Poolbeg Waste to Energy Facility

The idea of the Poolbeg incinerator was to solve a waste disposal problem for Dublin with a single large privately financed facility (chosen by the state). However, private companies began to collect and dispose of the waste that the Dublin councils had previously handled. In 2009, the High Court ruled that the councils did not own the city's domestic waste and could not prevent private companies from collecting and disposing of that waste. Meanwhile the company meant to build the incinerator failed in 2010 and 2011 to raise the finance for the project. This summer they are having another shot at fund raising €350m.

So the council has no more waste to dispose of and the contractor has failed to raise the money to build the facility. The proposed district heating was predicated on significant new residential development around Poolbeg and the Point which did not come to pass. Private waste companies like Panda, meanwhile built recycling and disposal facilities elsewhere without government funding and saw no need for the incinerator. Indaver built an incinerator in Meath again without government revenue guarantees.

The Poolbeg incinerator was to be subsidised in two ways: the state would guarantee the quantity of waste to be burnt and incineration would not be taxed to cover its pollution in the way that landfill is taxed. The guarantee would be similar to shadow motorway tolling where the concessionaire is paid a minimum amount if revenues fall short of expectations. Why the state should subsidise incineration is anyone's guess.

€80m of state money has been spent to date on the project including €4m on PR.

The European Commission is now investigating whether the project is in breach of EU Public Procurement directives. The basis of the complaint is that the contract is significantly different from what was tendered and requires a retender, that there was only one final bidder for the original tender and that the tender was sold by the original winning consortium to the current contractor in breach of tendering regulations.

The complaint was lodged by Joe McCarthy and Valerie Jennings and is detailed here: http://fiasco.ie/incinerator/resources/Background_Material_re_Poolbeg_Incinerator_Complaint.pdf

Pete_Cavan wrote: »

But can the government still legislate that, by leaving your waste on the side of the road for collection, it then becomes the property of the state and they can then dictate where the waste is disposed, as I alluded to in the OP?

the government is currently trying to find a legal way to win back control of domestic waste. Their approach is to propose that each local authority be divided into smaller subdivisions and that an exclusive tender would be offered for waste collection in each subdivision. This proposal was the subject of a recent consultation
http://www.environ.ie/en/Environment/Waste/PublicConsultations/#Reorganising%20Household%20Waste%20Collection

If made law, the state would decide who gets to collect waste and could direct how that waste is disposed for example by incineration. Because the existing waste companies have made significant investments in more environmentally friendly means of disposal than incineration, they will not take kindly to being asked to bid for their own business in a state run auction.

Dublin city council's contribution to the consultation was to state that they needed this market rigging to make their incinerator viable. Such a law would be opposed In the courts and would hold up the incinerator for years.

But are they subsidies? I am sure the same accusations could be made towards landfill and even recycling. I dont think that any method of waste disposal is taxed to cover its pollution.

The landfill levy is €65 per tonne and is priced to cover the pollution from escaping methane. Recycling does not create negative external environmental effects and does not require a special levy (it does create some residual landfill which is taxed as normal landfill).

As with many of these taxes, the purpose here is to encourage or discourage a certain outcome, in this case to discourage landfill and encourage incineration. If the tax was based on covering its pollution, it would be an extremely complicated formula and there would be many variables which would change regularly.

There are two environmental goals to the landfill tax: to compensate for environmental damage in pigovian style and to promote a waste disposal policy in line with the EU waste hierarchy meeting the landfill directive targets. You're right that it is complex to calculate the levy and that the calculation depends on changing variables. However economists have attempted to do just that.

Central govt commissioned the Eunomia consultancy to work out the cost of pollution caused by incineration while Dublin city council asked the ESRI to do the same. While they came up with different amounts for the levy, both agreed that incineration creates both solid and airborne pollution and suggested levies between €5 and €30 per tonne. Hogan's department considered these two reports and recommended instead that the levy be set at zero. This means that for example the co2 produced by incineration is not charged unlike the co2 produced by driving a car or generating electricity from coal or gas.

Why would a government in dire need of revenue decide to ignore multiple reports recommending the introduction of a modest commercial pollution tax in line with European regulations? I don't know. Why did Enda Kenny and Phil Hogan draft a bill to cancel the poolbeg incinerator in 2007 and state on the dail record that they were opposed to all incineration, and then meet up with the American company promoting the incinerator to assure them publicly that the regulatory envrironment would improve for them once they gained power? I don't know.

The guaranteed minimum revenue clause constitutes a subsidy because it has an economic value. If the facility owner were to seek such a clause in a commercial contract they would have to pay for it at a value equal to the risk associated. Guaranteeing a quantity of incineration is strange because it conflicts with the EU waste hierarchy that advocates recycling before incineration.

we need some policy because without it there would be no investment in waste disposal infrastructure.

Waste companies like Panda have invested heavily to date in a range of disposal facilities from recycling to MBT, composting, incineration/w2e and rdf. Government policy in threatening to build a huge subsidised incinerator and finding a way to forcibly obtain domestic waste has had the effect of dissuading further investment in what was a functioning private competitive profitable tax paying business sector.

The history of local authority involvement in waste collection has been one of grotesque mismanagement and poor service underwritten by ratepayers and central taxation. The local authorities have been forced out of the market by more innovative companies offering recycling and composting services at no cost to the state.

Latest news is that Dublin city council has changed the contract with Covanta to offer a 45 year concession to operate the incinerator. Obviously this is nuts and unlikely to make it through the courts.

Aidan1 wrote: »

Really? Does it not need to purchase ETS carbon credits like any other similar industrial site?

Municipal waste incineration is specifically excluded from the EU ETS. See 3.2.2 of this

http://ec.europa.eu/clima/policies/ets/docs/guidance_interpretation_en.pdf