Abstract
In this study, a net social cost framework is applied to provide insights on policy issues relating to the cross-border trade in waste fuel. We estimate the net social cost of using imported waste fuel in a highly efficient combined heat and power plant (CHP) in a cold climate by considering both private costs and benefits as well as external costs related to energy production, alternative waste management and fuel transport. We conclude that using imported waste fuel is beneficial from a societal perspective compared to using biofuel, given the wide range of assumptions regarding technical, economic and environmental characteristics. The net social cost is mainly determined by fuel cost advantages and the external cost of greenhouse gas emissions. External costs associated with transports only marginally impact the net social cost of waste imports for incineration. The results are robust to variation in the excess heat utilisation rate, which implies that importing waste for incineration would also be beneficial in countries with warmer climates where district heating networks already exist.
Highlights
In recent years, the concept of circular economy has received a great deal of policy attention in the European Union (EU) and its member states
This trade is explained by the fact that, in the EU as a whole, there is insufficient incineration capacity to incinerate all of the waste that is currently treated at lower levels of the waste hier archy, while the incineration capacity that exists is unevenly distributed geographically (Persson and Münster, 2016; Saveyn et al, 2016)
When private and external costs are summed, we find that waste fuel-fired district heating is clearly preferable in all scenarios, by a smaller margin when waste is transported from the UK.34
Summary
The concept of circular economy has received a great deal of policy attention in the European Union (EU) and its member states. A cornerstone of the EU Action Plan for a Circular Economy is its waste hierarchy (European Commission, 2015), which establishes a clear social preference order for different residue treatments. It notes that residues should not be landfilled, but instead prevented, reused, recycled or used as fuel (European Parliament, 2008). In the spirit of the waste hierarchy, several member states have either banned or taxed landfilling, which has led to an increase in the cross-border trade in combustible solid waste. How ever, the directive does not oppose the trade in waste fuel between member states since it aims to achieve self-sufficiency in the EU as a whole (European Parliament, 2008, Article 16)
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