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
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  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.'
 '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
 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'