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INCINERATOR TAX NEEDED TO LEVEL PLAYING FIELD FOR RECYCLING

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New research published by Friends of the Earth [1] reveals that ...
New research published by Friends of the Earth [1] reveals that

the government is undermining its own commitment to recycling by

subsidising incineration by as much as £14.75 a tonne. The

environmental campaign group is calling on the government to level the

playing field by increasing tax on incineration in next week's

pre-budget speech and increasing subsidies for recycling schemes.

According to the research, which looks at the subsidies and tax breaks

for recycling and incineration, if the two disposal methods were to be

given comparable support from the government, recycling should receive

subsidies of up to £50 a tonne because of the energy it saves.

Incineration should be taxed at around £10 a tonne to take account of

its negative environmental impacts.

The report 'Money to Burn' calculates that the government spends

between £7.65 and £14.75 on each tonne of waste incinerated in the

form of tax breaks and subsidies. This includes money received by

incinerator operators under Climate Change Levy exemptions, the

Renewables Obligation [2] and tax breaks on combined heat and power

(CHP). But the incineration industry bears no costs for its negative

environmental impacts, including pollution and 'disamenity' to the

local area, such as effects on house prices.

Recycling in contrast saves considerable quantities of energy because

it avoids the need to make new products from raw materials. Yet

recycling receives no subsidies for this energy saving.

Friends of the Earth is calling on the government to:

. Tax incineration by around £10 a tonne to take account of its

external environmental impacts

. Increase funding for recycling to £40-50 a tonne, which is £296m

and £370m a year

In this year's budget, the chancellor promised he would review the

case for economic instruments for incineration in the light of a new

government report on the environmental and health impacts of waste

disposal. This report is expected to be published around the time of

the Pre-Budget Report on 10 December.

Friends of the Earth senior waste campaigner Claire Wilton said:

'Recycling saves much more energy than incineration, creates more jobs

and has fewer greenhouse gas emissions. But the government is giving

tax breaks and subsidies to incineration, making it cheaper for local

councils to burn rubbish rather than recycle it. This could explain

why the government is falling short on its own target of recycling 25%

by 2005. It must face the financial facts and introduce a tax on

incineration while subsidising recycling to level the playing field.'

Notes

[1] 'Money to Burn: Perverse Subsidies for Incineration' is based on

research commissioned from Eunomia Research and Consulting Ltd. A

full report is available online at

http://www.foe.co.uk/resource/briefings/money_to_burn.pdf (full

report).

[2] Exemptions from the climate change levy, and payments under the

Rewewables Obligation, are granted to energy from waste plants on the

basis that they generate renewable energy. Incineration is eligible

for exemptions from the climate change levy. Although it is not

eligible under the Renewables Obligation, similar 'thermal treatment'

technologies are.

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