Defra gives guidance for LA/incinerator contractors contracts but will the contract between the 7 consortium authorities, including Redcar & Cleveland follow the guidance. Will the contract be good or bad for recycling?
Defra’s policy on incinerator operator/LA contracts.
Defra would expect the local authorities to satisfy themselves that the contract that they are proposing to enter into will retain sufficient flexibility to allow for increased levels of recycling in the future and minimise the amount treated by EfW and/or consigned to landfill. The WIDP standard contract contains provisions for contract variations throughout the term of the contract including, ultimately, for termination if required.
Plans for future EFW facilities
What about TVERF?
The document ‘Managing waste safely and sustainably THE TEES VALLEY ENERGY RECOVERY FACILITY’ shows that TV ERF is designed to produce only 49.9MW. Defra future planning policy for EfW developments greater than 50MW generation capacity is for them to embed recycling. That policy will not apply to TV ERF.
Based on the information supplied Are the councils going to get the best deal?
MY OPINION
As things are the best deal will ensure that the consortium of 7 councils’ contract conforms with Defra’s Contract flexibility guidance, they will not send recycling for incineration and pay the going rate, only for waste it does send to TV ERF.
Concerned that the LA/TVERF contract about to be signed by the consortium of 7 councils, including Redcar and Cleveland, may not comply with DEFRA’s Contract flexibility guidance which states, ‘LAs need to create contracts that are both robust and adaptable, effectively responding to changing future demands and circumstances’, I requested, on behalf of Guisborough Eco Group, a copy of the Product Agreement and confirmation that the contract will comply with the guidance.
The council’s response to the FOI.
The council provided their Response, which referred to the Report to the Cabinet meeting held on 30 October 2025 and the out of date Draft Product Agreement of 20/11/20.
MY ASSESSMENT
Some factors that may adversely affect the council’s recycling.
Observed factors that will have an adverse effect on the council’s incentive to aim for Defra’s Recycling Target and any future improved target.
- A minimum tonnage level is set
- Charges for waste incineration will never be less than the charge for minimum tonnage no matter how little is sent for incineration. Details below. Reducing costs should be fundamental but these factors do not allow it.
- Treating only consortium waste will inhibit reduction of waste sent for incineration and so maintain recycling rate rather than allow it to increase.
- It is not clear but it does seem that the councils will be required to pay a fee for not providing the minimum tonnage and the incentive to increase recycling and reduce waste sent for incineration will be lost.
- Reducing waste sent for incineration will reduce electricity generated and the Annual Electricity Compensation mechanism shall apply.
Evidence
The Response states, the Guaranteed Minimum Tonnage has been set at only 310,000 tonnes per annum. It was also stated, There is, therefore, sufficient flexibility to account for ambitious improvements in recycling rates – the guaranteed minimum tonnage having been set at only 70% of the projected need in 2055.
The Report to the Cabinet states, With the Guaranteed Minimum Tonnage (GMT) being set at only 310,000 tonnes per annum – which is c.150,000 tonnes below the current levels of residual waste generated each year by the seven Councils (which is fixed throughout the Contract term) – very significant headroom exists between the GMT and the Councils’ latest (2025) forecast, and at no time throughout the Contract term do the Councils forecast their combined residual waste volumes will be below 400,000 tonnes per annum
iii. The Defra Residual Waste Infrastructure Capacity Note makes reference that the vast majority of “consented capacity” included in the study comprises “merchant” facilities with no underlying local authority contract, and that this capacity may or may not be delivered in practice because it remains subject to commercial conditions. The TV ERF does not fall into this category, since it will serve a known, demonstrable local need for treating waste under the control of the partner authorities.
Project Agreement 22.2 Minimum Tonnage:
22.2.1 Without prejudice to clause 22.1 (Obligation to Accept) or clause 22.4 (Excess Waste), where the tonnage of Contract Waste (excluding Ad Hoc Waste) delivered in any Contract Year falls below the Minimum Tonnage:
22.2.1.1 the Minimum Tonnage shall nevertheless apply in calculating the Monthly Payment Base component of the Monthly Unitary Charge Payment, as provided in paragraph 6 of the Payment Mechanism; and
22.2.1.2 paragraph 20 (Annual Electricity Compensation) of the Payment Mechanism shall apply.
My interpretation of sustain and sustainability re TV ERF.
Once TV ERF is running it can sustain the burning but in my opinion that does not mean it is managing waste sustainably. I wish the councils would think they may be irreversibly disposing of material that could possibly become a resource in the future when the technology is in place.
Conclusion
It is up to the councils to comply with the government’s strategy, but it would be good if the councils will inform residents of the final contract. The councils could go above and beyond the current Labour Government plans to help reduce costs and improve recycling but it is up to them. We are in their hands!
The Labour Government is embedding a requirement into planning policy for further EfW developments to account for and mitigate against the risk of ‘locking in’ materials to incineration that can be recycled or could be recycled in future… The Draft Energy National Policy Statement for Renewable Energy Infrastructure will implement the changes for facilities greater than 50MW generation capacity.
TVERF will be built to generate 49.9MW energy. If it were built to generate 50MW those conditions might apply, but it avoids them because of the 0.1MW difference. I wonder if anyone has thought about rounding up 49.9 to the nearest whole number to improve the prospect of recycling?
*the views and concepts covered in this article are the views of the author .
Copyright © 2026 by Fred Page
On behalf of the Eco Group
Best wishes from Fred
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