Mixed response to latest LATS marketplace

13 August 2008
 
A new marketplace Landfill Allowance Trading Scheme (LATS) is to be launched by DEFRA, but with levels of trading remaining low and many waste-disposal authorities forced to write off their surplus allowances, reactions have been mixed.

DEFRA says the initiative is aimed at encouraging local authorities to become more confident about trading allowances, and the marketplace aims to provide ‘commonly-agreed, simple, standardised contracts for transactions’.

However, a number of local authorities have not been able to sell their large number of surplus allowances and it seems unlikely they will this year.

The North London Waste Authority said it was estimated to hold 231,603 surplus allowances with a book value of £1.58M. ‘Given that the LATS market for surplus allowances is very lacklustre ahead of the Government’s first target year in 2009-10 – because of the large number of excess allowance held by the majority of waste disposal authorities – it is quite likely that the authority’s allowance will be written off, in due course.’

Bernard Warr, secretary to the County Surveyors’ Society (CSS) waste panel and head of waste management at Cambridgeshire County Council, said most waste authorities which had taken a proactive approach to the EU Landfill Directive would have a surplus of ‘short-dated’ allowances on their books ‘that are pretty well valueless now, and will remain so until they expire in March 2009’.

‘Although DEFRA is trying to re-establish a marketplace for LATS allowances, it is facing an uphill struggle.’ North Tyneside Metropolitan Borough Council wasted almost £1M on LATS permits it did not need (Surveyor, 28 February 2008). It has still not sold these surplus permits and it is likely the larger part of the values of the allowance will be written off in 2007-08.

However, a council spokesperson said the council believed the LATS marketplace was ‘in principle, a good idea, and we are supportive of these changes to the trading system’.

Hampshire County Council had the greatest individual surplus last year (Surveyor, 8 November 2007) and expects to write off a surplus this year. But director of environment, Alison Quant, said: ‘In a sense, the more surplus we have, the better it is working. It should be an indication of success.’

A spokesperson for DEFRA said there might be an increase in trading as 2009-10 is a target year. Councils would not be able to bank or borrow their own allowances in a target year and therefore, more of them could need to trade allowances.

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