Waste Strategy factsheets
Landfill Tax
Budget 2007
In Budget 2007 the Chancellor announced that the landfill tax would increase more quickly and to a higher level than previously planned. Increases of £8 per tonne per year for active waste were announced from 2008-09 to at least 2010-11.
This is a big increase on the existing ‘landfill tax escalator’ under which the standard rate of tax was increased by £3 per tonne in each of the past three years as part of the Government’s previous aim, announced in 2002, of reaching a rate of £35 per tonne.
How much is landfill tax now and how much will it increase to?
The current standard rate of landfill tax is £24/tonne. This rate applies to active wastes (those that give off emissions). This will have doubled to £48/t in 2010/11.
A lower rate of £2 per tonne applies to inactive wastes listed. From 1 April 2008 this will increase to £2.50 per tonne.
What will this mean for waste producers and waste management companies?
Increasing the tax to a higher level makes investments in alternative non-landfill treatments such as recycling and anaerobic digestion more economically viable.Waste producers will have a greater incentive to avoid the burden of increased tax on landfilling through diverting waste from landfill and by using separated waste collection services involving waste auditing and separation of waste at source. These will become relatively cheaper, leaving only residual mixed wastes requiring disposal.
For example, assuming waste management companies pass on all the tax increase to waste producers, then for a company landfilling all its waste, the cost per tonne of disposal would increase by £24 per tonne by 2010/11 compared with current tax levels. By contrast if the company sent most of its waste to be recycled, with only 25% residual waste landfilled, it would only face an increase in waste treatment costs of £6 per tonne (all other factors remaining equal).
For many companies this relative change in costs could tip the balance between recycling and landfill disposal, making recycling now the most cost effective option. Source separation of waste has both environmental benefits, by allowing improved resource and energy recovery, and potential financial savings. Waste auditing and segregation allow businesses to see more clearly where their waste is produced and how it could be reduced. Reducing waste not only avoids any costs of waste treatment, but can also reduce costs through lower overall material consumption.
Has the landfill tax been successful?
Yes, it has been very successful to date. Overall quantities of waste recorded at landfill sites registered for the tax fell from around 96 million tonnes in 1997-98 to around 72 million tonnes in 2005-06, a reduction of around 25%.
Page last modified:
24 May 2007
Page published: 24 May 2007