truck at landfill

Landfill tax subsiding the waste industry?

14 March 2018

I’m not anti-landfill tax. In fact, I think the tax plays a crucial role in changing behaviours. Without the tax and the prospect of many more rises to come, I’m sure that the waste processing industry would have struggled to embrace alternatives to landfill quite so quickly as it has.

My issue is with how the tax is routinely used by commercial waste processing facilities to justify disproportionate annual hikes in their gate prices. Every year in the lead up to 1 April, waste carrier businesses like our service partners contact tips across the UK to ask for clarity about likely rate rises. This is because they need to know how much their disposal costs will be so that they can adjust their own rates for the coming year. Every time they make contact, the initial response tends to be something along the lines of, “Our prices are going up; we can’t really say by how much yet, but it’s likely to be either in line or a little bit more than this year’s increase in landfill tax.”

Then there comes a period where all the tips in each region wait for every other to make the first move, despite the fact that nothing changes in terms of their costs until 1 April. Meanwhile, waste carriers are left to guess what the price increases will be so that they can inform their own clients what rate changes to expect from the beginning of April.

I realise that running a tip is a business and everyone out there is looking to maximise profits. However, when a site promotes itself as having landfill diversion rates of, for example, even as low as 75 per cent, then how can a landfill tax increase of £5 per tonne translate into a rise of £10 in their mixed waste tonnage rates? Basic maths would suggest that if you divert 75 per cent from landfill, only 25 per cent of any landfill tax increase would need to be passed on (i.e. £1.25 per tonne, not £10).

As I said, landfill tax is ultimately forcing the industry to change habits and processes for the better, but wouldn’t it be refreshing if commercial waste facilities simply spelt out the fact that they want to make a bigger profit, rather than using landfill tax as a smokescreen for above-inflation price hikes? Alternatively, another, more justifiable, explanation for a 10-15 per cent price increase would be very welcome!

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