2.8 billion dollars MBT project shuts down in Lancashire, UK

Just after six years from the date they started their full operation, and nine years after a 2.8 billion dollars deal was signed for their construction and 25 years operation, two of Britain’s biggest recycling plants are set to close, leaving more than 250 workers facing redundancy. Residual waste will also no longer be treated at the two plants, if the proposals go ahead, and an in-vessel composting line, separating garden and food waste will be wound down. All community work – including an environmental education service and community liaison, waste minimisation, development and communications programmes – would also cease.

Farmington Waste Recovery Park and Thornton Waste Recovery Park, the two facilities that shut down, were developed to manage more than 300,000 tones of waste / year by extracting the maximum amount of recyclables for reuse and then transforming the organic portion of the waste into a high quality compost-like product called Organic Growth Medium (OGM). Originally the waste contract, which was supposed to include a third site at Huncoat, was procured under a £2 billion private finance initiative scheme, with the council required to make interest repayments of £12 million per year. According Daily Mail, until four years ago it was costing taxpayers £2million a week to keep the plant running and this is supposed to be the major reason for shutting down the facilities.

The company that undertook the construction and operation of the plans, Global Renewables Lancashire, claimed it would handle enough rubbish to fill Manchester United’s Old Trafford ground nearly 100 times over, and even consulted environmental pressure group Friends of the Earth during the planning stage. But two years ago, Lancashire County Council was forced to cancel the PFI initiative and take control of the business because it was losing so much money. The final blow came last week when it was confirmed the plant is to be mothballed this summer and turned into what one leading critic calls ‘the most expensive waste transfer station in Europe’. Lancashire County officials say that the main change will mothballing processing equipment which currently converts household waste into an inert organic compound. In the short-term the waste will be sent for landfill instead.

Lancashire County, took over Global Renewables in late 2014 and effectively brought the operation in-house. The contribution of the facilities to the County’s high recycling rate of around 47 per cent (against a 50 per cent target) was only accounted for around two per cent of this.

The closure of the facilities in Lancashire has been described as a ‘failure of catastrophic proportions’. But industry leaders warn that other recycling plants across the UK could suffer the same fate or not be replaced at the end of their natural life because of financial pressures on local authorities.  Jacob Hayler, of the Environmental Services Association, said: ‘These are difficult times for the recycling industry because commodity prices have fallen dramatically. When local authorities entered into deals of this kind, there was no expectation the price of plastic, metals and paper might drop so far. There is less of a case to invest in recycling so there could be more closures.’

I believe that, although it is probably too early to understand the full details of such a failure, this is another sign of the huge disruption that is in front of the waste management and recycling industry due to the fourth industrial revolution. The signs of disruption will not be limited to the operational challenges of waste to energy plants in North Europe, they will affect all kinds of treatment plants and recycling operations. But this is the beginning of a coming-soon blog.

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