Scottish Borders Council (SBC) has announced it is terminating its 24-year waste treatment contract with New Earth Solutions (New Earth), following policy changes and development issues.

First signed in 2011, the waste treatment contract involved the construction of a 50,000-tonne-per-annum (tpa) mechanical biological treatment (MBT) facility to pre-treat domestic and commercial residual waste. However, the contract was amended the following year to include combined heat and energy recovery, which would have involved the construction of a 24,000-tpa gasification facility.

Development issues

The advanced thermal treatment (ATT) facility at Easter Langlee near Galashiels was scheduled to begin commissioning this year, but has faced ongoing delays due to development issues relating to the technology proposed and changes to waste policy in Scotland.

The technology used at the energy-from-waste plant, supplied by New Earth’s sister company New Earth Advanced Thermal (NEAT) Technology Group Limited, pioneered a new gas-to-engine energy technology.

This would have seen the 24,000 tonnes of refuse-derived fuel (RDF) produced at the MBT pyrolysed and gasified before being the resulting gas was cleaned and combusted to produce 2.9 megawatts of electricity for the National Grid and up to two megawatts of heat for use in the district network.

According to New Earth, the technology had not yet been proved on a commercial scale and the company had therefore not been able to secure an operating permit from the Scottish Environment Protection Agency (SEPA). The project had already achieved the permit for mechanical treatment of waste and the production of refuse-derived fuel.

On top of the development issues, there were also concerns that the introduction of the new Waste (Scotland) Regulations (which require local authorities and some businesses to introduce separate food waste collections from 1 January 2016) would reduce residual waste arisings, and thus make the proposed developments less efficient.

As such, following a ‘detailed and thorough review’, the council and New Earth have agreed to terminate the contract. As the contract did not include compensatory damages for termination, there will be a mutual walk away.

The council estimates that it has to date spend £2.4 million on the project, with the vast majority (£2 million) relating to fees for technical, legal and financial advisors and project managers. The remaining £400,000 relates to money that the council invested in the Easter Langlee site to improve its asset value to the authority.

The council has said that it anticipates the £2 million to be written off as an accounting adjustment within the council’s 2014/15 income and expenditure account, but that this will ‘have no impact on council reserves or cash balances’. However, there will be a reduction in the value of capital assets held on the council’s balance sheet.

It added that there would be further costs in closing the project down.

‘Challenges were taking too long to resolve’

Darren Stockley, Managing Director of New Earth, commented: “New Earth was delighted to have been awarded the contract by Scottish Borders Council in 2011 and we have invested considerable resources in developing the project.

“We have worked closely with the council’s project team on delivering an innovative solution, but some of the challenges were taking too long to resolve.

“New Earth wishes the council every success with its future plans to reduce waste, increase recycling and divert waste from landfill. New Earth remains committed to providing sustainable waste treatment services to local authorities and the commercial sector at our six operational facilities.”

Council to undertake review of waste management strategy

SBC has said it will now undertake a review of its Integrated Waste Management Strategy to ‘consider the solutions to be put in place to meet future landfill diversion, biodegradability and recycling targets of the Scottish Government and the European Union…[and] ensure waste services are fit for purpose and financially sustainable in the long term.’

The current waste services for SBC residents will remain in place and the programme to introduce food waste collections to around 24,000 homes – in Galashiels (including Tweedbank), Peebles, Selkirk, Jedburgh and Hawick – will still take place during 2015.

Councillor David Parker, Leader of SBC, stated: “Both the council and New Earth have put in considerable effort to overcome issues related to the integrated waste management facility project, but ultimately time ran out to find a resolution.

“Despite this setback, SBC is as committed as ever to providing Borders’ residents with a waste service which meets Scottish and EU targets, and is also sustainable for many years to come.

“The council’s review of its Integrated Waste Management Strategy will ensure this is the case.”

Find out more about the Galashiels project.