Waste suited for incineration is perhaps to be opened to competition 

On 13 May 2015, the Government published a proposal for alternative financing of the so-called PSO tax. The financing is to take place under the budget instead of via the PSO tax. One of the initiatives, which is at the same time launched to reduce the consumers' electricity bill, is to open the waste energy production sector to competition. This means that in the future, the municipalities must put energy exploitation of waste up for tender.

The proposal implies that the municipalities may no longer direct where companies are to dispose of their waste which is suited for incineration. The companies are then free to choose between the country's incineration plants as opposed to today, where they can only choose between the municipal plant or export to other, preferably EU countries.

ENERGY EXPLOITATION OF HOUSEHOLD WASTE MUST BE PUT UP FOR TENDER

The municipalities are still responsible for collecting household waste. But they can no longer send such waste to the municipal waste energy production plant, unless the collecting company has been the awarded the contract based on a tender procedure.

CONVERSION INTO COMPANIES AND ABOLISHMENT OF THE SELF-SUFFICIENCY PRINCIPLE

The municipalities will be able to own and operate incineration plants, but in a corporate form - presumably as limited liability companies.

Today, the municipalities may not generate a profit from the operation of incineration plants, because the self-sufficiency principle implies that the costs are to be covered by the waste charges. It is a requirement that, within a few years, the charge revenue must balance with the costs relating to the waste management.

In the future, municipally owned incineration plants in a corporate form must fix the prices for the purpose of creating a profit if permitted by the market situation.

WE WILL FOLLOW THE PREPARATION OF THE DETAILED FRAMEWORK

Naturally, the proposal does not clarify all questions arising as a consequence of a decision to convert into a limited liability company, for instance limitation of the tasks to be converted and the extent of the municipalities' tender obligations.

We will follow the further negotiations and the legislative work closely to provide due advice on how the municipalities and any companies affected by the new act prepare in the best possible way.

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Henriette Soja

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Klavs Gravesen

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Line Markert

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