Page 24 - Waste-to-Energy in the Danube Strategy Region. Challenges and Prospects

2.2 Economic

Economic challenges are associated mostly with a lack of economic instruments to support the

dissemination of WtE projects, whether in terms of heat/electricity pricing, cost structure,
ownership or return on investment (Pan et al. 2015). Such instruments could include direct support

of WtE technologies in the form of subsidies or loan guarantees or indirect support in the form of

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the landfill taxes. It is not so common in the Danube region to subsidize or economically promote
WtE technologies as it is not a political priority (see section 2.1 above).

Indirect support for WtE in the form of taxes imposed on landfilling are the most common.

By making landfilling an uneconomical solution for disposing of recyclable or untreated waste,

such taxes indirectly support WtE. Austria, for example, gradually raised the landfill tax to the
current 87 euro per ton for low calorific waste, while high calorific combustible waste is banned

from landfills. Except for Germany, the rest of the Danube region is characterized by low taxes for

landfilling (e.g. 26 euro per ton in Romania, 20 euro in Czech Republic, and 5–10 euro in Slovakia).

For most of these states, the tax is supposed to increase significantly over the next few years
(CEWEP 2017). With a high enough landfill tax, more waste would be pushed higher up the waste

hierarchy, whether through recovery or recycling.

The dissemination of WtE technologies also depends on the given ownership model.

Generally, three kinds of ownership structures can be distinguished: public, private, and public–
private partnership (PPP). Public ownership enables a municipality to include a plant into the local

waste management system regardless of short-term profits. The downside of public ownership is

the risk that a facility operates with negative profit and therefore has to be covered by public

resources. The primary motivation for private ownership is to generate a profit, and therefore
return on investment is a crucial criterion for project development. Private projects tend to operate

more efficiently, but if a plant is facing long-term unprofitability investors will step away from such

project and the local waste management system would be deeply affected. The last form of

ownership is PPP, wherein the private sector invests in public projects. While sharing risks, costs

2 A landfill tax is part of the final price for landfilling. The price includes a fee for waste disposal, the landfill tax, and possibly a
recultivation fee.
Project co-funded by the European Union
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