Subsidy

A subsidy is money that is paid by a government or other authority in order to help an industry or business, or to pay for a public service .

The primary subsidies that have been available in the waste-related market have centered on the generation of renewable electricity, heat and road fuels (notwithstanding the subsidy that was available to those local authorities as part of a Public Finance Initiative (PFI) that they may have entered into with the private sector).

The subsidies relating to renewable electricity started with the Non Fossil Fuel Obligation (NFFO) regime (which had a strong bias towards Landfill Gas power generation), it was replaced by the Renewable Obligation Scheme (ROC) regime (which had more of a bias towards new ACT and AD technologies) and which is still being paid on some projects today. In the case of AD this was also supported by the Feed in Tarriff (FIT) regime, which was designed for smaller projects that in many cases better aligned with AD than the ROC regime, which ran in parallel for larger schemes. The most recent subsidy to replace the ROC regime is the Contracts for Difference (CfD) regime (which was biased towards other forms of renewable power, but has supported some ACT projects generating electrical power).

The subsidies relating to renewable heat have been focused on the Renewable Heat Initiative (RHI) regime, encouraging Combined Heat and Power (CHP) schemes but also having an impact on direct injection of Methane into the gas grid to replace natural gas. The methane has often been generated from Landfill Gas and AD projects.

The final set of subsidies that relate to the market are based indirectly around the Renewable Transport Fuels Obligation (RFTO) regime, where renewable transport fuels have been encouraged and this is driving a focus on technologies that generate methane and hydrogen for use in vehicles. Future support around aviation fuel and carbon negative technologies are also potentials for the market.

Whilst the Packaging Recovery Note (PRN) regime is intended to encourage recycling of specific materials, the mechanism works more as a tool to encourage investment by increasing the cost to waste producers and the market, rather than a subsidy per se, but arguably those that undertake the recycling and generate the PRN itself benefit from a payment that supports/encourages their activity.