All change and no change: DEFRA's Residual Waste Infrastructure Capacity Note, residual capacity need, and EfW requirements

On 30 December 2024, the Department for Environment, Food and Rural Affairs (DEFRA) published its long anticipated Residual Waste Infrastructure Capacity Note for England.[1]

With DEFRA stating that the note “is intended to support decision makers in planning for residual waste treatment to support the transition to a circular economy”, this article considers some of the note’s implications for those interested in planning for and delivering the waste infrastructure of the future.

What does the DEFRA note say?

Well, lots of things, and not all of it so easy to interpret.

The DEFRA note is focussed on municipal waste [2] arisings and makes projections for future residual waste treatment capacity need based upon waste growth assumptions. This includes estimations of the expected impact of planned waste policies that aim to achieve higher recycling and residual waste reduction.

In the note summary, DEFRA concludes:

“The modelling undertaken demonstrates that, following implementation of these policies, there will therefore be sufficient residual waste infrastructure capacity to treat forecast municipal residual waste arisings at a national level.”

As shown in Figure 1, nationally, recycling reforms are projected to reduce residual waste volumes (dark blue dashed line), keeping them within the current energy from waste (EfW) capacity (blue fill), and projected RDF exports (orange fill) combined, suggesting minimal need for additional facilities for municipal waste.

The note also states that, while England may then be approaching a point where national residual waste treatment capacity will be sufficient to manage municipal residual wastes, there is regional variation. Figure 2 shows that some areas face overcapacity, while others are expected to experience shortfalls.

Yet, things are not as simple as they seem…

The modelling in DEFRA’s note focuses only on municipal waste (i.e. waste from household, industrial, and commercial sources), and highlights how “evidence also suggests that alternatives are required to support the diversion of non-municipal wastes from landfill.”

The conclusions confirm an “allowance for capacity in landfills to manage 10% of all municipal solid wastes” and note that “the assessment undertaken does not consider treatment needs for non-municipal residual wastes.”

So, the situation isn’t as straightforward as it first seems. While the headline appears to suggest treatment capacity limitations are being met and hence England might (eventually) have enough EfW capacity, the note itself also points out that the partial nature of the assessment (i.e. not all residual waste) appears to rely on significant assumptions regarding the success of future residual waste reduction policies. It specifically highlights that ‘alternatives’ are required to achieve landfill diversion, whilst also allowing for ongoing landfill of 10% (of municipal waste), despite policy over many years seeking to reduce or even eliminate landfill in many comparable jurisdictions.

Furthermore, the modelling underpinning the note focusses on capacity only to 2035 – with typical project concept to operational delivery times of 5-10 years, this is a rather short timeframe. In addition, many EfW plants are already approaching their typical 30-40 year lifetimes, meaning that over the next two decades, this capacity will be lost if new projects do not come forward. The ongoing necessity for carefully and dynamically considering and planning future capacity is therefore evident.

The capacity note also (correctly in our view) highlights:

1. The connection between waste composition variation and capacity adequacy – how will the expansion of the UK Emissions Trading Scheme (ETS) to include EfW facilities influence residual waste calorific value, if fossil plastics are preferentially extracted?
2. The important sanitary role of waste incineration as a means to manage emerging societal waste streams such as those containing persistent organic pollutants (PoPs). Per and polyfluoroalkyl substances (PFAS), microplastics, pandemic personal protective equipment (PPE) etc, can also be added to this list, along with the uncertainty over arisings of such materials and others yet unknown, which may require the secure disposal that thermal treatment approaches can provide.

This sanitary role, the important service for society that EfW provides by cleaning up after others have made their best efforts, has a value in itself. It raises the question of whether, in the future, this will have recognised financial value, rather like the capacity payments we have paid to stand-by power plants for decades?

Overall, it therefore seems that waste capacity and project planners, investors and developers will need to continue looking a long way ahead, and in doing so will have to make their own assessments of capacity need. They will have to do this in a way that considers the balance of national and regional / local treatment demand and (all) residual waste arisings, and carefully manage the risk and opportunity presented by the impact of presently undemonstrated future policy.

Maybe not so much has changed?

What does DEFRA say about EfW?

The press release accompanying the DEFRA note is presented as a “crack-down on waste incinerators with stricter standards for new builds”.

Uncontroversially, the note confirms that the government does not support “the development of overcapacity of energy recovery infrastructure in England and will work to strengthen planning considerations to ensure that this does not happen.”

An accompanying DEFRA announcement makes various comments about EfW, including that “new waste incinerators will only receive planning approval if they meet strict new local and environmental conditions”.[5]

It is not yet known how and when these conditions will come into force, but it is suggested that for future EfW they will involve:

• Closer scrutiny on capacity need
• A greater focus on energy recovery efficiency, particularly on heat recovery
• A need to be ‘decarbonisation ready’

So, what does it all mean for EfW?

Those who remember when the UK was considered ‘the dirty man of Europe’ and can recognise the shape and smell of an old landfill from a mile away (with their decades of pollution risk) will see the value in the EfW infrastructure developed in the UK (mainly in England) over the past decades. We note that this infrastructure has successfully and reliably moved many tens of millions of tonnes of waste up the waste hierarchy, avoided consequent long-term pollution risks from landfill, recovered valuable materials and energy, and provided an effective and sanitary treatment outlet for the waste we have not been able to recycle or prevent.

The DEFRA note suggests we may be approaching the point where capacity needs are met, although that point is still some way off, and much has to fall into place for that to be the case. DEFRA suggests its policies will reduce residual waste arisings and quotes the new 50% residual reduction target (2023 regulations).

But pragmatically, and notably, DEFRA does not predict the end of residual waste. For as long as we generate residual waste, we will need to deal with it – by not doing so, decades of efforts to improve the management of our waste would be undone very quickly.

Therefore, in many ways the DEFRA note confirms the need for future EfW capacity, at some suitable capacity level, and subject to energy efficiency (heat) and decarbonisation compatibility.

All three of these ‘new’ requirements on future EfW projects make good sense. In fact, they reflect the way the sector has already been evolving. Over the past few decades, through successive waste strategies, the focus has always been upon making the best use of resources and avoiding environmental impacts.

So, taking each criterion in turn:

Capacity need

Has much really changed? There has always been a need for EfW plants to demonstrate their place in the waste hierarchy, and this has always been about carefully balancing the desire to prevent waste, to recycle more, and yet to provide adequate capacity. And all within a framework of cost effectiveness and a private sector waste market that responds to policy signals, rather than being government owned and planned.

With the need for new residual waste treatment plants to replace the old, and (as we write) still significant levels of landfill and export, the need case for ongoing EfW capacity is clear, and each new project will continue to demonstrate this need. Those that cannot are very unlikely to be financed and will fall away. So, although debate over the precise quantities of residual waste will continue, the 'new' policy is not so different after all.

Heat recovery

This has been an objective in the UK for decades. Whilst some UK plants are delivering, we have a very long way to go to even approach the best practice seen elsewhere, where policy, markets, and infrastructure have been shaped to deliver examples where the recovery of energy can approach 100%.

‘CHP ready’ was a step forward, but much more significant support is needed to facilitate the delivery of the next generation of EfW that can recover heat as well as power, and turn CHP ready from an aspiration to a deliverable reality. Heat zoning policy is promising, but it may be that more attention is required to ensure sites for new EfW plants are provided in locations where heat users and networks are located, and that new heat users are located and connected.

And for decarbonised EfW plants with carbon capture, this heat is also of great value. Whilst great strides are being made to decarbonise UK power, heat is a bigger challenge. A future where EfW plants supply this decarbonised heat is beckoning, and if fossil materials are diverted from residual waste, then this heat will progressively decarbonise even where carbon capture cannot reach.

Decarbonisation

To help current and future EfW plants deliver residual waste decarbonisation (even the potential for negative emissions from biogenic CO2 capture) and to avoid ‘decarbonisation ready’ being the new ‘CHP ready’, infrastructure to support approaches such as carbon capture and storage is required, and the connections and access for EfW must be facilitated and driven forward – or we will fail to seize this opportunity.

This need to connect to CO2 offtake infrastructure is broadly the same issue we have seen with heat recovery needing heat offtake infrastructure. As with heat supply, the EfW sector cannot deliver CO2 offtake alone. Connections and infrastructure solutions are needed i.e. suitable sites are required for future EfW plants that allow connection to CO2 use and storage infrastructure, and suitable incentives and policy frameworks are required to provide market confidence. Indeed, the pressing need for such CO2 infrastructure has already been highlighted in the 2023 National Infrastructure Commission report. [6] Such complex infrastructure requires vision and planning if the optimal and cost-effective solutions we need are to be realised.

Where to put the next generation of EfW plants?

For waste transport reasons, EfW plants generally need to be reasonably close to the waste arisings. The task of finding suitable sites has already had to balance the need for proximity and / or access to good transport links with both basic land availability for such infrastructure and power grid connections. Sites have already been difficult to locate, and ideal solutions rare.

The consideration of ‘need’ mentioned in the DEFRA note is not new, so the next generation of project developers will continue to need to carry out arisings and capacity assessments to justify new projects, albeit with revised and updated projections and future policy constraints.

However, with the indicated new DEFRA heat and decarbonisation policy requirements for future EfW plants (assuming these policies are robust), the identification of sites where all of the circles of the Venn diagram coincide will be much more complex.

Ultimately, the deliverability of an overall optimised UK infrastructure outcome that fully exploits the opportunity presented by EfW, with heat supply and CO2 capture (or hydrogen etc.), is a significant prize. It requires a future vision and a clear pathway of incentives to deliver the right solutions in the right locations. The DEFRA note is valuable. It considers many important factors, but it is only the start of a journey.

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References and notes

• [1] https://www.gov.uk/government/publications/residual-waste-infrastructure-capacity-note/residual-waste-infrastructure-capacity-note
• [2] Municipal waste includes both household waste and that from other sources which is similar in nature and composition (e.g. waste generated by businesses but not collected by local authorities).
• [3] https://www.gov.uk/government/publications/residual-waste-infrastructure-capacity-note/residual-waste-infrastructure-capacity-note#conclusion, see 6. Conclusion, Figure 2.
• [4] https://www.gov.uk/government/publications/residual-waste-infrastructure-capacity-note/residual-waste-infrastructure-capacity-note#results, see 4.3 Regional energy recovery infrastructure, Figure 1.
• [5] https://www.gov.uk/government/news/government-to-crack-down-on-waste-incinerators-with-stricter-standards-for-new-builds
• [6] https://nic.org.uk/studies-reports/national-infrastructure-assessment/second-nia/#tab-appendixb