GIB investments 'risk hindering the country’s efforts to increase recycling'
The UK Green Investment Bank’s (GIB) interventions in the UK waste sector ‘risk hindering the country’s efforts to increase recycling and decarbonise energy’, environmental consultancy Eunomia has warned.
Whilst undertaking a review into the projects funded by the bank since its creation in 2013, Eunomia found that out of a total waste sector investment of £269.7 million, over 90 per cent has been invested in projects that are mostly or wholly energy-from-waste (EfW) residual waste treatment facilities.
Of the 10 projects that it has funded, whether directly or through its fund managers, seven are wholly or mainly EfW. The remaining three are anaerobic digestion (AD) plants.
Eunomia evaluated that these 10 projects yield a total of 1.9 million tonnes per annum of treatment capacity. Of this, 85 per cent is thermal EfW, 12 per cent is for AD and just three per cent is for recycling.
‘EfW today will look far from green in the future’
However, the consultancy has claimed that GIB has made ‘repeated errors in assessing the environmental impact of the projects it funds’.
It stated that key factors in assessing the environmental impact of an EfW plant is how much carbon dioxide (CO2) would have been emitted by the source of electricity that the plant replaces (the ‘marginal’ CO2 emission factor). Eunomia highlighted that when GIB appraises the environmental impact of an incinerator, it assumes that ‘every unit of electricity produced by an incinerator leads to the avoidance of generation as intense as CCGT [combined cycle gas turbine]’. But, it argued that the ‘reality is that the benefit of electricity from incinerators drops rapidly over its lifetime’.
Dr Dominic Hogg at Eunomia commented: “If there’s one thing you’d expect a group of bankers to be able to do right, it’s their sums. Had they got the interest rate wrong on their investments, heads would roll. But there doesn’t seem to be the same concern over a serious flaw in their investment appraisal approach.
“No one will thank the GIB when the only obstacle to having decarbonised the electricity grid is the incinerators they built under the guise of being green. In 20 years’ time, these facilities will still be producing energy – and by that time, the carbon intensity will be almost 10 times the grid average.”
Chris Holmes, Waste & Bioenergy Managing Director at GIB responded to the claims, telling Resource: "GIB is playing an important role in supporting the UK’s move to a more circular economy. We are backing a range of project types and sizes across the waste hierarchy including recycling, anaerobic digestion and waste-to-energy projects. Our investments in waste-to-energy projects are not displacing recycling and are avoiding waste being sent to landfill.
“Our most recent investments include the construction of a materials recycling facility to recycle 20 per cent of incoming residual household waste, in addition to what is recycled at the kerbside, and we have also set up a £50 million fund to invest in smaller recycling and waste treatment projects across the UK.”
UK GIB should ‘support a circular economy’
Building on its claims that the UK’s recycling rate in 2030 could be limited to 66 per cent if residual waste treatment infrastructure construction and waste exports both proceed as expected, Eunomia concluded that ‘investing in EfW today will look far from green in the future’.
As such, Eunomia is now backing calls made by the Commons’ Environmental Audit Committee in July 2014 to ensure that UK GIB finances innovative technologies to ‘support a circular economy’.
The EAC stated: ‘The Green Investment Bank can play an important role in the transition towards a more circular economy, particularly where infrastructure development for innovative technologies is held back by a lack of finance. The Green Investment Bank should finance innovative technologies to support a circular economy… The government needs to ensure that its policies for recovering resources and generating energy are aligned and are consistent with the waste hierarchy.’
Stakeholders are also now looking to UK GIB to support the UK’s reprocessing industries, which is increasingly coming under pressure from external competition and unfavourable market conditions. Earlier this year, plastics reprocessing company ECO Plastics – now known as ECOPlastics Recycling – sought a buyer following financial difficulties and economic pressure from the fall in oil prices, and just last month, Aylesford Newsprint – one of the UK’s three major paper recyclers – made the majority of its workforce redundant after entering administration.
The sudden closure of Aylesford has affected many local authorities, with reports stating that three councils (South Hams District Council in Devon and two unnamed councils in Gloucestershire and south Wales) are facing a loss in revenue of nearly £1 million due to difficulties with selling their collected paper. Further to this, the loss has led some waste management companies, such as Printwaste, to export its recycled paper abroad. As such, it is thought that GIB investment in the UK reprocessing industry will help support the circular economy, and protect the jobs of those employed within it.
Find out more about Eunomia.