5. About Bird & Bird
● A truly international firm
● Over 1,200 lawyers and legal practitioners worldwide
● Leading-edge expertise across a full range of legal services
● Specialists in cross-border and multi-jurisdictional work
● Excel at managing complex projects across multiple regions with a seamless one-firm
approach
6. Energy
Management
Introduction to our International E&U team
A team of over 100 lawyers spread across our network advise on energy and
utilities matters across all of our practice areas. As an international team, our
sector approach is not broken down by offices but into sub-groups that focus
around particular aspects of the Energy and Utilities sector.
Our current areas of focus include:
Networks &
Transmission
Nuclear
Oil & Gas
Renewable
Energy
Energy
Storage
Digitisation
7. Transforming the Energy System2.3 IoT Applications 43
Fig. 2.18 Smart grid representation.
pathway for the packet to reach its destination with the best integrity levels. In
D3:
1. Distributed Generation
2. Demand management
3. Demand response
8. State of Play…
Over 600 operational plants, 3.5% of
renewable electricity
Reform of the Renewable Heat Incentive
Changes to the RTFO
Environment Agency charging regime
Clean Growth Strategy - HNIP
10. Bird & Bird is an international legal practice comprising Bird & Bird LLP and its affiliated and associated businesses.
Bird & Bird LLP is a limited liability partnership, registered in England and Wales with registered number OC340318 and is authorised and regulated by the
Solicitors Regulation Authority. Its registered office and principal place of business is at 12 New Fetter Lane, London EC4A 1JP. A list of members of Bird & Bird LLP
and of any non-members who are designated as partners, and of their respective professional qualifications, is open to inspection at that address.
twobirds.com
Thank you
Levent Gürdenli
Senior Associate, Bird & Bird
levent.gurdenli@twobirds.com
(+44 (0)20 7415 6612)
11. The political context for AD:
threats and opportunities
ADBA Spring Members’ Meeting, London 18th April 2018
Chris Huhne, Strategic adviser, ADBA
12. Overview
Economy has
slowed but real
wages stabilise
Making Brexit
work means
farm dangers
Tight public
finances due to
lost revenue
Need for rural
decarbonisation
and winter heat
13. A tale of two forecasts: 2018 v 2015Economic and Financial Outlook of the Office of Budget Responsibility, comparing Spring 2018 with November 2015 forecasts
2016 2017 2018 2019 2020
Levels of GDP in Spring 2018 forecast 100 101.7 103.3 104.6 105.9
Levels of GDP in Autumn 2015 forecast 100 102.5 105 107.4 109.8
Shortfall of 2018 over 2015 % 0 -0.8 -1.6 -2.6 -3.6
Total GDP in £ billions (FY) 2054 2116 2177 2241
Shortfall of GDP in £ billions -£16.03 -£34.26 -£56.76 -£79.60
Shortfall per household per year -£592 -£1,264 -£2,094 -£2,937
15. What this means for state spendingEconomic and Financial Outlook of the Office of Budget Responsibility, comparing Spring 2018 with November 2015 forecasts
FY 2016-7 FY 2017-8 FY 2018-9 FY2019-20 FY 2020-21
2015 autumn forecast for public receipts 723.4 762.7 796.5 831.1 871.9
2018 spring forecast for public receipts 726.5 752.2 775.8 800.1 824.9
Shortfall of public receipts in £ billions a
year 3.1 -10.5 -20.7 -31 -47
Shortfall of public receipts per week in
£millions -£201.9 -£398.1 -£596.2 -£903.8
17. Canada-style or Norway-style?
All options involve slower growth, but Canada is slowest
Norway and single market keeps standards aligned – and
stops non-tariff barriers
NTBs matter because GATT/WTO has cut tariff levels: now
world tariff levels average 2.88%; USA is 1.6% and EU is 1%.
FTA involves rules of origin on complex products
Admin costs and border delays add at least 2%
Just-in-time supply chains will break down
18. New NIESR estimates for tradeMonique Ebell study for National Institute of Economic and Social Research.
19. Will Brexit be reversed or softened?
Hopes of remainers for soft brexit or even breversal, but
March 2019 is not far off
Polling is not shifting fast enough, and referendum made
politicians into followers
But key vote on customs union has been post-poned until
after the May local elections: it may be Turkey or Norway not
Canada.
No Tory leader in recent years has faced down the right of the
party and risked split – will May?
21. Danger for farming and rural UK
EU farm spending only guaranteed until 2020
UK farming value added now represents just 0.7% of GDP
(£14 billion) and employs 430k
Subsidies exceed any other industry £3bln a year
Plus agri property relief from IHT: £515 million this year
Plus agri exemption from business rates: £100m
Plus farm averaging of profits, ag societies relief for shows,
red diesel
22. But opportunity for AD
Imperative of decarbonising farming, and AD is essential says
Committee on Climate Change
Search for rural diversification will favour AD
UK needs heat sources like biogas that can meet winter
demand surges (no solar, limited wind)
Also alternative uses like HGVs for transport
But future will depend on cost reduction in a world of tight
public finances
23. Gas is key to winter heat surgeGas demand in billion cubic metres per month (GB)
24. Summary
Hard Brexit or no deal is still a possibility
But watch the votes in Lords and post-locals Commons
Whitehall is still consumed by Brexit, limiting initiatives
Climate change imperative mandates AD for farming
Batteries cannot cope with heat surges: biogas is essential for
northern countries
But tight public finances may constrain support
Key to scale and speed of AD deployment will be cost reductions:
incremental and tech breakthroughs?
25. THE POLITICAL CONTEXT
FOR AD
QUESTIONS AND COMMENTS FROM THE
FLOOR WITH:
CHRIS HUHNE,
STRATEGIC ADVISOR, ADBA
31. 31Internal Only
Timelines
• Government response was released on 14 December 2016 outlining key policy decisions
• Regulations were laid on the 7 February 2018
• Tariff Guarantee budget allocations announced on 14 March 2018
• Subject to parliamentary approval, the regulations are expected to come into force in Spring 2018
• Applications for tariff guarantees will open at 10am on the day the regulations come into force or if this is not a
working day at 10am on the next working day
32. 32Internal Only
Tariff Guarantees
A tariff guarantee allows applicants to the Non-Domestic RHI to secure a tariff rate before their
installation is commissioned and fully accredited on the RHI.
• New form of application
• Consists of 3 stages
• One RHI number to be used through all 3 stages
Guide to Tariff Guarantees released on 12 February 2018.
33. 33
NOTE: Stage 1 and stage
2 information can be
submitted together
36. 36
Key date What is it used for? Assumptions/ comments
1 – Stage 1 submission
date
Determines the ‘tariff rate
date’
Assumes that the application is ‘properly made’ on
submission
2 – Expected
commissioning date
See key date 5 Can be amended during the stage 1 and 2
application stages. Is locked down once the Tariff
Guarantee is awarded (end of Stage 2).
3 – Date PTGN is issued The start of the 3 week
window to submit financial
close evidence
4 –Stage 2 submission date Has to be within the 3 week
window
If ‘properly made’ financial close evidence is not
submitted in the 3 week window the TG application
will be rejected.
5 – Stage 3 submission
date
Cannot be submitted before
key date 2 (expected
commissioning date). Must be
submitted within 6 months of
key date 2. Final cut of date
for all stage 3 submissions is
31st Jan 2020.
Example 1
Key date 2= 01/01/2018
Stage 3 submission window = 01/01/2018 to 01/07/2018
Example 2
Key date 2 = 05/10/2019
Stage 3 submission window = 05/10/2019 to 31/1/2020
37. 37
Stage 1 evidence – all applications (except biomethane)
• The energy source and technology that you
propose developing
• An address and contact details for the
applicant
• Location of the plant
• Expected commissioning date (which must be
before 31 January 2020)
• The expected heat to be generated each year
for eligible purposes
• The expected installation capacity of the plant
• Evidence as to the proposed heat use
• Evidence from the relevant local planning authority that any
necessary planning permission has been granted (or
evidence that it is not required)
• A declaration that the plant will be owned or jointly owned
by the applicant
• For CHP the power efficiency that the plant expects to
achieve
38. 38
Stage 1 evidence - biomethane
• The energy source and technology that you propose
developing
• An address and contact details for the applicant
• Location of the plant
• Anticipated date of the commencement of
injection in the case of biomethane (which must be
before 31 January 2020)
• The expected volume in cubic meters of
biomethane that you expect to produce for
injection each year once injection has commenced.
• The expected maximum initial capacity for the biomethane
• Evidence from the relevant local planning authority that any
necessary planning permission has been granted (or
evidence that it is not required)
• Evidence that a Connection Agreement has been entered
into
• A declaration that the plant will be owned or jointly owned
by the applicant
39. The budget check
39
The budget allocation for tariff guarantees was be published by BEIS on 14 March 2018 and is set at approximately 50% of
the remaining budget available for each financial year.
When an application is submitted Ofgem will estimate how much spend an installation will commit towards RHI budgets in
the 2018/19, 2019/20 and 2020/21 financial years using formulae listed in the regulations. The factors used in this
formulae use information from the stage 1 application and information published by BEIS.
There are 4 key formulae:
• Committed spend for the first year
• Committed spend for the second year
• Estimated heat for accreditations
• Estimated hear for biomethane
43. How does the queue work?
43
The past two slides have covered how the committed spend for each application is calculated. The next question is how is
it determined whether or not there is enough budget for that application?
• Applications are assessed in the order they are submitted against the available budget
• If an application breaches the budget in any of the 3 years it will be placed in a queue.
• When budget becomes available in any financial year the application at the top of the queue will be re-assessed against
the available budget and so-on
• Budget may become available either through applications dropping out of the TG process and releasing budget OR by
BEIS increasing the overall pot allocated to TG’s
In the following example we will assume the following budget allocations (these figures are for demonstration purposes
only)
45. 45
Resuming our example let’s assume
that the headroom is increased by
£50million in each financial year…
46. 46
Financial close evidence will need to prove two main points; firstly that funds are available to cover the complete
construction of the proposed project; and secondly that these funds are formally committed to the project. This proof may
come from investment agreements or some other form of legal or contract documentation. Crucially, financial close
evidence must be verified and supported by a report from an independent auditor who is not a ‘connected person’ (this
means any person connected to the applicant or investor as defined in section 1122 of the Corporation Tax Act 2010) .
The report should confirm:
• The validity of the financial close evidence provided
• That funds are available to cover the complete construction of the proposed project
• That these funds are committed to the proposed project
• Any caveats with regards to the above points
Ofgem prefers to receive financial close reports, including any relevant evidence in the ISAE3000 format (limited
assurance). When reviewing this report Ofgem will consider the information closely to determine whether or not financial
close has been met.
Stage 2 – financial close evidence
47. 47
Revoking a Tariff Guarantee
A Tariff Guarantee can be revoked where:
• There has been a material change in circumstances such that had the application
for the TG been made after the change, it would have been refused
• The installation does not commission and an application is not submitted before
the date noted in the Tariff Guarantee notice (earlier of exp. Comm. date + 6
months or 31/1/2020)
• The information on which the decision to issue a TG was based was incorrect in a
material particular
• The information on which the decision to issue a TG was based is materially
different to that in the stage 3 application
• An installation is materially different if the capacity is 10% greater or smaller than that provided at
stage 1 (does not apply to biomethane)
• Significant changes in the maximum initial capacity of biomethane. The installation capacity is such
that a different tariff would apply
49. RHI UPDATE
QUESTIONS AND COMMENTS FROM THE
FLOOR WITH:
CHAIR: OLLIE MORE, HEAD OF POLICY, ADBA
OLIVER QUAST, HEAD OF MARKET INTELLIGENCE, BEIS
LUKE BAILEY, SENIOR POLICY MANAGER - RHI, NEW SCHEME
DEVELOPMENT, OFGEM
52. 52
Strategic Review of Charges
AD Sector
Annual Subsistence Charging
Kathryn Nicholls– Environment & Business
53.
54. Response to the consultation
Waste Treatment Questions Responses Yes No Other
Q48 Do you agree with our proposals for the
waste: land spreading (mobile plant) sector
permit charges? - Do you agree with our
proposals for the waste: land spreading (mobile
plant) sector permit charges?
68 16 51 1
Q49 Do you agree with our proposals for the
waste: waste transfer and treatment sector
permit charges? - If not, please explain why
84 45 38 1 (BVSF)
22 Do you agree with the additional charge to
cover extra regulation work in the first year of
operation on an activity? - Do you agree with the
additional charge to cover extra regulation work
in the first year of operation on an activity?
182 62 117 2
54
55. First Year Charge
• Subsistence charges – additional charges
• 14. (2) The following additional charges apply –
• (a) £672, for the first year of the subsistence of a permit
granted on or after 1st April 2018, where that permit authorises
activities falling within a description in Table 2.16 of the
Subsistence Charge Table;
55
56. Charging scheme for Definition of Waste Services
• From June 2018
• Definition of Waste (DoW) service supports businesses make
decisions about the waste status of their materials
• No legal requirement to seek our opinion but a positive opinion
can lead to substantial business benefits
• Previous DoW services were suspended in Sept 2016 due to
lack of resources
• Time and materials charge:
• Upfront fee on submission (£750) then set hourly rate (£125)
56
59. Compliance Approach Basics
• We tried to keep it simple and understandable by layperson
• Work within current permit ‘limits’ for charging
• Same approach across waste installations and operations
• Recognise that:
• Recovery does not take less compliance resource than disposal
• Std Rules sites in some instances means similar compliance effort as
bespoke
• Need to reflect about baseline admin / indirect costs
59
60. Generic Approach
• Resource = High, Medium or Low
• Sector / Subsector
• Sub category
• Scale factor
• Site Inspection / audit frequency
• Desktop Compliance Assessment
• Waste Returns / Pollution Inventory
• Environmental Monitoring Returns
60
63. Context AD EMS Audit
2
11
17
25
32
19
11
15
5
0
10
Less than
30
31-50 51-70 71-90 91-110 111-130 131-150 151-170 171-190 191-210 More than
210
Acceptable = 37%
Need improvement
= 42%
Unacceptable = 21%
63
64. Context -AD Site based audit of 110 sites
• 23 % met all expectations of a compliant facility that
employs all risk mitigation measures.
• 60% of operators with off-farm waste permit (SR2012) met
expected performance.
• No crop fed plant met expectations.
• Operators relying on secondary containment to prevent
pollution often failed to meet all CIRIA 736 requirements.
64
65. Context - AD Site based audit of 110 sites
• Critical control areas (SCADA and records) were often found to be
close to potential failure points, meaning that emergency situations
could be made more difficult to manage or subsequently
investigate.
• Detailed risk assessments and engineering calculations were
rarely available for digestate lagoons.
• 77 % of sites failed to meet all expectation required for expected
performance.
• We estimate 20 % of AD sites pose risk to critical infrastructure e.g.
roads, train lines etc.
65
67. 0 100 200 300 400 500 600 700
Permitting
Planning
Communications
Compliance - Inspection
Compliance - Audit
Compliance - Other Intervention
Incident response - Cat 3&4
Enforcement
Incident response - Cat 1&2
Advice to Business
Work with local communities
Permit - Pre App
Case Study 1 Hours Recorded -AD site
No of Hours 2015 No of Hours 2016
2892 hours recorded
2015/16
784 hours recorded in 2016
313 hours recorded on
communications in 2016
68. Proposed Band Activity Proposed Annual
Subsistence
Current range of
charges
Current average
2.16.11 Biological treatment installation – treating 10 tonnes or more of animal waste
or 10 tonnes or more of hazardous waste a day.
Anaerobic and mechanical / biological treatment installation.
Anaerobic digestion installation.
£11,019 £520- 18 000 £4,130.00
2.16.13
Anaerobic digestion waste
£7,736 £1800 17800 £3,942.65
2.16.14 SR 2010 No.15 - anaerobic digestion facility including use of the resultant
biogas.
SR 2012 No.11 - anaerobic digestion facility including use of the resultant
biogas.
SR 2012 No. 9 - on-farm anaerobic digestion using farm wastes.
£5, 877 £520 - 1850 £3,069.62
2.16.15 SR 2012 No.12 - anaerobic digestion facility including use of the resultant
biogas (waste recovery operation).
SR 2010 No.16 - on-farm anaerobic digestion facility.
SR 2012 No. 10 - on-farm anaerobic digestion facility using farm wastes only,
including use of the resultant biogas.
£3, 809 £1580-2490 £2442.80
2.16.16 Remote storage of digestate - waste operation.
Storage and combustion of biogas.
SR 2009 No.4 - combustion of biogas in engines at a sewage treatment
works.
£ 2, 106 £1030 £2915.87
2.16.17 SR 2010 No.17 - storage of wastes to be used in land treatment. £1, 336 £780 £802.92
69. Comparison time and materials for expected
performance
69
0
10
20
30
40
50
60
70
80
Band 2.16 11 Band 2.16.13 Band 2.16.14 Band 2.16.15 Band 2.16.16. Band 2.16.17
Time and Materails
Inspection (includes write up system and general desk based compliance hours per site per year. Audit includes write up prep etc
71. Charging For Multiple Activity Waste Permits
Where a waste permit covers:
• more than one waste operation activity, we charge for the most
expensive waste operation activity
• more than one Section 5.3 and 5.4 waste installation, we
charge for the most expensive waste installation activity
• both waste installation(s) and waste operation(s), we will
charge for one waste installation and one waste operation.
71
72. Charging For Multiple Activity Waste Permits
Subsistence charges – general
13. (1) Subject to the other provisions of this Part, the subsistence
charge is the authorised activities charge, multiplied by the
compliance rating adjustment (to the extent this applies).
(2) Where any of the authorised activities fall within a description in
Table 2.16 of the Subsistence Charge Table, the subsistence activity
charges for those activities are –
(a) the highest applicable charge for any installation falling
within that Table, and
(b) the highest applicable charge for any other waste operation
falling within that Table.
72
73. Standard Rules Waste Permits
• A site with a permit covering 2 standard rule sets will attract a
specific charge per rule set = 2 charges.
• A site with a bespoke permit and a standard rules permit (one
rule set) will attract a charge per permit = 2 charges
• Mothballed sites = 50% of annual charge but no longer than 2
years.
• Pre-construction = Time and Materials
• First year of operation charge = £672
73
74. Biowaste Treatment New Site Example
• An operator has a permit for an open air composting facility treating less than
75 tonnes a day. It is their first year of operation, they will be charged:
• The site had a fire which required EA officer attendance, this took 6 hours
including travel
• Composting activity= £3,809
• First year charge = £672
• Invoice = £4,481
• Additional invoice for incident attendance = £84 per hour
74
75. Compliance Performance Interim Scheme
• No changes to existing CCS scheme and its application;
• breaches = points = Bands A-F
• Charge modifiers - % of charge levied - A 95%, B 100%, C
110%, D 125%, E 150%, F 300%
• Compliance adjustment factor applied to ‘baseline annual charge’
(derived from activity expected for Band B operators)
• Apply T&M for exceptional events in addition to A-F modifiers
78. Working towards zero foodwaste
to landfill by 2030
Robert Vaughan
Waste and Resources, Defra
79. Why does food waste recycling matter?
Post farm gate food waste is
10Mt a year (6Mt avoidable, 4 Mt
unavoidable).
Managing negative impacts
• Food waste in landfill generates
carbon emissions of 618kg CO2e
per tonne.
• Mitigating landfill contaminated
water (leachate).
79
80. Why does food waste recycling matter?
Enhancing positive
• Make the most of our resources.
• Producers energy – bio methane
• Method to recycle nutrients.
• Each tonne of food waste sent to AD
generates carbon emissions of -87kg
CO2e.
80
81. What have we achieved?
Food waste prevention
• A reduction in post-farm gate food waste
between 2007 and 2015 of around 1.25
million tonnes.
• Household food waste has reduced by
12% since 2007.
81
82. What have we achieved?
Growth in industry
• In 2012 60 AD plants processing food to
nearly 110 at end of August 2017.
• 402 AD installations with total 277 MW
capacity.
• In December 2014, there were 6
biomethane installations accredited on
the RHI. As of October 2017, there are
82.
82
83. What have we achieved?
Growth in feedstock
• Levels of biodegradable municipal
waste sent to landfill, which includes
food waste, has continued to reduce
and in 2015 was 7.7 million tonnes.
• Doubled the number of local authorities
that collect food waste with 109 LA now
separately collecting food waste.
83
0
20
40
60
80
100
120
2008 2009 2010 2011 2012 2013 2014 2015 2016
Separate food waste Food mixed in garden
Count of local authorities collecting food waste
84. What are the challenges?
Feedstock
• High cost of introducing separate food waste
collections in England – estimated at £20m
on going.
• Poor capture rate.
• Practical challenges. High density housing
stock, costs of commercial collections
• Tonnage collected by DA
• England 361,131
• Scotland 62,137
• Wales 96,318
• NI 4,799
84
Percentage of households with food waste collections
(separate and food and garden mixed)
85. What are the challenges?
Realising the potential of digestate
• Digestate can give rise to high
emissions of ammonia as great as, or
exceeding, emissions from slurry.
• Ammonia is an air pollutant that can
react with other air pollutants from
industry to produce particulate
emissions which are harmful to human
health. When deposited on land
ammonia increases the nitrogen content
of soils leading to biodiversity loss in
sensitive habitats.
85
0
20
40
60
80
100
120
140
1970 1975 1980 1985 1990 1995 2000 2005 2010 2015Index(1970=100)
Ammonia(1980=100)
Nitrogen Oxides
PM2.5
PM10
Ammonia
Sulphur
Dioxide
Non-methane
volatile
organic compounds
INDEX
LINE
86. Lessons from within the UK
86
Country Both
Food mixed
in garden
None
Separate
food waste
Count of LA collecting food waste in 2016/17
England 16 38 163 109
Wales 0 0 0 22
Scotland 5 7 2 18
N Ireland 4 6 0 1
U K 25 51 165 150
Percentage of LA offering a collection
England 5% 12% 50% 33%
Wales 0% 0% 0% 100%
Scotland 16% 22% 6% 56%
N Ireland 36% 55% 0% 9%
U K 6% 13% 42% 38%
Devolved Administrations have all
introduced arrangements to separate
foodwaste from residual waste
Scotland and Northern Ireland legislated for
all households and businesses to collect
foodwaste separately from residual waste
In Wales 100% of local authorities offer a
separate foodwaste collection – dedicated
funding programme
England Voluntary Consistency Framework
recommends Separate Foodwaste
Collection – cost of extending to all local
authorities estimated cost of £20m annually
87. What solutions do we have?
• A framework for greater consistency in
household recycling in England.
• Industry Food Waste and Recycling
Action Plan
• LA guide on food waste collection
• 7 pilot studies
• Industry Guidance: Dealing with Household
Food Waste at AD facilities – Management of
Liners
• Cost Benefit Analysis Tool
• International Food Waste collection
workshop
• Improved communications through
Recycle Now and others.
87
88. What are the challenges?
Realising the potential of digestate
• Need to develop secure end markets for
compost and digestate outputs.
• Contamination reduces the value of the
outputs, as well as the available
markets.
88
89. What solutions do we have?
End Markets for digestate
• Develop end markets for digestate
• Bioeconomy Strategy
• We need to maximise productivity from
existing UK bioeconomy assets, including
people, facilities and natural resources.
• We need to help create the right market
conditions to allow novel products and
services to thrive.
89
90. What solutions do we have?
Realising the potential of digestate
• Ammonia emissions can be mitigated by:
• Adequate facilities to store digestate with covers.
• Spread using trailing shoe and hose, dribble bar or
injection.
• Spread in cool and windless conditions or under a
crop canopy.
• Should not be spread at times of the year when
crops will not take up the nutrients.
• Government welcomes ADBA’s new AD Certification
Scheme and supports industry action to help minimise
the negative impacts of an important industry.
• Expect to publish Code of Good Agricultural
Practice for reducing ammonia emissions that will
cover the spreading of digestate.
90
91. • Clean Growth
Strategy
• Industrial Strategy
• 25 Year
Environment Plan
• Bio economy
Strategy
• Resources and
Waste Strategy
• The UK will work towards being a Zero Avoidable Waste
economy by 2050.
• We will work towards no food waste entering landfill by
2030.
• CEP MS must arrangements to collect biowaste
separately from residual waste by 2023
• Many local authorities have introduced separate
collection of food waste and we will work to support more
and work towards zero foodwaste to landfill by 2030
91
We will publish a Resources and Waste Strategy in 2018
95. Cost Benefit Analysis Tool
Mike Falconer Hall
Programme Manager
18 April 2018
The financial benefits of implementing proven
intervention measures
96.
97. Food Waste Recycling Action Plan
Developing the business case
Optimising food waste collections
Communicating with householders and
commercial food waste producers
Ensuring quality as well as quantity
Making contracts work
99. Interventions to improve the performance of
household food waste collections
WRAP trials have proven that low cost intervention measures can increase the amount
of household food waste collected for recycling
100. Increase in yield as a result of the
‘package’ of intervention measures
0.00
2.00
4.00
6.00
8.00
10.00
12.00
14.00
16.00
1 2 3 4 5 6 7 8 9 10
Uplift as
kg/hh/year
105. Other Resources
Recycle Now campaign run focussing on food
waste collections
Guidance published on how to improve the
quality of commercial food waste collections
The Right Waste Right Place campaign now
includes a specific food waste stream
Industry Guidance: Dealing with Household
Food Waste at AD facilities
Greater visibility of AD gate fees
110. Who is Energy Census?
• Commodity news and price reporting agency
(PRA) for the biofuel and associated certificate
markets
• Independent unbiased prices that can be
used in trading contracts
• Prices and news published at
www.energycensus.com and in the weekly
[RE]fuel Report
111. What is the RTFO and an RTFC?
Renewable Transport Fuel Obligation (RTFO) to reduce GHG emissions in
transport sector
UK suppliers > 450,000 litres/yr of petrol, diesel or gas oil obligated to:
1. Blend biofuel to minimum target volumes
and/or
2. Redeem a certificate (RTFC)
and/or
3. Pay buyout price
RTFCs are awarded to suppliers of biofuels – 1 per Litre, or 1.9 per kg
biomethane (3.8 if from waste feedstock)
112. Post-April 2018 road map to 2032
• Amendments to RTFO approved
• Certificates target three areas:
• Crop-based biofuels
• Waste-based biofuels
• Advanced biofuels (Aviation, BioSNG,
Hydrogen, Algae and others )
• Overall mandate will increase to 12.4%
• Crop-based de-emphasised as waste-
based, advanced increase
113. Energy Census Price Assessments
4pm London Time, 13th Apr 2018
RTFC Theoretical Value
• Spread between mineral based oil and biofuel prices
• Buyout capped at 30p/certificate (80p for Advanced),
hence max reward for waste biomethane = 8.2ppkwh
• Focus on waste based biodiesel
118. RTFC Price Risk Management
Limit exposure to fluctuating market prices, by index linking
the RTFC price for the duration of the supply contract.
Thank you!
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/604591/rtfo-guidance-
part-1-process-guidance-year-10.pdf
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/644843/renewable-
transport-fuel-obligations-order-government-response-to-consultations-on-amendments.pdf
119. HOW TO BENEFIT FROM
RENEWABLE TRANSPORT
FUEL CERTIFICATES
(RTFCS)
ANDREW GOODWIN,
MANAGING DIRECTOR, ENERGY CENSUS
122. BUSINESS RATES
A tax on occupation
Business rates currently raise £23.9 billion in England annually and act as an important source of funding for local services. They are an
annual tax on the occupation of non-domestic property – the business equivalent of council tax.
Based on an estimated rental value
Business rates bill is determined by its rateable value, which is its estimated open market rental value on a set date.
Assessed by the Valuation Office Agency (VOA) in England, independently of government.
Regular revaluations - not banded like council tax
One of the highest property taxes in the world
Rateable Value x National Non-Domestic Multiplier = Tax charge
Some ratepayer will benefit from transitional rates relief / Discretionary rates relief to cushion effects of revaluation
Loved by Government
Stable, difficult to avoid and cheap to collect
123. MYTHS AND HARD FACTS
My AD plant is on a farm, I’m a farmer - farmers don’t pay business rates!
If power exported you are no longer a farmer as created a power station – agricultural exemption is lost.
Shouldn’t I pay less as I used my own money to build my plant?
How you came to occupy the plant irrelevant.
Only question is - how much would our imaginary operator pay, in annual rent to have occupied the plant (provided by someone else) on 1/4/2015.
My plant has been running for a few years and I’ve now received a backdated bill – do I have to pay this?
In England, before 31/3/2018 the VO had powers to bring plants into the rating system backdated to 1/4/2015. You are legally liable to pay rates as
demanded by the council.
After finance costs my plant is just about breaking even so will my rates be less?
The tax is very inflexible and ability to pay not relevant.
So you can see this form of tax is deeply unsatisfactory for many of you, where you have used you’re own money and taken out an
expensive loan to build and use your AD plant.
124. REVALUATION AND APPEALS
The Governments 2017 rates revaluation
Came into force 1/4/2017 and sets your rates until next revaluation in April 2021.
In the absence of any rental evidence (other than site rents) the VO has valued crop based plants on a profits test and food waste
plants on a % of build costs
The resulting rateable values are very high.
Your rights of appeal
At any time up to 2021 – successful appeal and reduction of rateable value can be backdated to 1/4/2017
New appeal system – check, challenge and appeal
Establish clear grounds of appeal and relevant evidence to assist case beforehand
Risk of increase so professional help available
127. THANK YOU FOR
ATTENDING THE
ADBA SPRING MEMBERS
MEETING 2018
IF YOU HAVE ANY QUESTIONS PLEASE CONTACT:
DESIREE DE CECCHIS
EVENT PRODUCER, ADBA
EMAIL: DESIREE.DECECCHIS@ADBIORESOURCES.ORG