Comparing the cost of alternative waste treatment options - Gate Fees report 2015

7th July 2015

Gate fee information on a range of waste treatment, recovery & disposal options

Key points
Gate fees remain relatively constant
The median MRF gate fee is £6 per tonne in 2015
40% of local authorities pay no gate fee or receive payment from the MRF for their materials
65% of local authorities expect MRF gate fees to increase

Summary information on gate fees 2014/2015

MRF gate fees by nation 2014/15

 Notes on Table 2: 

Fewer MRF gate fees were reported by local authorities outside England. From the data provided median MRF gate fees are higher in Wales and Scotland, but lower in Northern Ireland. 

 
 

 

 

 

 

 

 

 

 

 

 

The aim of this report is to increase price transparency and, by improving the flow of information, improve efficiency in the waste management market.

Gate fee information in context

This survey of facilities in England, Wales, Scotland and Northern Ireland was conducted between December 2014 and March 2015. The survey covered both those procuring waste treatment, disposal and recovery services (primarily local authorities) and service providers. Following the survey work, interviews were carried out with senior managers of waste management companies (WMCs) and companies involved in Materials Recovery Facilities (MRF) operations.

Read more in the summary report.

Key findings

Gate fees for similar waste management options vary substantially – both across and within regions. The factors which determine specific gate fees at a facility are complex and may include the size of a facility, the nature and duration of contracts (including risk-sharing arrangements), financing arrangements, the age of the facility, the level of revenues generated from the sale of recovered materials and other outputs (such as energy, compost, digestate etc.), and prices paid for the management of residues. 

The key findings of this year’s survey of gate fees (Table 1) across the UK as a whole include:

  • The median gate fee paid by local authorities for MRF services is £6 per tonne, whereas in the previous year’s survey the median MRF gate fee was £10 per tonne.  However, feedback from the waste management companies interviewed suggested a trend increase in gate fees in recent years at their MRF operations. 
  • The range of MRF gate fees is much broader than the range associated with other facility types. This reflects the diverse range of services which fall into the MRF category, incorporating a range of different waste stream compositions, long contract gate fees agreed years ago, facility types, and revenue sharing arrangements. However, a large amount of variation still remains and this is reflected in the reported range of gate fees. Consequently, caution should be exercised when using a summary statistic such as the median MRF gate fee. 
  • From the sample of usable gate fees, a total of 33 local authorities (40%) reported that they do not pay a MRF gate fee (i.e. the gate fee is £0 or negative). However, when haulage and revenue were accounted for this number rose to 38 authorities (46%). Some of these contracts were procured in the last 12-18 months, but the highest revenue for local authorities is typically achieved on older contracts, when market prices for materials were higher.
  • For the 21 contracts in the survey signed by local authorities in 2014 the median MRF gate fee is the same (£0 per tonne) as that for the 14 contracts signed in 2013. Based on feedback from respondents, future MRF gate fees will be affected by the declining value of materials, the increasing importance of quality and consequent increase in MRF operating costs, and contractors’ changing view of future market values for the materials (reflected in contract terms and conditions);

Further details of the gate fees associated with each of the major technology options are provided in the summary report.