The Office of Fair Trading ('OFT') supported by Ofwat, has launched a market study into the market for the treatment of organic waste. The study will look at whether the market is working effectively to deliver the best outcome for customers. Organic waste is considered to have enormous potential to produce clean (low carbon) energy, however, investment is required.
The OFT has decided to launch this study after considering a proposal and request from Ofwat. The OFT will lead on the study and utilise its experience in conducting market studies and of the municipal, commercial and industrial organic waste sectors. It will be closely supported by a team from Ofwat who will provide expertise of the sewerage sector.
The study will examine a number of themes, including:
- whether price regulation of sewage-sludge treatment and recycling and disposal services remains appropriate and what scope there is to encourage greater competition;
- whether there are any barriers specific to efficient investment in and use of 'co-treatment' where waste from a variety of different sources is treated at a single facility; and
- what might be done to encourage efficient investment in advanced treatment techniques .
Heather Clayton, OFT Senior Director of Infrastructure, said 'Advanced organic waste treatment techniques like anaerobic digestion offer tremendous opportunities to produce clean energy and reduce unnecessary waste. We need to make sure that the conditions are right to maximize the potential for these technologies to benefit the UK.'
Cathryn Ross, Ofwat Director of Markets and Economics said that looking carefully at how sludge is regulated is part of Ofwat's much wider review of how it delivers a sustainable water and waste water sector. By sharing best practice and tapping into the OFT's expertise, Ofwat expects to make better informed decisions about how - or even if - it regulates organic waste in the sewerage sector.
The OFT expects to conclude the study in July 2011 in time for any recommendations to feed into Ofwat's wider review of economic regulation in the water and sewerage sector.
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