National Audit Office: The waste producer should pay for the disposal of hazardous waste, not the taxpayer. Decisiveness of the Ministry of the Environment is needed

7/13/2022 | 5:32 PM

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TALLINN, 14 July 2022 – Although the Waste Act prescribes that waste producers must cover the costs related to disposal of their waste, the state is continuing to pay for the operations of the Vaivara Hazardous Waste Management Centre. During the 22 years of operation, the state-owned waste management centre has not been able to be put into operation in such a way that the price of the service covers the costs. The delays of the Ministry of the Environment in searching for a better way to manage the centre, incl. a better form of ownership, have been costly to the state. The Ministry must find a solution that frees the state from paying for the disposal of hazardous waste, the National Audit Office finds in its audit report published today.

“Although the National Audit Office audited the topic of the Vaivara Hazardous Waste Management Centre for the third time in seven years and has made a number of recommendations for improving the situation, several problems still remain,” the Auditor General Janar Holm commented on the issue which the National Audit Office also audited in 2015 and in 2018.

The costs related to the closure of the hazardous waste landfilling site were nearly twice the amount collected for this purpose from waste producers. Although a tenth, i.e. five euros, of the service charge for each tonne of hazardous waste landfilled went into the closure reserve for the landfilling site during the audit period, the funds of the entire reserve were used up for the closure works of 50,000 tonnes of landfilled hazardous waste and there are no more funds in the closure reserve to cover the remaining 17,000 tonnes.

“If the state indirectly subsidises one method of handling hazardous waste, which is landfilling, but not some other method, it can lead to unequal competition,” added Auditor General Janar Holm. “Such a situation does not motivate generating less waste or recycling it.”

The National Audit Office finds that the form of ownership of the hazardous waste management centre where the state-owned centre is operated by a private enterprise on the basis of a short-term contract does not help to operate the centre efficiently. The company operating the centre receives revenue for managing and landfilling waste, but due to the short contract period, it is neither obligated nor motivated to make large investments in the infrastructure. The state has made the decision to invest 4 million euros in the expansion of the centre to keep it operational, but this additional money does not replace management decisions that would help to avoid spending public funds in the future. The resolution of the issue of the form of ownership at the Ministry of the Environment has been delayed and the decision is expected to be made only in 2023, right before the expiry of the contract with the current operator. During both the audits of 2015 and 2018, the Ministry of the Environment announced that the options for the form of ownership of the waste centre should be further analysed.

The National Audit Office is pointing out that the form of future management of the Vaivara Hazardous Waste Management Centre should be decided regardless of when the expansion of the landfilling site takes place or which developments are hoped to be seen in the centre. When making the centre self-sufficient, it must be taken into account that if landfilling continues in the same volume as in the last three years, the landfilling site will fill up quickly. It should also be taken into account that the centre is located far from most waste producers and the price of landfilling service that takes all the costs into account should be higher than it is now.

In addition, the National Audit Office is pointing out that no long-term funding has been found for the establishment of a final repository for man-made radioactive waste. “The elimination of the former Paldiski nuclear facility by 2040 is an international obligation of the Estonian state. It is something that must be done and delaying with it will only make the expensive project even more costly,” said Auditor General Janar Holm.

The preparatory stages of the final repository project were implemented with a delay of a few years and have cost at least twice as much as the initially estimated 7.5 million euros – 15.1 million euros. There is a risk that a further delay will increase the costs even more.

The control of risks related to radioactive waste and organising the management thereof has improved at the Ministry of the Environment and the Environmental Board over the years. The National Audit Office recommends the Minister of the Environment in cooperation with the Minister of Economic Affairs and Communications and the Ministry of Finance to set the establishment of a final repository for man-made radioactive waste as a priority and to plan the availability of funding for at least the years 2024–2026 and, if possible, longer.

Background

In Estonia, approximately 400,000 tonnes of hazardous waste are produced annually, which is largely recycled and recovered (this does not include waste generated in the oil shale industry). Approximately 10% of hazardous waste must be landfilled, e.g. waste incineration ash, smelting slag generated in the metal industry. With some exceptions, hazardous waste may only be deposited at the Vaivara Hazardous Waste Management Centre.

The Vaivara Hazardous Waste Management Centre in Ida-Viru County was established in 2000 and is owned by the state. The Ministry of the Environment together with the Environmental Agency are responsible for the operation of the centre, and the centre is operated by a private company.

In Latvia, the hazardous waste incineration plant and landfill are managed by the state-owned company LEGMC. In Finland, disposal of hazardous waste is managed by the company Fortum, 51% of which is owned by the state. According to the Ministry of the Environment, the Environmental Agency and the current operating company, there are four possible future forms of ownership of the centre: 1) the centre is managed by a private company on behalf of the state who is found by a procurement and to whom a contract is awarded for 5–6 years; 2) the state grants the centre for a long-term lease, i.e. for 15–20 years, with the obligation to make investments and receive hazardous waste generated exceptionally; 3) the centre is managed fully by the state, for example through a state-owned company; 4) the centre is sold into private ownership.

The Estonian state needs to establish a final repository for man-made radioactive waste by 2040. It is foremost the radioactive waste which will be generated during the elimination of the former Paldiski nuclear site that needs safe final disposal. The capacity of the final repository is planned at 3,000 m3 of waste. The Ministry of the Environment is responsible for the activities prior to the design of the final repository  (environmental impact assessment, studies, land use plans), while the Ministry of Economic Affairs and Communications is responsible for the establishment and operation thereof. In 2015, the total cost of the establishment of the final repository for radioactive waste was estimated at 90 million euros (not including inflation and the increase in construction prices).

The National Audit Office has also audited the handing of hazardous and radioactive waste in 2015 and in 2018.

Priit Simson
Head of Communications of the National Audit Office of Estonia
+372 640 0102
+372 5615 0280
priit.simson@riigikontroll.ee
press@riigikontroll.ee
http://www.riigikontroll.ee/

  • Posted: 7/13/2022 5:32 PM
  • Last Update: 7/14/2022 9:28 AM
  • Last Review: 7/14/2022 9:28 AM

The Vaivara Hazardous Waste Management Centre in Ida-Viru County was established in 2000 and is owned by the state. The Ministry of the Environment together with the Environmental Agency are responsible for the operation of the centre, and the centre is operated by a private company.

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