Long-term stability, political guidance and regulation are needed if the UK waste industry is to achieve the capacity and diversity it requires.

According to Ian Goodfellow, managing director of Shanks Waste Management, and chairman of the Environmental Services Association, the uncertainty in the current market is leading to funding problems for those responsible for procuring capacity.

Lenders are uncomfortable when they see clients not able to guarantee either volume or quality input, and the typical return on investment in a large Waste to Energy (WtE) facility can be in the region of 15 to 18 years after debt repayments, he said.

Speaking at the International Energy from Waste Conference, held in London this week, Goodfellow said: “From an industry point of view, what we need is political certainty on the fuel market. Less consultation and let’s have some more regulation and legislation so we can invest over the long-term. Long-term visibility, less political instability.”

Tim Judson, from the North London Waste Authority also called for increased certainty in the industry. He raised strong conerns about whether the waste industry would reach its required capacity, and its contribution to energy.

According to Judson, the industry has had a rocky ride through the credit crisis, and has been hit hard by government cuts. Now it needs to address issues like planning and engage with local communities if it is to deliver new WtE facilities.

There is also a need to de-risk projects and reduce costs, not through trying to pass the risks from one side of the table to the other, but by taking the risk out of the process.

Judson added that the industry needs to do more with local authorities to exploit some of the opportunities that arise from WtE solutions, and get better value for some of the materials created.

“I think London’s the place to start - it’s the place that’s got the greatest opportunities and the greatest threats going forward. If we can solve the waste management and the energy opportunities in London then the rest of the UK will be fine,” said Judson.

Another major hurdle the industry faces, is that with the exception of traditional thermal WtE, and some forms of Anaerobic Digestion (AD), many of the required technologies are not yet ready to deploy on the scale required, according to Andy Ryan, development director at Waste Recycling Group.

Ryan also said that the industry is moving away from an era of being assisted by PFIs.

“We’re moving past the end of PFI’s moving into an era where much of the capacity is going to be merchant, and that introduces a whole other dimension of risk on underpinning the inputs . And that’s before you get into the issue of what the composition of the waste is going to be….in undertaking a 25-year project somebody is underwriting the risk of what the public throws away for the next 25 years,” he said.

The development director added: “To make investments of the scale needed other sources of finance are going to have to be put in place. The typical bank project finance is very difficult given the risk positions that are on offer, so where is the underpinning going to come from? That’s a big issue.”