£240m arc21 residual waste project is an essential element of NI’s waste management plans and a significant economic enabler funded by foreign direct investment’- Grant Thornton report
29 June 2020
Over £46m annual costs of landfill and waste export to Europe is not a legitimate or sustainable long-term solution
The arc21 residual waste project is an essential element of Northern Ireland’s waste management plans and a significant economic enabler funded by foreign direct investment at a time when public finances are severely limited. This was a key finding from an independent assessment by business consultancy Grant Thornton about the proposed £240m public infrastructure project.
The report published today examines the strategic imperative for the infrastructure project within a wider UK and European environmental and economic context. This comes at a time when local government finances are under severe pressure and the ability to landfill our waste is reducing significantly due to the adoption of the The Circular Economy Package (CEP) targets into UK law which places a cap of 10% on landfill of municipal waste by 2035. All against a worsening economic situation due to the pressures of the global covid-19 pandemic.
The arc21 project is designed to deliver a sustainable approach to NI’s residual black bin waste and divert it from landfill. This will be achieved through the development of additional recycling facilities and an Energy from Waste (EfW) plant which will generate enough electricity to power 30,000 homes. It will serve the needs of six member Councils based in the East of Northern Ireland which account for almost 60% of the population.
Grant Thornton research estimates the cost to NI Councils of exporting significant amounts of our household waste to other parts of Europe to fuel energy from waste facilities there, to be over £16m per annum based on an average of 138,183 tonnes exported annually over the past three years. The cost of this practice, which the Strategic Investment Board for NI previously called “perverse” does not factor in the additional lost value of this potential fuel and heat source to NI when security of energy supply is a genuine concern here.
This also comes at a time when the market for receipt of Northern Ireland’s residual waste is not guaranteed with some countries like the Netherlands already introducing significant import taxes on such waste. Grant Thornton’s view is that the costs of exporting waste for energy recovery elsewhere are significantly more likely to increase than decrease over time, thus raising the importance of Northern Ireland having a permanent self-sufficient solution.
Alongside this, Grant Thornton’s analysis of NI landfill taxes and ‘gate fees’ suggests that despite the highest level of recycling recorded in NI at over 50% last year, the annual cost to NI Councils of sending a significant proportion of the remaining (largely unrecyclable black bin waste) to landfill is still more than £30m. The Circular Economy Package (CEP), adopted by the EU and implemented into UK law includes an ambitious target of 65% recycling by 2035 and places a cap of 10% on landfill of municipal waste in the same period. While pursuing these challenging targets NI therefore needs to find a sustainable solution for between 50% and 25% of its household waste.
Speaking about the report findings Andrew Webb, Chief Economist, Grant Thornton said;
“Northern Ireland faces a significant challenge to manage its waste in a more environmentally and economically sustainable way and in doing so help address the critical climate change agenda. The current approach of both landfilling and exporting our waste for the value to be extracted elsewhere is not a legitimate or sustainable long-term solution. The new Circular Economy targets mean that we need to develop a local self-sufficient solution which maximises the value from our waste. The arc21 residual waste project offers a compelling solution which is in line with modern international best practice for environmental protection and climate change mitigation. The fact that this public infrastructure will be delivered through foreign direct investment at a time when public finances are severely limited is also significant.
“The proposed infrastructure will contribute to the key environmental and renewable energy objectives of the Northern Ireland Executive. The ‘New Decade, New Approach’ agreement states, that there is a need for a coordinated and strategic approach to Climate Change and in particular the need to set ambitious targets and actions for a fair and just transition to a zero carbon society. The arc21 project mitigates against climate change by diverting biodegradable waste from landfill thus avoiding harmful emissions and at the same time producing renewable energy which displaces fossil fuels while adding to our security of supply. Typically, a project of this nature can bring added value by acting as the anchor for other developments that are also climate change friendly such as district heating, energy storage or hydrogen generation and distribution.”
The report also reinforces the direct economic impact of the project, from construction through to operation. The proposed £240m inward investment is estimated to support around 340 permanent direct and indirect jobs when the plants are operational and create or sustain 2,701 direct job years of employment. This employment is projected to support c.£58m of additional wages in the economy. When factoring direct, indirect and induced impacts, total benefits from the construction phase could amount to the creation or sustainment of 6.045 job years, £122m of wages and £215m of Gross Value Added. Ongoing direct benefits from the operations at the site are estimated to create c.100 jobs and add nearly £3m of wages into the local economy.
Responding to the report findings, John Ahern, Business Development Director, Indaver UK and Ireland, the private sector investor bidding to build the Becon project for arc21, said;
“The environmental and economic imperatives for this project combine to make it a must do, otherwise Northern Ireland risks failing to meet its key targets on landfill diversion, recycling, renewable energy, and wider climate change targets. The Becon project delivers a 21st century solution to manage NI residual waste in a responsible manner in line with the best practice across Europe. It ensures we maximise the value from that waste and contribute to critical climate change targets.
“We should remember that this scheme has been recommended for approval by three sets of professional planners over the last 5 years and has received no objections from over 70 statutory consultees, including the Public Health Agency, NI Environment Agency, Health and Safety Executive and Department for Infrastructure Roads Division. It was the subject of an independent and rigorous Planning Appeals Commission (PAC) hearing in 2017 which concluded that the project should proceed. If after all this time and expense the project does not proceed, the reputation of Northern Ireland to approve necessary infrastructure projects such as this will be further damaged as it will have failed to deliver any of its three planned residual waste management projects. As we await a planning determination, we urge the Minister and the Executive to consider how this project is entirely consistent with current government policies and addresses the wider environmental and economic imperatives.”
John Ahern added “At this stage, Indaver remains committed to this substantial investment in Northern Ireland and believe this ‘shovel ready’ project could play a key part in the economic recovery through the delivery of large scale public infrastructure and as a broader economic enabler.”
A copy of the Grant Thornton Report and Executive Summary is available on the links below: