Page 63 - Waste-to-Energy in the Danube Strategy Region. Challenges and Prospects

4.3 Economic challenges

Generally, WtE projects are exposed to several economic challenges, such as unpredictable

electricity and heat wholesale pricing, financially demanding construction and infrastructure costs,
lack of economic instruments to support WtE, and the implications of ownership models, all of

which affect profitability and return on investments. The Zwentendorf plant in particular faces

several of these issues. Firstly, the government of Austria decided to not provide any direct
financial subsidies for new WtE projects. Secondly, in order to be profitable and to fulfil its

commitments (e.g. for district heating), the plant faces pressure to secure its waste supply even

by importing waste from neighbouring countries. The necessity to transport waste also presents

a challenge for operating costs.
As of now, the government of Austria does not offer economic mechanisms, such as

government subsidies or insurance of investments, to support WtE projects directly. The only

economic instrument in place to encourage the use of thermal treatment of waste are landfill

taxes, known as “ALSAG”. Introduced in 1990, the tax gradually rose to approximately 87 euro per
tonne of waste in 2006, depending on waste composition and landfill standards. This long process

of implementing a de facto ban on landfill disposal was met with considerable resistance as landfill

operators offered their remaining landfill space at dumping prices before the actual ban on

untreated waste took place. Such situation complicated the implementation of waste
management policy, but the introduction of ALSAG provided financial security for long-term

development and investments in the waste management system (Federal Ministry of Agriculture,

Forestry, Environment and Water Management 2015).

As an indirect result of the ALSAG policy and the plant’s ownership structure, the
Zwentendorf plant was built without financial aid from the government. The ownership structure

also helped with other economic challenges. The plant is fully owned by Austrian multi-utility

group EVN AG, the majority stakeholder (51%) of which is NÖ Landes-Beteiligungsholding GmbH,

a subsidiary of the province of Lower Austria (EVN 2018). Being partially publicly owned, the
incinerator could be integrated into the publicly managed waste management system without

having to worry about short-term profits.

Project co-funded by the European Union
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