Landfill Allowance Trading Scheme

Economics

The Landfill Allowance Trading Scheme (LATS) was introduced by DEFRA on 1st April 2005 as a way to enable the UK the meet the Landfill Directive targets of reducing the amount of Biodegradable Municipal Waste being sent to landfill in a cost-effective way.

The LATS set annual tradeable landfill allocations for Waste Disposal Authorities which had to be met otherwise the penalty was £150 for each tonne of waste the Waste Disposal Authorities landfilled above their allowance.

The Landfill Allowance Trading Scheme (LATS) was introduced by DEFRA on 1st April 2005 as a way to enable the UK the meet the Landfill Directive targets of reducing the amount of Biodegradable Municipal Waste being sent to landfill in a cost-effective way.

The LATS set annual tradeable landfill allocations for Waste Disposal Authorities which had to be met otherwise the penalty was £150 for each tonne of waste the Waste Disposal Authorities landfilled above their allowance.

By making the allowances tradeable, high performing authorities and those with Energy from Waste facilities were able to sell unused permits to other Waste Disposal Authorities that required them. Allowances could also be ‘banked’ for use at a later date .

At the same time, the way the UK measured its progress towards the landfill diversion goal meant the adoption of a broader definition of Biodegradable Municipal Waste featuring more Commercial and Industrial Waste, meaning that the LATS system provided less of an accurate measurement of Biodegradable Municipal Waste sent to Landfill in the context of the targets.