household per year. Direct UK energy use in the food chain is in the region of 63 million tonnes of CO² -2 tonnes per tonne sold. At these levels any leap in the rate of the cost of carbon is containable and is in accord with the estimates by Nick Stern, that inflationary pressures of carbon accounting are of the order of 1% = 2% if action is taken early. More important to the economics are questions of GWP supply side impacts (witness Russian wheat) or scarcity of growing capacity (witness takeover bids in the fertiliser sector). Clearly the Food and Drink Federation is already on the case. One can but hope for a convergence of effort by all the interested parties – notably the Food Knowledge Transfer Network, the Resources KTN, Incpen, the Courtauld Commitment participants, FDF, BRC, NCC, WRAP et al.
……..but there are other issues Most notably the sector is taking on board the ethical dimension pioneered by the Food Ethics Council , both intra-UK, with regard to nutrition, obesity and access, as well as internationally, in terms of market pricing, transparency and reward mechanisms.
These issues are but a preamble to the sizeable “low hanging fruit “ available from the abatement of wastage in commercial and domestic streams. An integrated suite of strategies can deliver a “triple whammy” in terms of lowered GWP, improved food security and costs. The numbers are well rehearsed thanks to WRAP and others. 12 million tonnes are discarded by households plus a further 6.5 million tonnes post the farmgate. The data represent the culmination of a path from the original Biffaward food Massbalance by C-Tech in 2004 , via the East Midlands study from the Food Faraday in 2008 funded by EMDA and the FDF. Given the veracity of these data there is now an opportunity to institutionalise the process into a real-time data capture system administered by the Environment Agency or others. I shall never forget asking two Directors of a major processing company in East Anglia whether they reconciled the gross weight of raw materials delivered, the waste removed over the weigh bridge (or sewer) and the gross weight of invoiced outputs. I was met by blank stares.
Unlike many product areas, the concept of Producer Responsibility for end consumer waste will not work for food. As a consequence, end-of-life treatment options will be underpinned by a three pronged approach . First landfill taxes and bans will drive this “scrap” carbon toward non-specific technology options. Second, end markets in the form of recyclates, fertiliser substitutes and energy (as electricity, gas ,hydrogen, CHP, transport fuels etc) will themselves become more valuable as fossil carbon (on which they depend) becomes scarce. Third, Traded Pollution Permits will acquire greater value to initiate shifts to lower CO² profile reuse. Let’s examine the riders and runners.
|44| ENVIRONMENT INDUSTRY MAGAZINE
TAXES AND BANS At 2013 levels for Landfill Tax of £80, the gate fee ceiling for competing technologies is well and truly in place. Bans are the icing on the cake but any undergraduate economist will tell you that percentage diversion rates are simply irrelevant - high cost operators using the high cost route go out of business, and at, those levels, landfill is, effectively, totally marginalised.
EXIT MARKETS Whether we are at Peak Oil or not, as the price rises with increased energy demand the switch to coal, nuclear and gas will be triggered. The former could be saddled by expensive Traded Permit costs, the second by serious investment and aftercare costs, whilst the third will need an uplift in the electricity price to cover logistics, political and opportunity market costs .All these factors create an opening for scrap food.
Of recycling , composting and renewable energy options, it is energy which will offer the biggest “ Bang for the Buck” in terms of revenue per Gigajoule – albeit at the highest financial cost of sunk capital, operating costs and maintenance costs. Assessment of these choices by investors remains clouded by the continuing absence of any uniform and academically peer-reviewed approach to carbon footprinting, and that is a task only Government and Regulator can address. The importance of such evaluations is simply that investors don’t wish to pursue attractive, low internality priced technologies with CO² burdens when common sense says that, in 5 years or less, externality burdens will form a significant element of risk to bottom line performance in the form of Traded Carbon Certificates et al. We are in the midst of that process now in the waste sector.
Whilst revenue
per gigajoule is the driver, the route is defined by the whole life waste footprint from collection to point of sale, Only around 15% of the latter is associated with trucks and “fuel” preparation, with the balance in the energy conversion technology. It is for this reason that high energy conversion efficiency CHP systems will maximise margins and impart three important benefits - highest income per tonne of feedstock ,lowest exposure to carbon allowances purchases and, thereby, the greatest ability to charge a lower gate fee (or positive fee ) for the waste food inputs. There are some additional operational
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