Another £1.3m needed for council's Ludlow biochar scheme as huge costs rise confirmed
Councillors are being asked to approve another £1.3m for a Ludlow biochar scheme after Shropshire Council confirmed a huge rise in costs for the project.
The authority's planning application for the pyrolysis plant was approved in January, but councillors are now being asked to set aside more money to complete the development.
In a paper to be considered by councillors tomorrow (Thursday, July 17) a number of reasons are outlined for the increase in costs.
They include issues with preparation work for the site itself, as well as increased construction and machinery costs, and "additional demand for external technical expertise".
The site, on Coder Road business park in Ludlow, was previously home to an anaerobic digester and needs clearing and preparing for the new development.
The requested increase for the budget is £1.3m, taking the total budget from an original £2m to £3.3m.
The report prepared for councillors said that the business case for the project is "sound", despite the additional expense.
It stated: "Planning permission has been approved and the project is well advanced, however, additional funding is needed due to unforeseen and costly remediation and building works on the proposed site. While this brings an additional expense, the business case remains sound, and the anticipated benefits remain achievable."
The report warned that if the budget is not increased the council may have to look at a new site - and would still need to address issues at the current site.
It stated: "There is a risk that increased budget is not secured, compromising the ability to remediate the current site in Ludlow to house the biochar plant.
"An alternative site would be needed, the legacy issues with the Ludlow plant would remain an outstanding liability, abortive costs would need to be covered, and the significant environmental and financial benefits would not be realised."
The pyrolysis plant would turn substances such as wood waste, straw, and manure into 'biochar' - a charcoal-like substance which can used for a number of purposes, such as enhancing soil, an air or water filter, and a carbon-negative additive for material like concrete.
The biochar project is also planned to generate what are called 'Carbon Offset Removal Certificates' (CORCs).
The certificates certify the amount of carbon dioxide removed from the atmosphere by the biochar production process and can be sold on the open market.
The council report said that the project is still expected to deliver annual returns that would "more than cover borrowing costs".
It said that over the lifetime of the council's medium-term financial strategy it will result in 10,000 tonnes of physical carbon removal and would "provide an environmentallyfriendly alternative mechanism to handle green or food waste".
The report said that the outcomes would support the council's efforts to achieve its net zero ambitions.
The conclusion said the cost increases are unavoidable and in the case of the remediation for the land, would need to be tackled at some point.
It stated: "The additional funding requested in this paper is necessary and will address legacy costs arising from the former operation of the anaerobic digester plant that the council has deferred since the plant was mothballed, and meet additional construction costs arising from repurposing the existing building.
"The legacy cost is unavoidable, and would either be met by the council or would be netted off the future value of the site, if the biochar project did not proceed.
"The construction costs are necessary to deliver an effective, compliant building."
