“The landfill levy needs to go up to $300 a tonne. Only very large resource recovery/waste infrastructure projects will be built if it doesn’t.”
That’s according to Hitachi Zosen Inova (HZI) Australia’s managing director, Dr. Marc Stammbach. Stammbach said the above solution is key to meeting Australia’s recycling and carbon emissions targets – and an array of other targets. There are other issues that need addressing, too, most of them ongoing, but making landfills a last resort for waste is a good start.
One of HZI’s biggest footprints in Australia is building waste-to-energy and anaerobic digestion plants. And while some people would be right in that Stammbach does have a barrow to push when it comes to getting these facilities built, he says landfill levy increases have a wider impact than being a stick to make industries that create waste comply.
“It also affects recycling, and food and green waste in particular, because we have all these food and green mandates, but a very leisurely implementation for them, and no real punishment if you don’t do it,” he said. “Also, the issue with waste levies is that some have increased – some a bit more than others. Some you can regard as just another tax grab. In essence, these state governments made it a tax and a lot of what is collected is used it to fund other bureaucracies.”
The point being, those monies should go back into the waste industry to build infrastructure – and not just waste-to-energy plants, said Stammbach.
Some governments will point out that they have increased the levies consistently over the years, but again, Stammbach points out that increasing it within line with the consumer price index (CPI) is no real disincentive at all. Also, he said that if most state governments did have an epiphany and decided to use those CPI-increased funds to help build infrastructure, those monies wouldn’t go far.
“Construction costs in Australia have gone up more than proportionally to the CPI, probably twice,” he said. “That’s why everybody is complaining. Everything is so expensive around construction. And a big part of the construction of any facility – I’m also talking about anaerobic digestion and composting – is the civil infrastructure. That cost is what makes it hard to compete against landfills.”
Stammbach said that it’s not hard to find that – unsurprisingly – in Europe, some governments know that they need to be more proactive. In the UK, the levy is currently equivalent to AUD $200. It will increase to AUD $250 next year, in part due to the powers that be realising that there is no incentive for investors to build infrastructure and improve recycling efforts if most consumers take the cheaper option.
While there is an argument that the UK has much less land and a population more than twice that of Australia, Stammbach believes the issue goes deeper than that.
“The other thing is landfills are just net polluters. They are net producers of greenhouse gases,” he said.
Stammbach knows that there will be legacy issues with the number of landfills that are now closed but still emit greenhouse gases, and that is one reason why there needs to be incentives that encourage alternatives to landfills, especially as the outcomes are known.
“It’s absurd to keep going down that track,” he said. “That means every year we are locking in 20 years of major emissions – that’s when a landfill is very active – and another 100 years of lower activity.”
And what about landfill gas capture? Those who specialise in such technology are doing a good job, but it’s a bit like closing the gate after the horse has bolted, according to Stammbach. He has done some analysis that shows at best about 60 per cent of greenhouse gases can be captured, which means there is still a sizable amount of methane and CO2 going into the atmosphere. He believes that there needs to be a recovery rate of about 90 percent-plus from landfill to be equivalent to a waste-to-energy in terms of environmental impact.
“Most bioenergy in this country is actually the capture of landfill gas, which historically has been okay,” he said. “However, going forward to promote it is not ideal if the various governments are going to proclaim we will be greenhouse gas neutral by 2050. That can never be, because of the waste already in landfills.”
Then there is the issue of harmonisation. If you are a local or international company looking to Australia as a place to invest long-term in resource recovery infrastructure, getting a scoping team to get its head around the various states’ legislation is almost impossible in terms of making an investment viable. Has Stammbach seen much change over the past decade regarding states getting their act together?
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“We have not achieved anything,” he said. “The only harmonisation we have is the copy-and-paste approach provided by waste-to-energy regulations from Europe. That is with the exception of our basket case, New South Wales, which has outdone itself in that regard. In that state, there will need to be very difficult discussions around the licence conditions, because the regulator refuses to revise its decision (with regards to how difficult) this current framework is (to work with), which is unique in the world.”
Stammbach said the money is out there to invest in infrastructure –it’s the uncertainty that kills a project. He believes investors are looking for steady, long-term returns, but with governments often changing or amending regulations – and typically for the worse according to Stammbach – some are unwilling to take the gamble.
“For example, like we had with solid digestate from anaerobic digestion processes. The Victoria government suddenly declared it as a base of concern, and it took quite a bit of industry lobbying to overcome that perception,” he said. “But then the regulator understood, and quickly became active, and started thinking about how it worked. They consulted more with industry, and now it’s changed. You can now bring digestate – in similar conditions as you would in Europe – to land.”
Stammbach believes he is not asking for much when it comes to regulating waste to energy, and it comes down to consistency of approach. This also includes changing the terminology of something that was once waste into a product that is no longer waste but is still be classified as such.
“We actually don’t have, in this country yet, a regulatory framework that allows you to bring a waste out of a waste regime,” he said. “They have given some exceptions, such as for paper and steel, but not bottom ash and other things. Even compost is still under the waste regulation.”
Stammbach realises that waste-to-energy infrastructure is a political football, especially in NSW, which as mentioned, has some archaic regulations. Both Parkes in central NSW, and Woodlawn, situated in northern NSW, have been earmarked for waste-to-energy facilities and are currently in the planning stage. The Woodlawn plant is being mooted by Veolia, while the Parkes plant is currently under review with three bids. These are from New Energy Corporation, Veolia, and a consortium of Tribe Infrastructure, Masdar Tribe Australia, Acciona Concesiones S L, John Beever (Aust), and Acciona Construction Australia. But as Stammbach points out, in the rush for politicians to secure social license from the wider community by making sure a facility is not built in suburbia, the negative impacts by placing such facilities in regional Australia might be worse.
“One air specialist already did an analysis of what it will mean to bring waste out of Sydney to Woodlawn or Parkes,” he said. “By the time waste trucks are out of the Sydney Basin, we would already have caused more pollution and human health impacts than that which might be caused by a waste-to-energy plant in the middle of Sydney. This is because the emissions coming from a waste-to-energy plant are low compared to diesel emissions – be it from a train or truck – which means they have more impact to human health than a waste-to-energy stack in built-up areas.”
Costs
As mentioned, Stammbach talked about the landfill levy increasing in the UK from about AUD$200 to AUD$250 a tonne. He thinks that, due to construction costs in Australia, to disincentivise people from using landfills and incentivise more recycling/reusing, that a cost of about $300 a tonne would be necessary. He can’t see any state government increasing it by that much, although there is some promise from Victoria with their recently announced $40 a tonne step change, and he believes that most will stick to using the CPI as the guide. This means the highest cost to bury waste will be about $200 a tonne. And the consequences?
“A consequence is that the idea that ‘small is beautiful’ is dead,” he said, “because the unit cost of building anything small is too high. Hence, you can only build large projects. Hence projects will likely have to be at the scale of 400,000-plus tonnes to give a viable business case. And that is in a reasonable location, and it is also subject to bottom ash recycling. And if you don’t have that, nobody will invest. Nobody will develop a project. You can quote me – projects less than 300,000 tonnes, they’re dead even if they have a licence today. They’re not going to get built.”
Even if everything falls into line, there needs to be the willingness of state governments to come to the party. Stammbach says that WA, Victoria and Queensland get things done in a responsible manner. Once again, the outlier is NSW, which has a few issues, according to Stammbach. One is that it tries to outdo everybody when it comes to ‘tough’ regulations. Another is that it is hard to get a waste-to-energy permit.
“Then there is the uncertainty around organics going to land, which has shattered the confidence of councils and industry,” he said. “This is because they are afraid if they put food in the green organics, you have increased contamination. Suddenly the resulting compost can’t go to landfill anymore, because, for whatever reason, NSW decides to change the legislation. There is no recourse, because the way it’s structured, they can pull it from one day to the next, because it is an exemption. It’s at the prerogative of the NSW EPA.”
Stammbach is adamant that if there is a steady framework and certainty around permits and legislation, then industry and councils would probably trust this and just say, “Okay, this is unorthodox to do it like that, but so be it”.
Is getting everybody on the same page – not just the EPA and investors, but other entities too – put in the ‘too hard basket’ due to the number of entities that need to be involved to get an infrastructure project over the line? Not necessarily, said Stammbach.
“I would like to mention Switzerland,” he said. “The last big waste-to-energy plant they built was near Lucerne. It was replacing an old plant but was being relocated to a new site. There were participants from nearly 200 councils – not 20 – involved. They realised they had to do something, because when the old plant shuts down, where do they go to dispose of the waste? And if they get a new plant up and running, they will have to transport their waste further afield to existing plants, because they can’t go to landfill.
“In the end, it was accepted that they had to do something about waste, recycling and the composting, and not just talk about it for 20 years and do nothing.”