The Landfill Directive, implemented in July, set challenging targets for the UK to reduce the amount of biodegradeable waste sent to landfill sites.
By 2020 waste disposal authorities will have to have cut the volume of food, paper and garden waste chucked in the ground by 65% on 1995 levels.
In real terms, this translates as a figure of 18.3Mt for 2005 slashed to just 6.4Mt in 2020.
To make this easier to achieve, the government is introducing the Landfill Allowance Trading Scheme (LATS). Each waste disposal authority will have an annual allowance of biodegradable waste they are allowed to send for landfill. Surpluses can be traded between authorities.
'Basically it is an economic tool to give authorities greater choice and flexibility in how they reduce biodegradable municipal waste sent to landfill, ' says Department for the Environment Food & Rural Affairs (DEFRA), head of landfill policy, Ray Alderton.
Waste disposal authorities that have exceeded their targets for landfill reduction through recycling and waste treatment will be able to sell their left over allowances to authorities that have not.
'It is a trading scheme but it doesn't necessarily have to be monetary trading. A block of authorities can get together and form a diversion facility, ' says Alderton: A group of authorities could collaborate and pool both their allowances and their treatment facilities.
Alderton also says that regional variations in the cost of landfill might make it more cost effective for an authority in the North East, where landfill is cheaper, to divert all waste to landfill. This could only be achieved, however, if they bought up surplus landfill 'credits' from authorities in the South East, where landfill is comparatively expensive, and where recycling and composting are likely to feature large in waste management plans.
Authorities do not have to sell their allowances just because they have outperformed.
'They can bank the surplus and use it the following year, ' says ICE Waste Board chairman Peter Gerstrom. 'But in the target years they have to clear their surplus.' Target years are 2010, by when landfill volumes have to be down 25% on 1995 levels, 2013, when 50% reductions must achieved, and 2020.
Reduction performance must be reported to the European Union.
Penalties for not achieving waste reduction targets are tough at £200/t. And any authority failing to report its waste figures to the Environment Agency will be hit by DEFRA with a £1,000 fine.
Reporting will be quarterly using a new online software system, WasteDataFlow. Authorities will fill in a spreadsheet detailing total waste received, recycled, redirected and sent to landfill.
Alongside, a landfill allowance trading register will be run.
At the moment LATS will operate in England only, where over 80% of the UK's biodegradable waste is produced.
Wales has opted out of the scheme, preferring to enforce the targets with less room for manoeuvre. Scotland is considering using LATS and is consulting on whether it should begin in 2005 or 2008.