Waste and resource management

Beyond waste-to-power: The waste-to-fuel revolution

Changes in policy mean that the growth of waste-to energy looks set to continue over the next few decades.

The UK government's plans to ban new fossil fuelled cars by 20401considering stricter performance requirements for hybrids and placing further restrictions on carbon-emitting energy production, is one initiative that is providing real incentives for the development of waste-to-energy options. The waste sector is already repositioning itself as a energy source in that future. It is look at both supplying the National Grid as well as fuel production.

There are a number of businesses that are ready to seize these opportunities and are already seeing the benefits. 4 NEW Ltd, a London-based network of waste-to-energy treatment plants, received investment of approximately £40 million in 2017, including £18 million from Mirach Capital Group. Another company, Biogen expanded its recycling network through the acquisition of Tamar Energy, one of the largest anaerobic digestion and biogas plants in the UK.

During 2018, we are likely to see this repositioning of waste go even further as the idea of waste-to-fuel becomes even more of a viable and lucrative growth opportunity. In particular, the demand for more environmentally-responsible fuel sources will grow as the car industry responds to the government's plan to replace all conventional fuel cars.

A number of major car manufacturers, including Jaguar Land Rover2, recently revealed plans for new electric or hybrid cars and those developments look set to continue.

A growing role for renewables

The waste sector could also benefit from the need to meet ambitious renewable energy targets. By 2020, 9.75% of all fuels used in the UK should come from renewable sources, and this will rise to 12.4% by 2032.

A changing car industry

The government has recently confirmed that the Renewable Transport Fuel Obligation (RTFO) will have a greater emphasis placed on biofuels created from waste sources. There is also agreement that the use of land for the production of crops to develop fuels, rather than food, is not responsible or sustainable in the long term. These developments create a clear opportunity for the RDF/SRF and waste wood sectors to be a viable long-term solution to the UK’s fuel challenges, mitigating the issue Brexit causes to RDF exports.

The right opportunity at the right time

These opportunities are coming at just the right time. Thanks to both the cost and the impact of Brexit, waste businesses have been looking for UK-based solutions to enable them to process the huge quantity of refuse-derived fuels currently being exported. Waste-to-energy offers one way to address this problem.

The path to waste-to-energy has therefore now been well and truly cleared. With high expectations that it can be a key component in the growth of biofuels, the market now needs to get its approach right to take advantage of the opportunity.

By focusing on developing waste-to-energy capabilities, and in particular the technology that will make this possible, the sector should be able to seize this huge opportunity for growth in both the short and long term.

To find out more information and discuss how your business could take advantage of this opportunity, please contact Mike Read.

References

  1. ‘New diesel and petrol vehicles to be banned from 2040 in UK’, BBC, 26 July 2017
  2. ‘Jaguar’s new I-Pace electric car: gaining pace on Tesla?’, The Telegraph, 1 March 2018

Download the Annual waste and resource management review for our retrospective analysis of activity in the waste sector and a look forward to the key trends that will drive the sector for the next 12 months.