Kristina Veidemane Waste workshop October, 2008, Ohrid, Macedonia Full cost recovery. Setting fees and real costs for waste management

Principles Polluter’s Pay Principle: Waste Framework Directive, Article 15, the costs are covered by: –the holder who has waste handled by a waste collector or –the previous holders or the producer of the product from which the waste came. Costs recovery: Landfill Directive, Article 10, the full cost recovery on setting up landfill, operating, closure and after care shall be covered by price

Cost recovery WASTE SERVICES Investment costs Operational costs Environment al costs REVENUES FROM WASTE GENERATORS/HOLDERS Fees SUBSIDIES

Waste services Investment costs Construction of landfills; Construction of treatment facilities (e.g. composting); Seting up of the seperate waste collection sites Operational costs Wages, transportation, collection system, education Environmental costs Closure up, monitoring Landfilling tax/pollution charge (LV)

Principles in Latvia Latvian Waste Management Law, Article 13. –Waste generator cover the costs of municipal waste management, including municipally produced hazardous waste, and containing separate collection and sorting costs. Chapter VI. Fee for waste management Law on Natural Resource Tax

Implementation of Landfill directive in Latvia 340 million EUR for waste management system (estimation of 2000): –Landfills million EUR –Composting million EUR –Closure and aftercare of landfills (87.5 million EUR) –Collection system (65 mill)

Investment costs 340 million EUR per 2.2 million inhabitant = EUR per person Time frame – , investment per capita EUR per year Capacities of landfills – 530 kt/year.

Operational costs Estimation of 2000: 8 Million/year or 3.6 EUR per person per year. Environmental costs –Law on Natural Resource Tax, Municipal waste landfilling – c.a.1 EUR/t; c.a. 380 – 530 Th. EUR/year; 0.2 EUR/year

Cost recovery Investment+Operation+Environment = Fee EUR = 19.3 EUR per person Affordability - 1% from household income –Average income per person in 2005, EUR per year; %. Needs for the support from state budget

Fee for waste management municipal waste management fee has at least doubled in last five years in Latvia (c.a. 9 EUR per person per year)

Fee for landfilling Municipal waste: 21.5 EUR/t (50% of the waste management costs) Green waste: 10 EUR/t Construction waste: 5.7 EUR – 17 EUR/t (if mixed)

Conclusions It is rather difficult to ensure the full cost recovery when huge investments are required and income of inhabitants are rather low. EU funding schemes is the key tool to support the system development.