An increase in UK government spending on new incineration, recycling and waste treatment facilities could benefit waste disposal companies Biffa and Sanks.
The Catalyst Corporate Finance believes that the UK will have to invest £9bn in new incineration and treatment facilities in order to cut the amount of waste dumped in landfill to just 20 per cent by 2020. This will also offer opportunities to generate energy.
Both Biffa and Shanks stand to benefit from any investment. Together they are the largest pure play waste companies in the UK.,
In the recent comprehensive spending review, the government designated £1.5bn in private funding initiative credits to assist local authorities over the next three years. Catalyst Corporate Finance maintains, however, that this will be not be enough to meet the waste reduction targets set for 2020.
At the present time, the UK delivers 73 per cent of its waste to landfill, incinerates 3 million tones of waste a year, and has the capability to recycle or compost about 6.5 million tones. With the 20 per cent landfill goal in mind, Catalyst estimates the UK will need to incinerate 11.5m tonnes and recycle or compost 28m tonnes a year. This could lead to an additional 50 incineration facilities.
www.biffa.co.uk
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