The hidden value of waste

Posted on 8 Nov 2012
Removing the use of landfill sites completely is the holy grail of many manufacturing companies

Are waste-to-energy solutions too good to be true as a means to combat rising fuel and waste disposal costs? Peter Russell, head of manufacturing & industrials at RBS, considers refuse under a new light, analysing the benefits current waste-to-energy solutions are offering companies and how these will mature in coming years.

Supported by RBS

Rising fuel and waste disposal costs are eating away at business profit margins as well as reducing land fill charges, so waste-to-energy (WtE) solutions – creating heat or electricity by transforming a waste source – are now essential considerations for management.

While many UK manufacturers are concerned about the costs of establishing a WtE scheme for their plants and cite unreliable technology as justification for holding off investment, there are numerous motivating factors which make WtE attractive. There are also well proven and scalable processes in place to manage numerous industrial waste streams.

Escalating landfill tax

Landfill tax is central to helping the UK meet its European carbon targets and although it doesn’t apply directly to manufacturers, any increase is instantly passed on to them through the fees they pay to waste disposal companies. The government’s 2010 Emergency Budget spelled out that the standard rate of landfill tax would increase by £8 per tonne each year from 1 April 2011 until at least 2014.

It also explained that the standard rate would not fall below a floor of £80 per tonne from April 2014 until at least 2020. This means waste reduction is now an essential consideration for manufacturers, unless they want to see their production costs going through the roof.

A new way to look at waste

For Jon Miles, director of sustainable energy finance at RBS, WtE technology is the only solution. He explains: “More UK manufacturers need to change their views on waste. Don’t look at it as a problem that needs to be dealt with but more like a cashflow that is currently negative and needs to be made positive. “Thanks to many technology developments, there is currently a huge opportunity for early WtE adopters to gain significant advantages over their competition and slash their waste bills, while at the same time save on their energy expenses.”

Indeed, increasingly efficient technology is boosting the amount of energy or energy sources that can be extracted from waste products, while driving down landfill volume. Some technologies only provide part of the process by producing Solid Derived Fuel (SDF) (EU acceptable standard) that then needs transforming into energy. But even in this case the amount of waste going to landfill is reduced, so landfill tax savings are still realised, and the SDF can be used on site or sold as a commodity to energy plants.

Which technology works?

Probably the biggest opposition to the adoption of WtE solutions is the limited awareness of the actual procedures themselves and the wide range of solutions available.

For management it can be bewildering to work out if pyrolysis, gasification, a biomass boiler system or anaerobic digestion is the right solution. In truth all these systems are efficient and have their benefits, but work best if coupled with the right type of industry and production system. Waste oil from the automotive industry and slurry from the chemical sector is easily transformed into heat and electricity in special boilers while waste heat can be recovered from metal manufacturers and textile waste can be transformed into excellent biomass.

Miles explains there are three main steps before choosing a WtE solution for your company. He says: “You have to identify what type of waste you have – is it organic, clinical, wet, dry, etc. Then you have to work out how much it is costing you to dispose of it before deciding how it could benefit your overall manufacturing procedure and what added-value product do you want out of it – heat, electricity, fertiliser?”

Take the example of Arla Foods, the global dairy producer which identified its main sources of waste in its supply chain as being cow slurry and by-products from its processing and production operations. In Denmark it is planning to process 400,000 tonnes of slurry and 130,000 tonnes of dairy by-products per year from its dairies into biogas using anaerobic digestion. This will produce enough energy to power 8,000 average single family houses. In the UK it is the first dairy to become zero-to-landfill and has saved nearly 2,000 tonnes of waste each year, which represents more than £100,000 in landfill tax. It is also trialling a microbial fuel system which could supply a farm with all its annual energy needs if fed with slurry from 200 cows. Energy can also be sold back to the grid for profit.

Arla’s sustainability strategy is paying dividends in terms of corporate responsibility and in achieving its carbon objective, as well as demonstrating its commitment to innovation. In turn, this attracts high quality employees and customers while enhancing its public profile.

The Future of WtE

The media spotlight is on the big energy companies such as Veolia, who build enormous waste-to-energy plants, but these solutions also work well at a smaller scale. Thanks to technological developments there is no longer the need to have a lot of space to build the treatment plants – there is even a pyrolysis system (the thermochemical decomposition of organic material without the presence of oxygen)on the aircraft carrier HMS Ocean – nor the need for identical waste to fuel them.

Karen Wordsworth, director of climate change and sustainability at KPMG, explains: “Thanks to trials in the UK and abroad WtE technology is becoming more refined. Solutions are increasingly available to SMEs and MSBs.”

There are many international examples of small companies receiving additional revenue by handling neighbouring firms’ waste at a cost and successfully feeding their WtE system at the same time. This supply chain is increased by technologies which convert waste into pellets or briquettes that can be more efficiently consumed.

Wordsworth adds: “There are systems being trialled that create material from waste streams such as clinical waste that can be used for a biomass fuel. When finished this will have a dramatic impact on the UK WtE market, traditionally the realm of fast moving consumer goods organisations because of their well-publicised carbon targets, but is now the focus of heavier industry.”

Financing refuse projects will also become easier, because now the technology is proven in the field, it can be secured against a power purchase agreement. Alternatively there are companies that will install WtE technology at a manufacturer’s site and dispose of its waste for free; profiting from the on-sale of all the created energy.