gate fees 2018/19 report comparing the costs of alternative waste treatment options … gate fees...

Gate Fees 2018/19 Report

Comparing the costs of

alternative waste treatment

options

WRAP’s twelfth gate fees report analyses the gate fees charged for a range of waste treatment, recovery and disposal options as reported by local authorities. In addition, gate fees are supplied by organic facility operators.

Research date: October 2018 – January 2019 Date: July 2019

WRAP - Comparing the costs of alternative waste treatment options

2

WRAP’s vision is a world in which resources are used sustainably. Our mission is to accelerate the move to a sustainable resource-efficient economy through re-inventing how we design, produce and sell products; re-thinking how we use and consume products; and re-defining what is possible through re-use and recycling.

Find out more at www.wrap.org.uk

Document reference: [e.g. WRAP, 2006, Report Name (WRAP Project TYR009-19. Report prepared by…..Banbury, WRAP]

Written by: Hannah Dick & Peter Scholes

http://www.wrap.org.uk/

WRAP - Comparing the costs of alternative waste treatment options

3

Executive summary This report summarises the findings of WRAP’s twelfth annual gate fees survey. The survey

covers gate fees charged to local authorities in the UK for a range of municipal waste

recycling, recovery, treatment and disposal options, for the calendar year 2018. Given the

expected future growth in non-household recycling under the Circular Economy Package and

new Resources and Waste Strategy, commercial waste gate fees have been collected but are

reported in an accompanying report which can be found here.

The aim of this report is to increase price transparency and, by improving the flow of

information, improve efficiency in the waste management market. A lack of market

information may reduce a local authority’s ability to make informed decisions on waste

management options. The publication of indicative gate fee information should assist

authorities in making better informed decisions regarding waste management options and

benchmark what they might reasonably be expected to pay in gate fee.

Summary gate fee data reported by local authorities from 2018 for a range of technology

types are presented in Table 1.

Table 1: Summary of the UK gate fees reported by local authorities, 2018 (£/tonnes)1

Treatment Materials / Type of

Facility / Grade Median Mode2 Range3

No of

gate

fees

reported

2017

median

gate

fees

MRF

All contracts (all wastes) £25 £5 to

£10

-£41 to

£97 91 £22

Contracts beginning in

2018 £35

£35 to

£40

-£3 to

£60 18 £354

In-Vessel

Composting

(IVC)

Mixed food & green £50 £50 to

£55

£28 to

£67 28 £49

All feedstock types £46 £55 to

£60

£10 to

£73 52 £46

Anaerobic

Digestion

(AD)

All gate fees £27 £15 to

£20

-£5 to

£68 62 £26

UK (contracts started

between 2016 - 2018) £19 £0 to £5

-£5 to

£50 18 -

Energy from

Waste (EfW)5 All £89

£85 to

£90

£44 to

£125 68 £86

1 All gate fees reported excluding haulage costs. 2 Mode is the gate fee range (in £5 increments) which received the most responses in the survey data. 3 Range lists simply the ranges between the maximum and minimum data points in the survey data collected.

4 Contracts beginning 2017 5 Incineration with energy recovery.

http://www.wrap.org.uk/commercialgatefees2019

4

WRAP – Comparing the costs of alternative waste treatment options

Treatment Materials / Type of

Facility / Grade Median Mode2 Range3

No of

gate

fees

reported

2017

median

gate

fees

Pre-2000 facilities £65 £65 to

£70

£44 to

£89 20 £57

Post-2000 facilities £93 £85 to

£90

£50 to

£121 45 £89

Landfill

Non-hazardous waste

including landfill tax6 £113

£114 to

£119

£91 to

£176 76 £1067

Non-hazardous waste

excluding landfill tax £24

£25 to

£30

£2 to

£87 76 £20

Introduction Data gathering for this gate fee survey was conducted in November to December 2018,

collecting data for the 2018 calendar year. The survey targeted three main stakeholder

groups: local authorities (including unitary, waste collection and waste disposal authorities);

private sector operators of waste management facilities; and senior managers of large waste

management companies operating within the UK market.

The pricing of municipal waste management services can be complex. Users of the gate fee

information in this report should be aware of the following:

◼ Not all waste management services are costed or charged on a simple gate fee basis

(£/tonne). In some cases, a tonnage-related payment is just one element of a wider

unitary charge8 paid by an authority. For many authorities it is not appropriate, or

practicable, to isolate a pro-rata cost per tonne for a facility that may form just part of a

broader integrated service provision. As a consequence, only services for which it

has been possible to identify a gate fee (£/tonne) are included within this

report.

◼ The gate fee information for individual treatment options may not be directly applicable in

instances where multiple services are being procured. For example, a service that includes

collection together with EfW. Therefore, quoted gate fees are literally “at the gate” of the

facility in question and do not include the cost of additional services, such as collection

from households or transport to the waste management facility;.

◼ Contract terms, risk allocations and performance guarantees may vary significantly

between different authorities’ contracts, even in instances where the same technology is

being utilised. Such differences could have a significant impact on the associated gate fees

6 The standard rate of landfill tax for 2017/18 is £88.95 /tonne. 7 The standard rate of landfill tax for 2016/17 was £86.10 /tonne. 8 For an integrated or PFI infrastructure waste services contract, the private sector contractor can bundle the payments for a variety of waste management services (including potentially the initial capital spend and the ongoing maintenance and operation cost for associated waste management facilities) into a single ('unitary') charge to the local authority customer, rather than charging individual gate fees for each individual service.

5


(for instance, the contractor taking the risk for recyclates commodity price fluctuations

would result in a higher gate fee to compensate, than if risk sharing between the

contractor and local authority was utilised).

◼ A significant proportion of municipal waste management services are delivered under

medium to long-term contracts. Gate fees for such historic long-term contracts are

included in the survey sample but may not be reflective of the current market. However,

where reasonable samples were available the gate fees associated with more recent

contracts have been separately reported.

◼ Year on year changes in gate fees may reflect sampling variation. For instance, of the 221

local authorities responding in 2018, 155 also responded to the 2017 survey (70%), but 66

did not, meaning they are unique respondents to the 2018 survey. This difference in

samples needs to be considered when comparing the 2017 survey to those reported last

year.

◼ Gate fees in this report are presented in nominal terms with no adjustment for inflation.

Key Findings The key findings in this year’s survey are as follows for the UK:

Material Recovery Facilities (MRFs)

◼ The upward trend in MRF gate fee reported last year appears to be continuing. The

median MRF gate fee for contracts sorting 4 or more materials is £25/tonne, compared to

£22/tonne last year and £15/tonne in 2016. This year, 12% (15) of local authority

respondents report not paying a gate fee for MRF services, i.e. a zero or negative gate

fees, down from 16% (14) last year, 21% (20) in 2016 and 28% (30) in 2015. For

contracts signed in 2018, the median gate fee is £35/tonne and median contract length

down to 2 years.

◼ Of the 129 authorities supplying responses, 89 (69%) reported a change in gate fee in

2018 (64% in 2017), with 12 (19 in 2017) reporting a decrease (mostly due to new

contract negotiation or commodity price tracking) and 49 (39 in 2017) an increase in gate

fees (mostly due to indexation and commodity price tracking), again suggesting some

hardening in gate fees between 2017 and 2018. Of those reporting a change in gate fee

and providing a reason, 9 (11%) report the signing of a new contract, 13 (15%) report fee

change as result of a regular contractual review, 31 (36%) changes in commodity prices

(with an additional 13 (15%) as part of a contractual monthly or quarterly review giving a

total of 51%), 5 (6%) a change in the level of contamination (both increases and

decreases reported), and 25 (29%) contractual RPI increases.

◼ Interviews with contractors this year confirmed that the market is moving much more to a

fixed gate fee plus commodity price adjustments to minimise the risk to the operator, and

that contracting is getting more sophisticated with a trend to separate MRF processing and

commodity sales requirements managed in separate contracts. Although recyclate

commodity price fluctuation has the biggest impact on increasing MRF gate fees,

contamination is a particular issue and contracted contamination limits are reducing as

operators try to secure new markets and better prices for the recyclates they generate.

Contractors reported that by the end of 2018 typical gate fees for new local authority

contracts are £45-55/tonne.

6


In-Vessel Composting (IVC)

◼ The median IVC gate fee for all types of municipal feedstock (i.e. mixed organics, or green

or food waste presented separately) being sent to IVC facilities is £46/tonne, which is the

same gate fee as reported last year. The median gate fee for mixed food and green

waste, the most common feedstock type sent to IVC facilities, has increased by £1/tonne

since last year, to £50/tonne compared to £49/tonne. Operators cited a similar contract

gate fee for municipal mixed food and green waste of £48/tonne.

◼ Separate food waste is the most expensive at £61/tonne (the same as last year), and

green waste the least expensive at £33/tonne (an increase from £31/tonne). Nearly half

of the responses (small sample for this feedstock) were from Scotland and so not

necessarily representative of the whole of the UK.

◼ Contract gate fees given by operators are lower than those by local authorities, with

£45/tonne for food and £26/tonne for green waste. There is different regional

representation in the two samples which could be one reason for the difference, as policy

differences between Scotland and Wales, compared to England, mean there are

differences in gate fees particularly for separately collected food waste.

◼ The majority (72%) of local authorities sending waste to IVC facilities do so under contract

and are therefore likely to be reporting historic contract gate fees, which may explain why

there are some differences between gate fees cited by local authorities and the operators,

the latter reporting recently agreed municipal contract gate fees.

◼ Waste contractors also said they expect IVC gate fees to have remained somewhat stable

(in real terms i.e. in line with inflation), primarily due to the impact of long term contracts.

◼ Approximately 37% of authorities said their gate fees had changed in the last 12 months,

with 86% being increases, and the vast majority citing inflation/indexation as the reason.

Anaerobic Digestion (AD)

◼ The median AD gate fee reported by local authorities for 2018 for the UK as a whole is

£27/tonne, which is slightly higher than the £26/tonne gate fee from last year’s survey.

Before this year’s reported gate fee, the figure had shown steady decline, since 2015.

However, the median of contracts which have started in the last three years is £19/tonne,

which reflect waste contractor expectations of declining gate fees more accurately.

◼ For England, the pattern over the last four years has been of steady decline (£35/tonne in

2015, £30/tonne in 2016, £26/tonne in 2017, to £23/tonne last year) until this year, where

data reported by local authorities results in a median of £26/tonne.

◼ The median gate fee of all waste streams reported by the operators is £10/tonne, which is

a £3/tonne increase on last year’s figure. It is much lower than the £27/tonne reported by

the local authorities, although this figure includes gate fees from contracts signed some

years ago. The lower figure reported by operators is likely to reflect gate fees charged at

the time of the survey ie. December 2018, and therefore better reflect the current market.

However, the operator survey was also dominated by respondents in England, where lower

gate fees are seen compared to Wales and Scotland.

◼ The median gate fee in Wales has reduced from last year’s £49/tonne to £41/tonne. Due

to a small sample size for Wales, it is more likely than an individual authority’s reported

gate fee has an impact on the overall result, and so the result is more sensitive to changes

7


year on year. Despite this decrease, Wales still has the highest gate fees, which is thought

to reflect the fact that a high proportion of the contracts in Wales are long-term PFI

contracts.

◼ The market continues to be fragmented, affected by local competition and national

legislation and policy. For example for in Scotland, food waste collections are mandated in

the Waste (Scotland) Regulations 2012 and in Wales, food waste tonnages are boosted

through the Collections Blueprint, creating greater demand for food waste treatment

capacity, compared to England where separate food waste collections are currently not

mandatory. Market perception is very much impacted by what is happening in the markets

in London and the south east, where gate fees are under extreme pressure. Scotland,

Wales and Northern Ireland, as well as northern England, represent stronger markets with

higher typical gate fees, which are reflected in the overall medians generated by this

survey.

Energy from Waste facilities (EfW)

◼ This year the reported median gate fee for incineration with energy recovery (EfW) is

£89/tonne compared to £86/tonne last year. For pre-2000 EfW facilities, the median gate

fee is £65/tonne, compared to £57/tonne last year. For post-2000 facilities, median gate

fee is £93/tonne compared, compared to £89/tonne last year.

◼ Of the authorities responding to the question, 65% said their gate fee had changed in

2018. Most (93%) said this was due to an inflation increase or some other contractual

annual uplift, with others reporting a change due to negotiating a new contract or contract

extension.

Non-hazardous landfill

◼ The UK median landfill gate fee is £24/tonne, which is an increase compared to last year’s

of £20/tonne. Similar to last year, variability is getting larger, with a range of £2 to

£87/tonne). Landfill gate fees vary regionally, depending upon the availability of capacity

locally and of alternative options such as EfW or ports for RDF export.

◼ Local authorities and waste contractors expect to see increases in landfill gate fees in

future years as available landfill capacity reduces.

Detailed Summary

Materials Recovery Facilities (MRF)

◼ The median MRF gate fee (for MRF contracts which sort 4 materials or more) is £25/tonne

(based on 91 responses from local authorities), up from a median of £22/tonne last year.

◼ Only 12% of local authority respondents (i.e. 15) report not paying a gate fee for MRF

services i.e. a zero or negative gate fee, in comparison to 16% (14) last year, 20% (20) in

2016 and 28% (30) in 2015.

◼ The local authority gate fees reported include historic data (long term contracts) therefore

the median reflects a combination of the current market fees and fees inherited from

past years. For contracts signed in 2018, the median MRF gate fee has increased to

£35/tonne (18 reported contracts started in 2018). Contractor interviews report that new

contract gate fees could be as high as £45-55/tonne.

8


◼ Contracting data has shown that contract lengths have decreased over time, reducing the

contractor’s commodity pricing risk. The median contract length for 2018 signed contracts

is 2 years, compared to 6 years for contracts signed in 2014, and 19 years for contracted

started before 2014. Of all contracts reported, 49% were of 5 years duration or less.

◼ Of the 129 authorities supplying responses, 89 (69%) reported a change in gate fee in

2018 (64% in 2017), with 12 (19 in 2017) reporting a decrease (mostly due to new

contract negotiation or commodity price tracking) and 49 (39 in 2017) an increase in gate

fees (mostly due to indexation and commodity price tracking9), again suggesting some

hardening in gate fees between 2017 and 2018. Of those reporting a change in gate fee

and providing a reason, 9 (11%) report the signing of a new contract, 13 (15%) report fee

change as result of a regular contractual review, 31 (36%) changes in commodity prices

(with an additional 13 (15%) as part of a contractual monthly or quarterly review giving a

total of 51%), 5 (6%) a change in the level of contamination, and 25 (29%) contractual

RPI increases.

◼ The single price range with the most gate fees is £5 to £10/tonne (i.e. the mode,

compared to £0 to £5/tonne last year); the full range of responses was from -£41 to £97,

similar to last year. Reported gate fees are influenced by a wide range of factors including

material mix, contract length and age, contractual pricing mechanism, annual tonnage,

MRF technology employed, and the degree of risk share between the authority and

contractor.

◼ Analysing median gate fee and gate fee range per UK nation (plus London) shows Wales

and Northern Ireland experiencing higher median gate fees and minimum gate fees than

England, potentially due to relative market size. This corroborates trends seen in previous

years.

◼ The key driver in MRF gate fees, as evidenced in the last 3 to 4 years of gate fee surveys,

has been variability in the value of recyclates, and the need for contractors to reduce their

exposure to this risk. For instance, in 2017 some materials showed annual price

increases10, such as +63% for mixed cans and +25% for plastic bottles from 2016 lows,

with plastics and card showing decreases over the same period. In 2018, the impact of

the China Sword initiative pushed reductions in price particularly for fibres (e.g. card -

24%) and plastics (e.g. mixed plastics -36%). This unpredictable variability has increased

the number of contracts which exercise some form of price review mechanism (in some

cases as often as weekly or monthly) based upon a basket of commodity materials pricing.

For instance, in 2018, 51% of reported contracts included such a mechanism, compared to

37% in 2017 and 29% in 2016.

◼ Of the 117 respondents expressing an opinion, 97 (83% v 84% last year) expect gate fees

to increase in the future. Of factors which local authorities report as influencing MRF gate

fees, commodity prices, input material quality and operating costs, in rank order, are

9 Note that, depending upon when contracts were signed at the value of the applied commodity material basket at that time, gate fee adjustments to compensate for basket value fluctuation can result in both gate fee increases or reductions.

10 Based upon WRAP Materials Pricing Report; 2017 variations are based on the difference between prices first week Dec 2016 and first week Dec 2017; 2018 based upon the difference between the first week Dec 2017 and first week Dec 2018.

9


deemed those having most impact on gate fees now and in the future, the same as in last

year’s survey.

◼ Interviews with contractors this year confirmed a number of factors evident from the

survey results:

o That gate fees to local authorities in general are continuing to increase;

o The market is moving much more to a fixed gate fee plus commodity price

adjustments to minimise the risk to the operator;

o That contracting is getting more sophisticated with a trend to separate MRF

processing and commodity sales requirements managed in separate contracts;

o That the market is moving much more to price review on a monthly, 3 monthly

or 6 monthly basis to take into account fluctuations in commodity prices;

o That contamination is a particular issue and contracted contamination limits are

reducing as operators try to secure new markets and prices for the recyclates

they generate.

Table 2: Summary of MRF gate fees reported by local authorities by nation (and London)

(2018) (£/tonne)

In-Vessel Composting (IVC)

◼ The median across all types of municipal feedstock being sent to IVC facilities is

£46/tonne, which is the same as was reported last year. Operators cited a similar contract

gate fee for municipal mixed food and green waste of £48/tonne.

◼ The median gate fee for mixed food and green waste for the UK, the most common

feedstock type sent to IVC facilities, has increased by £1/tonne since last year, to

£50/tonne compared to £49/tonne. Separately collected food waste is the most expensive

at £61/tonne (same as last year), and green waste the least expensive at and £33/tonne

(also increased from £31/tonne), with differences likely reflecting the additional ABPI

requirements of composting food waste, such as contamination removal before shredding,

prevention of cross-contamination between ABPI clean and dirty areas, and high

temperature composting requirements. However, the sample size for the separately

collected food waste in particular is small, and three of the seven authorities responding

were from Scotland. For food waste the operators survey median was £45/tonne, which is

significantly lower than that cited by local authorities which was £61/tonne. Regional

differences in policy and legislation impact the market for food waste. For example in

Country/Region Median Mode Range Number of gate fees

UK £25 £5 to £10 -£41 to £97 91

England (incl.

London) £17 £0 to £5 -£41 to £82 63

London £18 £5 to £10 -£2 to £38 11

Wales £49 £80 to

£85 -£2 to £81 7

Northern Ireland £39 £35 to

£40 £32 to £70 12

10


Scotland, food waste collections are mandated in the Waste (Scotland) Regulations 2012

and in Wales, food waste tonnages are boosted through the Collections Blueprint, creating

greater demand for food waste treatment capacity, compared to England where separate

food waste collections are currently not mandatory. Therefore the gate fees seen for

separately collected food waste are different between the nations.

◼ It should be noted that of operators who completed the survey, nine out of the ten were

from England, and therefore are likely to report lower gate fees than the local authorities

where there is more of a mix of regional representation.

◼ Operators gave a slightly lower figure for green waste at £26/tonne, compared to the

£33/tonne cited by local authorities.

◼ The discrepancy between separately collected food and green waste gate fees specified by

local authorities and operators may be due to local authorities reporting contract gate fees

which have been agreed a number of years ago. The analysis shows that 72% of the

authorities report sending material to an IVC facility under a contract. Median gate fees

for contracts started in 2018 were reported at £46/tonne, compared to £45/tonne last year

and £38/tonne for those started in 2016.

◼ Approximately 37% of authorities said their gate fees had changed in the last 12 months,

with 86% being increases, and the vast majority citing inflation/indexation as the reason.

◼ The waste contractor interviews suggested that IVC gate fees have remained somewhat

stable (i.e. in line with inflation) as mainly their operation is based on long term municipal

contracts. This does align with responses from local authorities and the only slight

increases in median gate fees for mixed food and green waste and separate green waste.

However, it should be noted that in this year’s data, 23 new contracts have been signed in

the last 3 years and 57% of reported contracts have a term of five years or less, which

suggests there is more turnover in the market than these operator interviews indicate.

Table 3: IVC gate fees provided by local authorities by waste material type (£/tonne)

Waste Type Median Mode Range Responses

All materials

(UK) £46 £55 to £60 £10 to £73 52

Mixed food &

green waste £50 £50 to £55 £28 to £67 28

Food waste

only £61 £60 to £65 £30 to £73 7

Green waste

only £33 £40 to £45 £20 to £64 15

Anaerobic Digestion (AD)

◼ The median AD gate fee for 2017 is £27/tonne, which is slightly higher than the £26/gate

fee in last year’s survey. The range is exactly the same as last year, with six local

11


authorities citing an income or £0/tonne gate fee for their food waste (twice more than the

three reporting last year).

◼ For England, the pattern over the last four years has been of steady decline (£35/tonne in

2014/15, £30/tonne in 2015/16, £26/tonne in 2016/17, to £23/tonne last year) until this

year, where data reported by local authorities results in a median of £26/tonne. The range

has remained the same since last year (-£5 to £68/tonne). The modal range is £15 to

£10/tonne and so the median does not fall within range, indicating variability.

◼ The median gate fee in London has increased by £1/tonne since last year, at £27/tonne.

This figure is based on eight gate fees from six local authorities. Information from waste

contractors suggests that this does not reflect the current market in London, or at least not

the more recent contracts. Only one of the contracts reported started in 2018, with a few

of the others reported as having started in the last decade, and therefore this could be a

reason the median does not reflect the market as seen by the industry. It should be noted

that there is significant variability, i.e. gate fees as low as £0/tonne and some as high as

£68/tonne.

◼ The median gate fee in Wales has reduced from last year’s £49/tonne to £41/tonne. The

range has shifted upwards slightly from £14 to £62/tonne last year, to £19 to £64/tonne

this year. One authority has made a significant saving since last year by changing

contract, and as Wales is a relatively small sample size, it is likely that this saving has

influenced the overall median figure. Despite this decrease, Wales still has the highest

gate fees, which is thought to reflect the fact that a high proportion of the contracts in

Wales are long-term PFI contracts.

◼ Although there was insufficient data to be able to report figures, for the first time this year,

an authority in Northern Ireland reported as sending separately collected food waste to

AD.

◼ The median figures of contracts which have started in each of the last three years have

been £20/tonne or below. Combining the last three years (sample size of 18 authorities),

the overall median is £19/tonne, with a range of -£5 to £50/tonne, and a modal range of

£0 to £5/tonne, which reflect waste contractor expectations of gate fees more accurately.

◼ The median gate fee of all waste streams reported by the operators is £10/tonne, which is

a £3/tonne increase on last year’s figure. It is much lower than the £27/tonne reported by

the local authorities, although this figure includes gate fees from contracts signed some

years ago. The operator survey was also dominated by respondents in England, where

lower gate fees are seen compared to Wales and Scotland.

◼ As first identified two years ago, market over-capacity (or lack of capture of available

unavoidable food waste as feedstock) in various parts of the UK is driving gate fees down

to an unsustainable level. for AD operators. The slight increase in gate fees reported by

local authorities is not reflected from the interviews with waste contractors, however they

also did not report further decreases.

◼ The waste company interviews reported that market continues to be fragmented, affected

by local competition and legislation (which affects supply). With most large waste

companies and AD sector membership organisations run from London, it seems that the

overall perception of the AD market is dominated by what is happening in the markets in

London and the south east, where gate fees are under extreme pressure. Scotland, Wales

12


and Northern Ireland, as well as northern England, represent stronger markets with higher

typical gate fees, which are reflected in the overall medians generated by this survey.

Table 4: Summary of Anaerobic Digestion facility gate fees reported by local authorities

(£/tonne) by nation (and London)

Median Mode Range Responses

UK (all gate fees) £27 £15 to £20 -£5 to £68 62

UK (contracts

started between

2016 - 2018)

£19 £0 to £5 -£5 to £50 18

England (incl.

London) £26 £15 to £20 -£5 to £68 43

Wales £41 £15 to £20 £19 to £64 10

Northern Ireland Insufficient

data

Insufficient

data

Insufficient

data 1

London £27 £25 to £30 £0 to £68 8

Energy from Waste facilities (EfW)

◼ As in previous years, results are reported for the UK as a whole, segregating results for

facilities built before and after 2000.

◼ This year, the overall median gate fee reported by local authorities for EfW (incineration

with energy recovery) is £89/tonne compared to £86/tonne last year.

◼ For pre-2000 EfW facilities, the median gate fee is £65/tonne, compared to £57/tonne last

year. For post-2000 facilities, median gate fee is £93/tonne, compared to £89/tonne last

year. The difference between pre- and post-2000 facility gate fees is thought due to the

difference in the original construction cost of facilities, particularly taking environmental

controls into account, as well as the prevailing market conditions at the time contracts

were signed.

◼ Of the authorities responding to the question, 65% said their gate fee had changed in

2018. Of those that reported a reason for this change, most (93%) said this was due to an

inflation increase or some other contractual annual uplift, with others reporting a change

due to negotiating a new contract or contract extension.

◼ Based upon the responses to this survey, in the period 2013 to 2018, a total of 41 new

contracts are reported to have started. For these contracts signed over the 5 year period,

median gate fees show that for pre 2000 facilities, new contracts were being signed at

gate fees significantly above the overall median gate fee for 2018 (£85/tonne compared to

the overall median of £65/tonne) and more in line with market (and post-2000) gate fees.

For post-2000 facilities, new contracts between 2013 and 2018 were being signed with

gate fees slightly lower than the overall median gate fee for 2018 (£87/tonne compared to

the overall median of £92/tonne). It is not clear from the data supplied, why this should be

the case. . Note in terms of contract lengths, most of the post-2000 facility new contracts

filled all or most of the capacity for newly built facilities (i.e. anchor contracts), and

therefore average at 25 years. For new contracts for pre-2000 facilities, these are renewed

13


or replacement contracts for existing long-established facilities, reflected in a much shorter

median contract term of 7 years.

◼ The range in reported gate fees is broad at £44 to £125 (£85-90 mode range). This is

because there is a significant range of contractual and funding factors which can have an

influence on gate fee charged including mode of financing (PFI/PPP or prudential

borrowing), whether the asset reverts to the local authority or not, contract length, and

whether the authority made a capital contribution. Operators reported that contracts are

getting more sophisticated and applying a unique set of contractual and funding factors,

therefore making it difficult to compare individual gate fee figures.

◼ Discussions with the waste management companies confirmed the figures generated by

the survey, and that the main impact on local authority gate fees now all of the local

authority dedicated PFI capacity has been delivered, will be contracted inflation increases.

For new contracts in the future, the likely factors influencing gate fees will be the

propensity of merchant EfW capacity (there are some active projects coming through), the

availability of landfill (which will drive local disposal gate fees) and the impact on RDF

exports post Brexit. It is thought the low value of Sterling and possible reduction in the

availability of cheap back-haul transport to Europe post Brexit will impact the availability of

European free capacity as an option, could push up RDF pricing and potentially UK EfW

spot and new contract gate fees. Although it has been suggested that Dutch operators are

looking east for future material, and are taking smaller packages of waste to de-risk, UK

contractors explain that most want to keep communication open for if they need additional

waste for capacity drops in the future.

Table 5: Summary of Energy from Waste (Incineration with energy recovery) gate fees

reported by local authorities 2018 (£/tonne)

Type of

facility


All £89 £85 to £90 £44 to £125 68

Pre-year

2000

All responses £65 £65 to £70 £44 to £89 20

With contracts £66 £65 to £70 £44 to £89 16

Without

contracts £54 £45 to £50 £47 to £81 4

Post-

year

2000



Without

contracts £93 £90 to £95 £92 to £110 3

Non-hazardous landfill

◼ Across the UK the median landfill gate fee reported by local authorities is £24/tonne,

ranging from £2 to £87/tonne, and mode of £25 to £30/tonne. This is an increase on last

year’s median of £20/tonne. However, variability of the gate fees around this median is

getting larger, which is mirrored by the fact the median does not fall within the modal

range.

14


◼ From the data collected, it would suggest that both Wales and Northern Ireland’s gate fees

have dropped since last year. In the case of Wales, a significant decrease from £32 last

year to £19/tonne this year has been reported. For Northern Ireland the median has

decreased from £13 to £9/tonne. However, in both cases, the range is identical to last

year’s results, and given that both sample sizes are relatively small (in comparison with

England for example), it is likely that the reported changes are more a reflection of the

authorities that have responded and which happens to fall as the ‘median’, which is the

key average figure reported in the annual gate fee report, rather than being a reflection of

changes in the market.

◼ Gate fees in England have increased slightly from £22 to £24/tonne, and the range of gate

fees has decreased since last year, from £2-£50 to £5-£44/tonne. There are regional

differences in England. Similar to last year, the lowest gate fees are seen in the East of

England at £10/tonne (which is a slight decrease since last year at £13/tonne) and the

highest in the North West, which has increased by £1/tonne since last year to £30/tonne.

◼ Local authorities and waste contractors expect to see increases in landfill gate fees, due to

an increasing lack of available capacity.

Table 6: Summary of landfill gate fees reported by local authorities by nation (£/tonne)

Median Mode Range Responses Median 2017

UK (including

£88.95 landfill tax,

2018/19 tax year)

£113 £114 to

£119

£91 to

£176 76 £107

UK (excluding

landfill tax) £24 £25 to £30 £2 to £87 76 £20

England (incl.

London) £24 £25 to £30 £5 to £44 48 £22

Wales £19 £15 to £20 £2 to £48 7 £32

Northern Ireland £9 £5 to £10 £8 to £52 5 £13

15


Contents Executive summary .................................................................................................. 3

Contents ................................................................................................................. 15

Tables ..................................................................................................................... 16

Figures ................................................................................................................... 17

Glossary .................................................................................................................. 19

Acknowledgements ................................................................................................ 19

1.0 Introduction ................................................................................................. 20

2.0 Approach & Scope of this study ........................................................................ 21

3.0 Survey response rates ...................................................................................... 22

3.1 Local Authorities ............................................................................................... 22

3.2 Reasons for not supplying gate fee data ............................................................. 23

3.3 Organic operators survey .................................................................................. 25

3.4 Interviews with waste management companies ................................................... 26

4.0 Results and analysis ......................................................................................... 26

4.1 Materials Recovery Facilities (MRFs) ................................................................... 26

4.1.1 Current gate fees and trends ........................................................................ 27

4.1.2 Gate fee by contract year ............................................................................. 29

4.1.3 Contract review ........................................................................................... 30

4.1.4 Materials collected and sorted ...................................................................... 31

4.1.5 Key influencing factors ................................................................................. 33

4.1.6 Waste contractor interviews ......................................................................... 35

4.2 In-Vessel Composting ....................................................................................... 35


4.2.2 Contract review ........................................................................................... 39


4.2.4 Survey of IVC operators ............................................................................... 42

4.2.5 Key influencing factors – operators ............................................................... 43


4.3 Anaerobic Digestion (AD) .................................................................................. 45


4.3.2 Contract review ........................................................................................... 47


4.3.4 Survey of AD operators ................................................................................ 50

4.3.5 Key influencing factors – operators ............................................................... 51


4.4 Energy from Waste ........................................................................................... 52


4.4.2 Contract review ........................................................................................... 55

16




4.5 Non-hazardous landfill ...................................................................................... 58


4.5.2 Contract review ........................................................................................... 62



5.0 Recommendations for future surveys .............................................................. 65

Appendix 1 – Data Collection Methodology ............................................................ 67

Tables Table 1: Summary of the UK gate fees reported by local authorities, 2018 (£/tonnes) ............ 3

Table 2: Summary of MRF gate fees reported by local authorities by nation (and London)

(2018) (£/tonne) .............................................................................................................. 9

Table 3: IVC gate fees provided by local authorities by waste material type (£/tonne) .......... 10

Table 4: Summary of Anaerobic Digestion facility gate fees reported by local authorities

(£/tonne) by nation (and London) .................................................................................... 12

Table 5: Summary of Energy from Waste (Incineration with energy recovery) gate fees

reported by local authorities 2018 (£/tonne) ..................................................................... 13

Table 6: Summary of landfill gate fees reported by local authorities by nation (£/tonne) ...... 14

Table 7: Local authority response rates 2018 .................................................................... 22

Table 8: Local authority response rates 2017 .................................................................... 23

Table 9: Reasons given by local authorities not supplying gate fee data (count of responses,

2018 survey) .................................................................................................................. 24

Table 10: IVC and AD facility operator response rates 2018 ............................................... 25

Table 11: Composting and AD facility operator response rates and (responses with usable gate

fees) by survey year ....................................................................................................... 25

Table 12: MRF gate fees reported by local authority by nation and London (2018) (£/tonne) 27

Table 13: MRF gate fee reported by local authorities by contract start year (2014 to 2018,

from 2018 data £/tonne) ................................................................................................. 29

Table 14: Changes in MRF gate fees reported by local authorities in 2018 with reasons ........ 30

Table 16: Range and frequency of materials being sorted at MRFs reported by local authorities

in 2018, with material prices changes in December 2018 per key recyclate material (as %) .. 32

Table 17: Key influencing factors – current MRF pricing (indicated by 2018 local authority

survey – 112 respondents) .............................................................................................. 34

Table 18: Key influencing factors – future MRF pricing (indicated by 2018 local authority

survey – 118 respondents) .............................................................................................. 34

Table 19: IVC gate fees provided by local authorities by waste material type (£/tonne) ........ 35

Table 20: IVC contract lengths (for which contract length was submitted) ........................... 39

Table 21: IVC gate fees based on contract start year (£/tonne) .......................................... 40

Table 22: Factors influencing current IVC gate fees (indicated by local authority survey – 44

respondents) .................................................................................................................. 40

17


Table 23: Factors most likely to influence future IVC gate fees (indicated by local authority

survey – 43 responses) ................................................................................................... 41

Table 24: Contract and spot IVC gate fees, for municipal waste, provided by facility operators

(£/tonne) ....................................................................................................................... 42

Table 25: Factors influencing current IVC gate fees (indicated by IVC operators surveyed – 9

responses) ..................................................................................................................... 43

Table 26: Factors most likely to influence future IVC gate fees (indicated by IVC operators

surveyed – 9 responses) ................................................................................................. 44

Table 27: AD gate fees reported by local authorities by nation (and London) (£/tonne) ........ 45

Table 28: AD contract lengths ......................................................................................... 47

Table 29: Factors influencing current AD gate fees (indicated by local authorities surveyed –

28 Reponses) ................................................................................................................. 48

Table 30: Factors most likely to influence future AD gate fees (identified by local authorities –

27 responses) ................................................................................................................ 49

Table 31: Contract and spot AD gate fees, for municipal waste, provided by facility operators

(£/tonne) ....................................................................................................................... 50

Table 32: Factors influencing current AD gate fees (identified by AD operators surveyed – 10

responses) ..................................................................................................................... 51

Table 33:Factors most likely to influence future AD gate fees (identified by AD operators

surveyed – 8 responses) ................................................................................................. 51

Table 34: Summary of energy recovery (EfW) gate fees reported by local authorities 2018,

with and without contracts (£/tonne) ............................................................................... 53

Table 35: EfW contracts started and median gate fees reported by local authorities 2013-2018

(£/tonne) ....................................................................................................................... 55

Table 36: Energy recovery contract lengths reported 2018 ................................................. 56

Table 37: Key influencing factors – current energy recovery gate fees 2018 (indicated by local

authority survey – 63 responses) ..................................................................................... 56

Table 38: Key influencing factors – future energy recovery gate fees 2018 (indicated by local

authority survey – 65 responses) ..................................................................................... 57

Table 39: Landfill gate fees reported by local authorities, broken down by nations and regions

within England (£/tonne) ................................................................................................ 59

Table 40: Landfill contract lengths (for which contract length data was submitted) .............. 62

Table 41: Factors influencing current landfill gate fees (indicated by local authorities – 68

responses) ..................................................................................................................... 64

Table 42: Factors most likely to influence future landfill gate fees (indicated by local

authorities – 70 responses) ............................................................................................. 64

Figures Figure 1: Reasons given for local authorities not supplying gate fee data ............................ 24

Figure 2: UK MRF gate fees reported by local authorities over time, 2008 to 2018 (£/tonne) . 27

Figure 3: MRF gate fees reported by local authorities by nation and London (2018 in £/tonne)

..................................................................................................................................... 28

Figure 4: MRF gate fees reported by local authorities by English region (2018 in £/tonne) .... 29

Figure 5: Selling prices of key recyclates January 2016 to December 2018 (where January

2015 price = 100) Source: WRAP Materials Pricing Report ................................................. 32

18


Figure 6: IVC gate fees reported by local authorities by material stream (£/tonne) ............... 36

Figure 7: IVC gate fees reported by local authorities over time by material stream ............... 38

Figure 8: AD gate fees reported by local authorities over time for the whole of the UK

(£/tonne) ....................................................................................................................... 46

Figure 9: Impact of contract start date on AD gate fees reported by local authorities (£/tonne)

..................................................................................................................................... 48

Figure 10: Pre-2000 EfW gate fees reported by local authorities over time 2009-2018 (UK,

£/tonne) ........................................................................................................................ 54

Figure 11: Post-2000 EfW gate fees reported by local authorities over time 2010-2018 (UK,

£/tonne) ........................................................................................................................ 54

Figure 12: Landfill gate fees reported by local authorities over the time for the whole UK

(£/tonne) ....................................................................................................................... 58

Figure 13: Landfill gate fees over time reported by local authorities by nation (£/tonne) ....... 61

Figure 14: Impact of landfill contract lengths on gate fees (£/tonne) .................................. 63

Figure 15: Impact of contract start date on gate fees (£/tonne) ......................................... 63

19


Glossary

AD Anaerobic Digestion

C&I Commercial and Industrial

C&D Construction and Demolition

Dirty MRF Residual Waste MRF

EfW Energy from Waste

HWRC Household Waste Recycling Centre

IVC In-Vessel Composting

MBT Mechanical Biological Treatment

MHT Mechanical Heat Treatment

MRF Materials Recovery Facility

OAW Open-Air Windrow

PFI Private Finance Initiative

SRF Solid Recovered Fuel

RDF Refuse Derived Fuel

WCA Waste Collection Authority

WDA Waste Disposal Authority

WRA Wood Recyclers Association

Acknowledgements

Our thanks to all of the local authorities who took time to contribute to this survey, and all of

the waste management companies and individuals who generously provided information or

agreed to be interviewed. In addition, our thanks to the Renewable Energies Association

(REA), Anaerobic Digestion & Bioresources Association (ADBA) and the Chartered Institution

of Wastes Management (CIWM) for their help in promoting this survey.

20


1.0 Introduction

This report contains the findings of WRAP’s twelfth annual gate fees survey. It summarises the

gate fees charged to local authorities for a range of waste treatment, recovery and disposal

options. The report also looks at the factors likely to influence future gate fees and includes

comparisons to the previous year’s results.

The aim of the gate fees survey is to increase price transparency and, by improving the flow

of information, improve efficiency in the waste management market. A lack of market

information can reduce a local authority’s ability to make informed decisions on waste

management options. Therefore, the publication of indicative gate fee information, such as

that contained within this report, should assist local authorities in making better informed

decisions regarding waste management options. The year-on-year changes in gate fees are

also valuable in informing the changes in the state of the market for different ways of

managing waste.

The objectives of this year’s survey were as follows:

◼ To capture the variation in gate fees by treatment/disposal option, by surveying local

authorities that procure waste disposal services and service providers including Waste

Management Companies (WMCs) and operators of organic treatment facilities;

◼ To encompass a broad regional distribution of gate fees for facilities across England

(including London as a separate region, and where possible, to carry out analysis on a

regional basis within England), Wales and Northern Ireland; and

◼ To assess market trends via a comparison of gate fees over time.

This report presents a review of gate fees for a range of options for the treatment and

disposal of waste, together with a forward looking analysis of the factors likely to influence

future gate fees.

21


2.0 Approach & Scope of this study

This survey compiles information regarding gate fees charged in 2018 for a variety of waste

management services. The geographic scope covers the whole of the UK with the sub regional

data by English region where sample size allows.

Requests for gate fee information were issued to local authorities, including all Unitary

Authorities, Waste Disposal Authorities (WDAs), and Waste Collection Authorities (WCAs)

within the UK. The waste management services included in the local authority survey

questionnaire were:

◼ Materials Recovery Facilities (MRF);

◼ In-Vessel Composting (IVC);

◼ Anaerobic Digestion (AD);

◼ Energy from Waste (EfW);

◼ Non-hazardous landfill.

Separate requests for information were also distributed to waste management operators in the

following sectors:

◼ In-Vessel Composting;

◼ Anaerobic Digestion.

This involved another online survey, which included questions relating to both gate fees

relating to waste supplied from municipal sources (i.e. local authority services) and

commercial and industrial sources. The results of the latter have been reported in the

separate Commercial waste gate fees report .

In addition to the above, telephone or face-to-face interviews were held with representatives

of major waste management companies. These interviews were flexible in their scope, in that

they addressed all major waste service types offered by the company in question.

22


3.0 Survey response rates

3.1 Local Authorities

A summary of response rates by authority type and the gate fee data by facility type that have

been secured by this year’s survey are shown in Table 7 below. For comparison purposes the

same data reported in last year’s survey are shown in Table 8.

Table 7: Local authority response rates 2018

England Scotland Wales NI UK

WDA WCA Unitary London Unitary Total

No. of Local

Authorities 32 230 91 37 32 22 11 418

No. of emails sent

out 118 448 239

113 80 64 35 912

No. of Local

Authorities

responding

27

(84%)

86

(37%)

61

(67%)

21

(57%)

20

(63%)

16

(73%)

11

(100%)

221

(53%)

No. responding

with usable gate

fee(s)

12

(38%)

21

(9%)

42

(45%)

10

(27%)

15

(47%)

13

(59%)

9

(82%)

112

(27%)

No. of LAs that provided gate fee data for the following facilities:

MRFs 86 (21%)

IVC 36 (9%)

AD 44 (11%)

EfW (Incineration with Energy

Recovery)

62 (15%)

Landfill 61 (15%)

Response rates were higher than last year, from 213 to 221 local authorities overall, due to

regular emails and phone calls. The number of unitary authority respondents in England

increased from 55 to 61, as well as for WDAs from 23 to 27, with a slight decrease in WCAs

from 87 to 86. In London the number of respondents also showed an increase from 14 to 21.

Responses from authorities in Wales, Scotland and Northern Ireland (100% of authorities

represented) remained very similar, with a decrease by one for Wales.

Of WCA respondents, 55% completed the survey themselves, whereas the remaining 45%

deferred to the relevant WDA. The total response rate in England increased from to 165

(47%) to 174 (49%).

23


This year 27% of local authorities responded with usable gate fees in comparison to last year’s

31%. Around 50% of the authorities who responded to the survey responded with gate fees,

which is down from 60% last year.

Table 8: Local authority response rates 2017

England Scotland Wales NI UK

WDA WCA Unitary London Unitary Total

No. of

Local

Authorities

32 230 91 37 32 22 11 418

No. of

emails sent

out

132 535 287

99

82 64 56 1,139

No. of

Local

Authorities

responding

23

(72%)

87

(38%)

55

(60%)

14

(38%) 20 (63%)

17

(77%)

11

(100%)

213

(51%)

No.

responding

with usable

gate fee(s)

23

(72%)

26

(11%)

39

(43%) 8 (22%) 18 (56%)

13

(59%)

10

(91%)

129

(31%)

No. of LAs that provided gate fee data for the following facilities:

MRFs 94 (22%)

IVC 42 (10%)

AD 38 (9%)

EfW (Incineration with

Energy Recovery)

55 (13%)

Landfill 58 (14%)

The sample size of local authorities has increased this year from 213 to 221, the response rate

still remains high with over 53% of local authorities completing the survey. The mix of

responding local authorities was also different from last year. This difference in sample is

common for this survey. For instance, of the 221 local authorities responding in 2018, 155

also responded to the 2017 survey (70%), but 66 did not, meaning they are unique

respondents to the 2018 survey. This difference in samples needs to be considered when

comparing the 2017 survey to those reported last year.

3.2 Reasons for not supplying gate fee data

Every year there are a number of local authorities contacted that say they cannot supply gate

fee data for a number of reasons. This year these reasons were captured as part of the survey

and are presented within Table 9.

24


Table 9: Reasons given by local authorities not supplying gate fee data (count of responses,

2018 survey)

Survey

Section

Unknown

- part of

an

integrated

contract

Contractually

obliged not

to divulge

Contractor

says data is

confidential

WDA

holds

the

data

No gate

fee -

use In-

house

facilities

No of

Responses

with no

gate fee

data

MRF 25 15 9 1 5 30

AD 8 3 2 2 1 30

IVC 5 5 2 2 0 28

EfW 18 12 5 1

46

Landfill 18 10 3 0 2 42

Total 74 45 21 6 8 154

Note that not all local authorities that did not supply gate fee data provided a reason for not

doing so. Overall results are presented in Figure 1.

Figure 1: Reasons given for local authorities not supplying gate fee data

Although data confidentiality was an issue with around a third of those respondents providing

a reason, 52% of those not providing gate fees did so because they did not have access to

gate fee data per waste management service type, either because they paid a single price for

an integrated contract, or because this information was held by their waste disposal authority

(WDA). Only 1 out of all respondents said that they were unwilling to provide data as it was

being collected by a third-party contractor to WRAP.

25


Additionally, this year the question was posed as to whether the WRAP gate fees survey was

useful or not to local authorities. The majority of respondents did find the survey useful with

61% opting for ‘Yes’ with only 10% ‘No’. The remaining 29% of respondents left this question

blank.

3.3 Organic operators survey

Although the overall number of respondents for both IVC and AD was higher than last year,

the number who has provided useable gate fees has decreased by 2 for IVC. However, it has

remained the same for AD. The total number of usable gate fees for both has also decreased

since last year. This was despite the support of the REA, ADBA and CIWM in promoting the

survey with their members, along with emailed and telephoned chase up. The response rates

of the organic operators’ survey are shown in Table 10.

Table 10: IVC and AD facility operator response rates 2018

IVC AD

No. of operators contacted in relation to

each type of facility 105 142

Total No. of responses (and % operators

that responded) 11 (11%) 19 (13%)

Total No. with usable gate fees (and %

operators that responded) 9 (9%) 12 (11%)

The response rates achieved by this year’s survey compared with previous years are shown in

Table 11 below.

Table 11: Composting and AD facility operator response rates and (responses with usable

gate fees) by survey year

Survey Year IVC AD

2018 11 (9) 19 (12)

2017 12 (11) 16 (9)

2016 13 (11) 15 (12)

2015 17 (11) 23 (9)

2014/15 14 (14) 12 (12)

2013/14 20 (17) 32 (10)

2012/13 10 (10) 14 (11)

2011/12 10 (7) 11 (9)

2010/11 9 3

2009/10 7 n/a

2008/09 13 n/a

26


3.4 Interviews with waste management companies

Interviews were conducted at a senior level with 3 large waste management companies to

test the draft conclusions from the local authority and operators’ surveys. The interviews with

these companies were timetabled such that the initial gate fee findings of this year’s surveys

could be discussed. Discussions were open in scope, potentially including all aspects of the

market that were relevant to gate fees in the UK.

Additionally, AD and MRF operators were being interviewed specifically on commercial gate

fees and relevant information from these interviews were also fed into the conclusions of this

report. The scope of these conversations was in relation to their specific markets.

4.0 Results and analysis

As with previous years, analysis of the cleaned survey data focussed upon generation of:

◼ Median gate fee i.e. the value in the midpoint of the distribution of gate fee data collected,

with an equal probability of falling above or below it;

◼ Gate fee range i.e. the range between the minimum and maximum values obtained in the

survey.

The mode has also been calculated for a fourth year, due to the problems of interpreting the

sometimes large range between minimum and maximum figures collected. In this case, mode

is the gate fee range (in £5 increments) which received the most responses in the survey

data. Note that the median gate fee does not always reside within the mode range.

4.1 Materials Recovery Facilities (MRFs)

To make the reported data compatible and comparable to that published in previous years,

only gate fees for mixed recyclate streams of 4 materials or more have been included in the

following analysis.

Of a total of 174 responses from 147 local authorities, 13 were rejected as streams containing

less than 4 materials, 14 where no material information was provided and 2 for other reasons.

Of those 144 acceptable responses (from 125 local authorities: 93 in England, 15 in Scotland,

8 in Wales and 9 in Northern Ireland), 91 included usable gate fee data upon which the

following analysis was based. Of those not reporting gate fees and providing an explanation,

16 local authorities reported that MRF gate fee could not be extracted from fees for integrated

contracts, 11 explained that they were contractually obliged not to provide gate fees to third

parties and 6 reported that their contractor has asked for gate fees not to be provided. Of the

remaining 14 local authorities that supplied other explanations, most operated their own MRFs

so did not pay a relevant gate fee for access.

27


4.1.1 Current gate fees and trends The high-level results from the survey are given in Table 12. The median MRF gate fee (for

MRF contracts which sort 4 materials or more) in the current survey is £25/tonne from 91

responses reported by local authorities, with a range of responses between -£41/tonne (i.e. an

income) and £97/tonne.

Table 12: MRF gate fees reported by local authority by nation and London (2018) (£/tonne)

The median gate fee is more than the £22 reported last year for the UK as a whole,

suggesting another year on year hardening in gate fees. Figure 2 charts the median MRF gate

fee over time from the 2008 survey, plus min-max ranges.

Figure 2: UK MRF gate fees reported by local authorities over time, 2008 to 2018 (£/tonne)

In last year’s survey, 14 local authorities (16% of those responding with gate fees) reported

not paying a gate fee for or earning an income from MRF services, i.e. a zero or negative gate

fee. In 2016 this was 20 authorities, 21% of those responding; in 2015 30 authorities 28% of

those responding; and 2014 this was 38 authorities, 46% of those responding. This year this

number is 15 local authorities (12% of those responding) showing a further decline, with 1

authority paying a zero gate fee and 14 authorities a negative gate fee (i.e. receiving an

Country/Region Median Mode Range Number of gate fees

UK £25 £5 to

£10 -£41 to £97 91

England (incl.

London) £17 £0 to £5 -£41 to £82 63

London £18 £5 to

£10 -£2 to £38 11

Wales £49 £80 to

£85 -£2 to £81 7

Northern Ireland £39 £35 to

£40 £32 to £70 12

28


income). Of these, the majority are short term contracts (=<7 years, median 6 years) that

started between 2013 and 2016.

The single price range with the most gate fees is £5 to £10/tonne (i.e. the mode, compared

to £0 to £5/tonne last year); the full range of responses was from -£41 to £97, similar to last

year. Reported gate fees are influenced by a wide range of factors including material mix,

contract length and age, contractual pricing mechanism, annual tonnage, MRF technology

employed, and the degree of risk share between the authority and contractor.

Of those local authorities reporting gate fees, 69% (last year 64%) report a change in gate

fee during 2018. In addition, 33% of respondents report receiving revenue directly associated

with the sale of materials sorted by the MRF. This income has been taken into account in the

calculation of the reported median (and mode)gate fees.

Regarding input specification, 70% of respondents reported contamination limits of between

5% and 30% by weight, with most between 5% and 10% (median 10%).

Analysing median gate fee and gate fee range per UK nation (plus London) shows Wales and

Northern Ireland experiencing higher median gate fees and minimum gate fees than England,

potentially due to relative market size. This corroborates trends seen in previous years.

Median gate fee and range per nation are shown in Figure 3.

Figure 3: MRF gate fees reported by local authorities by nation and London (2018 in

£/tonne)

To this end, gate fees in England only were increased compared to last year at £17/tonne

(£13/tonne last year), whereas reductions were noted in Wales at £49/tonne (£52/tonne last

year) and Northern Ireland £39/tonne (£43/tonne last year).

Low response rates in some regions mean that direct comparisons between English regions

are difficult. The data collected does show peaks in gate fee in the South East in particular,

with median gate fee in London decreasing significantly from last year (£18 from 11 responses

29


v. £43 from 8 responses last year). Median gate fees and ranges per English region are shown

in Figure 4.

Figure 4: MRF gate fees reported by local authorities by English region (2018 in £/tonne)

4.1.2 Gate fee by contract year

Of the 137 responses received, 119 (87%) report being under contract for MRF services,

similar to last year. The data received from local authorities includes a considerable amount of

historic (long term contract) data which does not necessarily reflect current market conditions.

Median gate fees were therefore determined for each contract start year, from which trends

could be identified. This shows an increasing trend in median gate fees for each contract start

year from 2014. New contracts reported this year had a median gate fee of £35 (from 18

contracts). Contract length also shows a considerable decrease depending upon the year the

contract started, from 19 years for contracts signed before 2014, to 2 years for contracts

started in 2018. Results are summarised in Table 13.

Table 13: MRF gate fee reported by local authorities by contract start year (2014 to 2018,

from 2018 data £/tonne)

Contract start year Median Mode Range

No of

contracts

started

Median

contract

length

2018 £35 35-40 -3 - 60 18 2

2017 £23 No mode11 -18 - 60 7 2

2016 £36 45-50 -10 - 70 24 3

11 i.e. no gate fee range attracted more responses than any other

30


2015 £9 5-10 -10 - 82 8 5

2014 £8 5-10 -6 - 40 11 6

Before 2014 £24 5-10 -5 - 51 37 19

Of the 129 authorities supplying responses to this question, 89 (69%) reported a change in

gate fee in 2018 (64% in 2017), with 12 (19 in 2017) reporting a decrease (mostly due to new

contract negotiation or commodity price tracking) and 49 (39 in 2017) an increase in gate fees

(mostly due to indexation and commodity price tracking), again suggesting an increase in

gate fees between 2017 and 2018. Of those reporting a change in gate fee and providing a

reason, 9 (11%) report the signing of a new contract12, 13 (15%) report fee change as result

of a regular contractual review, 31 (36%) changes in commodity prices (with an additional 13

(15%) as part of a contractual monthly or quarterly review giving a total of 51%), 5 (6%) a

change in the level of contamination, and 25 (29%) contractual RPI increases. These results

are summarised in Table 14.

Table 14: Changes in MRF gate fees reported by local authorities in 2018 with reasons

4.1.3 Contract review

Reported contract length covers a wide range, although almost half (49% of responses) are

short term, i.e. 5 years or less, with 25% between 6 and 10 years. These are very similar

results to those obtained in 2017. Nevertheless, there are some long-term contracts reported

with 18% of responses giving contract lengths over 20 years.

12 Not all of the local authorities reporting a new contract responded to this question, hence the difference in new contract figures between table 13 and table 14

Change in Gate Fee

in 2018 Responses Reason Responses

Yes 89 (69%)

New contract 9 (11%)

Contract review 13 (15%)

Commodity Price Change 31 (36%)

Change in level of

contamination 5 (6%)

Regular contractual price

review (monthly or

quarterly)

13 (15%)

RPI 25 (29%)

No 40 (31%)

Total 129 85

31


Table 15: MRF contract length

(2018)Contract length (years) Count Proportion of count

1 7 6%

2 14 12%

3 22 19%

4 6 5%

5 7 6%

6 6 5%

7 8 7%

8 4 4%

9 1 1%

10 9 8%

12 1 1%

14 2 2%

15 3 3%

18 1 1%

19 1 1%

20 2 2%

23 1 1%

24 2 2%

25 12 11%

>25 5 4%

Note: percentages do not add to 100% due to rounding.

4.1.4 Materials collected and sorted

Respondents reported the materials collected and sent to MRFs for sorting. Almost all report

the collection of key recyclates such as cans, plastic bottles, card and paper. This mirrors the

results obtained in last year’s survey. Of those responding, 70% report collecting glass in their

comingled collections. These results are summarised in Table 16.

The key driver in MRF gate fees, as evidenced in the last 3 to 4 years of gate fee surveys, has

been variability in the value of recyclates, and the need for contractors to reduce their

exposure to this risk. For instance, in 2017 some materials showed annual price increases,

such as +63% for mixed cans and +25% for plastic bottles from 2016 lows, with plastics and

card showing decreases over the same period. In 2018, the impact of the China Sword

initiative pushed reductions in price particularly for fibres (e.g. card -24%) and plastics (e.g.

mixed plastics -36%). This unpredictable variability has increased the number of contracts

which exercise some form of price review mechanism (in some cases as often as weekly or

monthly) based upon a basket of commodity materials pricing. For instance, in 2018, 51% of

reported contracts included such a mechanism, compared to 37% in 2017 and 29% in 2016.

32


Table 16: Range and frequency of materials being sorted at MRFs reported by local

authorities in 2018, with material prices changes in December 2018 per key recyclate

material (as %)

Material Number of times

material is cited as

part of MRF gate

fee

% of

responses

Materials

price change

20181

Cans 91 99% -14%2

Plastic bottles 88 96% +7%3

Card (exc. drinks cartons) 83 90% -23%4

Paper 82 89% -3%5

Aerosols 77 84%

Drinks cartons e.g. Tetrapak 74 80%

Plastic: non-bottle rigids 66 72% 0%7

Foil 65 71%

Glass 64 70% 0%6

Plastic other 29 32% -36%8

Plastic film 27 29% -23%9

Other 9 10% Key:

1 source of data: WRAP Materials Pricing Report, comparing

first week Dec 2017 to first week Dec 2018

2 As mixed cans

3 As clear PET

4 As mixed paper & board

5 As News & PAMS

6 As clear glass

7 As mixed rigids

8 As mixed polymers

9 As LDPE film

Plotting WRAP sourced key recyclate prices from January 2016 to December 2018 (as in Figure 5) illustrates a variety of changes, with significant changes, for instance, in the price of card over this period.

Figure 5: Selling prices of key recyclates January 2016 to December 2018 (where January

2015 price = 100) Source: WRAP Materials Pricing Report

33


4.1.5 Key influencing factors

As part of the survey, local authority officers were asked to select, from pre-defined lists, up

to three factors that they felt were important in influencing current and future gate fees

(respondents could select ‘other’ if they wished to add additional comments not covered in the

lists). All percentages quoted here are based on the total number of local authorities that

responded to these questions.

Of factors influencing gate fees, commodity prices, input material quality and operating costs

are deemed those having most impact on gate fees now and in the future, the same as in last

year’s survey. Note that more respondents (31 v 11) expected legislative requirements to have

an impact in future prices than they do now. Of the 117 respondents expressing an opinion,

97 (83% v 84% last year) expect gate fees to increase in the future. Results are summarised

in Table 17 and Table 18 following.

34


Table 17: Key influencing factors – current MRF pricing (indicated by 2018 local authority

survey – 112 respondents)

Factor influencing current gate fees No. of responses %

Product/commodity end market prices 91 81%

Quality of input materials 69 62%

Operating costs 52 46%

Cost of managing residues 21 19%

Inflation (RPI, RPIX) 18 16%

Competition between similar facilities 16 14%

Complying with the MRF Code of Practice 15 13%

Contractual changes, other than inflation increase 12 11%

Legislative requirements 11 10%

Availability of capacity 10 9%

Other 9 8%

Investment/capital costs 3 3%

Competition from alternative treatment options 2 2%

Government incentive schemes e.g. renewables 1 1%

Table 18: Key influencing factors – future MRF pricing (indicated by 2018 local authority

survey – 118 respondents)

Factor influencing future gate fees No. of

responses %








Complying with the MRF Code of Practice 10 8%

Other 10 8%






“Other” responses included Brexit, and lack of local markets for key materials such as plastics.

35


4.1.6 Waste contractor interviews

In interviews with waste contractors last year, the Chinese import restrictions were starting to

bite, and gate fees of up to £45-£50/tonne were reported. Interviews with contractors this

year confirmed a number of factors evident from the survey results:

◼ That gate fees to local authorities in general are continuing to increase;

◼ The market is moving much more to a fixed gate fee plus commodity price adjustments to

minimise the risk to the operator;

◼ That contracting is getting more sophisticated with a trend to separate MRF processing

and commodity sales requirements managed in separate contracts;

◼ That the market is moving much more to price review on a monthly, 3 monthly or 6

monthly basis to take into account fluctuations in commodity prices; and

◼ That contamination is a particular issue and contracted contamination limits are reducing

as operators try to secure new markets and prices for the recyclates they generate.

Waste contractors expected that commodity price volatility will continue through 2019 before

finally stabilising in 2020.

Overall the view was that reported gate fees for new contracts were up to £45-55/tonne by

the end of 2018 and beginning of 2019, significantly higher than the averaged figures

reported by the survey.

4.2 In-Vessel Composting

A total of 68 responses from 61 local authorities, 4 were rejected due to inclusion of transport

costs. Of the 64 acceptable responses, 39 included 52 usable gate fees which are included in

the analysis.

Of the responses which did not include gate fees, 6 said the gate fee was part of an

integrated contract, 5 were contractually obliged to not share gate fees, 2 stated that the

contractor said the gate fees should be regarded as confidential, and 4 provided various other

reasons such as that the contract was managed by the disposal authority.

4.2.1 Current gate fees and trends

The median for all types of feedstock being sent to IVC facilities is £46/tonne, which is the

same gate fee as reported last year. However, it is perhaps more meaningful to consider the

gate fees by feedstock type, which can be seen in Table 19 and Figure 6. The median gate

fee for mixed food and green waste, the most common feedstock type sent to IVC facilities,

has increased by £1/tonne since last year, to £50/tonne compared to £49/tonne.

Table 19: IVC gate fees provided by local authorities by waste material type (£/tonne)

36


Waste Type Median Mode Range Responses

All materials

(UK) £46 £55 to £60 £10 to £73 52

Mixed food &

green waste £50 £50 to £55 £28 to £67 28

Food waste

only £61 £60 to £65 £30 to £73 7

Green waste

only £33 £40 to £45 £20 to £64 15

No median figures were generated for other waste streams such as mixed green waste and

card, and for each of ‘mixed food, green and card waste’, only one response for the first was

received. The lack of responses for these material types has been sustained over three years

now, and so may justify a rationalisation of the survey to minimise the number of material

types included.

Of the feedstocks able to be reported, food waste is the most expensive at £61/tonne,

followed by mixed food and green waste at £50/tonne, and £33/tonne for green waste. For

most material types, the median falls within the mode range, with the exception of green

waste. The median for all materials does also not fall within the modal range, which is

expected as the markets for each material type can vary; as food waste gate fee will be

influenced by the local availability of anaerobic digestion capacity, and green waste on

availability of local open air windrow (OAW) capacity.

Figure 6: IVC gate fees reported by local authorities by material stream (£/tonne)

Figure 7 shows how the gate fees for the three types of reported feedstock have changed

since 2009/10. The following changes can be seen:

37


◼ The median gate fee for IVC using mixed food and green waste is £50/tonne, which is an

increase on the last few years, which have stayed at around £46-47/tonne prior to 2017.

The range has however remained relatively stable at the lower end for the last year, but

has seen increases at the top end over the last few years, from £28 to £63/tonne last year,

to £28 to £67/tonne this year.

◼ The median for food waste is the same as last year, at £61/tonne. Gate fees for this

material type had seen significant increases prior to this year, increasing from £45/tonne in

2015. Three of the seven responses for food waste feedstocks were from Scotland, where

the market is significantly different to the rest of the UK, partially due to the Waste

(Scotland) Regulations 2012 boosting food waste collections. The range in gate fees has

reduced this year, with the minimum increasing from £18 to £30/tonne, with the upper

range remaining the same at £73/tonne.

◼ The median for green waste only has increased from £31/tonne to £33/tonne. Although

an increase, the gate fees are not as high as in 2014/15 and 2015/16. OAW has not been

surveyed and so it is difficult to compare, but this is higher than the last median gate fee

for green waste reported in 2015/16 of £24/tonne. However, the range is fairly wide and

indicates reasonable variation.

38


Figure 7: IVC gate fees reported by local authorities over time by material stream

39


For mixed green and food waste, in England the gate fees have remained relatively stable,

having increased by only £1/tonne from £49 to £50/tonne (range £28 to £67/tonne). Last year,

there was insufficient data to be able to report IVC gate fees in Wales, and this year, slightly

smaller sample sizes were seen for both London and Northern Ireland as well.

The median for Northern Ireland seems to have increased from £49 last year to £58/tonne this

year. However, it is likely this is a reflection of the authorities who provided gate fees compared

to last year rather than significant market changes. The number of contracts in Northern Ireland

is also relatively small, as treatment contracts are managed on authorities’ behalf by waste

management groups such as arc21.

The median for London is £51/tonne compared to £55/tonne last year. As per last year, it

remains higher, but only slightly, than the English median.


Of those providing data, 72% of the authorities report sending material to an IVC facility under a

contract, while 14% said they are not using a contract at present; 14% of the authorities did not

provide a response. This is over a 10% decrease in authorities using contracts, from 83% last

year.

Of those under contract, 80% provided start and end dates, which has allowed for calculation of

the contract length. Table 20 demonstrates that 54% of the contract gate fees are associated

with contracts of a duration of 5 years or less, 62% were for a duration of 10 years or less, and

5% of contracts are over 25 years.

Table 20: IVC contract lengths (for which contract length was submitted)

Contract Length (years) Number of contracts

No. %

1 1 3%

2 5 14%

3 5 14%

4 4 11%

5 5 14%

7 1 3%

9 1 3%

10 1 3%

11 1 3%

40



No. %

12 1 3%

15 8 22%

17 1 3%

24 1 3%

>25 2 5%

Total 37 100%

Table 21 shows that gate fees for new contracts seem to have been increasing since 2015, after

a drop from years prior to that. However, it should be noted that these contracts take into

account various types of feedstock and across the whole UK, and sample sizes are small and so

significant trends cannot be claimed.

Table 21: IVC gate fees based on contract start year (£/tonne)

Contract start

year Median No of contracts started

2018 £46 4

2017 £45 9

2016 £38 4

2015 £30 2

2014 £48 4

Before 2013 £53 15

Approximately 37% of the authorities said that their gate fees had changed in the last 12

months, with 86% (of those who gave us data) being increases, and the vast majority citing

inflation/indexation as the reason.


Table 22 shows that over 55% of the local authority respondents think that operating costs is by

far the most influential factor on their current gate fees. Inflation is next at 41%, with both

quality of input materials and availability of capacity in joint third with approximately a third of

respondents believing that these are the most influential.

Table 22: Factors influencing current IVC gate fees (indicated by local authority survey – 44

respondents)

41


Factor influencing current gate

fees

Response Rates

No. %







Competition from alternative treatment

options 7 16%


Contractual changes, other than

inflation increase 4 9%



Government incentive schemes e.g.

renewables 2 5%

Other 2 5%

Operating costs is also identified by local authorities as being most likely to influence gate fees in

the future (see Table 23), followed by competition between similar facilities and availability of

capacity. This is the same ranking as last year.

Table 23: Factors most likely to influence future IVC gate fees (indicated by local authority

survey – 43 responses)

Factor influencing future gate

fees

Response Rates

No. %







Competition from alternative

treatment options 8 19%






Other 1 2%

42



fees

Response Rates

No. %

Government incentive schemes e.g.

renewables 0 0%

Of the 43 local authorities expressing an opinion, 65% think that gate fees will increase in the

future, compared to 28% that think they will stay the same and just 7% that they will decrease.

4.2.4 Survey of IVC operators

A total of 11 responses were received from IVC operators, providing 65 usable gate fees (including

both contract and spot market gate fees, for both municipal and commercial waste sources). Of

these, 49 were municipal gate fees. Details of the commercial waste gate fees can be found in the

Commercial waste gate fee report.

Table 24 shows the municipal gate fees provided by the operator’s survey. The median of

£35/tonne for all feedstock types under contract is £8/tonne lower than the £43/tonne reported

last year, and £11/tonne lower than that reported by local authorities. Less substantial changes

since last year’s operator figures are seen in specific feedstock types and so it is thought that this

result is likely to be due to the specific sample rather than reflective of particular market changes.

For example:

◼ Mixed food and green (contract): operators cited a median of £48/tonne which is a little lower than

the £50/tonne reported last year, and the £50/tonne median cited by local authorities this year,

but broadly aligns with the conclusion of a stable market.

◼ Food waste (contract): the operator’s median is £45/tonne compared to £44 last year. However,

this is significantly lower than that reported by local authorities which was £61/tonne.

◼ Green waste (contract): the operators reported a median of £26/tonne this year, a £1/tonne

decrease on last year. Local authorities reported a higher median of £33/tonne.

Table 24: Contract and spot IVC gate fees, for municipal waste, provided by facility operators

(£/tonne)

Feedstock No. of gate

fees

Gate fee (£/tonne)

Median Range

CONTRACT GATE FEES

All waste streams 40 £35 £9 to £65

Mixed food & green waste 16 £48 £27 to £65

Food waste only 9 £45 £31 to £55

Green waste only 15 £26 £9 to £35

SPOT MARKET GATE FEES

43


Feedstock No. of gate

fees

Gate fee (£/tonne)

Median Range

All waste streams 9 £45 £45 to £48

Mixed food & green waste 6 £47 Not reported

Food waste only 0 No data No data

Green waste only 3 £45 No data

The major differences between local authority and operator figures are for the separately collected

materials. We know these markets to be more influenced by region, due to different policies on

organic collections, and greater demand and capacity availability. The majority of data from the

operator survey came from IVC facilities in England (i.e. 9 out of 11). This may explain why for

example food waste gate fees are lower than reported by local authorities, as policies in Wales and

Scotland for example are in place to encourage separate collection of food from green waste,

therefore creating greater demand for food waste treatment capacity.

4.2.5 Key influencing factors – operators

The key factor influencing current gate fees cited by operators was operating costs (see Table 25).

Competition from similar facilities, competition from alternative options and ‘other’ were all cited as

joint second most influential factors, with a third of respondents giving these as influential factors.

Inflation was rated the second most influential factor last year but has not been considered as

influential as last year, with only one respondent citing this. This does not correspond with local

authority responses which suggested this was one of the most influential factors on gate fees this

year.

Table 25: Factors influencing current IVC gate fees (indicated by IVC operators surveyed – 9

responses)

Factor influencing current gate fees Response rates

No. %


Competition from similar facilities 3 33%


Other 3 33%




Quantity of input materials 1 11%




44



No. %


Table 26 shows that IVC operators expect that operating costs are most likely to influence future

gate fees. Competition from both alternative treatment options and similar facilities were ranked

next important.

Table 26: Factors most likely to influence future IVC gate fees (indicated by IVC operators

surveyed – 9 responses)

Factor influencing future gate fees Response rates

No. %












Other 0 0%


The waste contractor interviews suggested that IVC gate fees have remained somewhat stable and

that most changes since last year will have been due to inflation, which does align with responses

from local authorities as there are only slight increases in median gate fees for mixed food and

green waste and separate green waste. However, it should be noted that 23 new contracts have

been signed in the last 3 years and 57% of reported contracts have a term of five years or less,

which suggests there is more turnover in the market than these operator interviews indicate.

Operators also commented that it seems like a declining market, with local authorities moving

from mixed food and green collections to enable diversion of separately collected material to

cheaper treatment options i.e. green waste to OAW and either food waste to AD, or stopping food

waste collections entirely. This is certainly the case in Wales, where authorities have been

45


encouraged to align their collections with the Welsh Government Collection Blueprint which

specifies separate food and green waste collections.

4.3 Anaerobic Digestion (AD)

Of a total of 75 responses from 69 local authorities sending waste to anaerobic digestion facilities,

3 were rejected due to inclusion of transport costs. Of the 72 acceptable responses, 47 included

62 usable gate fees which are included in the analysis.

Of the responses which did not include gate fees, 8 said the gate fee was part of an integrated

contract, 3 were contractually obliged to not share gate fees, and 7 provided various other reasons

such as that the contract was managed by the disposal authority or that they operate their own

AD facility and therefore do not pay gate fees.


Table 27 and Figure 8 show the median AD gate fee is £27/tonne this year, which is slightly higher

than the £26/tonne gate fee in last year’s survey. The range is exactly the same as last year, with

six local authorities citing an income or £0/tonne gate fee for their food waste (twice more than

the three reporting last year).

Table 27: AD gate fees reported by local authorities by nation (and London) (£/tonne)


UK £27 £15 to £20 -£5 to £68 62

England (incl.

London) £26 £15 to £20 -£5 to £68 43

Wales £41 £15 to £20 £19 to £64 10

Northern

Ireland Insufficient data Insufficient data Insufficient data 1

London £27 £25 to £30 £0 to £68 8

The median AD gate fee reported over time is summarised in Figure 8. This shows a steep decline

in gate fee in 2015 from a steady £40/tonne to less than £30/tonne. This reflected what waste

contractors and the operators were reporting at the time. This year the gate fee has remained

relatively static at this level with only a £1/tonne rise. The range has also widened over time, and

the fact the median does not fit within the modal range (£15 to £20/tonne) reiterates that there is

wide variability across the UK in AD gate fees.

46


This median reported by local authorities is substantially higher than that reported for municipal

waste by the facility operators (£10/tonne); however, the local authority reported median does

contain a significant proportion of historical data, so the operator’s figure is thought more likely to

be an accurate reflection of current market prices, particularly in England.

Figure 8: AD gate fees reported by local authorities over time for the whole of the UK (£/tonne)

For England, the pattern over the last four years has been of steady decline (£35/tonne in

2014/15, £30/tonne in 2015/16, £26/tonne in 2016/17, to £23/tonne last year) until this year,

where data reported by local authorities results in a median of £26/tonne. The range has

remained the same since last year (-£5 to £68/tonne). The modal range is £15 to £10/tonne and

so the median doesn’t fall within range, indicating variability.

The median gate fee in London has increased by £1/tonne since last year, at £27/tonne. This

figure is based on eight gate fees from six local authorities. Information from waste contractors

suggests that this does not reflect the current market in London. Only one of the contracts

reported started in 2018, with a few of the others reported as having started in the last decade,

and therefore this could be a reason the median does not reflect the market as seen by the

industry. It should be noted that there is significant variability, i.e. gate fees as low as £0/tonne

and some as high as £68/tonne.

The median gate fee in Wales has reduced from last year’s £49/tonne to £41/tonne. The range

has shifted upwards slightly from £14 to £62/tonne last year, to £19 to £64/tonne this year. One

authority has made a significant saving since last year by changing contract, and as Wales is a

relatively small sample size, it is likely that this saving has influenced the overall median figure.

Despite this decrease, Wales still has the highest gate fees, which is thought to reflect the fact that

a high proportion of the contracts in Wales are long-term PFI contracts.

47


Although there was insufficient data to be able to report figures, for the first time this year, an

authority in Northern Ireland reported as sending separately collected food waste to AD.

Of all the authorities that responded to the question, 52% said that gate fees had not changed in

the last twelve months and 48% said they had. Of those providing data (having said gate fees

had changed), nine responses reported decreases, compared to twelve increases. The decreases

tended to be more substantial (£19/tonne reduction was the largest) and linked to new contracts

and contract extensions, than most of the increases which were smaller and linked to inflation.


Of those responding, 79% of the authorities report sending material to an AD facility under a

contract, while 13% said they are not using a contract at present; 8% of the authorities did not

provide a response. This is an increase in those not using contracts since last year (up from 6%).

Of those under contract, 81% of the authorities provided start and end dates, which has allowed

for calculation of the contract length. Table 28 demonstrates that 35% (53% last year) of contract

gate fees are associated with contracts of a duration of 5 years or less, 50% (67% last year) were

for a duration of 10 years or less, and 11% being 25 years long. Compared to last year, contract

lengths represented in this year’s sample seem to proportionally represent longer term contracts,

and so this may also explain an unanticipated rise in the gate fee median.

Table 28: AD contract lengths


No. %

2 5 11%

3 6 13%

4 5 11%

6 2 4%

7 2 4%

8 1 2%

10 2 4%

11 2 4%

12 1 2%

14 2 4%

15 10 22%

18 1 2%

20 2 4%

25 5 11%

Total 46 100%

48


Figure 9 shows the impact of contract start dates on AD gate fees. The median figures of

contracts which have started in the last three years have been £20/tonne or below. Combining

the last three years (sample size of 18 authorities), the overall median is £19/tonne, with a range

of -£5 to £50/tonne, and a modal range of £0 to £5/tonne.

2015 shows a much higher median but it should be noted that three of the five contracts started

were in Scotland and Wales, which is probably a reflection of the very different markets in these

countries in comparison in England.

Figure 9: Impact of contract start date on AD gate fees reported by local authorities (£/tonne)


Table 29 shows that an overwhelming 82% of local authorities believe that availability of capacity

is the greatest influencing factor on current AD gate fees. This is up from third last year.

Operating costs was ranked second with 75% and then competition between similar facilities with

71%. These three factors were also ranked as the top three last year but competition between

similar facilities ranked first last year.

Table 29: Factors influencing current AD gate fees (indicated by local authorities surveyed – 28

Reponses)

Factor influencing current gate fees Response Rates

No. %




49


Factor influencing current gate fees Response Rates

No. %










Other 2 7%

The same three factors rank in the same order, as being the most influential factors on future gate

fees. All of the authorities responding to this question said they thought availability of capacity

would influence them. Government incentive schemes was the fourth most influential at 70%.

Opinions about what will happen to AD gate fees over the next twelve months are relatively split,

with 45% believing they will stay the same and 41% increase, but only 14% think they will

decrease.

Table 30: Factors most likely to influence future AD gate fees (identified by local authorities –

27 responses)

Factor influencing future gate fees Response Rates

No. %













Other 1 4%

50


4.3.4 Survey of AD operators

Responses were received from 18 AD facility operators at 15 different sites. This is a small sample

of the existing AD facilities in the UK, of which there are around 10013, and therefore the results

cannot claim to be truly representative of the overall UK market. For example, only two of the

sites were based outside of England (in Scotland). From these operators, 214 usable gate fees

were provided, which were spread across different material categories (including food waste

supplied from municipal and commercial sources) and the type of commercial arrangement

entered into, e.g. contract or spot gate fees. Of these, 85 were municipal gate fees. Details of

the commercial waste gate fees can be found in the Commercial waste gate fee report.

Table 31 shows that the median gate fee of all waste streams reported by the operators is

£10/tonne, which is a £3/tonne increase on last year’s figure. It is much lower than the £27/tonne

reported by the local authorities, although this figure of course includes gate fees from contracts

signed some years ago. The operator survey was also dominated by respondents in England,

where lower gate fees are seen compared to Wales and Scotland. There is some differentiation of

waste stream type with the lowest fees for food waste in biobags and the highest for food

preparation waste.

Very few responses (from two operators) were received for spot market gate fees for municipal

waste, and therefore this is not reported separately.

Table 31: Contract and spot AD gate fees, for municipal waste, provided by facility operators

(£/tonne)

Feedstock

No. of

gate

fees

Gate fee (£/tonne)

Median Range

CONTRACT GATE FEES

All waste streams 46 £10 -£5 to £34

Food waste NOT packaged or in PE bags or biobags 4 £9 £7 to £34

Food waste in biobags 12 £7 £2 to £34

Food waste in PE bags 9 £22 £4 to £34

Packaged food waste 12 £10 -£5 to £34

Food preparation waste 9 £25 £0 to £34

13 http://www.biogas-info.co.uk/about/faqs/

51


4.3.5 Key influencing factors – operators

Although a small number of responses (from 10 facilities) were received, competition from similar

facilities was identified as the most influential factor on currently gate fees, which was the same

as the two previous years (see

Table 32). Availability of capacity followed as the second most influential. This year, quantity of

input materials has ranked much higher than last year.

Table 32: Factors influencing current AD gate fees (identified by AD operators surveyed – 10

responses)


No. %






Other (please state below) 2 20%







Table 33 shows that very similar results came from the question about the greatest influence on

future AD gate fees, i.e. that competition and availability of capacity and quantity of input

materials are likely to continue influencing gate fees.

Table 33:Factors most likely to influence future AD gate fees (identified by AD operators

surveyed – 8 responses)


No. %







Other (please state below) 1 10%


52



No. %





Of those responding, 74% of the operators thought that gate fees were going to decrease in the

next twelve months, compared to only 4% that thought they would increase; 22% thought that

gate fees would increase and remain the same.


As first identified two years ago, market over-capacity (or lack of capture of available

unavoidable food waste as feedstock) in various parts of the UK is driving gate fees down to an

unsustainable level. The slight increase in gate fees reported by local authorities is not reflected

from the interviews with waste contractors, however they also did not report further decreases.

Operators said that typically when pricing for AD, £0/tonne would be the start point. Additional

fees for packaging/contamination levels and consideration of the likely biogas yield would be

taken into account in the final pricing. However, the market is fragmented, affected by local

competition and legislation (which affects supply). Market perception is very much impacted by

what is happening in the markets in London and the south east, where gate fees are under

pressure. Scotland, Wales and Northern Ireland, as well as northern England, represent stronger

markets with higher typical gate fees, which are reflected in the overall medians generated by

this survey.

Some operators thought that aspirations contained in the England Resource and Waste Strategy,

which was published in late 2018, may have an impact on stabilising or even increasing gate

fees, as there is a requirement for local authorities to collect food waste. However, this depends

upon the results of the subsequent consultation, and it may take a while for local authorities to

all start adopting food waste collections, and so this may be a longer term impact rather than

having immediate effect.

4.4 Energy from Waste

In total there were 116 responses to the survey (excluding repeats and invalid responses) from

96 different local authorities, who reported use of energy from waste as a residual waste

recovery method. Of these responses, one outlier was excluded, and six responses received were

identified as RDF production for export to mainland Europe so were also excluded.

53


This left 109 responses from which 68 had usable gate fees. These responses were from 58

different local authorities, 46 of which were English authorities, 4 from Scotland, 7 from Wales

and none from Northern Ireland.


As in previous years, results are reported for the UK as a whole, with results split for facilities

built before and after 2000. Results are summarised in Table 34.

This year, the reported median gate fee for EfW (all responses) is £89/tonne compared to

£86/tonne last year. Of this year’s respondents, just 2 reported new contracts in 2018, although

one of these authorities reported 2 new contracts.

For pre-2000 EfW facilities, the median gate fee is £65/tonne, compared to £57/tonne last year.

For post-2000 facilities, median gate fee is £92/tonne, compared to £89/tonne last year. Three

entries did not specify the destination of their waste.

Table 34: Summary of energy recovery (EfW) gate fees reported by local authorities 2018,

with and without contracts (£/tonne)

Type of

facility

Median Mode Range

Respons

es

All £89 £85 to £90 £44 to £125 68

Pre-year 2000



Without contracts £54 £45 to £50 £47 to £81 4

Post-year 2000



Without contracts £93 £90 to £95 Insufficient data 3

The majority of responses received were for contracted gate fees (80% pre-2000, 91% post-

2000). For pre-2000 facilities, non-contracted gate fees showed a lower median than for

contracted (£54/tonne v £66/tonne). For post-2000 facilities, contracted and non-contracted

median gate fees were similar at £92/tonne and £93/tonne respectively.

Of the 76 authorities responding to the question, 49 (65%) said their gate fee had changed in

2018. The majority of these (89%) were contracted. Of those that reported a reason for the

change in their annual gate fees (45 responses), most said this was due to an inflation increase

(42) or some other contractual annual uplift, with others reporting a new contract or contract

extension.

54


The range in reported gate fees is broad at £44 to £125 (£85-90 mode range). This is because

there is a significant range of contractual and funding factors which can have an influence on

gate fee charged including mode of financing (PFI/PPP or prudential borrowing), whether the

asset reverts to the local authority or not, contract length, and whether the authority made a

capital contribution. Operators reported that contracts are getting more sophisticated and more

unique, therefore making it difficult to compare individual gate fee figures.

Looking at trends in gate fees over time, the pre-2000 gate fee has consistently hovered around

£60/tonne. Only one authority reported a new contract with pre-2000 facilities in 2018. Pre-2000

gate fee trends are shown in Figure 10.

Figure 10: Pre-2000 EfW gate fees reported by local authorities over time 2009-2018 (UK,

£/tonne)

For post-2000 facilities, median gate fees appear to have peaked at £100/tonne in 2014 and

have plateaued at £90-95 since then. This year 2 authorities reported new contracts with post-

2000 facilities. The data is summarised in Figure 11.

Figure 11: Post-2000 EfW gate fees reported by local authorities over time 2010-2018 (UK,

£/tonne)

55


Based upon the responses to this survey, in the period 2013 to 2018, a total of 41 new contracts

are reported to have started. For these contracts, median gate fees and ranges are reported in

Table 35. These show that for pre 2000 facilities, new contracts are being signed at gate fees

significantly above the overall median gate fee (£85/tonne compared to the overall median of

£65/tonne) and more in line with market (and post-2000) gate fees. For post-2000 facilities, new

contracts are being signed with gate fees slightly lower than the median gate fee (£87/tonne

compared to the overall median of £93/tonne) and range of all contracts reported for this type of

facility. Note in terms of contract lengths, most of the post-2000 facility new contracts are anchor

contracts for newly built facilities, and therefore average at 25 years. For new contracts for pre-

2000 facilities, these are renewed or replacement contracts for existing long established facilities,

reflected in a much shorter average contract term of 7 years.

Table 35: EfW contracts started and median gate fees reported by local authorities 2013-2018

(£/tonne)

Facility type Contracts started Median gate

fee (£/tonne)

Range

(£/tonne)

Median

Contract

Length

Pre-2000 8 £85 £68-£89 7 years

Post-2000 33 £87 £50-116 25 years


A range of contract lengths were reported. The split was mainly between authorities sending

material to established energy recovery facilities, with short to medium term contracts (21% of

reported contracts of length less than 10 years) with a significant proportion of PFI/PPP related

contracts for which dedicated energy recovery plants were constructed, with long term contracts

(71% of reported contracts with length 20 years or more). Contract length data is summarised in

Table 36.

56


Table 36: Energy recovery contract lengths reported 2018

Contract length (years) Count Proportion of count

1 1 1%

3 1 1%

4 2 3%

5 3 4%

7 8 10%

8 1 1%

9 1 1%

10 3 4%

11 1 1%

14 1 1%

18 1 1%

23 2 3%

24 2 3%

25 28 35%

>25 24 30%


Of factors influencing gate fees, respondents reported indexation (RPI), increased operating

costs and availability of capacity as having the most impact on current and future gate fees;

similar to last year’s responses. Responses are summarised in Table 37 and Table 38.

Of the 80 respondents providing an opinion, 68 (85%, 73% last year) expected gate fees to

increase in the future, only 6% expected a reduction.

Table 37: Key influencing factors – current energy recovery gate fees 2018 (indicated by local

authority survey – 63 responses)

Influencing factor No of responses %








Other 12 19%

Cost of landfilling residues 10 16%

57




Competition from foreign incinerators 5 8%



Cost of recycling residues 2 3%

Table 38: Key influencing factors – future energy recovery gate fees 2018 (indicated by local

authority survey – 65 responses)

Influencing factor No of responses %











Other 8 12%


Cost of landfilling residues 7 11%

Cost of recycling residues 5 8%

Competition from foreign incinerators 4 6%


Discussions with the waste management companies confirmed the figures generated by the

survey, and that the main impact on local authority gate fees now all of the local authority

dedicated PFI capacity has been delivered, will be contracted inflation increases.

For new contracts in the future, the likely factors influencing gate fees will be the propensity of

merchant EfW capacity (there are some active projects coming through), the availability of

landfill (which will drive local disposal gate fees) and the impact on RDF exports post Brexit. It is

thought the low value of Sterling and possible reduction in the availability of cheap back-haul

transport to Europe post Brexit will impact the availability of European free capacity as an option,

could push up RDF pricing and potentially UK EfW spot and new contract gate fees. Although it

has been suggested that Dutch operators are looking east for future material, and are taking

58


smaller packages of waste to de-risk, UK contractors explain that most want to keep

communication open for if they need additional waste for capacity drops in the future.

4.5 Non-hazardous landfill

A total of 125 responses from 90 local authorities, 9 were rejected due to inclusion of transport

costs or being outliers. Of the 116 acceptable responses, 76 included usable gate fees which are

included in the analysis.

Of the responses which did not include gate fees, 18 said the gate fee was part of an integrated

contract, 10 were contractually obliged to not share gate fees, 2 said the contractor said the gate

fees should be regarded as confidential, and 6 provided various other reasons such as that the

contract was managed by the disposal authority.


The UK median landfill gate fee is £24/tonne, ranging from £2 to £87/tonne, and mode £25 to

£30/tonne, excluding landfill tax (£88.95/tonne in 2018) and haulage costs. This is an increase

compared to last year’s median (£20/tonne). Error! Not a valid bookmark self-reference.

shows that gate fees have remained relatively stable over the survey period. However, variability

of the gate fees around this mean is getting larger, which is mirrored by the fact that the median

does not fall within the modal range, and the general trend appears to be up.

Figure 12: Landfill gate fees reported by local authorities over the time for the whole UK

(£/tonne)

Table 39 shows the breakdown of gate fees by nation as well as per region within England.

59


Table 39: Landfill gate fees reported by local authorities, broken down by nations and regions

within England (£/tonne)

Median Mode Range Responses Median 2017

UK (including

£88.95 landfill tax,

2018/19 tax year)

£113 £114 to £119 £91 to £176 76 £107*

UK (excluding

landfill tax) £24 £25 to £30 £2 to £87 76 £20

England £24 £25 to £30 £5 to £44 48 £22

London Insufficient

data Insufficient data

Insufficient

data 2

Insufficient

data

South East £23 £20 to £25 £12 to £29 9 £20

South West £28 £25 to £30 £10 to £39 14 £24

East of England £10 £5 to £10 £5 to £33 5 £13

East Midlands £22 £20 to £25 £11 to £28 4 £21

West Midlands £17 £15 to £20 £13 to £32 5 £24

North West £30 £40 to £45 £20 to £44 5 £29

North East £26 £25 to £30 Insufficient

data 3 £25

Yorkshire &

Humber

Insufficient

data

Insufficient data Insufficient

data 1 £13

Wales £19 £15 to £20 £2 to £48 7 £32

Northern Ireland £9 £5 to £10 £8 to £52 5 £13

Note: includes 2017/18 landfill tax value of £88.95/tonne

Figure 13 shows that gate fees are highest in England and lowest in Northern Ireland. Gate fees

in England have increased slightly from £22 to £24/tonne, and the range of gate fees has

decreased since last year, from £2 to £50 to £5 to £44/tonne.

Similar to last year, the lowest gate fees in England are seen in the East of England at £10/tonne

(which is a slight decrease since last year at £13/tonne) and the highest in the North West, which

has increased by £1/tonne since last year to £30/tonne (see Table 39).

From the data collected, it would suggest that both Wales and Northern Ireland’s gate fees have

dropped since last year. In the case of Wales, a significant decrease from £32 last year to

£19/tonne this year has been reported. For Northern Ireland the median has decreased from

£13 to £9/tonne. However, in both cases, the range is identical to last year’s results, and given

60


that both sample sizes are relatively small (in comparison with England for example), it is likely

that the reported changes are more a reflection of the authorities that have responded and which

happens to fall as the ‘median’, which is the key average figure reported in the annual gate fee

report, rather than being a reflection of changes in the market.

Just under half the authorities reported that gate fees (not including landfill tax increases) had

changed since last year, with all but one authority out of those that provided figures, citing

increases. The majority were related to inflation.

Figure 13: Landfill gate fees over time reported by local authorities by nation (£/tonne)

62



Of those authorities sending material to landfill, 77% (72% last year) did so under a contract,

while 17% (19% last year) said they were not using a contract at present. The balance of

authorities did not provide a response.

Of those under contract, 76 provided start and end dates which has allowed for calculation of

the contract length. Table 40 demonstrates that a third of the contracts are for six years or

less, just over half (51%) are 14 years or less, and 36% of the contracts are for 25 years or

over.

Table 40: Landfill contract lengths (for which contract length data was submitted)


No. %

1 2 3%

2 5 7%

3 6 8%

4 7 9%

5 3 4%

6 2 3%

7 8 11%

8 1 1%

10 2 3%

11 1 1%

14 2 3%

15 4 5%

16 3 4%

20 1 1%

23 2 3%

25 12 16%

>25 15 20%

Total 76 100%

Figure 14 shows that there seems to be a relationship between contract length and landfill

gate fees, with longer contracts having higher gate fees than shorter contracts. This may be

related to longer term contracts having an infrastructure investment element. Figure 15

shows that there is no clear relationship demonstrated by considering the year the contract

was started.

63


Figure 14: Impact of landfill contract lengths on gate fees (£/tonne)

Figure 15: Impact of contract start date on gate fees (£/tonne)


Table 41 shows that that over half (54%) of the authorities thought that landfill tax was the

most influential factor on their existing gate fees. Legislative requirements ranked second,

compared to fourth last year, with 50% of the authorities feeling this was a key influence.

Availability of capacity dropped from second to third year at 44%, and operating costs and

inflation were both still within the top five as last year, each with over 30% of local authorities

naming these are key influences.

64


The factors identified by local authorities as being the most likely to influence gate fees in the

future (

Table 42) are ranked differently to those thought to have influenced for the last twelve

months. Availability of capacity and legislative requirements are considered the most

important (53%), followed by landfill tax (50%).

Table 41: Factors influencing current landfill gate fees (indicated by local authorities – 68

responses)

Factor influencing current gate

fees

Response Rates

No. %

Landfill tax 37 54%







Competition between similar

facilities 6 9%



Other 5 7%


Product/commodity end market

prices 2 3%


Government incentive schemes

e.g. renewables 0 0%

Table 42: Factors most likely to influence future landfill gate fees (indicated by local

authorities – 70 responses)


fees

Response Rates

No. %



Landfill tax 35 50%




65



fees

Response Rates

No. %


Competition between similar

facilities 10 14%


Other 4 6%



Government incentive schemes

e.g. renewables 2 3%


Product/commodity end market

prices 0 0%

There is an increasing trend of authorities believing that landfill gate fees will increase, with

86% of authorities saying so (up from 81%, 80% and 76% the last three years). Only 3%

thought they would decrease (same as last year), with 12% saying they would remain the

same.


Discussions with waste contractors that operate landfills confirm the regional nature of the

market. There are multiple drivers which have an impact on landfill gate fees. For example,

whether there is sufficient capacity within a region, or competition from energy from waste

facilities, and what the strategy of the operator may be, i.e. whether they want to conserve

their capacity (maintain or increase gate fees) or fill their landfills as quickly as possible (lower

gate fees). Also, as landfills close, this presents the opportunity for remaining operators to

increase prices as remaining capacity becomes scarce.

The view generally was that landfill gate fees would start to increase (which agrees with the

local authority perspective), due to no new landfill infrastructure development and that

materials which are going to landfill are increasingly difficult to deal with, e.g. mattresses.

5.0 Recommendations for future surveys

It is recommended each year, that the results from the previous survey are reflected upon

prior to deciding the scope of next year’s survey in light of any recent legislation or policy, and

66


any other contextual changes. Currently, the survey captures the areas of most interest, and

in recent years has discounted open air windrow composting, mechanical biological treatment

(and other residual waste treatments) and wood waste outlets. However, with the Resource

and Waste Strategy having been launched at the end of last year, there could be outcomes

from the upcoming consultations, such as common approaches to recyclates and food waste

collections, which may need to be incorporated into the survey next year.

It should be noted in this review that changes in one sub-sector can impact other sub-sectors

e.g. potential overcapacity in AD capacity impacting on IVC gate fees, impact of RDF export

prices on landfill and EfW gate fees, so this should be taken into account when this selection

of target sub-sectors is made.

The questionnaires should be reviewed each year to ensure the questions are still relevant and

allow authorities and operators to provide pertinent information. They should also be

assessed as to whether they can be streamlined, to minimise the time required to for

respondees to maximise responses. For example, the material types being accepted into IVC

could be streamlined due to lack of responses for certain categories.

Response rates are slightly higher than last year, but not significantly. It shows that constant

chase up calls for the survey period, and engagement by organisations including CIWM, REA

and ADBA to actively promote the survey, are necessary to maintain levels but not necessarily

improve. The survey period was slightly longer this year, and completed before Christmas, as

per two years ago. Last year, the survey period spanned the Christmas period, and some

authorities said it clashed with other deadlines they had, such as their inputs for

WasteDataFlow, and does appear to coincide with a dip in responses.

Response rates from the organic operator surveys remains low, despite engagement with

ADBA and REA, who both promoted it. Engagement with waste operators proved less

successful this year. This may have been because of the publication of the Resource and

Waste Strategy at the end of last year, and the uncertainty about arrangements at the end of

March when the UK leaves the European Union. It is likely the people we sought were busy

with these other activities and unable to spare the time to comment on the results of the gate

fees survey this year.

67


Appendix 1 – Data Collection Methodology

Local authority survey

This year’s survey followed the format of the last five years’ surveys, in that it was conducted

using a web-based questionnaire. The questionnaire was constructed and designed by

Anthesis and hosted by the website Survey Monkey.

The online questionnaire was publicised to local authorities by an email containing a survey

link for each local authority contact. At least one email was sent to a specific contact at every

local authority in the UK. Where multiple contact details were available within an authority, the

survey was sent to each one. The survey was also publicised on WRAP’s website.

The covering email contained summary information about the gate fees survey in general, and

provided links to WRAP’s webpage for the previous year’s survey. As the summary report from

last year’s survey is available on WRAP’s website, a link to the relevant webpage was provided

for both of these reports rather than providing attachments in the email. The covering email

also confirmed the support of relevant organisations14; this support was extremely important

in demonstrating the credibility and importance of the survey.

The covering email was sent to all local authorities on 2nd November 2018. A second email

was then sent out to all contacts on the 19th November 2018 to remind them about the survey

and of the deadline. The deadline was extended by a few extra days (from 30th November

until 7th December 2019) and a third email was sent to inform those who had not already

responded.

Authority responses were monitored throughout the survey. Extensive phone calling was made

throughout the survey period to local authorities, to ensure they had received the invitation to

participate, to ask if the correct people had received it, and to establish whether they intended

or were able to complete the survey, by the required deadline. Local authorities were also

offered the chance to complete the survey over the phone with the Anthesis team member

making the calls. During the survey period a helpline and email address were made available

by Anthesis to answer questions and support local authority officers with filling in the

questionnaire.

Sampling strategy

14 Supporting organisations include: Department for Environment, Food & Rural Affairs (England), The Welsh Government, The Welsh Local Government Association, the Department for the Environment (Northern Ireland), LARAC, Resource London, the Organics Recycling Group (ORG) and the Anaerobic Digestion & Bioresources Association (ADBA).

68


The contact database for local authority officers was used to send emails to at least one

contact from each local authority. If a bounce-back email message was received, which

included details of a new officer, the contact list was updated and the email was re-sent. If no

new contact details were provided, attempts were made to try to identify updated contact

details (during the reminder phone calls) to which the questionnaire could be sent.

All local authorities in the UK were targeted. The intention was to maximise responses across

the board. However, there were some priority areas, to which chase up phones call were

given precedence. For example, London, partly due to the comparatively low number of

authorities, required a high response rate in order to produce accurate results. Wales was

also an area of particular interest. Phone calls were also concentrated on WDAs and Unitary

authorities, as these were considered the most likely to be able to complete the survey and

have most relevant data.

Questionnaire

A single questionnaire was used for capturing all data from local authorities. This

questionnaire included detailed questions covering all waste management services listed

within the survey scope (Section 0). Question logic was built into the survey so that if the

authority answered ‘no’ to using a specific service (e.g. a MRF or IVC) they then bypassed all

subsequent questions regarding that service type. In this manner the questionnaire was kept

relevant to the individual authority.

The online questionnaire that was developed by Anthesis for the 2015 survey was used as the

template, to which numerous alterations have been made over the years, for example removal

of MBT and wood waste reprocessing as requested by WRAP.

All questions relating to gate fees and changes in gate fees were open questions that required

the input of £/tonne values. Closed questions were restricted to the section that asked about

current and future factors influencing gate fees. This section provided a number of possible

options that respondents could select from a predefined list; however, respondents could also

select ‘other’, and add additional comments in a free text box if relevant factors were not

contained in the list.

Survey of organic waste treatment operators

The organic waste treatment operators’ survey followed the same approach as the local

authority survey, in that it was conducted using web-based questionnaires. A different

questionnaire was compiled for each of IVC and AD operators (wood waste reprocessors have

not been surveyed for the last few years). The questionnaires were constructed and designed

by Anthesis and hosted by market research website Survey Monkey.

The online questionnaires were publicised to organic waste treatment operators by a covering

email containing the relevant survey links depending on the contact and which treatment

69


technologies were relevant to them. Where multiple contact details were available within a

company the survey was sent to each one. The survey was also publicised on WRAP’s website.

The covering email contained summary information about the gate fees survey in general and

provided links to WRAP’s webpage for the previous years’ survey. As the summary report from

last year’s survey is now available on request via WRAP’s website, a link to the relevant

webpage was provided for both of these reports rather than providing attachments in the

email. The covering email also contained the logos of the supporting organisations.

The introductory email was sent to organic waste treatment operators on 12th November

2018. A second email was then sent out to all contacts on 26th November to remind them

about the survey. A third email was sent out on 30th November 2018 to operators that had

partially completed a survey or had not yet responded, and the survey deadline was extended

to the 7th December 2018 (from the initial date of the 30th November), to encourage further

responses.

Operator responses were monitored throughout the entire duration of the survey. Phone calls

were made throughout the survey period, to ensure they had received the invitation to

participate, to ask if the correct people had received it, and to establish whether they intended

or were able to complete the survey, by the required deadline. Operators were also offered

the chance to complete the survey over the phone with the Anthesis team member making

the calls. During the survey period a helpline and email address were made available by

Anthesis to answer questions and support local authority officers with filling in the

questionnaire.

For this year’s study a contact database for IVC and AD operators was updated from last year

using Anthesis’ contact details for relevant operators. A total of 236 emails were sent to

approximately 150 operators at the start of the survey period (some with multiple contacts).

Questionnaires

Individual questionnaires were devised for IVC and AD operators, based upon those devised

by Anthesis for last year’s survey. If an operator was known to have more than one type of

organic facility, multiple links were included within the emails sent to these contacts.

Waste management companies

A number of waste management companies, that have a range of technology types and

regional distribution, were identified. Key contacts within these companies were contacted to

see whether they would be willing to take part in either a telephone or face-to-face interview,

with a senior member of the Anthesis delivery team.

As was the case with previous years, it was anticipated that information gained from these

interviews would not necessarily be actual gate fee figures associated with particular facilities,

70


but, more likely, a range of gate fees and a market trend commentary. This information was

used to ‘sense check’ the information received from local authorities. The rationale was that

by not asking for gate fees for specific facilities, companies would be more willing to

participate, and would also engage in a discussion about relevant drivers in the market place.

The approach taken was to present a summary of the gate fees collected in the local authority

survey (median and regional differences) and ask the company representatives to confirm or

otherwise comment on them. General questions (rather than specific questions about gate

fees) were also asked about the local authority and commercial markets.

Data analysis and quality assurance

Whilst there is some data analysis functionality available through the website used to host the

online questionnaires it was insufficient for all the survey requirements. Consequently, the

data was exported into Microsoft Excel file format to facilitate detailed analysis and the

production of charts.

Data checking and cleansing

Once the data was exported it was checked for obvious errors, as well as less likely errors,

which required potential clarification with the respondents. This primarily involved senior

members of the team examining the data and highlighting potential errors using their

knowledge of the market.

Typical issues which were identified during this data checking and cleaning stage included for

example:

◼ Where £0/tonne gate fees were stated, checking with the authority these were valid and

that they hadn’t intended to leave blank;

◼ The same gate fee entered in both the including and excluding haulage fields; and

◼ Data which appeared to be outlying (either high or low) or illogical.

Such issues were identified within the data, checked with the supplying local authority by

phone or email and corrected prior to analysis of the data. In some cases, where responses

were not received and gate fees looked significantly out of step with others, they were

eliminated from the analysis.

Haulage costs

The key data for this survey are the gate fees charged at each type of facility (£/tonne). For

comparability reasons these must exclude all other costs which may be associated with the

management of a waste, e.g. collection, bulking, or haulage costs. For this reason, this survey

has differentiated between prices for ‘gate fees excluding transport’ and ‘gate fees including

transport’.

For comparison calculations, only gate fees excluding haulage have been used in the analysis

of data. Where responses had been received which included transport only, an estimate was

71


made as to what the transport element of that gate fee was, so a gate fee excluding haulage

could be calculated. Authorities were asked, where possible, to provide gate fees both

including and excluding haulage. These were used to calculate an average ‘transport /tonne’

cost for each facility type and then removed from the gate fees which included haulage costs.

This enabled additional data points to be considered in the overall analysis. Due care was

taken to identify any calculated gate fees where transport costs were thought not be

accurately accounted for through this method and these were removed from the analysis.

PFI / integrated contracts

A number of local authorities, with existing PFI or integrated contracts, quoted gate fees

which were obviously not ‘gate fees’ for a specific treatment facility, but represented the

whole, or part of a payment for an integrated service. Comments provided within the survey

and further questioning of some of these authorities revealed that complex payment

mechanisms were in place for waste treatment and disposal, whereby the true cost of the

technology or technologies used was masked by the structure of the payment mechanism.

This issue is particularly marked under integrated contracts, where service fees may be paid to

operators covering a range of services.

Given the issues outlined above, all gate fees that were identified as being linked to complex

payment mechanisms, and that led to unusual gate fees being quoted, were excluded from

the dataset. Clear examples of this issue are when authorities quote the same gate fee for a

range of services.

Materials Recovery Facilities

MRF gate fees depend on the range of materials collected for sorting, and therefore to allow

for comparability, only gate fees provided which represented sorting of a typical mix of at

least four key materials were included in the overall analysis.

Data analysis limitations

In the analysis of the data collected, relevant sample sizes are reported. When examining data

in detail or comparing results per waste management service from this year to those obtained

from previous years, the size of the sample on which results are based needs to be

considered. This is particularly relevant when, for instance, comparing results for a particular

waste management type at national level, or comparing results between English regions,

where a small sample size per individual nation or region may make robust comparison

difficult. Where such issues arise, these are highlighted in the text.

72


www.wrap.org.uk/gatefees2019

gate fees 2018/19 report comparing the costs of alternative waste treatment options … gate fees...

Documents