The push for more AD sites

BRITAIN’S ANAEROBIC digestion capacity is growing and yet many foodservice companies are still sending food waste to landfill. Footprint looks at the gaps in the UK system. 


There are now 106 anaerobic digestion (AD) plants in the UK, not counting those used in the water industry. They can handle 5.1m tonnes of food waste, turning it into 88MW of electricity and “digestate” (a type of fertiliser). That’s double what was available less than two years ago. And yet many companies in the hospitality and foodservice sectors are still sending food waste to landfill. “If you want to divert current food waste [levels] from hospitality to AD, then there’s nowhere near enough capacity,” explains Peter Charlesworth of the consultants Carbon Statement. “The transportation isn’t there either – at least not at the frequencies that restaurants and pubs require.”


Charlesworth and his team have been commissioned to map the country’s AD capacity and find out where the gaps are. They have already estimated that 50% of food waste from the 12,000 outlets within the Hospitality Carbon Reduction Forum ends up in landfill. This is costing companies thousands in landfill taxes and wasting food that could have been used to generate energy.


“There’s a big focus from the industry to improve the amount of food waste recycled but the reality is there’s a lack of available AD plants, a lack of cost-effective transport options and a lack of low-enough gate fees, which make it a harder and bigger task to implement,” he says. “It’s happening but there is much that can be done to accelerate it.”


Having mapped the forum members’ sites across the UK against existing and planned AD capacity, Charlesworth says it is clear that “there is little co-ordination between the supply of food waste, collection and the positioning of sites”. Those on the ground tend to agree – even those that are ahead of the game.


Mitchells & Butlers has 1,500 businesses across the UK, including well-known pub chains such as Harvester and O’Neill’s, all of which add up to a “significant volume” of food waste. Nevertheless, 85% is already diverted from landfill and the head of environment, Richard Felgate, hopes to hit 100% within the next 12 months.


“We haven’t got far to go, but in some areas there are gaps”, he explains. “In the large conurbations it’s much easier to access AD, but in the outlying areas the distances to a site can be more of a challenge. At the moment we’re struggling to achieve our objective.”


He isn’t alone. The BaxterStorey co-chief executive John Bennett says finding affordable outlets for food waste is difficult. “Transport and volumes are both issues,” he explains.


This is where foodservice and hospitality differ from retail: retail tends to have fewer sites and higher volumes of waste, while in hospitality there are often thousands of sites each creating a small amount of food waste. “At a lot of the sites we operate the quantities collected are relatively low,” Bennett says.


For this reason, hospitality can be seen as a less attractive – or at least a more expensive – proposition for waste contractors than retailers. But supermarkets have not been sheltered from problems. Sainsbury’s said a couple of years ago that it was “desperate” for greater AD capacity. It eventually took the matter into its own hands: in October it announced an investment in Tamar Energy as part of a project to build 40 new plants by 2017 with a total capacity of 100MW. Sainsbury’s doesn’t produce enough waste to keep the sites going on its own, so it’ll certainly be looking for partners.


Projects like the Tamar one – which is worth £100m – will help improve access to AD plants for other food companies. “As the number of plants grows, the affordability will improve,” says Bennett.


For the moment, the numbers don’t always add up. Surpassing the 100- site mark is a milestone, but the food waste industry is in its early stages of development. There is also a lot of confusion over prices and non-transparent commercial models. Gate fees at AD plants can vary from £25 to £47 a tonne, says Charlesworth. “Some of the hidden elements are financing high-rate, high-risk debt models,” he explains, “and figures over 20% are not uncommon in financial models I have seen for new plants.”


Feedstock supply is the principle risk element in many AD financial models, which again explains why retail firms have been the main suppliers to date. But hospitality-sector food waste is, according to Charlesworth, “the ideal combination” of feedstock for AD plants. “It provides a pretty much ideal mix of food that is really easy for AD operators to use. Much better than lots of one type of food.” The bugs, which convert organic matter into biogas, apparently like variety.


The quality of feedstock can vary greatly depending on where the bins are located and how well staff and customers buy in to the system. As Eilidh Brunton, business development executive at the Food Waste Network, explains: “If located back-of-house and fully trained staff are responsible for separating waste into the correct bins, then quality can be very high. Feedstock quality becomes an issue when bins are located front-of-house and consumers are responsible for separation.” Packaging can be a problem. “What comes off the de-packager is a porridge of macerated plastic, card and food residues, and finding a home for this can add additional costs for the processor.”


Those with suitably uncontaminated feedstock are, however, in a strong position to negotiate with waste contractors, she adds: they can offer a reliable supply of quality feedstock, which will significantly improve the likelihood of AD plants receiving finance and reduce the cost of the finance.


With this in mind, the hospitality sector is unlikely to follow Sainsbury’s lead and invest in its own plants. The big fast-food companies may well have the balance sheets and volume of waste to make it happen, but they’d be hit with the same old barrier: geography.


“Their food waste is spread geographically, so where would the AD facility be sited? says Mike Read, the head of waste at accountants Grant Thornton. “It would probably make more sense for them work in partnership with their waste collection partners to provide the certainty around feedstock contracts – both in quantum and length – to allow them to finance AD plants. Such plants, anchored by the larger foodservice companies, could also service food from the hospitality and smaller foodservice sector.”


What hospitality and foodservice sector might lack in big investment and single- site volumes, it makes up for in multi-site and high-quality food waste tonnages. Charlesworth says businesses should use that to their advantage.


“At the moment all of the downstream benefits of waste production are hidden behind the waste transportation companies in the form of bin-lift prices and the benefits of efficient recycling are difficult to link back to the provider of the energy.


“The sector wants to use its leverage to encourage AD plant deployment, make efficiencies end to end in the waste industry and to link returns for food waste to energy price rises in the future.”


For an exclusive Q&A with Eilidh Brunton from the Food Waste Network, go to features-2/interviews