Archived press release

Incinerator Tax Needed to Level Playing Field for Recycling

3 December 2003

New research published by Friends of the Earth today [1] reveals that the Government is undermining its own commitment to recycling by subsidising incineration by as much as 14.75 a tonne. The environmental campaign group is calling on the Government to level the playing field by increasing tax on incineration in next week's pre-budget speech and increasing subsidies for recycling schemes.

According to the research, which looks at the subsidies and tax breaks for recycling and incineration, if the two disposal methods were to be given comparable support from the Government, recycling should receive subsidies of up to 50 a tonne because of the energy it saves. Incineration should be taxed at around 10 a tonne to take account of its negative environmental impacts.

The report `Money to Burn' calculates that the Government spends between 7.65 and 14.75on each tonne of waste incinerated in the form of tax breaks and subsidies. This includes money received by incinerator operators under Climate Change Levy exemptions, the Renewables Obligation [2] and tax breaks on combined heat and power (CHP). But the incineration industry bears no costs for its negative environmental impacts, including pollution and `disamenity' to the local area, such as effects on house prices.

Recycling in contrast saves considerable quantities of energy because it avoids the need to make new products from raw materials. Yet recycling receives no subsidies for this energy saving.

Friends of the Earth is calling on the Government to:

• Tax incineration by around 10 a tonne to take account of its external environmental impacts.

• Increase funding for recycling to 40-50 a tonne, which is 296 million and 370 million a year.

In this year's budget, the Chancellor promised he would review the case for economic instruments for incineration in the light of a new Government report on the environmental and health impacts of waste disposal. This report is expected to be published around the time of the Pre-Budget Report on 10 December.

Friends of the Earth Senior Waste Campaigner Claire Wilton said:

"Recycling saves much more energy than incineration, creates more jobs and has fewer greenhouse gas emissions. But the Government is giving tax breaks and subsidies to incineration, making it cheaper for local councils to burn rubbish rather than recycle it. This could explain why the Government is falling short on its own target of recycling 25% by 2005. It must face the financial factsand introduce a tax on incineration while subsidisingrecycling to level the playing field."

Notes

[1] `Money to Burn: Perverse Subsidies for Incineration' is based on research commissioned from Eunomia Research and Consulting Ltd. A media briefing and full report is available from the press office at Friends of the Earth or online at www.foe.co.uk/resource/briefings/money_to_burn_media.pdf
(media briefing) (PDF†)
www.foe.co.uk/resource/briefings/money_to_burn.pdf
(full report) (PDF†)

[2] Exemptions from the climate change levy, and payments under the Rewewables Obligation, are granted to energy from waste plants on the basis that they generate renewable energy. Incineration is eligible for exemptions from the climate change levy. Although it is not eligible under the Renewables Obligation, similar 'thermal treatment' technologies are.

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If you're a journalist looking for press information please contact the Friends of the Earth media team on 020 7566 1649.

Published by Friends of the Earth Trust