Déchets et ressources – quelles opportunités d’investissement dans le secteur au Royaume-Uni ? by Department for Business & Trade

DIT France webinar 23rd Feb 2021

WELCOME TO Déchets et ressources – quelles opportunités d’investissement dans le secteur au Royaume-Uni ?

Presentation title - edit in the Master slide

Today’s agenda • Welcome from Mia Barclay, DIT France • Introduction in French from Olivier Chazal, ADEME Club International • UK waste sector overview from Deborah Sacks, UK Waste Sector Specialist

• Focus on the Green Gas Support Scheme from Tim Charters, BEIS Clean Heat Corporate Finance Advisor • Government support to help you locate and expand from the UK by Victoria Zastava, IST • Another launchpad service for inward investors, Nick Churchward, Burges Salmon • Questions and discussion

Déchets et ressources – quelles opportunités d’investissement dans le secteur au RoyaumeUni ? Le mot d’introduction de l’ADEME CME

23/02/2021

Présentation de l’ADEME ~900 salariés permanents

Paris

180 doctorants 3 Sites centraux 17 Directions régionales (Hors DROM)

Angers (siège social)

Budget incitatif : 700 M€ en 2020 (Hors PIA) ~10 000 contrats / an Valbonne

Intitulé de la direction/service

23/02/2021

Principal opérateur de l'État pour la transition écologique et énergétique Principal opérateur de l'État pour la transition écologique et énergétique Tutelles : Ministère de la Transition Ecologique MTE) ; Ministère de l’Enseignement supérieur, de la Recherche et de l’Innovation (MESRI).

Missions de l’ADEME (contrat d’objectifs 2020-2023) :

Accélérer le déploiement de la transition énergétique et écologique ; Innover et préparer l’avenir de la transition énergétique et écologique

Contribuer à l’expertise collective pour la transition énergétique et écologique

Intitulé de la direction/service

23/02/2021

Les missions de l’ADEME

Intitulé de la direction/service

23/02/2021

Investing in Waste Management in the UK Deborah Sacks Waste and Resources Specialist February 2021

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Resources and Waste Management Strategy - implementation 1. Consultation on Extended Producer Responsibility

2. Consultation on Consistency of Collections from Households and Businesses 3. Consultation on Deposit Return Scheme 4. Government Response on Standards for bio-based, biodegradable, and compostable plastics

https://www.gov.uk/government/publications/resources-andwaste-strategy-for-england

Extended Producer Responsibility for Packaging: Making producers responsible for the full net cost of managing packaging they place on the market.

This will be a significant cost transfer from the public purse. It will incentivise producers to question whether the packaging they use is necessary, could be reduced or not used at all. Producers who use unrecyclable packaging (such as polystyrene or black plastic), will be required to pay higher fees so incentivising them to use recyclable packaging.

Fees will also be modulated to deliver funding to support additional collection and upgrading of infrastructure to allow recycling of currently unrecyclable materials, where producers are willing to invest (e.g. fund the roll out of collections for plastic films and flexibles), where reduction of packaging is not possible, or to incentivise greater uptake of re-use and refill business models and systems.

Extended Producer Responsibility for Packaging: • • • •

Setting more ambitious targets on producers Introducing clear and consistent labelling for recyclability Collection of plastic films and flexibles for recycling as soon as is practical, Clearer labelling on all packaging as to whether it can be recycled

The collection, handling and use of data required by Extended Producer Responsibility will need to be underpinned by digital infrastructure. This will be required to: • to facilitate registration processes, • to support the administration of the payment framework and • to enable the submission of evidence on packaging placed on the market and its flow through the waste management system.

Collection Systems Capturing as much material as possible in ways that enable it to be treated in the most appropriate way • Consistency of collections and materials collected – for households and commercial • Separate food waste collections

Smarter approach to waste management and recycling in cities through  Better design and planning for recycling/waste management  More and better recycling collection points at destination hubs and locations

Destinations of RDF and SRF from the UK in 2019 2.6 million tonnes

Belgium

Bulgaria

Cyprus

Denmark France

Germany 15% Netherlands 42%

Germany Greece

1% 3% Norway 5%

Sweden 21%

Latvia

Norway Portugal Spain Sweden The Netherlands

United States 12

Hazardous Wastes Defra has commissioned a study which should be available later this year. This will identify how much of which feedstocks require treatment in England and Wales

The UK Government has also committed to reviewing the regulatory framework for all waste exports and to banning the export of plastic waste to countries that are not members of the OECD.

Battery Recycling 38,000 tonnes of batteries are reported as being placed on the market. The Environment Agency has released figures confirming that the recycling industry achieved a battery collection rate of 45.23% in 2018 There are collection and shredding facilities in the UK, but no re-processing facilities

96%

41.6%

53.2%

Waste Electrical and Electronic Equipment The UK generated the second most waste electrical and electronic equipment (WEEE) per capita in the world in 2019, behind only Norway, according to a report published by a global e-waste grouping. The Global E-waste Monitor report says the UK generates 23.9kg per capita.

Tyres More than 486,000 tonnes of used tyres (approx 55 million tyres) are generated annually in the UK. Both tyre manufacturers and end users are responsible for disposing of waste tyres responsibly. In the UK, the Landfill Regulation 2002 stated that whole tyres are not permitted to be sent to landfill (unless they have a diameter over 1.4 metres) The 2006 EU Landfill Directive caused a tyre recycling boom. Approximately 87% of used tyres are diverted from landfill sites in Europe. 34% are recycled, 32% are incinerated for energy production and the remainder are sent for re-treading. 16

Deposit Return Scheme

Defra will soon be consulting on a deposit return scheme for drinks containers: This is likely to include • PET Plastic bottles • Steel and aluminium cans • Glass bottles Deposit is likely to be 20p per container A Deposit Management Organisation will be created which will be responsible for meeting high collection targets set out in legislation. They will report the evidence on meeting these targets. The consultation will ask if the scheme will include all containers or just those used “on the go”.

Disposable Cup Take-back Scheme

Sellers of takeaway drinks will be required to provide in-store take-back facilities for single use paper cups and to ensure that thee are recycled. In the longer term, recycling targets will be introduced for laminated card, which will help facilitate “on the go” recycling of paper cups in places such as transport hubs. This will help meet the recycling targets for these materials.

Communications A key aspect of the future implementation of waste policy in the UK will be communications: Households will need to change their behaviour in managing their waste Businesses will need to change too! A significant amount of funding will go from the EPR scheme to communications campaigns

There are different incentive regimes: Electrical power is incentivised through the Contracts for Difference Scheme Heat is incentivised through the Green Gas Support Scheme (which is replacing the Renewable Heat Incentive) Transport fuels are incentivised through the Renewable Transport Fuel Obligation Mostly, gate fees are driven by the landfill tax: £94.15 per tonne for biodegradable waste (£3 per tonne for inert waste) 20

Renewable Transport Fuel Obligation The Renewable Transport Fuel Obligation (RTFO) supports the UK Government’s policy to encourage the production and use of biofuels that don’t damage the environment. Under the RTFO suppliers of transport (and non road mobile machinery (NRMM)) fuel in the UK must be able to show that a percentage of the fuel they supply comes from renewable and sustainable sources. Fuel suppliers who supply at least 450,000 litres of fuel a year are affected. This includes suppliers of biofuels as well as suppliers of fossil fuel.

Renewable Transport Fuel Obligation A company must register under the RTFO if it supplies 450,000 litres or more for use in the UK per year.

Fuel suppliers can buy themselves out of their obligations at a cost of 30p per litre, RTFCs are traded - currently the price is in the region of 31p per litre Sustainable Aviation Fuels are receiving a lot of attention, especially from airlines

Green Gas Support Scheme Tim Charters, Corporate Finance Advisor – Clean Heat, BEIS

Agenda • Background on Renewable Gas in the UK • Current UK Biomethane Market • The Green Gas Support Scheme

Biomethane in the UK – Background • Anaerobic Digestion plants in the UK since late 1800s; • Previous policy encouraged development of AD projects for power or local heat uses; • Variety of feedstocks: • • • •

Crop Food waste (domestic, commercial, industrial) Sewage Agricultural wastes

• Almost 600 AD sites now operational in the UK

Biomethane in the UK – Background • The Renewable Heat Incentive introduced subsidies for biomethane injected into the gas grid; • In practice, this has meant biogas upgraded from wet AD; • Several feedstocks have been supported, however recent plants have been required to use at least 50% waste; • Subsidies based on the volume of gas injected; • Relatively few plants have sold biomethane for transport fuel to date.

Current UK Biomethane Market • Market maturing with over 100 plants now commissioned;

• Geographically spread across Great Britain; • 13,700 GWh injected into the grid to date; • Plants developed by a mix of independent developers, and increasingly, large corporates;

• Renewable Heat Incentive coming to an end, to be replaced by Green Gas Support Scheme; • Final cohort of RHI projects currently under construction.

* From 2018, data includes advance “tariff guarantee applications”

The Green Gas Support Scheme - Subject to ministerial and parliamentary approval…

GGSS 2020 consulted on: • New support scheme for AD biomethane injection • For plants built for 5 years from Autumn 2021

• Learning lessons from RHI • Funded by levy on gas

Key elements – Tariffs • Biomethane generated from newly constructed AD plants;

Biomethane Volume

Proposed tariff range

Tier 1 – First 60,000 MWh

4.90 – 5.50 p/kWh

• A “tariff” is paid for each kWh injected into the gas grid to provide income stability;

Tier 2 – Next 40,000 MWh

3.25 – 3.75 p/kWh

Tier 3 – Remaining

1.50 – 2.50 p/kWh

• Tariff levels set to provide a target return based on capital and operating costs; • Tariff paid for 15 years from first injection; • The tariff declines at higher volumes. Final rates soon to be announced.

Key elements – Feedstocks and Offtakes • A range of feedstocks supported, however a minimum of 50% must be waste derived; • Sustainability requirements on feedstock; • Easier interaction with the Renewable Transportation Fuels Obligation

Next steps • Government response soon • Regulations • Autumn launch

The GGSS • Support for new AD from Autumn 2021 • Tariffs and tiering • Managing sustainability and air quality Any questions: greengassupport@beis.gov.uk

Investment Services Team

Victoria Zastava Head of Energy & Infrastructure Victoria.Zastava@invest-trade.uk

Agenda

IST service overview

What we can do for you

How to get assistance from the IST

Our Role

We act as a single point of contact for potential and existing investors into the UK, providing impartial advice and support

Free and confidential assistance that is tailored to your business needs

Extensive market intelligence

Expert business support services

IST services are supported by a Knowledge Lab and Partnerships Team

Our Offices

Scottish Development International

The IST has offices across the UK, providing extensive coverage for potential and existing investors

Newcastle Invest Northern Ireland

Leeds

Manchester Nottingham Birmingham Cambridge Trade & Invest Wales Bristol

DIT

Our Service Portfolio Accessing market opportunity

D E L I V E R E D B Y I S T

Tax advice

Finding top quality staff

Access & introductions to the right people

Support with visa applications & entry to the UK

Setting up in the UK

IST

Tailored assistance for entrepreneurs

Bespoke market research R&D Helping select the best market location

Ongoing Government support

Business partnerships

Capital investment

C O N N E C T E D B Y I S T

Industry Associations

Energy Networks Association

Chartered Institution of Wastes Management

Society for the Environment

Environmental Services Association

Heat Pump Association

Textile Recycling Association

Energy Institute

Fuel Cells UK

The UK District Energy Association

Anaerobic Digestion & Bioresources Association

Energy UK

The Recycling Association

WRAP

Material Recycling World

Renewable Energy Association

The British Plastics Federation

London Sustainability Exchange

ePURE

We Are Here to Help

A waste management solution consists of a number of components and the decisions around these are interlinked

The IST can help you to navigate this complex environment

Frequently Asked Questions “Please send information about the UK Government’s incentives for renewable heat and power generation”

“What is the UK market for anaerobic digestion?”

“Please send advice on the best tax structure for establishment of a subsidiary in the UK”

“Where should I locate an energy from waste facility?”

“What is the latest position on plastics recycling in the UK”

WE CAN ANSWER ALL OF THESE QUESTIONS, AND MORE! 9

Summary The IST provides a tailored service for companies in the waste management sector ▪ Market intelligence

▪ Tools to find waste ▪ Site searches and strategic advice for planning and permitting ▪ Help to attract finance ▪ Introductions to specialist commercial partners

General Enquiries Enquiries@invest-trade.uk +44 (0) 20 7000 9012

DO YOU HAVE ANY QUESTIONS?

gov.uk/dit This information has been prepared by the Department for International Trade (DIT), and suppliers of DIT, for general informational purposes only. This information is not intended to amount to advice on which you should rely. Although DIT and its suppliers makes reasonable efforts to ensure the accuracy of any information provided, neither DIT nor any of its suppliers makes any representations, warranties or guarantees, whether express or implied, that any information supplied is accurate, complete or up-to-date. Accordingly, you must obtain professional or specialist advice before taking, or refraining from, any action on the basis of this information. Neither DIT nor any of its suppliers accepts any responsibility for updating this information in light of subsequent events or for any other reason. This information does not constitute a recommendation or endorsement by DIT or any of its suppliers. To the fullest extent permitted by law, neither DIT nor any of its suppliers accepts or assumes any responsibility or liability to any reader of this information for any loss or damage, whether in contract, tort (including negligence), breach of statutory duty, or otherwise, even if foreseeable, arising under or in connection with the use of or reliance on this information including, but not limited to, loss of profits, sales, business, or revenue, business interruption, loss of business opportunity, goodwill or reputation, or any indirect or consequential loss or damage. Should any such reader choose to rely on this information, then they do so at their own risk. DIT is the owner, or the licensee, of all intellectual property rights in this information and DIT reserves all rights in this information.

UK waste sector inward investment briefing

DIT France webinar 23 February 2021

Nick Churchward, Partner

Overview Burges Salmon by numbers

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We operate in all UK jurisdictions.

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Offices in London, Bristol, Edinburgh and Dublin

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97 partners, 560+ lawyers, 850+ staff

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£105m turnover (FY 19/20)

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Expertise in energy and environmental law

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UK Law Firm of the Year 2020 and Energy & Infrastructure Team of the Year 2020 (Legal Week British Legal Awards)

Launchpad service for inward investors Overview •

Our project managers help inward investors to fast track the UK set up process and focus on winning new business

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Free scoping consultation meeting

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Full-service law firm, advising across UK jurisdictions

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Rapidly deployed project management to deliver on the ground support

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Fixed-fee pricing of legal advice for the establishment of UK entities

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DIT client - European industrial waste reprocessor UK project support and legal advice (incl. market knowledge, real estate, planning and business immigration)

24 hour help desk: launchpad@burges-salmon.com

Waste and Resource Management expertise Examples of our services include:

• Advising in all 4 UK jurisdictions, all 4 environmental regulators (EA, SEPA, NRW and NIEA)

• Waste regulation (including “end of waste”) • Real estate issues and land rights, project leases, planning and permitting

• Acquisitions and disposals (corporate and assets) • Contracts and regulatory advice on Inputs (fuel, materials) and Offtakes (products, energy, residues etc)

• Construction contracts, equipment supply contracts

• Debt and equity financing • Contractual and regulatory issues and disputes

UK Market View

Positive Policy & Regulatory Environment Circular Economy and Waste Hierarchy: Chemical Recycling “…molecules, not electrons” Market consolidation and merchant projects. Municipal opportunities

Traditional vs Advanced Technologies

Revenue streams – Gate Fee, RTFO, Heat, Power, PRNs, offtakes

Impacts on waste export market => UK investment opportunities

www.burges-salmon.com This presentation gives general information only and is not intended to be an exhaustive statement of the law. Although we have taken care over the information, you should not rely on it as legal advice. We do not accept any liability to anyone who does rely on its content. © Burges Salmon 2020

Thank you for listening!

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Mia Barclay – Department for International Trade France, Renewable Energy Trade & Investment Adviser mia.barclay@fcdo.gov.uk

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Olivier Chazal – ADEME, Club International olivier.chazal@ademe.fr

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Deborah Sacks – Department for International Trade, Waste Sector Specialist deborah.sacks@trade.gov.uk

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Tim Charters – Department for Business, Energy & Industrial Strategy, Clean Heat Corporate Finance Advisor tim.charters@beis.gov.uk

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Victoria Zastava – DIT Investment Support Team, Head of Energy and Infrastructure victoria.zastava@invest-trade.uk

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Nick Churchward – Burges Salmon, Partner nick.churchward@burges-salmon.com