Dredging dilemma: How a proposed new landfill tax could jeopardise UK Ports

The UK’s ports are the lifeblood of our island nation, facilitating vital trade, supporting industries, and playing a critical role in managing our waterways. Indeed, Ports are one of five key areas for investment by the UK Government’s new National Wealth Fund.

Maintaining the depths of our ports and navigation channels through regular dredging is not merely an operational necessity, it is a fundamental pillar of national infrastructure, ensuring economic prosperity and, crucially, mitigating flood risk.

As one of the UK’s leading operators in the treatment of hard to handle wastes, including dredgings from inland waterways and ports, Augean views, with significant concern, the proposed reforms to Landfill Tax in England and Northern Ireland, specifically the plan to remove the exemption for stabilisers used in dredged material from April 2027.

This change threatens to have far-reaching and detrimental consequences for the UK’s port sector.

Currently, the dehydration of dredged material, particularly contaminated dredgings, often relies on the use of Air Pollution Control residues (APCr) from Energy from Waste and Biomass plants which contribute to the UK’s renewable energy needs.

This established method, utilised by the industry to great effect for well over 10 years, has proven to be both environmentally effective and cost-efficient.

APCr acts as a vital stabiliser, enabling the safe and compliant dehydration and subsequent disposal of contaminated dredgings in engineered landfills. However, the proposed Landfill Tax reform categorises these stabilisers as attracting the Standard Rate Landfill Tax, which currently stands at a substantial £126.15 per tonne and is set to increase.

The implications for UK ports are stark.

The removal of this exemption will almost certainly lead to a significant increase in the cost of treating contaminated dredgings as the alternative is to dehydrate contaminated dredgings using virgin lime or cement which has a high environmental carbon impact and is expensive.

For contaminated dredgings, where specialised treatment is already complex and expensive, this additional burden could be prohibitive. Such a sharp rise in operational costs poses a direct threat to the financial viability of crucial dredging projects across the UK.

This impact could be further exacerbated in view of the pending tightening of CEFAS regulations which will reduce the contamination levels of dredgings that can be

disposed to sea, meaning that land-based options for dehydrating contaminated dredgings must continue to be a viable solution.

The proposed tax increase places an unprecedented financial strain for Ports who already operate within tight margins, and significant increases in operational costs can lead to difficult decisions.

One of the most worrying potential consequences is a slowdown in dredging activity.

Faced with escalating costs and potential spending cuts, ports may be forced to reduce the frequency or scope of their dredging programmes. This is not merely an inconvenience; it presents a grave risk to national resilience.

Reduced dredging directly impacts channel depths, limiting the size and draught of vessels that can access ports, thereby hindering trade flows and disrupting supply chains.

We urge His Majesty’s Treasury and HMRC to reconsider this specific aspect of the Landfill Tax reform.

While we understand the broader objectives of encouraging a circular economy and simplifying the tax system, these goals must not come at the expense of critical national infrastructure and flood defence.

We advocate for a more nuanced approach that recognises the unique nature and essential role of dredged material management within the UK’s maritime sector.

Maintaining the exemption for stabilisers used in dredged material is not a loophole; it is an acknowledgement of a necessary process that safeguards our ports, enables our trade, and protects our communities from the growing threat of flooding. The long-term economic and environmental well-being of the UK depends on it.

We recommend Port Authorities respond to HMT’s ‘Consultation on Reform of Landfill Tax in England and Northern Ireland’ to say “no” to removing the exemption for stabilisers used in dredged material from April 2027, due to the unintended adverse environmental and economic consequences for Ports.

The closing date for comments is 21st July 2025. The online response form can be found on the gov.uk page:

https://www.gov.uk/government/consultations/consultation-on-reform-of-landfill-tax