‘Taxes on energy profits could cost north London £20m,’ says boss of council-owned waste firm

An impression of what NLWA’s new incinerator could look like. Photograph: NLWA

Taxes on energy profits could cost north London £20 million, the boss of the area’s council-owned waste company estimates.

This year, the North London Waste Authority (NLWA) handed out £10.2m in windfall payments to the seven councils that own it.

The dividend depends on the monthly levy each borough pays to NLWA, and Islington will get £1.2m.

The price of energy soared because of the war in Ukraine which has affected gas supplies from Russia.

Commercial energy companies have reported huge spikes in their profits and the government brought in an energy generator levy.

The new tax is on energy suppliers generating more than 50 gigawatts a year. The first excess £10m they earn will be exempt from the charge.

NLWA boss Martin Capstick told Islington’s environment and regeneration scrutiny committee this week that it could cost north London £20m. He said it was impossible to predict how long the high fuel price would last.

NWLA-owned London Energy has made “large profits” from electricity sales during the energy crisis from burning north London’s waste. The energy is fed into the national grid.

Last year the councils that own NLWA approved a £1.2bn scheme to replace the ageing incinerator with a new one.

Residents across the boroughs joined with environmental campaigners to call for a rethink. They said burning waste is not green and can cause health problems.

Capstick said: “No-one wants to see the hardship associated with the high energy prices. In this case, the benefit has at least gone to the public sector and not the private sector, and our members are very keen those gains go back in as much as possible.”

The waste centre in Enfield deals with 90,000 tonnes of rubbish from Islington, including 70,000 tonnes of household waste. Islington produces the least waste of the seven boroughs.

The council is keen to drive this down by encouraging people to reduce, reuse and recycle, and avoid buying items in unnecessary packaging.

NLWA is trialling a food waste collection above flats in Holloway Road.

It runs campaigns including Save Our Stuff, with an aim to keep 10k tonnes of waste out of landfill or incineration as part of a three-year waste reduction plan. This includes pioneering polystyrene recycling.

The firm has been telling residents that north Londoners use 46m pieces of plastic every week – and half of it cannot be recycled.

Capstick said the government’s ban on some single-use plastics was welcome, but he would like to see more items included.

He pointed out glass bottles were not included in a return scheme for plastic bottles.

Ben Griffith from Islington Environmental Emergency Alliance said: “We all know we need change away from incineration and landfill and towards the circular economy.”

He said government targets are for waste to be halved, with interim recommendations that individuals should cut their waste by 29 per cent by 2028.

He added: “Incrementalism is absolutely hopeless and goes nowhere near the sort of challenge that we face.”

Dr Uzma Zahid said she was concerned about the promotion of incineration.

Capstick said NWLA is working on a waste strategy and will consult community groups.

He said some waste cannot be recycled but the target is to get to net zero.

“The best solution for waste we cannot recycle is to convert it into energy. There isn’t a lower net carbon way of dealing with waste that can’t be recycled.”