Landfill: A Victim of dutch Success?

A combination of landfill bans and overcapacity in its waste to energy sector has led to the Netherlands' remaining landfills competing fiercely for the remaining non-combustible waste that cannot be recycled. Gate fees have fallen to below cost price of operating the facilities, jeopardising the all-important aftercare funds. In such a scenario, what future does landfill have? by Heijo Scharff Currently the Netherlands landfills 1.5 to 2 million tonnes of waste annually. That is only a 2% to 3% of the total waste generation of some 60 million tonnes per year. Essentially only wastes for which no recycling or incineration option exists, are landfilled. Landfill bans were first introduced in 1995 and gradually extended to 64 waste categories. Currently 61 are in force and a further three will enter into force when recycling capacity has become available. Landfill tax was first introduced in 1996 and gradually increased until it was abolished in 2012. It has to be emphasised that landfill tax has played a very important role in achieving the low landfill rates. Currently Dutch policymakers argue that landfill tax is no longer important. They state that the combination of landfill bans and available recycling capacity will enable The Netherlands to keep landfill rates low. In The Netherlands there were two tax levels: €108 per tonne for 'combustible waste' and €16 per tonne for 'non-combustible waste'. To make it simple the distinction was based on density. Anything lighter than 1100 kg per m3 was considered 'combustible waste'. The method was to determine the weight of a load and divide by the volume of the container. It seems that the announcement of landfill bans and taxes resulted in a decrease in the landfilling of combustible waste in the years prior to 1995. Between 1992 and 1995 alternative treatment capacity actually did become available in anticipation of landfill bans and tax. From 1995 to 2001 landfill was relatively constant despite the increase in landfill tax. Then from 2001 to 2005 there was a strong reduction in the landfilling of combustible waste and a steep increase in exports. This coincided with an increase of the tax rate to €80 per tonne. The export of combustible waste dropped sharply in 2005 when in Germany the landfill ban for biodegradable waste was implemented. After the financial crises in 2007, less waste was produced and the incinerators had spare capacity. Previously incinerators refused wastes considered non-combustible. Although there is a landfill ban for combustible wastes, with a special exemption it could be landfilled. When this happened, the high tax rate could be collected. After 2008 a period of over-capacity started. Everything that was 'combustible' was actually incinerated. At the time import of waste for incineration was debated, but not accepted. A situation arose where the state was no longer collecting any landfill tax at the higher rate but only at the lower rate. The tax income was hugely reduced and the court cases continued. In addition some incinerator companies that had landfills within their own organisation started digging out combustible waste. Gate fees at waste to energy facilities fell to below €60 per tonne of waste. Tax Break The amount of domestic waste available for incineration was limited. Hence it was attractive to incinerate previously landfilled waste and ask for a tax return. Since the tax was specifically linked to landfilled waste, the state could not refuse a tax return for waste which had been taxed at the time of deposition, but that was no longer in the landfill. The state was not only collecting less money - it was paying it out. Down in the dumps: between 1991 and 2005 the number of landfills in operation in the Netherlands reduced from 80 to 22 In conclusion - it was better for the state to abandon the landfill tax altogether. This of course resulted in objections by landfill operators that had plans to dig up waste and have it incinerated. The discussions and court cases have not yet ended. Currently waste for incineration is imported mainly from the UK. The recycling sector was opposed to abolishing the landfill tax. They were afraid that landfill would again become a cheap outlet for recyclable wastes. It was agreed that the development of landfill would be followed in detail. Since January 2012 the state produces monthly updates on the amounts of waste landfilled. Several aspects are interesting to point out. First of all it was clear very quickly that the abolishment of landfill tax did not lead to landfill of combustible waste or biodegradable municipal waste. In 2011 there was a strong decrease in the amount of non-combustible waste landfilled. This was mainly caused by contaminated soils and soil treatment residues. Project managers and treatment plant operators confirmed that the rumour of the upcoming abolishment created an incentive to postpone projects or temporarily store residues. This is confirmed by the increase in 2012. Stockpiles were emptied and transported to landfill at the moment the landfill tax was no longer due. The detailed monthly updates clearly indicate that no wastes are landfilled for which a sensible alternative exists. It is nevertheless possible that the new 'equilibrium' of landfilled non-combustible waste will be at a higher level than in the years 2003 to 2009. Again this may be due to export. Although there was no clear increase in the landfill tax for non-combustible waste, after 2002 the landfilling of it followed a similar development as combustible waste. There are indications that when the profiling of German landfills (that needed to be closed) became more important, it also became attractive to transport the non-combustible waste to Germany. For some 'mineral' wastes it was possible to obtain an export permit for the 'recovery operation' profiling of landfills. Now that the landfill tax has been abolished, it could be that the more expensive transport to Germany no longer outweighs the previous tax advantage. Free Market Failure Between 1991 and 2005 the number of landfills in operation in the Netherlands reduced from 80 to 22. After 2005 the number has remained constant until 2013. In 2013 one landfill closed. With 50 million m3 of remaining landfill volume, the operational landfills have insufficient financial provisions for capping and aftercare. Provisions have always been on a per tonne basis. Consequently they cannot opt to end operations and close the landfill. There is no choice but to stay in business and try to accrue the financial provisions. Fierce competition over the remaining amount of waste is the result. The gate fees for landfill in the Netherlands have seriously declined. In 2010 the average gate fee fell below €18.5 per tonne. In some situations this at best is sufficient to cover the operational costs. In most situations, it is insufficient. Landfill operation in the Netherlands is incurring an annual loss in the order of €15 to €20 million on a turnover of €30 to €40 million. Under competitive conditions 1.5 to 2 million tonnes of waste per year is insufficient for remunerative operation of 22 landfills. The gate fee does not cover the total costs. In the Netherlands opening a new landfill is not allowed. Consequently the landfill business in the Netherlands cannot be considered a free market. Uneconomic landfill operation also poses other problems. Around 85% of landfill operation is carried out by public companies. Since the waste that is currently landfilled is not municipal waste anymore, various public companies no longer see a need to continue with a landfill operation. In the current situation however, they cannot find a buyer for their companies and are therefore forced to stay in business and incur a loss. AFTERCARE risks and the future of landfill Financial provisions for capping are managed by the landfill operators. It is likely that various landfill operators are covering their losses by eating into their financial provisions for capping. Strictly speaking this is forbidden. But the situation is not clear-cut. The competent authorities manage the financial provisions for aftercare. The landfill operator cannot touch it. For aftercare of the current 22 operational landfills it is calculated with a harmonised tool applied by all competent authorities that €517 million is required. Currently the competent authorities have accrued €115 million. Under the current conditions there is a certain risk that a large portion of the additional €400 million will not be furnished by the landfill operators. Small amounts of waste that require landfill will continue to arise. It is in the interest of society to have continued access to landfills as a sink for hazardous substances. Also in the future, society needs landfills as an essential element of an ecologically safe circular economy. Landfills therefore have a future! But landfill operators should be able to provide the required service. Excess capacity and bankruptcy of operators comes at a huge cost to society. At some point, as currently in the Netherlands, it is no longer profitable to provide landfill services. It could then be considered that public organisations or the state take responsibility for the continued operation of a 'safety net' in waste management. Heijo Scharff is manager of research and development at NV Afvalzorg and a member of ISWA's Working Group on Landfill.