05 February 2009 3:09pm, Environmental News

Landfill operators should already be imposing carbon levies of up to $13.74 per tonne of waste they receive to fully cover their future carbon liabilities under the emissions trading scheme, according to scenarios in a soon-to-be-released report prepared for the Department of Climate Change.

Hyder Consulting's Ron Wainberg told CE Daily the modelled scenarios suggested surcharges ranging from $2.50 a tonne of waste to $13.74 a tonne would be appropriate, depending on factors including the landfill's location and its level of methane gas capture.

However, each landfill "will be different" and some could fall outside this band, he said.

Wainberg said some landfill operators had not fully realised the implications of the scheme.

"When the penny drops, a number of landfills will close," he suggested.

White paper proposals mean that landfill operators are incurring some future liabilities for wastes being sent to landfill today, unless their landfill closes before the start of the scheme.

[UPDATE February 6: The Australian Landfill Owners Association has rejected the possibility of early landfill closures (see related article)]

Wainberg said it was important that landfill operators evaluate emissions from their landfill.

They should also understand that, while the scheme will generally cover landfills that emit 25,000 tonnes of CO₂e a year, some landfills with emissions of as little as 10,000 tonnes of CO₂e a year will have liabilities.

This lower threshold will apply to landfills located near another operating landfill in order to reduce the risk of waste generators diverting their waste from the closest landfill to one further away that doesn't pass on a carbon cost.

The Department of Climate Change is expected to release the Hyder report shortly.
 

Contractual difficulties

Wainberg told CE Daily landfill operators should be looking at including a carbon surcharge from the end of this financial year in their municipal waste contracts with councils.

Moving before that time would be difficult because council rates – used to pay for waste disposal services – are fixed until then.

Further complicating matters, general manager of communications with recycling and waste company SITA, Mike Ritchie, told CE Daily any move ahead of the scheme legislation's passage through Parliament might be difficult, as many waste contracts specify that there be no price rises except as provided for by an actual change of law.

Even for contracts where no such constraint exist, competitive pressures could make it difficult for a landfill operator to add a substantial carbon levy if others in the industry don't impose one, he said.

"Landfill is possibly the only industry where the Carbon Pollution Reduction Scheme burden applies now, even before the scheme starts," noted Ritchie, who is also president of the NSW branch of the Waste Management Association of Australia.

Landfill operators will need to decide whether to simply absorb until mid-2010 the future carbon liabilities they are already incurring or whether to take the plunge and move quickly to impose a carbon levy, he said.

Alternatively the industry could seek to collectively impose a carbon levy – a move which might require the scrutiny of the Australian Competition and Consumer Commission, he said.

Wainberg and Ritchie will discuss the implications of emissions trading for the waste industry at a Waste Management Association of Australia seminar in Brisbane next Wednesday.

 

Concerns over tools for predicting emissions

Meanwhile, lingering concerns remain over the quality of techniques for estimating greenhouse gas emissions from landfills.

One industry source told CE Daily an unscrupulous operator could potentially arrange for the required representative sampling to occur in sections capped with a deep layer of clay "that never leaks methane" – a tactic an auditor is unlikely to pick up.