New Earth Solutions: Bill Riddle
The man with the answers for effective waste disposal
Last month, environment secretary David Miliband revealed the government's new waste strategy, proposing a raft of initiatives to reduce the amount of waste going into landfill. The problems are twofold: First, there's a lack of space. Second, biodegradable material needs to be filtered out to avoid the release of greenhouse gases on decomposition.
The upshot is, local authorities desperately need to find an alternative or face heavy fi nes. Could New Earth Solutions and its founder Bill Riddle be their saviour?
The technology Riddle has helped design is extremely ecological. The New Earth plant in Poole, Dorset processes waste from dustcarts and turns it into compost. From mixed household waste, this compost can be used for land restoration and from source-segregated (food) waste, it can be used on farmland. The composting process is non-thermal and completely contained, with all emissions and unpleasant smells filtered out before being released into the environment. This results in a very low carbon footprint, particularly when compared to other alternatives to landfill, such as incineration. The process can also remove recyclables from mixed waste, and the firm is looking to incorporate new technologies to re-use glass and plastics, with the aim that just 5% of domestic waste will end up in landfill sites.
Few companies can rival these environmental credentials. But Riddle's no eco warrior. In fact, he is the fi rst to concede that the motivation behind the venture was by no means altruistic. “I'd be lying if I said that New Earth was set up for purely environmental reasons,” he says. “There were problems that needed solving, and I felt there were commercial opportunities in solving those problems.”
Serial entrepreneur Riddle pre-empted the fact that landfi ll tax, which was introduced in 1996 to stem the overfl owing of landfill sites across the UK, would steadily rise to encourage recycling and the use of greener technologies. Realising that local authorities would be keen to limit their debt to the Treasury, he started to think about more sustainable alternatives for waste disposal. At the same time, he foresaw that then-pending European Union laws would have a similar effect. The obligation to divert biodegradable waste had already been placed on a statutory footing following European Landfill Directives. And European Land Allowance Trading Scheme regulations mean fines will be imposed if these targets are not met.
Local authorities that fail to divert the required amount of biodegradable waste face being fi ned £150 for every tonne they fall short of their quota. According to Riddle, there are critical cut-off dates in 2010, 2013, 2016 and 2020 when the fi nes will be imposed. And to prove just how ahead of the game he has been, he adds: “The new waste strategy proposes that landfi ll tax will effectively have doubled by 2010, so this acts as a double incentive on local authorities to divert waste.”
He saw that councils needed help to avoid these penalties and realised he needed to fi nd a means of treating biodegradable waste. He also saw the opportunity to run a double business model – where the end products can also be sold.
Against the odds
Riddle's entrepreneurial journey began at 17, when he overcame dyslexia to make a success of his grandfather's small sand quarry, WH White, in Poole. Against the odds he grew the business from four to 400 employees and acquired a landfill site.
It was during this time that he visite
d the London Brick Company, where he was shown a brick that had been forged from a kiln running on landfill gas. He saw the potential of this fuel, which was of course readily available to him, as a viable means of producing electricity. The construction of a six-megawatt power station followed in 1995, and a new company was established, Canford Renewable Energy (CRE), which has been running successfully for more than 10 years, supplying ‘clean green' electricity to 18,000 homes via the National Grid. However, the future of CRE currently hangs in the balance as the waste regulations pile up.
“Sadly, landfill gas production relies on biodegradable waste. Now that this is being phased out of landfi ll sites, there is no future in that business.”
Thinking like an entrepreneur, the anticipated demise of CRE was the driving force behind Riddle setting up a new business. New Earth would help to solve the problem of greenhouse gas-emitting biodegradable waste in rubbish dumps, which was the reason for CRE's downfall. However, although he had clearly tapped into a lucrative niche in the market, Riddle got a lot more than he bargained for when he started putting the wheels in motion. After securing planning permission for a composting site in 2001, the foot and mouth crisis threw a major spanner in the works, resulting in the unique animal by-products regulations that “ruled out all currently available composting technologies in the UK”.
Undeterred, Riddle partnered with Austrian composting expert Herald Lubek, and together they designed a technique that adhered to the new rules. Machinery was sourced from Austria, Germany and the UK and various products were custom-made. After the good fortune of securing planning permission on the land he already owned, a test plant was built there with a capacity of 15,000 tonnes a year. Riddle intercepted waste going to his landfi ll site and tested batches through the plant to build knowledge and discover how the machinery would handle meat and other materials.
On the completion of these trials, the Department for Environment, Food and Rural Affairs certifi ed that the New Earth plant was the UK's fi rst facility to divert 80% of the biodegradable content of domestic waste from landfill. Following this success, Riddle was granted an EU patent on the technology, and successfully applied to extend the plant, upping the capacity to 50,000 tonnes per year. The extension required a further £4m injection of funding, which followed the initial £2m investment, all coming from Riddle and his business partners. “Because of the huge potential of this business,” he says, “I set about forming a team to take it on a nationwide basis. We recruited various individuals, including Peter Mills, the chairman of the Composting Association, as contracts director.”
However, Riddle is not the only one to realise the potential of the business. So far the company has secured a contract with Bristol, for approximately 20,000 tonnes of waste per year, Bournemouth Borough Council, to handle up to 70,000 tonnes a year, and a 15-year deal with Kent County Council is due to be signed this month. On the signing of the Kent deal, a massive £50m injection of funding will be released from German investors at Nord Bank. This will help support the company's ambitious expansion plans, funding the first 10 New Earth plants.
Planning permission has already been secured for the second site off the M20, and a further 10 planning applications have been submitted. According to Riddle, there is a need for 500 facilities in the UK by 2013 to meet increasing diversion targets. But his comparatively modest aim for New Earth is to have 50 plants (each with a 50,000 tonne capacity) either under construction or operating by 2010. “This only represents 10% of the market need by 2010,” he says, “so we don't feel we're being too greedy.”
The current facility's turnover is £2.5m, meaning that, if the target is achieved, there is a potential turnover of upwards of £125m.
The success of New Earth, Riddle maintains, is partly down to the flexibility of the contracts that he is able to offer to his clients. “They haven't got to come to us with any funding package in private finance initiative or prudential funding,” he explains. “We can and prefer to fund our own plants so the impact on the council tax payers is the minimal increase on their current disposal costs.” Furthermore, what this funding infrastructure offers the local authorities is shorter-term, modular contracts, where New Earth will only treat the amount of waste necessary for them to meet their targets, if they prefer. This was vital, says Riddle, to get the local councils on board. He adds that one of the biggest hurdles he has faced in starting up New Earth has been the nervousness of local authorities in making the wrong decision too early. In order to help allay these fears, the councils pay a ‘gate fee' per tonne of waste that is treated by New Earth, instead of having to stump up an initial lump sum.
The combination of these factors leaves Riddle confident about his business' scope for growth. “The UK is running out of landfill space, but the country doesn't need permission for more sites if we put a New Earth facility at the front end.”
The Fourth Utility
So what's next for New Earth? Riddle hopes that in 10 years his company will be the market leader in waste disposal. Although currently running at 20% dearer than landfill, he expects that rising landfill escalators will place them on a level playing field before long. Growth-wise, he insists they will ensure they have a secure foothold in the UK before attempting to expand abroad. However, further technologies are constantly being investigated to enhance the UK offering. He is even looking at re-mining old landfill sites, to recover useful assets buried there, such as plastics.
“We see ourselves as the fourth utility. People have to accept that they've got to do something with waste. Instead of just burying it in a hole, we should be dealing with it locally and properly. That's what we're doing and that's why we're ahead of the game.”
Company: New Earth Solutions
Proposition: Ecological waste disposal
Founder: Bill Riddle
Employees: 24 Turnover: ?2.5m