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Waste Fuels: Trends In The Age Of Coronavirus

September 2020

This is a time of flux and shift, with long-established foundations undermined across societies around the world. Politicians, businesses and families alike are needing to adapt rapidly and we are disoriented, wondering which is the right path ahead. Little wonder, then, that the RDF export figures are somewhat erratic; even so, it is not simply a case of all numbers being pulled downwards in unison; there are other factors at play.

Overall, there has been an irrefutable impact on RDF export tonnages; looking at the total January to July tonnages for 2017 through to 2020 in Chart 1, even if we were to assume the continuation of the downward trend shown in recent years, we can see that there is a gap of over 500,000 tonnes between where the figures are and where they might otherwise have been.

In this period of upheaval, what shifts are taking place under the surface? This is perhaps most easily seen by reviewing market shares rather than actual tonnages. Volumes are down universally, but are there companies, countries etc which are faring better than others? Is there evidence that SRF is withstanding the storm better than RDF? Are small players proving more resilient than the big companies?

Firstly, let us consider ‘Notifier Type’. Notifiers can be categorised as either ‘Producers’ (those companies that collect and process waste, such as Biffa and Suez or other independent facilities) or ‘Aggregators & Brokers’ (for example, Geminor, Andusia, N&P, Totus etc). The market share analysis in Chart 2 indicates that ‘Aggregators and Brokers’ are increasing their slice of the cake, though it should be remembered that this does not mean that their overall tonnages have risen.

Within the ‘Producer’ element, is there any evidence that the Top 5 (Biffa, Suez, FCC, Veolia and Renewi) are performing better or worse than other independent producers? Chart 3 suggests there is not much distinction between the two groups:

Turning our attention to the Country of Destination (Chart 4), we note that the tonnages to Sweden are proving more robust than other countries, notably Germany and the Netherlands. ‘Others’ includes Latvia, Cyprus, Greece and Bulgaria; all showing relative resilience.

By grouping countries into particular regions such as ‘Scandinavia’, ‘North-West Europe’, we notice (in Chart 5) that Scandinavia is taking market share at the expense of North-West European destinations. Eastern Europe is also building share, though it is a timely point to remember that an uplift in market share does not necessarily translate into growth in actual tonnage; in this context, ‘faring well’ equates to ‘faring less bad’.

Finally, we look at the split between RDF and SRF, and it is apparent that SRF (primarily for cement kilns) is holding its own versus the relative retreat of RDF volumes. Unsurprisingly, given the messages of the previous charts, SRF from England primarily heads to (1) Eastern Europe, (2) Southern Europe and (3) Scandinavia; thus the relative robustness of these destinations aligns with the prevalence of SRF offtake. Moreover, three quarters of SRF volumes are administered by Aggregators & Brokers (rather than Producers), so again the earlier assessment concurs with the SRF performance. Indeed, the further into 2020 we look, the higher the share that is claimed by SRF versus RDF: in the three months up to July 2020, SRF accounted for almost one third of total exports of EWC 19 12 10 material.

What conclusions can be drawn from this? There are many factors taking their toll on RDF/SRF exports, such as the increase in domestic EfW capacity, the Dutch waste import tax, other transboundary movements such as SRF from Germany to Denmark or Italy to the Netherlands … and, of course, the Coronavirus impact. These aspects combine to a greater degree on the lower-grade RDF, where the future is perhaps uncertain. If the current trend in building EfW in the UK continues, then, logically, that will cannibalise the feedstock currently going overseas. Even so, it is always likely to be the case that there will be commercial (and environmental) benefit for some companies in the UK to ship their waste fuels to an R1-status CHP in the Netherlands or Scandinavia where there is efficient heat recovery as well as electricity, rather than for it to be hauled by road to an energy facility in the UK purely for its electrical potential (though the rise in emphasis on heat networks in the UK is acknowledged). Furthermore, the resilience of the SRF production / export figures in the face of significant global turbulence indicates great promise for this form of fuel, as the cement industry seeks ways to make their product in a cleaner, less impactful way. The overriding trend to reduce dependence on fossil fuels and minimise pollution gives a sense of optimism for the future strength of SRF exports.

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