Denmark – social cost-benefit analysis of waste as fuel in of cement production

Every year 3.3 million tonnes of waste is incinerated in Denmark. The number is expected to increase to over 4 million tonnes by 2020. So far, the answer to the increasing amount of waste has been to enlarge the municipal incineration capacity. EAIs report shows that it would be better for society to give private production companies the opportunity to use the waste as a replacement for fossil fuels. The result is based on a welfare economic analysis of enlarging the use of waste as a replacement for fossil fuels in the production of cement at Aalborg Portland A/S. The report examines three alternatives for producing cement with waste. The three alternatives are, respectively: import; cancellation of the enlargement of municipal incineration capacity; and transferring waste from existing municipal incinerators. The welfare economic analysis assesses both the socio-economic and environmental effects of each of the three alternatives.



The analysis shows that importing waste is the best alternative. At the same time, in the long term, it is a better solution for society to enlarge incineration at industries rather than enlarging municipal incineration capacity. Finally, the result shows that there are no net benefits for society to transfer waste from existing municipal incinerators at present the time.



The calculations in the report were carried through for 100,000 tonnes of waste. Aalborg Portland A/S alone has the potential for using 250,000 tonnes of waste. If this opportunity is exploited, the net social benefit would be almost 60 million DKK per year. However the potential is bigger. An investigation among production companies with heavy energy consumption seems to show that industry has the potential to use between 0.5 and 1 million tonnes of waste per year.



In order to maximize social benefit, it is necessary to change the current regulation and organisation of the sector. Professor of Public Administration, Jørgen Grønnegård Christensen has contributed a chapter in the report, which questions the role of the municipalities. He suggests how the current organisation of the sector can be changed, so the industry can access combustible waste