England set to launch the world‘s first allowance trading scheme for municipal waste

The trading scheme, to be introduced in April 2005, is a further step in the drive to move to more sustainable waste management practices, like composting, for biodegradable waste, such as kitchen and garden waste. It will benefit councils, such as Isle of Wight District Council, Windsor and Maidenhead Borough Council and Dorset County Council who have taken the lead in dealing with kitchen and garden waste by collecting, composting and recycling over a quarter of household waste produced in their region during 2002/03.



The scheme has been developed by Government to help local authorities meet tough targets under the EU Landfill Directive to reduce the amount of biodegradable municipal waste going to landfill sites. Under the scheme, authorities will be set allowances for the amount of biodegradable waste they can landfill. Waste disposal authorities will be able to trade their allowances with other disposal authorities; selling allowances if their waste has been diverted to other disposal routes, e.g. recycling, or buying allowances if they exceed their set allowances. Waste disposal authorities will also be able to save unused allowances (bank) or bring forward part of their future allocation (borrow).



The scheme, now approved by both Houses of Parliament, is the first of its kind in the municipal waste sector, but trading schemes have already been used successfully across the world in other sectors, most notably to reduce emissions to the atmosphere.



The diversion of municipal biodegradable waste from landfill is a key objective under the Landfill Directive. One tonne of biodegradable waste produces between 200 and 400m3 of landfill gas. Landfills released 25% of the UK‘‘s methane emissions in 2001, which represents 2% of our total greenhouse gas emissions.



By 2010, biodegradable waste going to landfill must be 75% of the amount produced in 1995; by 2013 this is reduced to 50% and by 2020 to 35%.



Environment Minister Elliot Morley welcomed the scheme and highlighted how it is set to help local authorities in meeting waste targets: He said: “These Regulations create a trading scheme that allows councils to cut the amount of waste going to landfill sites where it is most cost effective to do so. “It is an innovative approach which moves Government away from the old tools of command and control by offering an alternative to the regulatory system of inflexible targets. “Through the flexibilities of trading, banking and borrowing, authorities can find the most cost-effective means of meeting waste targets, tailored to their specific waste strategies and circumstances.”



In England the scheme is designed to give local authorities as much flexibility as possible, whilst still ensuring that the Landfill Directive targets are met. Earlier this month, Government confirmed that the penalty for non-compliance with targets to divert biodegradable waste from landfill would be reduced from £200/tonne to £150/tonne.



Mr Morley concluded: “Experience from other trading schemes show that they work by helping to secure cost-effective solutions to meeting targets. This should not mean an increase of pressure on council bills.”



NOTES



The EC Directive [1999/31/EC] on the landfill of waste requires the UK:



· by 2010 to reduce the amount of BMW going to landfill to 75% of that produced in 1995

· by 2013 to reduce the amount of BMW going to landfill to 50% of that produced in 1995

· by 2020 to reduce the amount of BMW going to landfill to 35% of that produced in 1995



The target years for the UK take advantage of a derogation in the Directive that allows member states which landfilled over 80% of their municipal waste in 1995 to postpone the targets by up to four years. The target years set out in Article 5(2) of the Directive are 2006, 2009 and 2016.



The Regulations are made under the Waste and