Redcar & Cleveland requires overcapacity analysis before agreeing £2.1bn incinerator contract

Redcar & Cleveland Borough Council has passed a motion establishing eight mandatory preconditions before the authority will approve any binding commitment to the Tees Valley Energy Recovery Facility (TVERF), the planned 450,000 tonne per annum energy-from-waste plant approved for the Teesworks site in Grangetown.

The motion, proposed by Councillor Tristan Learoyd and passed yesterday (9 October), sets a requirement of comprehensive analysis of contract terms, UK Emissions Trading Scheme liabilities, and regional overcapacity concerns before the council proceeds with the £2.1 billion project involving seven North East authorities.

Councillor Learoyd said the motion aims to address concerns about "public funds being directed into private equity" for "projects that are completely unnecessary, because the coexisting capacity exists".

The decision follows Newcastle City Council's September vote to request withdrawal from TVERF, although that authority's cabinet has not implemented the request.

Concerns about overcapacity and UK ETS

The motion references Defra's December 2024 Residual Waste Infrastructure Capacity Note, which identified the North East as having 1.12 million tonnes (Mt) operational energy-from-waste capacity against 0.85 Mt local authority residual waste arisings in 2022-23.

With an additional 0.28 Mt under construction and 1.84 Mt consented, the region's total potential capacity reaches 3.24 Mt. The motion states TVERF's 450,000 tonne capacity represents over half of current local authority residual waste arisings.
The analysis notes national policy requires progress towards 65 per cent municipal recycling by 2035, with a statutory target to halve residual waste per capita by 2042, which Defra evidence indicates would represent municipal recycling rates of 70-75 per cent.

The motion mandates a transparent UK Emissions Trading Scheme pass-through formula before any contract approval. The UK ETS will include energy-from-waste facilities from 2028, preceded by a monitoring and reporting period from 2026, creating carbon cost exposure for residual waste containing fossil-derived plastics.

A September 2025 report by Suez estimated UK ETS liabilities could increase gate fees by approximately £48 per tonne initially, with allowance prices potentially rising from £88 per tonne in 2028 to £130 per tonne by 2038.

Against this backdrop, the motion requires the council to seek clarification on which emissions fall within scope, how allowance costs will be forecast and reconciled, and how costs will be allocated between partner authorities to avoid cross-subsidy between councils with different recycling performances or waste compositions.

Contract flexibility and governance

The motion also stipulates that Cleveland & Redcar first establishes whether the contract contains minimum tonnage obligations or "put-or-pay" clauses that would require councils to pay for capacity availability regardless of utilisation levels. In addition, it seeks to clarify liabilities if partner authorities have significantly less residual waste than assumed due to higher recycling rates or diversion to sustainable aviation fuel production.

TVERF is planned as a carbon capture ready facility located adjacent to the Northern Endurance Partnership carbon capture and storage infrastructure. The motion requires explanation about which party bears responsibility and cost for demonstrating and achieving decarbonisation readiness compliance, including at refurbishment, and solutions if these requirements cannot be met.

The motion mandates publication of a Full Business Case for consultation, including scenarios for 70-75 per cent municipal recycling by 2042, UK ETS allowance price bands, gate fee sensitivities, and contract flexibility mechanisms.

The council requires a comparative economic appraisal determining whole-life cost per tonne for alternative residual waste treatment options, including existing energy-from-waste capacity in the North East, elsewhere in England, and on the European continent.

The analysis must model economic impacts at recycling rates of 65, 70, and 75 per cent to determine whether TVERF's fixed capacity structure becomes increasingly costly compared to flexible alternatives as waste volumes decline in line with national targets.

The motion establishes mandatory annual public reporting on emissions, waste composition, UK ETS cost pass-through, contract performance, and market-testing of alternatives.

Darlington Borough Council voted against a similar withdrawal motion on 2 October. Council leader Stephen Harker stated that proceeding with TVERF represents the "best option" and that withdrawal would pose the "greatest financial risk" to taxpayers.

The motion directs that any proposed resolution of the eight issues must be brought to scrutiny committees and then to full council before any binding commitment. The cabinet had been scheduled to consider the TVERF contract under urgency procedures in June 2025, waiving standard notice periods, although the council motion now establishes preconditions for any contract approval.

The facility is scheduled to commence operations in 2029, with Viridor confirmed as the selected operator under a contract potentially lasting 40 years. The project has planning permission and received an environmental permit from the Environment Agency in 2024.