The Department for Environment, Food & Rural Affairs (Defra) has announced plans to introduce a new regulatory treatment standard for refuse-derived fuel (RDF).

The announcement comes in the government response (published this week) to its call for evidence on what the ‘challenges’ facing England’s RDF market are, and ‘how these might be managed’

The document reports concerns from within the industry regarding RDF production processes, the improper or illegal storage and stockpiling of RDF, and the lack of strict legal enforcement on behalf of government authorities.

Defra has argued that the introduction of a clear definition of RDF coupled with a regulatory treatment standard will help ‘provide clarity’ within the industry and ensure that the waste hierarchy is properly followed.

Call for evidence identifies ‘market failures’

Defra’s announcement comes after a call for evidence revealed a number of ‘market failures’ within the RDF industry. The appeal attracted 47 contributions from members of the waste and recycling industry, the ‘majority’ of whom supported ‘at least some form of government intervention’.

A number of core complaints were raised as a result of the call for evidence, including:

• concerns over operators producing low quality RDF containing significant quantities of recyclable materials.
• problems with operators improperly storing or stockpiling RDF for long periods of time, leading to environmental issues such as leaching and pest infestation; and
• a belief that there is a general lack of proper enforcement on behalf of the authorities regarding illegal activities.

Defra argues that the results provide an ‘environmental rationale for intervention in the RDF market in England’.

The report reads: ‘There is a market failure in that the environmental cost of RDF compared to recycling is not fully taken into account by those generating RDF.’

It goes on to note: ‘The overriding message from the responses provided is that some form of government intervention in the RDF market in England is necessary to address existing ‘market failures’.’

Proposed action

As such, Defra has outlined that it will investigate the feasibility of introducing a more precise definition for RDF, bolstered by a more detailed treatment standard outlining certain processing requirements. The report states that this would ‘provide clarity to the industry and help with the standardisation of processing’.

Regarding the proposed treatment standard, the report suggests that this might include requirements regarding the shredding process and the removal of recyclable materials. Defra says that it will consult the Environment Agency (EA) and the devolved administrations regarding the potential terms of a new standard, and to discuss whether or not this should take the form of new legislation.

Defra acknowledges that the new regulations might burden operators with extra costs, but insist that steps will be taken to ensure that these are minimised.

The department also said the EA will provide tougher law enforcement, and will take action against any party guilty of ‘serial poor performance and deliberate non-compliance’.

However, the report dismisses the idea of introducing a compositional standard, stating that there is little support for the idea within the industry.

Defra also notes that the development of an EU-wide definition is unlikely, but will investigate the possibility of a national definition developed in tandem with the devolved administrations.

Lastly, the report dismisses the possibility of taxing or banning RDF exports (called for by some parties in order to ensure that the waste is used domestically so the energy recovered contributes towards domestic energy security and renewable energy targets), noting that this would ‘contradict longstanding government policy on the free market’. Defra added that it ‘does not wish to discriminate between RDF produced for domestic plants and RDF produced for plants abroad in the tax regime’.

'Risk that government intervention could create unnecessary barriers'

The government response has received criticism from UK waste management company FCC Environment. Paul Taylor, the company’s CEO, commented: “An RDF standard set by Defra would not make sense as European energy-from-waste (EfW) facilities vary so operators should be able to define their own RDF specifications. Intervention from the government will only increase RDF production costs and reduce the viable opportunities for export, contrary to the principle of free trade across the EU. This will inevitably lead to an increase in landfill in the UK until at least the end of the decade when more EfW facilities are built and become operational.”

He added that there is a “risk that government intervention could create unnecessary barriers, increase costs and artificially distort the RDF market”, as he believes “there is a shortage of energy-from-waste treatment capacity in the UK, whilst there is overcapacity in Europe” (However, a recent report released by environmental consultancy Eunomia Research & Consulting found that if infrastructure construction and waste exports both proceed as expected, the UK’s residual waste treatment capacity will exceed supply in 2017/18, moving to a situation of potential overcapacity in the UK in 2018/19 of around 2.5 million tonnes. Further, Eunomia warned that overcapacity could thus ‘limit’ the UK’s recycling rate to 66 per cent.)

FCC did, however, advocate the Environment Agency exercising “greater control, monitoring and policing of the production, storage and use of RDF through its existing powers and the permitting system”.

Read the full government response to the RDF market consultation.