The Landfill Allowance Trading Scheme, LATS, is an initiative by the UK government, through DEFRA to help reduce the amount of biodegradable municipal waste (BMW) sent to landfill

Landfill

A landfill site , is a site for the disposal of waste materials by burial and is the oldest form of waste treatment...

.

How does it work?

The Waste and Emissions Trading Act (2003) provides the legal framework for the scheme and for the allocation of tradable landfill allowances to each waste disposal authority

Waste disposal authority

Waste disposal authorities were established in the UK following the Environmental Protection Act 1990. WDAs are in charge of the use of funds from Council Tax to facilitate the disposal of municipal waste. WDAs must manage waste which is collected by local councils. In the case of unitary...

 in England

England

England is a country that is part of the United Kingdom. It shares land borders with Scotland to the north and Wales to the west; the Irish Sea is to the north west, the Celtic Sea to the south west, with the North Sea to the east and the English Channel to the south separating it from continental...

. These allowances will convey the right for a waste disposal authority to landfill a certain amount of biodegradable municipal waste in a specified scheme year.

Each waste disposal authority

Waste disposal authority

Waste disposal authorities were established in the UK following the Environmental Protection Act 1990. WDAs are in charge of the use of funds from Council Tax to facilitate the disposal of municipal waste. WDAs must manage waste which is collected by local councils. In the case of unitary...

 is able to determine how to use its allocation of allowances in the most effective way. It will be able to trade allowances with other authorities, save them for future years (bank) or use some of its future allowances in advance (borrow). This will allow individual waste disposal authorities to use their allowances in accordance with their investment strategy.

Performance

In its first year, 2005/6, the total tonnage of biodegradable waste

Waste

Waste is unwanted or useless materials. In biology, waste is any of the many unwanted substances or toxins that are expelled from living organisms, metabolic waste; such as urea, sweat or feces. Litter is waste which has been disposed of improperly...

 that could be landfilled in England was 15,196,000. The calculated amount that was landfilled was 12,386,666 tonnes, 18.5% less BMW than they were allocated.

Ten LATS facts

• The LATS was launched on 1 April 2004. Allowances were allocated to each waste disposal authority at a level that will enable England to meet its targets, as a contribution to the UK targets, under the Landfill Directive
  Landfill Directive
  The Landfill Directive, more formally Council Directive 1999/31/EC of 26 April 1999 on the landfill of waste, is a European Union directive issued by the European Union to be implemented by its member states....
  
  .
• The flexibilities of trading, banking and borrowing will enable waste disposal authorities to meet their obligations under the scheme in the most cost effective way.
• Trading is not mandatory, but it is an opportunity. The advantage of trading for local authorities is that overcomes the fact that different waste disposal authorities will face different diversion costs depending on their particular circumstances.
• Unlimited banking is allowed between target years but allowances cannot be banked out of a target year or the year preceding a target year.
• Authorities are able to borrow up to 5% of the next year's allowance, although allowances cannot be borrowed into the target year or the year preceding a target year as this may cause England as a whole to breach its target.
• Trading and Borrowing must be recorded on the web-based allowance Register that is being developed by Defra.
• The Environment Agency
  Environment Agency
  The Environment Agency is a British non-departmental public body of the Department for Environment, Food and Rural Affairs and an Assembly Government Sponsored Body of the Welsh Assembly Government that serves England and Wales.-Purpose:...
  
  , the monitoring authority for England, will use the mass balance process to monitor the amount of biodegradable waste sent to landfill in any year by each waste disposal authority (WDA).
• WDAs will be required to provide quarterly returns to the Environment Agency within three months at the end of each quarter via WasteDataFlow.
• A fixed penalty of £150/tonne will be incurred if a waste disposal authority breaches its landfill allowances target in the scheme year.
• There is no reason why an authority should ever need to pay a penalty - the six month reconciliation period at the end of each scheme year will give authorities the opportunity to trade or borrow allowances to ensure that they comply with their obligations.

Unclarity

London's Western Riverside Waste Authority has declared that LATS guidance is flawed. The initial definition of municipal waste counted it as any waste that originated from houses or households. The most recent LATS guidance indicates that municipal waste is any waste under the control of the waste disposal authority

Waste disposal authority

Waste disposal authorities were established in the UK following the Environmental Protection Act 1990. WDAs are in charge of the use of funds from Council Tax to facilitate the disposal of municipal waste. WDAs must manage waste which is collected by local councils. In the case of unitary...

. The problem lies when the waste disposal authority collects a proportion of commercial and industrial waste, which in one piece of legislation is counted and in the other is exempt. This leads to the potential for fines for some authorities.