Essex County Council / Southend Borough Council

Transcription

1 Essex County Council / Southend Borough Council Review of deliverability constraints associated with the use of industrial estates for waste management facilities Study Report Version: Final (5.1) 17 October 2014

2 Contents Section Page No. Executive Summary 1 Glossary Introduction Purpose and Scope of Study Methodology Findings Conclusions Analysis of Approaches Recommendations Afterword.. 34 Appendices: 1 Methodology for selecting the sample of industrial estates Waste Industry Questionnaire Findings from Waste Industry Survey Industrial Property Management Industry Questionnaire Findings from Property Management Industry Survey Notes of Stakeholder Workshop Findings from the quantitative assessment examining the main determinants for economic viability/feasibility of waste management facilities.. 88 Assessments associated with the preparation of this report have involved an element of professional judgement. The conclusions presented rely upon information provided by third parties which have been used in good faith. While due care and diligence has been exercised in the research and production of this report, BPP Consulting LLP excludes to the fullest extent lawfully permitted, all liability for any loss or damage however arising from reliance on its contents.

3 With the economic recovery, the price of employment land is increasing and availability is increasingly constrained. This is especially so in parts of the study area with good access to the M25. Some waste management development can offer relatively stable returns to landowners over long periods of time but in general it is a land use which currently struggles to compete with other uses of employment land due to its low value (rate of return per hectare), initial capital investment and the perception that it is a bad neighbour activity. The use of generic development management policies and Areas of Search within the WLP to guide the development of waste management facilities on employment land will improve the deliverability of future waste management capacity, particularly where these are applied in combination with specific site allocations. The deliverability of the WLP would be greatly improved through the allocation of further strategic sites (at least 0.65 hectares in size), in addition to those allocated in the Preferred Approach, which are able to accommodate a range of waste management uses. It is likely that suitable sites would be found within shortlisted employment land. The deliverability of waste management capacity can be expected to improve as the number of allocations increases. Key Recommendations: 1. To ensure maximum deliverability of additional waste capacity on employment land, the development of the WLP should seek to: a. Continue to identify specific allocations of industrial land, no less than 0.65ha in size, with good accessibility to waste arisings, able to accommodate a range of waste management uses. b. Include Areas of Search encompassing the potential areas of employment land identified in the ELR. c. Include general policy identifying industrial land as broadly suitable for waste management uses subject to meeting development management criteria intended to ensure sustainable development. 2. The negative perception of waste management could be improved with the development of a Design Guide Supplementary Planning Document (SPD) setting out the authorities expectations with regard to a good standard of design and operations. It would assist the WLP process if this were done in parallel with the development of the WLP, or at least the WLP included a clear commitment to prepare such an SPD. 3. The importance of waste management to a high performing local economy should be emphasised in discussions with stakeholders, such as the Local Enterprise Partnership, during the preparation of the WLP. 4. District Councils to review whether sufficient employment land has been allocated in their Local Plans to supply all sector needs. They should also entertain, and certainly not rule out, the possibility of waste management Page 2 of 102

4 capacity being developed on employment land. This is particularly so in the case of high end low impact uses such as those which deal with single material streams. In designating employment land in local plans the LPAs should consult with Essex County Council at the earliest possible opportunity with a view to establishing the suitability of locations for waste management uses which may be compatible with other employment uses. Page 3 of 102

5 Glossary Contract for difference: This is a new system being introduced by the Government to replace Renewable Obligation Certificates (ROCs- see below). Under the Contract for difference' Feed In Tariff, government offer top-up payments for renewable power if the wholesale price of energy falls below a certain threshold. EfW: An Energy from Waste facility is a waste management facility that uses waste to generate energy or a fuel thereby capturing the energy value in the waste. When directly combusted the heat energy can be used for direct heating and/or to drive turbines to generate electricity. Alternatively, a combustible fuel, such as methane or syngas, can be produced. ELR: Employment Land Review. The report prepared by Essex County Council which assessed the suitability of employment land in Essex and Southend on Sea for locating waste management uses. The title of the report is Review of employment land for waste management facilities dated September Employment land: Land allocated by local planning authorities for industrial and commercial use i.e. land that gives rise to employment. Gate fees: Fees charged to accept material at a waste management facility. Generally expressed as /tonne. Green Belt: Areas of land around large metropolitan areas designated to prevent urban 'sprawl' and merging of urban areas by keeping land permanently open. The essential characteristics of Green Belts are their openness and their permanence. The Government attaches great importance to the preservation of Green Belts. HGVs: Heavy Goods Vehicles these are vehicles with a combined (vehicle and payload) weight exceeding 3.5 tonnes. Industrial Land: For the purposes of this study industrial land is taken to mean land identified as potentially suitable for the development of waste management uses within the ELR (see above). ktpa: Waste management capacity measured as thousands of tonnes per annum. Merchant facilities: Waste management facilities primarily developed to manage non-municipal waste. Such facilities are developed using private finance rather than relying on long term public sector contracts. R1 requirements: Annex II of the revised Waste Framework Directive sets out a list of waste management operations that can be classed as recovery. One of these is the use of waste principally as a fuel or other means to generate energy referenced as R1. The Annex includes an energy efficiency threshold, which incineration plants dedicated to treating local authority collected waste must achieve, or surpass, in order to qualify as a recovery operation. ROCs: Renewable Obligation Certificates. Certificates issued to operators of electricity generating stations that have been accredited as producing power from renewable sources for the eligible renewable electricity they generate. To be superseded by 'Contract for Difference' (see above). Site: Site is considered to relate to a specific plot of land, more likely within an area of employment land, rather than the entire area of employment land itself. WLP Area: This is the area covered by the Replacement Essex and Southendon-Sea Waste Local Plan i.e. Essex and Southend-on-Sea. Page 4 of 102

6 1 Introduction 1.1 Essex County Council (ECC) and Southend-on-Sea Borough Council (SBC) (hereinafter referred to as the 'authorities') are producing a Replacement Essex and Southend-on-Sea Waste Local Plan (WLP also referred to as the Plan ) as required by the Planning and Compulsory Purchase Act (2004). The WLP will replace the existing Essex and Southend WLP (adopted 2001) and covers the administrative areas of both ECC and SBC. 1.2 The WLP will set out the authorities vision, objectives, strategy and policies (and how they will be delivered and implemented) with respect to waste related issues and development over the plan period 2015 to In doing so the WLP will indicate how much additional waste management capacity is needed in the area and where this capacity should be provided, in accordance with the overarching aim of achieving sustainable development. 1.3 The existing and emerging district council Local Plans, as well as the unitary council of Southend on Sea s Local Plan include employment land allocations and it is considered that these might provide opportunities for the location and development of future waste management capacity. 1.4 In due course the WLP will be tested for soundness in accordance with the National Planning Policy Framework (NPPF). One of the tests of soundness is concerned with the effectiveness of the Plan, the measure being that the Plan should be deliverable over its period and based on effective joint working on cross-boundary strategic priorities 1. Effectiveness is also captured by the NPPF requirement that Local Plans should be aspirational but realistic. It is important therefore, for the authorities to demonstrate that the ways in which the WLP proposes waste will be managed are reasonably likely to happen. It is equally important for the authorities to ensure that the policies in the WLP do not undermine the aspirations and plans of the district councils for the development of industrial locations. 1.5 This study tests the validity of the hypothesis that, in future, waste management capacity may reasonably be expected to be developed on industrial areas. Industrial areas are defined as being within those areas of employment land allocated in existing and emerging district council Local Plans, as well as the unitary council of Southend on Sea s Local Plan. The report should be read alongside the Councils Review of employment land for waste management facilities. The identification of such land for a waste management use is in accordance with current national planning policy concerning waste management 2. More information about the purpose and scope of this study is included in Section 4 below. 1 NPPF, Para "Paragraph 4 of National Planning for Waste, October 2014." Page 5 of 102

7 2 Purpose and Scope of Study 2.1 The last key stage in the preparation of the Waste Local Plan was the publication and consultation on a Preferred Approach in November The Preferred Approach identifies site-specific proposals for strategic 4 waste management facilities, drawing on the sites that came forward through a Call for Sites exercise undertaken in October-December As well as identifying specific locations for strategic facilities, the Preferred Approach (Preferred Approaches 6 to 11) considers how proposals will be considered which come forward for development on land that is not allocated or is not on an existing safeguarded site. In such cases development is guided to various types of land, reflecting those specified in paragraphs 20 and 21 of the former planning policy on waste, PPS10 5. For the purposes of this study, it is important to note that the Preferred Approaches (6 to 10 6 ) include the following types of land within the categories considered suitable: within existing industrial estates used for general industry (B2), storage and distribution (B8) or land allocated as such in an adopted local plan or LDF document ; and. within those employment areas (existing or allocated) not categorised by Use Class B2 or B8; 2.3 This is included in the general location criteria for the following types of use: Recycling and Recovery Facilities Materials Recycling/ Recovery Facilities and Waste Transfer Stations Inert Waste Recycling Facilities Metal Recycling and Vehicle Dismantling Facilities In-vessel Composting Facilities Clinical waste treatment facilities Mechanical Biological Treatment, Autoclaving and Anaerobic Digestion Facilities Energy from Waste, Pyrolysis and Gasification Facilities 3 "The Preferred Approach document, supporting evidence and earlier Issues and Options stage (December 2010) are available to view on the ECC website: Policy/Pages/RWLP-documents-and-supporting-evidence.aspx" 4 "The Preferred Approach considers what constitutes a strategic waste facility at paragraph This states that generally facilities with a throughput greater than 50,000 tpa are considered strategic. Table 8 of this document provides a more detailed analysis." 5 "Note that updated national planning policy on waste includes a similar expectation." 6 "Open Windrow Composting is covered by Preferred Approach 11 that does not include industrial and employment land as being potentially suitable." Page 6 of 102

8 2.4 The Preferred Approach justified the general identification of industrial estates as being suitable for most types of development, on the basis that national planning policy extant at that time (PPS10) stated that WPAs should consider industrial sites as possibly suitable for waste management uses. It should be noted that recently updated national planning policy for waste 7 includes a similar expectation in paragraph The district councils within Essex are also preparing their own Local Plans to guide other forms of development including that associated with employment. These plans include policies allocating land as specifically suitable for the development of employment uses. However it should be noted that Government guidance to planning authorities on the implementation of the waste hierarchy 8 recognises that such authorities also have a role in furthering sustainable waste management. In particular this includes the following: While such authorities may not have the planning functions in respect of the preparation of Local Plans covering waste, or dealing directly with waste planning applications, they must have regard to national planning policy for waste and are expected to help deliver the Waste Hierarchy. This might include: working constructively with waste planning authorities to identify and protect those sites needed for waste management facilities. Local planning authorities should consider the need for waste management alongside other spatial planning objectives Earlier Government guidance 9 on this matter suggested that: when undertaking Employment Land Reviews, it is important to consider the full range of employment opportunities, including appropriate waste management proposals, before releasing sites for non-employment uses, such as housing. 2.6 Following consultation on the Preferred Approach and to inform the next stage of WLP preparation, a report entitled Review of employment land for waste management facilities has been prepared by ECC and SBC. Drafts have been subject to discussion and review with each Essex district council in line with the Duty to Cooperate plan making requirements " " 8 "Planning Practice Guidance for waste "" 9 "Guidance for local planning authorities on implementing planning requirements of the European Union Waste Framework Directive (2008/98/EC), DCLG, December uthorites_on_implementing_planning_requirments_of_the_european_union_waste_framework_directive EC_.pdf" 10 In summary, the Duty to Cooperate requires planning authorities to cooperate when planning for strategic matters (including waste management) which cross administrative boundaries. Page 7 of 102

9 2.7 The assessment of employment land across the county and Southend-on-Sea involved the application of the WLP s emerging development management criteria and so establishes the extent to which these criteria (and hence the WLP) will allow the location and development of additional waste management capacity in suitable locations within the WLP area sufficient to meet all of Essex and Southend s requirements over the plan period (i.e. to 2032). The assessment included three stages as follows: All Local Plan designated employment land/industrial estates (initially 240) were identified in the WLP area. From the initial 240 estates/sites, a shortlist was prepared through a desktop exercise that identified the presence of key constraints which would inhibit waste management development. The key constraints considered were: o Site size, o proximity to Natura 2000 sites, o flooding, o proximity to sensitive land uses, o access. Finally, each of the shortlisted areas were assessed for their suitability for waste management development against specific criteria, including: o Availability (at that time); o land use policy; o individual unit size; o compatibility with adjoining land uses, 2.8 Based on the criteria applied, the review of employment land revealed that there appears to be scope (both availability and suitability) within existing industrial estates to locate a range of waste management facilities. The locations identified are considered to offer opportunities for development that would be in line with the emerging development policies of the WLP. The industrial locations have been identified to demonstrate the deliverability of emerging WLP policy in terms of providing for the development of additional waste management capacity on employment land in Essex and Southend-on-Sea. 2.9 In order to ensure that the WLP addressed NPPF requirements regarding deliverability and viability (see below), the ELR highlighted that further analysis was needed to inform approaches in the WLP. This was with the intention of identifying deliverable opportunities for the development of waste management capacity by, for example, the allocation of sites forming part or all of the shortlisted employment areas The NPPF does not include specific waste policies. However, other policies in the Framework are relevant to the content of the WLP. In particular, when testing soundness, the examination Inspector will consider whether the WLP has been positively prepared. In testing this aspect the Inspector will look to see that the waste management requirements identified by the WLP can be met and this will include an assessment of the deliverability of development on land identified in the WLP as suitable for waste management. This study is intended to provide evidence related to the deliverability of waste management facilities on industrial estates in particular. Page 8 of 102

10 2.11 It is worth noting that in preparing an evidence base, paragraph 160 of the NPPF advises that: Local planning authorities should have a clear understanding of business needs within the economic markets operating in and across their area. To achieve this, they should..work closely with the business community to understand their changing needs and identify and address barriers to investment, including a lack of housing, infrastructure or viability Furthermore the NPPF includes the following on Ensuring viability and deliverability 173. Pursuing sustainable development requires careful attention to viability and costs in plan-making and decision-taking. Plans should be deliverable. Therefore, the sites and the scale of development identified in the plan should not be subject to such a scale of obligations and policy burdens that their ability to be developed viably is threatened Local planning authorities should set out their policy on local standards in the Local Plan.In order to be appropriate, the cumulative impact of these standards and policies should not put implementation of the plan at serious risk, and should facilitate development throughout the economic cycle In addition, paragraph 18 of the former national planning policy on waste management (PPS10) noted the following: waste planning authorities should: avoid unrealistic assumptions on the prospects, for the development of waste management facilities, or of particular sites or areas, having regard in particular to any ownership constraint which cannot be readily freed, other than through the use of compulsory purchase powers Therefore in order to demonstrate that the WLP is deliverable, (as required by the NPPF) this study assesses whether it is reasonable to expect that waste management development will come forward at suitable locations shortlisted in the ELR. This also takes into account the impact of the WLP s development management criteria This study therefore forms part of the evidence base of the emerging WLP. It further informs the in-principle policy approach promoting waste related developments on employment land that are deliverable and viable for a range of waste management facilities. The study presents qualitative and quantitative information to provide an understanding of the practical and deliverability constraints associated with the use of industrial estates for a range of waste management facilities. Ultimately, this study considers ways in which any reliance of the WLP on industrial land for the development of required waste management capacity might be supported. Page 9 of 102

11 3 Methodology 3.1 This study has involved several distinct activities which all make a contribution to assessing the deliverability of waste management facilities on industrial land in Essex and Southend-on-Sea. These activities are as follows: - Sample survey of waste management industry - Sample survey of industrial property management industry - Stakeholder Workshop - Assessment of the main determinants for economic viability/feasibility of waste management facilities via separate research. 3.2 A description of each of the activities is set out below. Further details are set out in the appendices as follows: Appendix 1: Methodology for selecting the sample of industrial states Appendix 2: Waste Management Industry Questionnaire Appendix 3: Findings from Waste Management Industry Survey Appendix 4: Industrial Property Management Industry Questionnaire Appendix 5: Findings from Property Management Industry Survey Appendix 6: Notes of Stakeholder Workshop Appendix 7: Findings from the quantitative assessment examining the main determinants for economic viability/feasibility of waste management facilities 3.3 It should be noted that a meeting with the District Councils also took place at which the concept of holding the stakeholder workshop was considered. Survey of sample of waste management industry representatives 3.4 The survey of a number of representatives of the waste management industry focussed on the following three factors considered to affect the deliverability of waste management facilities on industrial estates: Operational, Setting and Economic. 3.5 Each of these is considered in turn as follows: Operational 3.6 Operational factors are those which affect the ease with which a waste management facility can function on a daily basis in particular how easily materials can be received, stored, processed and removed. Certain types of facility produce outputs such as power, heat and biogas and the ease with which these outputs can be utilised/distributed is also an operational factor. The presence of utilities needed for the facility to function in the form of power and water is also a factor. As the locations being examined are all existing, developed, industrial locations it was assumed that necessary power and water would already be available. Page 10 of 102

12 Setting 3.7 Setting factors include those, which if present, may require specific measures to ensure that they are not harmed by the operations of a waste management facility. For example if a site is adjacent to a habitat that has a protected status it may be necessary to implement mitigation measures to reduce the risk of operations harming that habitat. Such factors include the presence of dwellings whose inhabitants might also be adversely affected if no mitigation is in place. In extreme cases it may be that no level of mitigation reduces the risk to an acceptable level and so operations cannot take place in that location (essentially making that location undeliverable for such development as conceived at the time). Economic 3.8 Economic factors are those factors which would affect the viability of developing a waste management facility in an industrial location. Economic factors include the cost of leasing or purchasing a site and fiscal measures (incentives and penalties) affecting the management of waste. This report examines the main determinants for economic viability/feasibility of waste management facilities. 3.9 The deliverability of different types and sizes of waste management facility will be affected by the above factors in different ways. So for a certain type of facility the presence, absence or presence in excess of certain factors may make it difficult or impossible for a facility of a particular type to be developed in a particular location. It may however be possible to develop a facility of a different type Ultimately it is for the waste management industry to decide to develop a facility or not and so, in understanding deliverability, it is important to establish industry views of how these factors might affect the prospects of development of different types of waste management facility on industrial locations in Essex and Southend-on-Sea in particular. The approach taken to obtaining these views and the findings are set out in the following sections Representatives of the waste management industry were contacted to obtain their views on how deliverability of waste management facilities is affected by certain factors. The representatives were chosen on the basis that they had knowledge of developing waste management facilities, and an interest in doing so within the study area. The survey results were recorded on an anonymous basis to assure confidentiality and maximise cooperation. As part of this exercise, where possible, views were sought on the suitability and deliverability of sites on a sample of types of industrial locations which may be found in Essex and Southend on Sea Views were obtained through the completion of a survey questionnaire (included in Appendix 2). The questionnaire included schematic diagrams intended to illustrate each of the types of industrial location which made up the representative sample of locations. Respondents were specifically asked to consider the deliverability of waste management facilities in those locations. Initially s were sent to 26 sector representatives based on a listing of consultees contacted in previous stages of consultation. This included the 11 The process of selecting the representative sample of locations is described in Appendix 1 Page 11 of 102

13 questionnaire and a request to discuss its contents by telephone. A total of eleven telephone interviews took place, with the representatives ranging from smaller local companies to those operating on a national basis. While the majority (80%) of respondents had a local interest a few of those from the larger companies did not currently have operations in the WLP Area but had substantial experience of developing waste management capacity using a variety of technologies, mostly in industrial locations A breakdown of the experience of the representatives spoken to or the companies they represent, in terms of developing different types of facility in different types of location, is provided in Table 1 below: Table 1 - Experience of waste management industry representatives surveyed Facility type Type of location (no. of respondents) Industrial estate/area 12 Urban (builtup) Area 13 Rural Area 14 - Transfer & bulking Recycling - MRF Composting - open or in vessel Construction and demolition (C&D) processing - Treatment inc MBT and AD Treatment energy from waste including ATT This shows that the respondents covered experience of developing all types of waste management operations in the full range of settings and in particular that which is the focus of this study i.e. employment land. Survey of a sample of industrial property management industry representatives 3.15 Industrial property management companies were also surveyed for their views on the viability of locating waste management facilities on industrial estates. As some of these companies might be unfamiliar with waste management a list of the key characteristics of different waste management facilities was drawn up and included with the questionnaire The industrial property management companies contacted were taken from a listing of companies that had previously been contacted during earlier WLP consultation exercises. This information was supplemented with an Internet search for contact names associated with the management of land shortlisted in the ELR Initial contact was made by ing a questionnaire and introductory letter and this was followed up with a phone call. The questionnaire is included as 12 An 13 An area of land that has been specifically developed for use by light and heavy industry. area of land located within or on the edge of the built up area of a town or city but is not located in an industrial estate/area. 14 An area of land that is away from main settlements; mainly surrounded by open, undeveloped greenfield land including on the edge of small settlements e.g. villages." Page 12 of 102

14 Appendix 4. Key questions were as follows: a. How are waste management facilities/uses perceived by other tenants on an industrial estate? b. What is the approximate cost of the sale and lease of industrial land in Essex? c. Is there a broad understanding of the sale and rental costs of industrial land and the turnover of occupiers on these industrial estates? d. What are the preferences for site owners relating to development and use i.e. bespoke or generic buildings, short or long term lease arrangements? industrial property management companies were contacted and, of these, nine agreed to participate in the survey. The main findings from the survey are included in Appendix While some representatives had clear views on specific areas others had a much wider perspective and were able to provide views which related to the entire area. The consistency of views expressed in responses between representatives suggests that a sufficiently large sample had been surveyed. 15 Stakeholder Workshop 3.20 During the study period it was decided that it would be useful to hold a workshop for stakeholders to inform the study. Representatives from the following stakeholders were invited: Waste Management Industry Industrial Property Management Industry District Council Planning Authorities The Environment Agency - as permitting body and statutory consultee on planning applications 3.21 The initial aim of engaging these stakeholders in discussion was to provide an opportunity for all parties to clarify, and consider, each other s positions with regard to the potential development of waste management facilities in industrial locations. This was with a view to achieving some consensus on the need for local waste management facilities, and how they might be accommodated in such locations. Other aims of the workshop were to achieve the following: A. A better understanding of the nature and possible impacts of modern waste management activities; and, B. To identify and clarify potentially problematic issues that might affect site deliverability; 3.22 The workshop was also intended to provide a forum to further cooperation between the District Councils and the authorities, building on a roundtable session involving the District Councils that took place earlier in the project The 20 respondents to the telephone interview process, as well as others who had been contacted but not completed the survey, were invited to attend along 15 "During the survey it became apparent that the companies contacted initially did not have an interest in Southend on Sea and so respondents from that area were deliberately sought and interviewed." Page 13 of 102

15 with representatives of all District Councils in Essex together with a representative of the Environment Agency. Representatives from all three stakeholder groups attended: seven from the waste management industry; three from the property management industry; two from local authority. This allowed for three mixed facilitated discussion groups to be established with representatives expressing a range of views and testing each other s perspectives The workshop involved a combination of presentations and group discussion and feedback. Following a brief Q&A session the discussion groups were invited to consider a number of questions as follows: Question 1: Site availability had been ranked in the telephone interview process as the most important determinant in developing a site. a. But what determines site availability? b. Is it solely down to landowner willingness? c. If so how might ECC and SoS engage with landowners most effectively to secure support for use of industrial estates identified in the Plan? Question 2: The price of land was identified in the telephone survey as secondary to land availability but is also an important factor. Some respondents said that it could be prohibitive to development on industrial sites. a. How do the economics of waste management influence the decision to develop a site on an industrial estate? b. In particular what return is generally being sought on investment? c. What are the main barriers to gaining the required investment? d. How might they be overcome? Question 3: The term "Industrial estate" is generic for a wide range of areas allocated for employment type development. a. Is there a need for the emerging WLP policy to distinguish between types of estate so that prospective developers are directed towards sites on the 'most appropriate' industrial land? b. If so how might such a distinction be framed in policy? c. Is there a role for policy to encourage the migration of long established sites to 'more appropriate' ones? 3.25 A summary of the responses is provided in Appendix 6. Quantitative assessment examining the main determinants for economic viability/feasibility of waste management facilities Work was undertaken with a view to establishing the maximum price the waste management industry would be prepared to pay for land in Essex and Southend on Sea. This determines the ability of waste management uses to effectively compete for sites on industrial estates in the area and in turn helps ensure that approaches put forward in the WLP are deliverable Completion of this task requires understanding of the following two elements: a. The price or cost of land on industrial estates in Essex and Southend of Sea. b. The sensitivity of different types of waste management development, in terms of their viability, to rents and land prices. Page 14 of 102

16 3.28 The information required was obtained from the survey of the waste management industry and property management industry as outlined above and through a literature survey Furthermore, validation of the approach and findings was obtained from selected experts from the sector via a review of Appendix 7. 4 Findings 4.1 The raw findings from each of these four main evidence gathering activities are presented within the appendices as follows: - Survey of waste management industry Appendix 3 - Survey of industrial property management industry Appendix 5 - Stakeholder Workshop Appendix 6 - Assessment of the main determinants for economic viability/feasibility of waste management facilities Appendix This section presents the findings as responses to the following key questions which need to be understood for an assessment of deliverability of waste facilities on industrial estates to be made. 1. What are the key barriers to the development of waste management facilities on industrial land in Essex and Southend on Sea and how do they affect the development of additional waste management capacity? 2. Are these barriers likely to change over the period of the WLP i.e. to How might local planning policy facilitate the development of additional waste management capacity on industrial land? Answers to these questions, derived from the findings are set out below: 1. What are the key barriers to the development of waste management facilities on industrial land in Essex and Southend on Sea and how do they affect the development of additional waste management capacity? Availability of land 4.3 The only absolute showstopper was identified as availability of land. Availability was found to have two elements associated with it as follows: - the presence of unoccupied plots of land - willingness of landowners to release land for waste management 4.4 The survey and workshop revealed that landowners were often wary of allowing waste management development on their land or, in some cases, were fundamentally opposed to it. However it seems that the position of landowners is affected by two factors: - The price that a waste management company is prepared to pay to occupy and operate on a piece of land; and Page 15 of 102

17 - the perception that the proposed waste management facility will in some way devalue the land - either by direct damage or by deterring higher value users on adjacent and nearby plots While landowners initial reactions may be negative towards an approach for a waste management use, it does seem that this initial position can be modified if the right terms are offered over a sufficiently long period to make it a worthwhile commitment. This shift in position may be assisted by specific companies, and the industry generally, being able to satisfy concerns, by education, that what is proposed will not cause the feared adverse impacts. This could be in the form of assurances of environmental permits being in place, quality management systems and external verification. 'Showcasing' existing facilities operating elsewhere without causing any adverse impacts may also help change perceptions. Regulatory authorities also have a role to play by implementing and enforcing appropriate standards of operation across the sector. This may include the development and implementation of a Supplementary Planning Document (SPD) concerning design standards for waste management facilities and waste management at sites more generally. Proximity to residential areas 4.6 The close proximity of industrial land to residential areas was most frequently noted as an issue that requires careful consideration and was seen as a potential barrier to waste management development in particular locations. This was especially so for waste management facilities processing putrescible wastes, such as in-vessel composting and anaerobic digestion. It should be noted that under Environment Agency permitting rules, intended to limit possible exposure to bioaerosols, the location of such facilities proximate to areas of human occupation may be restricted. In cases of larger size industrial estates, that may have residential areas proximate to a particular boundary, it might still be possible to develop a plot within the estate at sufficient distance from that residential area to reduce the risk of potential impacts to an acceptable level. It should be noted that the ELR already screened out land where a significant portion (e.g., 50% or more) fell within either 100m or 250m of sensitive properties (housing, hospitals and schools), however such a criteria does not completely eliminate the possibility of proposals coming forward on employment land proximate to residential areas. Impacts will also be managed through appropriate and relevant development management policy criteria to be applied when determining individual planning applications. 4.7 Other elements of waste management uses which make them less compatible on land in close proximity to residential areas were the possible need for 24 hour operations and access to the site by HGVs. Limitation of hours of operation below a 24 hour (3 shift) regime may compromise the viability of an operation requiring substantial up front investment and may in some cases be prohibitive e.g. EfW plant requires continuous operations to maintain operational efficiency and avoid costs and delays associated with frequent start up. Such 24-hour operations tend to be associated with higher capital cost facilities which may require good quality access to the strategic highway network, which is more commonly associated with larger/modern industrial estates and distribution centres situated on the outskirts of settlements and utilising the strategic road network. So, although a lack of a good access to a site was not considered to be a showstopper, in Page 16 of 102

18 general it was noted that if the access was through a residential area then this could be problematic. Size of sites 4.8 It was noted all the locations were potentially quite large (the smallest size category considered in the representative samples of industrial locations was less than three hectares and the ELR screened out land less than 0.5 hectares). Most respondents considered that open composting could not be located in such locations and one respondent felt that an EfW facility would need a plot of at least 3 hectares thus ruling out some of the smaller locations shortlisted in the ELR. However it should be noted that an EfW plant recently built in Exeter has been accommodated on a site of only 1 hectare in size. 4.9 Findings of a literature review set out in Table 1 of Appendix 4 indicate that the minimum site size for a facility of some sort is 0.65 hectares. i.e. any site of this size or larger could theoretically accommodate a waste processing facility with a significant capacity. Costs of land 4.10 Waste management is not a use of land that is particularly profitable and so the waste management industry can struggle to compete with other users especially in high demand locations. This is particularly the case for sites in prime locations due to connectivity where it is considered that certain players in the sector can only realistically compete for sites of 1 hectare or less. However the cost of land appears to play a variable role in determining viability and overall viability depends on the particular type of facility being developed and business model applied. Not surprisingly, land price can be a significant factor for activities with low profit margins Table 1 below sets out the findings with regard to land prices in Essex and Southend on Sea and illustrates the range of prices which might be expected regardless of type of use. Table 1: Indicative Employment Land Price ranges 16 Low High Purchase Price/hectare < 1 million 2.5 million Rental cost (open)/hectare 100, ,000 Rental cost (building)/sq ft Applying the values obtained to minimum facility footprint data suggests that to secure a site of minimum size required to process at least 40,000 tonnes 17 of biodegradable waste would cost: 1. Between 400,000 and 1 million to purchase; or 2. Between 43,000 and 183,000 per annum in rent. 16 "Derived from survey respondents" 17 "See Table A3-2 in Appendix 4" Page 17 of 102

19 4.13 A developer with a project with large up front capital expenditure is more likely to be sensitive to land costs as an element in set up cost. Therefore the development of technologies that entail large capital outlay will be more sensitive to land costs if they exceed a certain threshold. Or, put another way, where land costs are high it is less likely that technologies that entail large capital outlay will be developed unless they either have long-term security or offer a particularly high level of profitability. Profitability may in turn be dictated by the availability of competing capacity either locally or within an acceptable driving distance There will also be an absolute threshold of land cost above which technologies of any sort are unlikely to be viable. That is where the waste management industry will be unable to compete. One industry expert indicated that as a rule of thumb 5/tonne 18 cost of land was considered to be a threshold although it might be exceeded in the case of purchase where the land can be viewed as an asset As one would expect, land prices are affected by the availability of unoccupied plots so locations with smaller industrial areas tend to be more expensive. The survey of industrial property industry established that land prices and rental rates were highly variable across the county with costs generally rising as connectivity to main urban areas, (and sources of waste), improves The survey did not result in specific estates being identified as particularly expensive, although it was noted that, as a rule of thumb, the more accessible the land is to London and the M25 the more expensive it tends to be. Perception of Waste Management 4.17 The perception that all waste management activity is likely to have significant adverse impacts means that landowners are not actively seeking to locate such uses on their land and would prefer to host other uses. This generally puts the waste management industry at a disadvantage when competing for the use of land. 2. Are these barriers likely to change over the period of the WLP i.e. to 2032? 4.18 The principal barriers identified above are: (i) (ii) the terms offered and the possible negative impact on land value In the case of the former this is very much dependant on how competitive waste management uses will be as compared with other potential tenants. This will depend on market conditions both within the waste management sector (and the potential long term returns envisaged) and the state of the economy more generally. Economic recovery can be expected to result in increased demand for industrial land as new businesses develop and others expand such an increased demand will push property prices up if supply remains limited. This finding seems to be consistent with that in the ELR, the executive summary of which includes the following: 18 "Gareth"Philips"SITA"Estates"Manager" Page 18 of 102

20 The review found that the amount, size and location of employment land/industrial estates varies considerably across the study area. The recent economic downturn has had an effect on the number of units being let and the length of tenancy in most industrial estates However an economic recovery is also likely to lead to increased quantities of waste requiring management. The other factor that might improve the competitiveness of the waste management industry, as the economy recovers, are increases in the demand for materials and energy. Generally speaking, increasing material and energy prices will improve the incomes of waste management companies making the development of additional facilities more attractive and in turn meaning that the industry may be willing to pay more for land In the case of waste management facilities having a negative impact on land values, the expectation is that the quality and performance of waste management facilities will continue to improve partly through regulatory pressure and partly through operators being more conscious of their own public image and its importance in maintaining their licence to operate. As more facilities become operational which do not impact on their surroundings in a manner that matches common perceptions, it should become easier for the industry to convince landowners that their activity will not negatively affect the value of industrial land In addition the operating model of the sector is changing with an increase emphasis on logistics, moving towards smaller satellite facilities where materials can be separated for bulking for onward transport to larger more remote facilities. This allows for the possibility of a reduced land demand on better connected (and hence more expensive) sites with the larger facilities sited on cheaper land. 3. How might local planning policy facilitate the development of this capacity on industrial land? 4.23 The lack of suitable allocated employment land was highlighted as an issue with one representative of the property management industry noting, Chelmsford is full! The allocation of further employment land in local policy was therefore seen as crucial The imposition of additional controls intended to address the specific environmental impacts of waste management facilities and seek high quality development was thought to make the development of such facilities a more expensive venture than for other types of employment use. Additional expenditure on such mitigation could therefore make the waste management industry even less competitive than other uses (Also the additional investment has a longer pay back period and so the developer may be more committed to a longer lease period). On this basis it is important that local planning policy, or other environmental regulations, do not result in additional unnecessary costs associated with the development and operation of a waste management facility in particular and look to a consistent approach of promoting high quality development on employment land regardless of its end use. Page 19 of 102

21 4.25 In order to help waste management companies compete in the property market in particular locations, planning policy identifying allocations of land exclusively for waste management uses would be particularly supportive. 4. Other key findings 4.26 None of the characteristics associated with the representative samples of industrial land (represented by schematic drawings as set out in Appendix 1) would automatically rule out development in those locations i.e. it was considered that some form of waste management could be successfully developed in any of the locations considered Management of waste is increasingly involving the separation of different materials to realise, and increase, their value. This activity frequently involves the separation of dry, non-putrescible materials and can take place within a warehouse-type (B2 or B8) building with external yard storage and parking area typically of the kind found on industrial estates One representative of the waste management industry noted that in some areas, waste planning authorities had placed restrictions on where waste may be sourced. It is thought that this is to counter those concerns about particular waste development leading to an area becoming a dumping ground for waste arising in neighbouring areas (this point is partly linked to the negative perceptions associated with waste management facilities and more importantly the lack of positive perception of benefits such facilities may bring such as cheap or stable priced heat). Such catchment area restrictions can hinder the operation of the market, stifling competition and potentially making the development of a facility unviable. This may be of particular relevance if the viability of developing a facility on certain industrial estates is more marginal than other locations proposed The findings of the surveys and the workshop suggest that additional waste management capacity may be developed on industrial land subject to the following: - Land being available - Proposed waste uses being compatible with the character (including existing or planned use) of the industrial land on which the proposed use may be situated. In particular the need for sites to be appropriately located, offering unhindered vehicle movement and accommodating structures with a suitable roof height for associated vehicles and plant For related planning policy to be effective (deliverable) both of these factors need to be taken into account. Therefore it seems sensible to consider the following planning policy approaches: - clearly define industrial land in relation to the different types of waste use that may be accommodated taking account of the fact some types of waste management use may be less suitable for some locations than others. - set out the circumstances under which industrial land may be developed for waste management use. - Page 20 of 102