Posted: Friday 21st October 2011

The OFT has today issued recommendations designed to encourage increased competition and greater efficiency in the treatment of organic waste.

In its market study into the treatment of organic waste in England and Wales the OFT identified a number of barriers to competition related to aspects of economic, environmental and planning regulation, and to the apparent corporate culture of some water and sewerage companies. The market study followed a request to the OFT from Ofwat and the OFT has worked closely with Ofwat throughout the market study.

The report makes a range of recommendations aimed at promoting competition, hence driving efficiency and innovation in the sector.

At the heart of the recommendations are proposed changes to the economic regulation of water and sewerage companies to foster efficiency and help create a level playing field between them and other suppliers of organic waste treatment. The study also recommends greater harmonisation of the environmental regimes applicable to sewage sludge and other organic waste.

In addition, the OFT considers that planning policy proposals currently under consideration could contribute to greater competition.

Sonya Branch, OFT Senior Director of the Services, Infrastructure and Public Markets Group said:

'Our market study, conducted with Ofwat's support, identifies that there is greater scope for competition in the treatment of organic waste, however the current economic regulation, environmental protection and planning regimes are barriers to this competition developing.

'We have therefore today made a number of recommendations to Ofwat and other government bodies that have the potential to tackle these barriers to competition, benefit consumers and drive efficiency and innovation in organic waste treatment.'

The OFT has provisionally decided that a market investigation reference to the Competition Commission would not be appropriate at this time, as it considers that the regulatory barriers and distortions to competition identified in this market study can be better and more proportionately addressed by Ofwat and other government departments acting on the recommendations in this study.

The OFT is now consulting on this provisional decision.

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