£24Bn Tax Bill for Decommissioning Oil and Gas Assets in UK Waters

The OGA estimates that the total cost of decommissioning around 320 installations, including offshore platforms, will be between £45 billion and £77 billion. But operators can use decommissioning costs to offset corporation tax they have paid since 2002 and petroleum revenue tax, which is a tax on profits made on oil fields commissioned before 1993. In November 2017, HM Treasury changed tax rules so that companies buying assets could offset decommissioning costs against taxes paid in the past by the operator selling the assets, a change that was intended to make buying and selling assets more viable for operators.

The NAO notes that operators’ expenditure on decommissioning is rising: they have spent more than £1 billion on decommissioning in each year since 2014. In 2016/17, the government paid out more to oil and gas operators in tax reliefs than it received from them in revenues for the first time – a repayment of £290 million.

Revenues recovered in 2017/18 – the Office for Budget Responsibility expects net annual receipts from the oil and gas sector to  rising from £1.2 billion in 2017/18 to £2.4 billion in 2022/23 - but the government’s tax relief payments are increasing as tax revenues fallen due to a combination of lower production rates, a reduction in oil and gas prices and operators incurring high tax-deductible expenditure.

SUEZ Cleans Up With Landfill, Recycling & Waste to Energy Deal in Serbia

Home to the largest dumpsite in Europe still in use, Serbia’s capital city, Belgrade, has turned to French environmental services firm as it looks to clean up its waste disposal.

Image © Jovan Marković, Via Flickr

Home to the largest dumpsite in Europe still in use, Serbia’s capital city, Belgrade, has turned to French environmental services firm as it looks to clean up its waste disposal.

Following a competitive bidding process SUEZ has secured the largest PPP contract in the country so far to build a new waste to energy plant and a C&D waste recycling plant. As part of the 25 year deal the firm will also build a new sanitary landfill and take on the significant task of remediating the old Belgrade municipal waste site. Through a Special Purpose Vehicle with its partner ITOCHU, SUEZ will also be responsible for financing, construction and the long-term operation of the new facilities.

Fabrice Rossignol, CEO SUEZ Italy, Central & Eastern Europe and CIS explains that the bidding process was “very complex because it’s a PPP and there was little experience in the country”. However, As part its Cities Initiative, the International Finance Corporation (IFC), a member of the World Bank Group, advised the city of Belgrade on structuring and implementing the PPP.

“The Belgrade Waste PPP is a landmark and pathfinder project for a region which has huge investment needs in infrastructure, in particular in the environment sector. We are convinced that Public-Private Partnerships are among the best solutions to combine technical, financial and contractual performance,” says Marie-Ange Debon, senior executive vice-president at SUEZ.

Heat & Power
Under the agreement, SUEZ and ITOCHU’s SPV will raise over €300m to build a 340,000 tonne per year combined heat and power waste to energy facility. Once operational it is expected to generate 25 MW of electricity 56 MW of heat.

When it comes to waste composition Rossignol explains that it’s not so different to that being processed by similar plants in Western Europe, but there is a bit more moisture and  less packaging than in more developed countries.

The electricity is to be sold to the grid, while the City of Belgrade will take the heat for its district heating system, which is currently meets 86% of its energy requirements using natural gas.

Being a 25 year contract there is always the potential for the waste stream entering the plant to change over time. Rossignol explains that that was one of the reasons behind the choice of combustion technology. “We’re talking about a failrly clasical grate incineration plant, so the grate can take anything,” he says.

The combustion and emissions technology are being carried out by French firm CNIM, which will also manage construction of the project alongside Serbian construction company Energoprojekt.

Out with the old
In use since 1977, Vinča landfill is the largest in the Belgrade area. It’s been receiving around 2700 tonnes of waste every day for years, with little by the way of environmental control. In June this year a fire at the site burned for over a month causing alarm over air pollution among residents.

“We’re going to build a new landfill and rehabilitate the old dump,” says Rossignol. “It’s a huge dump with leachate going straight into the Danube. We will have to excavate the waste and move it. It’s quite a complex remediation project, with a significant amount of money involved. For that we rely on our knowhow, but also on local companies.”

“From a technical point of view, the beauty of the project is that we can do one line {at the waste to energy plant} for all 340,000 tonnes, which is not usual,” he continues. “The fact we can do it with only one line is due to the fact that there will be a landfill. When you close the line for maintenace you need to have a place for the waste. Also part of the project is to collect the landfill gas and recover heat and energy.”

The Future
While the contract also includes the construction and operation of a facility to process 200,000 tonnes of C&D waste per year, it does not include dedicated municipal waste recycling infrastructure.

According to Rossignol, while the city is not developing an MRF for municipal recycling right now, a significant quantity of the available recyclable materials are collected by the informal sector at source.

However, he does expect a more formal approach to the collection and sorting of recyclables in the future, but says that at the moment the focus is on diverting waste away from a highly polluting dumpsite and ensuring that what is landfilled is done so at a sanitary facility.

Do Waste to Energy Plants Discourage Recycling?

A common perception amongst the public is that Waste to Energy plants discourage recycling. Gareth Jones argues, it can be easier and more economically feasible than traditional recycling methods for some plastic

Opinion blog GARETH JONES  


A common perception amongst the public is that Waste to Energy plants discourage recycling. Gareth Jones argues, it can be easier and more economically feasible than traditional recycling methods for some plastics.

It has been reported that the five European countries with the highest recycling rates (Germany, Austria, Sweden, Netherlands and Belgium) are amongst the countries with the most Waste to Energy (WtE) facilities in Europe. These countries use their landfills to dispose of less than 1% of the waste they generate, with the majority being productively handled by WtE plants. The environmental benefit of these facilities is on a much larger scale than many know.

To offer an insight into a debate that’s often plagued with misconceptions, as well as addressing the benefits of WtE, it is important to outline the many ways by which WtE plants operate in conjunction with recycling, working to utilise waste as a resource.

Firstly, it’s important to note that there are strong parallels between WtE plants and recycling. The myth of diminished recycling efforts can be dispensed with as evidence by showing the positive impact these plants are having. As the pair work hand in hand with one another, results are only being seen as beneficial to the environment.

It goes without saying that recycling is an incredibly positive method of dealing with waste of all kinds and we have become much better at doing it. For example, recycling a tonne of aluminium saves 14,000 kWh of electricity, and there’s no limit to the number of times you can recycle drinks cans, so the cycle is endless. As much as this is all a positive, it’s fair to state that the process isn’t perfect. The value of plastic has dropped and outlets have dried up, which has created a ripple effect across the entire recycling industry.

Financial Concerns
Despite the push for recycling, in a large number of countries there are financial concerns for many municipalities, and it appears that huge amounts of plastic are being exported to dubious landfill sites rather than being recycled. This therefore suggests that our recycling efforts alone are not enough to deal with our waste.

Most recycling centres are restricted to collecting only a few types of plastic, limiting the chance of success. As a result of these challenges, the recycling industry continues to struggle with the variety and volume of potentially recyclable waste.

For both waste disposal and waste treatment, we require a number of solutions in order to effectively keep costs down whilst remaining efficient.

While waste prevention and recycling must be at the forefront of any waste management approach, WtE plants demonstrate that recycling needn’t be our only method of material reuse. These plants help to eliminate the limitations set on recycling of complex materials and prove to work well in collaboration with recycling efforts.

WtE plants have been found to generate 500kWh of electricity per tonne of waste, highlighting their indisputable productivity levels. With the government investing heavily in the awareness and encouragement of recycling, the public has become increasingly passionate about material re-use.

However, despite everyone’s efforts, there are still materials that are not suitable for recycling found in recycling bins. WtE plants put non-recyclable materials to the best possible use. With the help of these plants, we deal with all materials in a responsible manor, ensuring that we know where the waste has gone and simultaneously producing energy.

To put things simply WtE plants are designed to extend our ability to recover and recycle. A large amount of ferrous materials can be recovered from bottom ash and the ash itself can be used as secondary aggregate, actively contributing to recycling.

There are a number of factors that can adversely affect recycling efforts, including contamination, segregation, and complex packaging materials. WtE helps provide a solution to these setbacks, helping to avoid the problems inherent in nationwide recycling systems.

Creating a More Positive Future
A common perception is that waste management plants are only there to create a solution for residual waste, whereas they should continue to engage and encourage the public to recycle too. If we are to create a more positive future for the environment and for waste management, it’s important to continue to raise awareness and help the public understand all aspects of recycling and energy generation.

WtE plants are not the smoke-pumping, landscape-ruining developments the public often associate them with. The aim is to design structures that blend in with their surroundings and provide an economic value to the surrounding communities.

None of the materials that are sent to landfills are converted into re-usable material and little energy is produced. WtE plants are able to produce energy from items that cannot be recycled so that they are sustainably recovered.

The public should be encouraged to research and ask questions so that they themselves discover what experts across the world already know; WtE is an increasingly successful industry driving positive environmental and economic growth, enhancing our aim to see waste as a resource.

Gareth Jones is Business Development Manager at Indaver and has worked in waste management for 20 years, including Indaver's proposed waste to energy plants.

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