Business

Impetus administration forces RDF site closures

Impetus Waste Management, also known as Green North East Trading Bidco Limited, and one of the main suppliers for Air Products’s aborted gasification facilities, has gone into administration, forcing the closure of two of its waste transfer sites.

Ernst and Young LLP have appointed two administrators today (11 November), Joe O’Connor and John Sumpton, who will oversee the closures of the Teesside and Leeds waste transfer stations (WTS), which deal with refuse-derived fuel (RDF). These sites formed a large part of Impetus’s business and trading, with the Teesside site holding 500,000 tonnes of waste per year.

Impetus administration forces RDF site closures

The closures are expected to lead to the loss of 73 jobs. The company’s landfill and composting sites in Teesside and Leeds will remain open, however, after being sold to Highfield Environmental Limited. The company had also just last week suspended development on a new £10-million WTS, turning workers away from the site as they arrived to begin the development.

Impetus, one of the largest waste transfer businesses in the North East, holding several commercial, household and council contracts, stated yesterday (10 November) that it had encountered ‘increasing difficulties’ brought on by market changes that led to its administration.

Air Products withdrawal precipitates decline

Impetus previously sold its RDF waste to Air Products, an industrial gases company, to fuel its Teesside gasification plant. However, Air Products was unable to overcome ‘design and operational challenges’ and so announced its departure from the energy-from-waste (EfW) business earlier this year (4 April). The decision halted the development of two large incinerator developments in the North East that were to take a significant amount of Impetus’s RDF. Stopping these two developments led to Air Products having to write-off between £630 million to £700 million.

Following Air Products’s withdrawal from the EfW business, Impetus had confirmed that its RDF operations would not be affected by the abandonment of the Air Products gasification plant, but this has proved not to be the case.

At the time of Air Products’s withdrawal, Labour MP for Stockton North, Alex Cunningham, said: “This is yet more devastating news for Teesside coming on the tail of thousands of other lost jobs in the area in steel, construction, metal and related industries in recent months.

“People on Teesside need to know whether the incomplete plants have a future, if they will be sold or there is some other options for them. I will also be raising the issue in Parliament when it returns next week.”

Alternatives to the partnership between the two companies were sought, but, ultimately, Impetus became unprofitable and ‘loss-making’ after the dissolution of the arrangement with Air Products, despite changes to the company’s management. The collapse in fortunes for the company led to Ernst and Young placing the firm under administration.

Lack of viable alternative made facilities “unsustainable”

In a statement addressing the news of Impetus’s administration, O’Connor said: “Unfortunately, earlier this year Impetus’s main refuse-derived fuel (‘RDF’) offtaker, Air Products, was no longer able to take the RDF being produced and the absence of viable alternative RDF offtakes made the WTS facilities in North Tees and Leeds unsustainable.

“The management team looked to identify UK and export opportunities for the RDF produced at these facilities. However, the volumes and prices achieved were unfavourable. Despite internal improvements in efficiency, the company’s management were sadly unable to return this part of the business to profitability resulting in today’s decision to place Impetus into administration.”

Responding to fears over job losses following the immediate redundancy of staff at its two waste transfer sites in Leeds and Teesport, O’Connor sought to reassure employees at landfill and composting facilities in Cowpen Bewley and Teesport, which have been sold to Highfield Environmental Limited and will retain the ‘majority’ of the workforce. He said: “The landfill and composting facilities and the Total Waste Management operation continue to remain profitable but they were unable to fully support the WTS business. These facilities will continue under new ownership with relevant employees transferred over to the new owners, saving 31 jobs.”

More information about Air Products and its withdrawal from the energy-from-waste sector can be found in Resource’s previous article, as well as in a feature on the gasification market in our upcoming print edition.

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