Veolia to invest £750m in UK recycling arm

Waste management firm Veolia is planning to invest £750 million (€898m) in its UK-based recycling business in the next five years.

Veolia UK chief executive Estelle Brachlianoff told Reuters  that gradually rising landfill taxes had been a major revenue driver for Veolia in Britain, where it has annual revenue of about £2bn, making it the company's second-largest market after France.

"We expect Britain will be a major growth area for Veolia in the coming five years as we help this country become greener," Brachlianoff told Reuters in a telephone interview.

Three quarters of Veolia's UK revenue comes from waste recycling, the rest from energy services and water.

Unlike other countries which boost recycling through legislation and subsidies, Britain imposes a steadily increasing landfill tax, now around 85 pounds per tonne.

Brachlianoff said that as the tax had been consistent and predictable, it had spurred a large recycling industry. Twenty years ago Britain was landfilling some 80 percent of its waste; that percentage has now more than halved, she said.

Companies such as Veolia, France's Suez, Britain's Biffa and Pennon unit Viridor as well as a string of smaller niche players are recycling paper, plastic, wood, metals and glass, while organic waste is composted, burned or used as feedstock for biogas production.

Veolia also sells energy efficiency services to industrial customers and operates 10 energy-from-waste plants, which feed over 2 gigawatt hours (GWh) of electricity per year to the grid.

Brachlianoff said if all of Britain's waste was reused, up to 10% of its green energy and up to two percent of its power could come from waste incineration.

"Waste cannot replace nuclear or coal, but among green energies it is significant, not a niche market," she said.