May 2005

London implements trading scheme for municipal waste allowances

London— The Landfill Allowance Trading Scheme (LATS), one of the government’s key measures to reduce the amount of biodegradable waste going to landfill, went live in April.

The scheme will see progressive reductions in the amount of biodegradable municipal waste that disposal authorities can landfill. The diversion of biodegradable municipal waste from landfill is a key objective under the Landfill Directive. By 2010, biodegradable waste going to landfill must be 75% of the amount disposed in 1995; by 2013 this is reduced to 50% and by 2020 to 35%.

Current estimates suggest that around 68% of English municipal waste is biodegradable. In England this means reducing the amount of such waste landfilled to 11.2m tons in 10/2009 - a reduction of 9.7m tons from that landfilled in 04/2003.

Landfilling biodegradable waste can contribute to environmental problems, such as leachate production and the release of methane, a potent greenhouse gas, which can contribute to climate change. Local authorities across England have been set limits on the amount of biodegradable municipal waste they can dispose of in landfill sites. These ‘landfill allowances’ are tradable. Authorities can buy more allowances if they expect to landfill more than is permitted by the number of allowances they hold. Authorities with low landfill rates can sell their surplus allowances. Waste disposal authorities will also be able to save unused allowances (banking) or bring forward part of their future allocation (borrowing).

Any transfer of allowances, through trading or borrowing, will need to be registered on the LATS Register - an online system to record all allowances allocated to each waste disposal authority and to facilitate the banking, borrowing and trading of allowances. This system, which is only accessible by waste disposal authorities, has been launched in April.

Through the flexibilities of trading, banking and borrowing, authorities can develop the most cost-effective strategy for meeting their waste targets. Disposal authorities that exceed the limit set by the allowances they hold will be fined £150 for every ton they are over the limit. Environment Minister Elliot Morley welcomed the scheme and highlighted how it is set to help local authorities meet waste targets. Elliot Morley said: "The Landfill Allowance Trading Scheme is an innovative and flexible approach which moves Government away from the old tools of command and control by offering an alternative to the regulatory system of inflexible targets.


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