Organics recyclers raise costs concerns

Letsrecycle, 25th February 2013

Composting businesses and anaerobic digestion plant operators are facing increasing cost pressures which they are finding a challenge to pass on to material suppliers according to the Organics Recycling Group.

And the Group, which is part of the Renewable Energy Association, is calling on Chancellor George Osborne to be mindful of the pressures on industry, in particular with regard to the cost of fuel, ahead of the Budget on March 20.

Jeremy Jacobs, technical director of the Organics Recycling Group, told letsrecycle.com that fuel costs were a big issue.

Mr Jacobs said: “We were pleased to see a small fall in the cost of red diesel in recent months but it is now back to or above the price of a year ago at around 70p per litre and is likely to rise during coming weeks.”

Constant

Explaining that other costs are also impinging on businesses, Mr Jacobs added: “There is a constant pressure on costs with not only fuel but also compliance and regulatory costs with something more always being required. Overall, it is becoming a real challenge to add value to products to increase income to cover these costs as most operators are finding they are not getting any more on the gate fee.”

The Group considers that while using material produced from the composting process in agriculture is a standard and acceptable route, particularly because farms are often on the doorstep of businesses, not enough added value is gained.

Added value

“Often members produce material and it is used in the agriculture sector for nothing,” said Mr Jacobs. “It is important to try and produce added value and go for sectors such as horticultural and golf courses where a finer product is needed, maybe by blending soils.”

He continued: “I know this is not easy but a number of members are now seeing success in this direction but costs do remain an issue for all.”

In particular, he said that local authorities and other suppliers of green waste may have to face up to some increase in gate fees. “Using shredders is costly because of the fuel use and I know members try to operate these as efficiently as possible with a full level of feedstock.”

Mr Jacobs noted that these topics will be discussed at the Organics Recycling Group’s annual conference which is being held next month.

Speaking to letsrecycle.com, one operator in Surrey said: “Fuel costs are a huge bill to us and we have to make sure that when we operate machinery it is at maximum capacity otherwise it is not economic. We are managing to charge a tipping fee but if we raise it by much then the landscape gardening sector will disappear to somewhere else, it’s really hard to up it by much at all.”