OFT and Ofwat investigate market for organic waste and anaerobic digestion

At first sight the decision by the Office of Fair Trading to investigate the market for organic waste sounds surprising. The investigation was triggered by a request from Ofwat, not because it had competition concerns but because it was concerned that the appropriate incentives may not be in place to encourage anaerobic treatment of organic waste from food scraps from household waste and waste products from the food and farming industry.

Heather Clayton, OFT Senior Director of Infrastructure, said:'Advanced organic waste treatment techniques like anaerobic digestion offer tremendous opportunities to produce clean energy and reduce unnecessary waste. 'We need to make sure that the conditions are right to maximize the potential for these technologies to benefit the UK.'

There is a concern over competition as the water companies may have a regional monopoly and with the dominant impact of transport costs may be able to exploit an unfair market advantage. But perhaps more importantly if the market for organic waste is to develop it needs a more commercial attitude to developing new sources of supply than the water companies have so far shown. This is where Ofwat and the OFT may have a role to stimulate activity.