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Environment Group Research Programme Research Findings No. 10

Review of the Environmental Effects of the Landfill Tax in Scotland

ENVIRON

Main Findings

• Over the study period, 1997 to 1998, the quantity of inactive material landfilled has declined by between 16% and 21%, while Customs and Excise (C&E)report a 27% drop over the same period.

• Waste collection authorities (WCAs) have experienced on average a 3% yearly rise in the amount of waste collected, but a 13% drop in the quantity of inactive waste collected. Inactive waste has accounted for approximately 8% of waste collected by WCAs over the study period.

• Survey data indicates the quantity of European Waste Catalogue (EWC) Code 20 00 00 (general waste) disposed of to landfill rose by 17% between 1997 and 1998. Conversely, C&E data suggests a 16% reduction in the amount of active waste landfilled over the period.

• Legislation such as the Producer Responsibility Obligations (Packaging Waste) Regulations and the Urban Waste Water Treatment (UWWT) Directive appear to have had a great impact on changing waste management practices.

• The number of waste management licensing (WML) exemptions granted has increased since the introduction of the tax, from 197 in 1996, to 821 in 1997 and 826 in 1998.

• There is no empirical evidence to suggest the tax has resulted in an increase in flytipping.

• There has been a substantial increase in landspreading of organic wastes since the introduction of the tax, best demonstrated by an 18% increase in uptake of the WML exemption for this practice.

• Uptake of the WML exemptions for reuse of construction and demolition (C&D) waste has increased by 14%. The uptake of exemptions for reprocessing this material has increased by 64%.

• The exemption from the landfill tax for contaminated material arising from redevelopment of contaminated sites allowed 740,000 Tonnes of contaminated material be landfilled in 1997 and over 540,000 Tonnes in 1998.

Introduction

This study has concentrated on the determination and assessment of environmental effects attributable to the Landfill Tax, through generation of data and collection of information relating to three primary areas of interest: data and information relating to waste quantities generated and available disposal routes; the implementation of the Landfill Tax, particularly changes introduced during the period covered by this study, and the effects of other legislative measures; and identification and assessment of possible areas of environmental effect.

Methodology

Data collection for the study period, covering 1997 and 1998, was through both primary and secondary means. Primary data was collected through survey questionnaires. In the first survey round questionnaires were issued to the following groups: a sample of businesses, selected on the basis of Standard Industrial Classification (SIC) codes; local authorities as WCAs; a sample of construction and demolition contractors; private and public sector landfill site operators; and recycling companies. Due to poor response from businesses and construction and demolition companies to the first survey round covering 1997, it was agreed with the Advisory Group not to repeat this part of the survey for 1998.

Secondary data collection involved collation of data from SEPA on operational landfill sites, incidents of fly tipping, WML exemptions, Producer Responsibility Obligations (Packaging Waste) Regulations (PRO Regulations), SEPA waste policy and the National Waste Strategy for Scotland (NWS); information from C&E on volume of waste disposed of to landfill, including exempt waste; and further research on composting & landspreading, recycling and reuse of construction & demolition wastes, and other fiscal measures elsewhere in Europe/overseas.

A review of other legislative measures, both current and forthcoming, which are likely to have an impact on waste generation and disposal to landfill was also made.

Findings

The most significant fluctuations over the study period have been in the quantity of C&D waste disposed of to landfill. Survey data indicates the quantity of inert material landfilled has declined by between 16% and 21%. C&E reported a 27% drop in the amount of inactive waste landfilled over the period. WCAs reported a 13% drop in the quantity of inactive waste collected.

Active waste volumes disposed of to landfill have fluctuated somewhat over the study period. Information from waste collection authorities indicates the quantity of EWC Code 20 00 00 (general waste) disposed of to landfill rose by 17% between 1997 and 1998, although it accounts for a similar proportion of all waste landfilled in both years. Data held by C&E reports a 16% (745Ktonnes) drop in the amount of active waste landfilled over the period. This survey does not support such a decline however; in fact the continuing trend appears to be for increased production of active waste. However, the discrepancies between data generated by this study and data held by C&E may in part be explained by some landfill operators being registered for Landfill Tax in England, and therefore the returns for the sites they operate in Scotland are excluded from the data provided by C&E. This does not however provide any explanation for the decline in quantities of waste landfilled demonstrated by the C&E data alone. Given that there are no alternatives to deal with this quantity of material in Scotland, although a proportion may be due to those landfill operators registered outwith Scotland receiving a greater proportion of the total waste generated, it may be that active waste disposal is being under reported to C&E.

Recycling rates among local authorities have increased fractionally over the study period, from an average of 2.5% in 1997 to an average of 3.5% of all waste collected in 1998. Information received from recycling companies has confirmed an increase in interest in recycling among waste producers, particularly in the commercial and industrial sectors. Whether or not these increases can be attributed to the Landfill Tax is debatable, particularly in light of requirements under other legislation such as the PRO Regulations. During 1998 approximately 330KTonnes of packaging material was recycled/reprocessed in Scotland under the PRO Regulations.

Legislation

The principal area of legislation of relevance to this study has been the Landfill Tax itself, which has undergone substantial changes during the study period. The most notable changes have been the raising of the levy on active waste to £11 a tonne and the introduction of an escalator of £1 per year up to 2004; an exemption from the tax for inert wastes used in landfill for quarry restoration; and an exemption from the tax for some restoration materials at all landfill sites. In addition, a House of Commons committee enquiry into the operation of the Landfill Tax has been held.

The effects of other legislative measures have become apparent, most notably the UWWT Regulations and the PRO Regulations. The influence exerted by this legislation on waste management and disposal have made the effects of the Landfill Tax more difficult to discern. Other aspects of national legislation which have a bearing on waste management have emerged, including the publication of the National Waste Strategy for Scotland. At the EU level, finalisation of the Landfill Directive provides the basis for reshaping the options for waste disposal in Scotland.

Taxes in other Countries

National taxation regimes to discourage landfilling operate in Australia and six European countries currently; Austria; Belgium; Denmark; Finland; France and the Netherlands. A tax on landfilling of waste was introduced in Sweden on the 1st January 2000. Norway is currently investigating the possibility of introducing a tax. In Australia each state has the authority to pass laws and levy taxes on the disposal of waste. The arrangements in Denmark have been reviewed in detail as an example of how a tax on disposal has been used to reshape waste management practice. This has been achieved through an integrated set of measures which operate at all levels in the waste hierarchy, and which provide an incentive, ultimately to encourage the conservation of raw materials through reuse. In addition to the tax on landfilling, other measures are focused at other levels of the waste hierarchy, for example, differential tax levels on incineration and incineration with energy recovery. Further measures are aimed at reducing the use of virgin materials where reusable wastes are available, and target specific waste types, such as consumables and packaging, through reimbursement mechanisms, e.g. refundable deposits. Others are aimed at feeding revenue directly back into development of reprocessing and recovery facilities.

Environmental Effects

There has been a significant increase in the number of WML exemptions granted since the introduction of the tax, most notably those for: land spreading of waste (+18%), reuse of construction and demolition material (+14%) and reprocessing of construction and demolition material (+64%). These exemptions are considered likely to account for a large proportion of the inactive waste that is no longer being disposed of to landfill. This is a clear demonstration of sustainable waste management. However the degree to which this change in practice can be attributed to the Landfill Tax is uncertain.

This study has found no empirical evidence to suggest there has been an increase in flytipping as a result of the tax. Information provided by SEPA and local authorities included anecdotal accounts in certain areas, however, in the absence of formal, standardised recording procedures, these findings cannot be confirmed.

The increase in reuse of C&D waste and organic wastes spread to land represent significant environmental benefits arising from the tax, in terms of movement of waste away from landfill to more sustainable options. However this represents an effect on a narrow range of waste streams. Other benefits include improvements in data collection and recording at landfill sites, which provide a quantitative basis for future waste management assessment.

There has been considerable uptake in the exemption for contaminated material arising from redevelopment of contaminated sites, with some 1.2 million tonnes of material exempted in Scotland up to 13 October 1998. This has facilitated the remediation and return to use of contaminated or derelict land and is widely considered to be a positive effect in environmental terms. However, it has acted as a disincentive to the development of more sustainable in-situ treatment or destruction remediation methods. There are additional environmental costs associated with transport and risk.

Conclusions

The Landfill Tax has resulted in a reduction in the amount of inactive waste disposed of to landfill. No significant change in the quantity of active waste has been recorded by this study, although data held by C&E suggests a decline in this waste stream also. Possible areas of environmental effect have been identified. However, it is difficult to attribute apparent effects, such as the increase in uptake of WML Exemptions, in relation to, for example, landspreading of organic wastes and reuse and reprocessing of construction and demolition material, to the tax. This is particularly the case where quantitative data is not available to support perceived increases in activities with negative environmental effect, such as flytipping. The effect of other legislative measures, such as the Urban Waste Water Treatment Regulations and the PRO Regulations, in changing waste management practices have made it difficult to attribute the effects to the tax precisely.

A key finding of the study is the absence previously of a reliable framework for the collection of data on waste generation, management and disposal, particularly in the period since 1994 the last year for which Waste Collection, Disposal and Regulation Statistics were collated by the Scottish Office.

This study has revealed current arrangements for waste data collection to be patchy and inconsistent. Data and information is required on a national level; reliable information is essential if initiatives to achieve sustainable waste management objectives are to be promoted and implemented with confidence and credibility. Improvement in waste management data collection must be seen as a key priority.

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