting and anaerobic digestion facilities.

This report is set in the context of the EU Landfill Directive which requires member states to divert biodegradable municipal waste (BMW) from landfill, of which organic waste is a significant component.

The current issues concerning the organic waste sector are:

• Over reliance on landfills for disposal of organic waste. Significant amounts of organic waste needs to be diverted from landfills under the EU landfill directive to avoid financial penalties from the European Commission.
• Compost producers are aware of the need to respond and provide processing infrastructure and have indicated that – subject to the right economic conditions – they could add sufficient new capacity in the short term.
• Funding is needed to support the rapid development of food waste reprocessing facilities across the island of Ireland. This will help to stimulate a greener economy by creating skilled jobs in construction, collection, reprocessing marketing and distribution - and bring significant environmental benefits.
• New end markets for compost are emerging in the peat and tillage industries.
• Anaerobic digestion is emerging as a technology to process food waste, due in part for its potential as a source of renewable energy.

Northern Ireland:

Landfill levy is at £40/tonne (From April 2009) and will increase by £8 per year up to 2013.
Food waste collections have grown rapidly and are expected to continue to do so as higher landfill levy rates make alternative disposal routes for food waste more financially attractive.
The Northern Ireland Landfill Allowance Scheme (NILAS) [1] places limits on local authorities to landfill up to an allocated tonnes of BMW to landfill. A fixed penalty of £150/tonne will be incurred if a local authority breaches its landfill allowances target in the scheme year. This has created a good incentive to divert organic waste from landfills.

Ireland: 

• New initiatives are needed to create the right economic climate to divert organic waste from
  landfills.
  - Landfill levy is at €20/tonne and needs to be increased in an escalator effect to the limits      like in Northern Ireland.
  - Statutory instrument making the commercial brown bin [2] mandatory (this is being              drafted in food waste regulations).
  - Local authorities putting conditions for the roll out of brown bins in waste collection              permits.
• Landfill gate fees have to be high, to create a disincentive. This will make source separation of organic waste more financially attractive. Recent and projected increases in landfill levy rates are pushing disposal costs towards this point in Northern Ireland.
• Ireland needs to increase the landfill levy to the same level. When combined with the prospect of potential fines under the NILAS, this provides local authorities in Northern Ireland with a strong financial driver towards the diversion and treatment of food waste.
• In Ireland there will be restrictions on the amount of allowed organic waste to be landfilled in the EPA’s Guidance on Municipal Solid Waste – Pre-treatment & Residuals Management to be published in June 2009. 
• The national legislation making the commercial brown bin mandatory will create a driver for the diversion of organic waste from landfills. 

Set against this, the compost producers have indicated that once the right economic conditions are created, additional processing infrastructure will be  provided and will require a capital investment of the order of £225-450 million.

The sectors have the potential to create approximately 1,500 directly employed and 10,000 indirectly employed linked or work on occasion in the sectors. 

Notes

[1] The Landfill Allowance Scheme (NI) Regulations 2004 (NILAS) came into operation on 1st           April 2005.

[2] ‘Brown bin’ is source separate collection scheme for food waste/garden & park waste.

You can find out more on What is the circular economy? on the InterTradeIreland Cross-Border Trade Hub.