Estonian Natl Audit Office: Waste producer should pay for disposal of hazardous waste

TALLINN – Although the Waste Act prescribes that waste producers must cover the costs related to disposal of their waste, the state is continuing to pay for the operations of the Vaivara hazardous waste management center, the National Audit Office found in its audit report published on Thursday. 

During the 22 years of operation, the state-owned waste management center has not been able to be put into operation in such a way that the price of the service covers the costs. The delays of the Ministry of the Environment in searching for a better way to manage the center, including a better form of ownership, have been costly to the state. The ministry must find a solution that frees the state from paying for the disposal of hazardous waste, the National Audit Office noted.

"Although the National Audit Office audited the topic of the Vaivara hazardous waste management center for the third time in seven years and has made a number of recommendations for improving the situation, several problems still remain," Auditor General Janar Holm said, commenting on the issue which the National Audit Office also audited in 2015 and in 2018.

The costs related to the closure of the hazardous waste landfilling site were nearly twice the amount collected for this purpose from waste producers. Although a tenth, that is five euros, of the service charge for each ton of hazardous waste landfilled went into the closure reserve for the landfilling site during the audit period, the funds of the entire reserve were used up for the closure works of 50,000 tons of landfilled hazardous waste and there are no more funds in the closure reserve to cover the remaining 17,000 tons.

"If the state indirectly subsidizes one method of handling hazardous waste, which is landfilling, but not some other method, it can lead to unequal competition," Holm added. "Such a situation does not motivate generating less waste or recycling it."

According to the National Audit Office, the form of ownership of the hazardous waste management center where the state-owned center is operated by a private enterprise on the basis of a short-term contract does not help to operate the center efficiently. The company operating the center receives revenue for managing and landfilling waste, but due to the short contract period, it is neither obligated nor motivated to make large investments in the infrastructure.

The state has made the decision to invest 4 million euros in the expansion of the center to keep it operational, but this additional money does not replace management decisions that would help to avoid spending public funds in the future.

The resolution of the issue of the form of ownership at the Ministry of the Environment has been delayed and the decision is expected to be made only in 2023, right before the expiry of the contract with the current operator. During both the audits of 2015 and 2018, the Ministry of the Environment announced that the options for the form of ownership of the waste center should be further analyzed. 

The National Audit Office pointed out that the form of future management of the Vaivara hazardous waste management center should be decided regardless of when the expansion of the landfilling site takes place or which developments are hoped to be seen in the center.

When making the center self-sufficient, it must be taken into account that if landfilling continues in the same volume as in the last three years, the landfilling site will fill up quickly. It should also be taken into account that the center is located far from most waste producers and the price of landfilling service that takes all the costs into account should be higher than it is now. 

In addition, the National Audit Office pointed out that no long-term funding has been found for the establishment of a final repository for man-made radioactive waste. "The elimination of the former Paldiski nuclear facility by 2040 is an international obligation of the Estonian state. It is something that must be done and delaying with it will only make the expensive project even more costly," Holm said.

The preparatory stages of the final repository project were implemented with a delay of a few years and have cost at least twice as much as the initially estimated 7.5 million euros -- 15.1 million euros. There is a risk that a further delay will increase the costs even more. 

The control of risks related to radioactive waste and organizing the management thereof has improved at the Ministry of the Environment and the Environmental Board over the years.

The National Audit Office recommended the Minister of the Environment in cooperation with the Minister of Economic Affairs and Communications and the Ministry of Finance to set the establishment of a final repository for man-made radioactive waste as a priority and to plan the availability of funding for at least the years 2024-2026 and, if possible, longer. 

In Estonia, approximately 400,000 tons of hazardous waste are produced annually, which is largely recycled and recovered (this does not include waste generated in the oil shale industry). Approximately 10 percent of hazardous waste must be landfilled, for example waste incineration ash, smelting slag generated in the metal industry. With some exceptions, hazardous waste may only be deposited at the Vaivara hazardous waste management center.

The Vaivara hazardous waste management center in East-Viru County was established in 2000 and is owned by the state. The Ministry of the Environment together with the Environmental Agency are responsible for the operation of the center, and the center is operated by a private company. 

The Estonian state needs to establish a final repository for man-made radioactive waste by 2040. It is foremost the radioactive waste which will be generated during the elimination of the former Paldiski nuclear site that needs safe final disposal. The capacity of the final repository is planned at 3,000 cubic meters of waste.

The Ministry of the Environment is responsible for the activities prior to the design of the final repository -- environmental impact assessment, studies, land use plans --, while the Ministry of Economic Affairs and Communications is responsible for the establishment and operation thereof.

In 2015, the total cost of the establishment of the final repository for radioactive waste was estimated at 90 million euros, not including inflation and the increase in construction prices.