Defra has told the sludge working group set up by Ofwat to explore a number of issues around the nascent bioresources market that there is currently a lack of evidence around a regulatory impact assessment and £m benefits to make the case for legislative change around the co-treatment of sludge with other waste.

Defra has advised that the water and waste industry should create the evidence base and to engage with the EA on the risks. Defra’s waste team is responsible for the waste controls under the Environmental Permitting Regulations.

The sludge working group heard an update from Defra and the Environment Agency at a meeting which took place on 23^rd January – the last meeting of the group in its current format.

However, Ofwat said it would continue to monitor bioresources market development over coming months and years and that engagement would continue with stakeholders on more targeted issues.

The regulator said it expected to want feedback on how the market is going from the perspective of all sludge working group members and market participants and would convene ad-hoc meetings as the need arises.

Among issues discussed at the January meeting was the type of contract information needed to allow contractors and other stakeholders to identify gaps in the market.

The aim of the information is to enable market participants to understand where opportunities could arise now or in the future. Key points of a presentation on proposed contract information to the meeting by specialist food, green and sewage waste recycling facilities provider Agrivert, which is a member of the group, included:

• Wastewater treatment works should have meaningful names including the town they serve – currently not all wastewater treatment works names are intuitive.
• The value of the contracts was not required as it is commercially sensitive.
• The number of tenders received would give stakeholders an idea of interest in a particular service.

Market information – timetable and next steps

Ofwat then provided an overview of its draft proposed timetable for consulting on the proposed Direction which would bring together both physical and contract information.

The regulator is planning to publish the Direction consultation soon after the licence conditions are enacted.  However, due to the timing of the new licence condition companies will not be required to publish the information for 2016-17, although it is hoped that companies will publish this information on a voluntary basis later in 2017.

Defra and the Environment Agency also provided an update at the meeting on environmental regulations in the context of Defra’s constraints that had materialised as a result of Brexit.  Defra confirmed that the Environmental Permitting Regulations system remains a valid regulatory approach for spreading mixed materials to land. The EPR system is flexible and it is possible to make amendments without a need for legislative change, Defra said.

Following the update provided by Defra and the EA, some delegates remained concerned that the current environmental regulations will act as a barrier to the development of the market.

According to Defra, there is currently a lack of evidence around a regulatory impact assessment and £m benefits to make the case for legislative change around the co-treatment of sludge with other waste. Defra has advised that the water and waste industry should create the evidence base and to engage with the EA on the risks.