EA concerned about reporting visibility in a competitive sludge market
Reporting visibility and the potential for "a race to the cheapest cost option" by companies to the detriment of the environment are among concerns that the Environment Agency (EA) has over a sludge market open to competition.
The latest meeting of Ofwat’s sludge working group heard that the agency currently has good visibility of where sludge comes from and goes to because there are only a small number of players in the market. The EA is concerned that this could change with the opening up of markets, and reporting become more difficult.
It also made it clear that it does “not want to see” a race to the cheapest cost option by companies to the detriment of the environment.
Opening up the markets for sludge treatment, transportation, recycling and disposal are among Ofwat’s Water 2020 proposals. The environmental regulations surrounding this market, which are outside of Ofwat’s control, were the purpose of the working group meeting.
The regulation itself derives from two primary sources, European and domestic legislation, this is pre any impact from Brexit.
Under consideration is whether water and sewerage companies’ (WaSCs) regulatory dispensation, under the Controlled Waste Regulations 2012, will distort the market going forward. Opening up the market is likely to place pressure on the following words used in the Controlled Waste Regulations 2012 ‘…within the curtilage of a sewage treatment works as an integral part of the operation of those work’.
WaSCs, Under the Industrial Emissions Directive (IED), have significantly lower regulatory obligations and costs compared to other organic waste companies who would require a permit to treat sludge. No decision has yet been made as to whether this will continue to be the case. The current rules apply to sites exceeding 75 wet tonnes per day (on any one day).
One delegate asked why WaSCs receive exemptions, the response being mainly as a result of past successful lobbying and history. Ofwat’s proposal is to try and address these issues and make it a more level playing field for everyone.
There was a general comment that if the water industry was aligned more to the rest of the industry then this could have a significant impact on water customer bills with possibly no additional benefit to the environment.
Other emerging concerns at the meeting included:
- Some operators are sweating their assets, which could lead to poor quality outputs. Commercial decisions are driving this behaviour but the EA does not want to see this increasing
- Concern over the split between sludge and network plus, in that the level of the quality of the sludge produced could impact later processes. Where does the responsibility over the quality of the sludge reside?
- Contaminants in sludge: where do they go? What are the future challenges? Can it still be used on land?
- An EA internal audit project found some wastes not suitable for composting going to other waste treatment sites which could include anaerobic digestion. Further investigation is required.
The meeting also looked at whether Brexit provides the opportunity to consolidate waste regulations, or whether this was too big a task. The response was that was no reason to change the environmental standards but it may be an opportunity to revisit the administrative processes and to reduce red tape. It was also commented that EPR is a modern recently developed platform, but may still be improved upon.
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