This year, food waste disposal costs have become a live issue for cash-strapped English local authorities that are, for the first time, concerned about the cost of either disposal via anaerobic digestion or commercial composting.
On 31 March 2026, the UK government’s Simpler Recycling rules took effect for households in England, making a weekly, separate food waste collection a statutory requirement for local authorities.
Six months on, every council faces the same procurement question: where should the caddie contents go? For most, the shortlist has two names. One is an anaerobic digestion (AD) plant. The other is an enclosed, in-vessel composting (IVC) facility operating under the Animal By-Products Regulations (ABPR). For biogas operators the question is the mirror image: how much capacity should you commit to council contracts, and at what price?
The cost picture has shifted sharply in the last eighteen months. WRAP’s Gate Fees Report 2025/26, published on 3 July 2026, shows that although AD Facility payments for waste (seen in 2025) have ceased, on average (for current contracts), AD gate fees for food waste are still falling with a UK median of £13 a tonne.
Meanwhile, letsrecycle.com’s monthly organics index shows AD prices climbing every month of 2026 as new food waste volumes look for outlets. Both datasets are accurate. Both reflect a changing market, inevitably adjusting prices according to the rising demand for municipal and commercial organic food waste processing.
This article lines up the two sources, runs a worked example for a typical collection tonnage, and sets out the non-price factors that decide whether the cheapest gate fee is actually the cheapest route.
Key Takeaways:
- AD is cheaper on every current measure. WRAP’s 2025/26 medians are £13/t for AD against £77/t for food-only IVC and £66/t for mixed food and garden waste IVC.
- The gap is narrowing fast, and AD no longer pays councils on the index. On letsrecycle.com’s index, the AD charge moved from £1 to £16/t in January 2026 to £20 to £35/t in September, while IVC barely moved (£40 to £65 in January, £42 to £67 from April). In January 2025 the top of the AD range was still a payment to councils of up to £10/t; by December 2025 every AD figure was a charge. At range midpoints the AD advantage fell from about £53.50/t in January 2025 to about £27/t now.
- Read the signs carefully. letsrecycle.com shows a charge to the waste supplier as a negative number and a payment to the supplier as a positive one. WRAP does the opposite: a negative gate fee means the council is paid. Every figure in this article is shown as a cost to the council, so a positive number is a charge and a negative number is income.
- WRAP and letsrecycle.com are different measures. WRAP reports medians across councils’ existing contracts. The letsrecycle.com index is a monthly market indicator. Use WRAP to benchmark what you pay and letsrecycle.com to judge what a new contract will cost.
- Cheap AD contracts may not be repeatable. The six authorities that signed food-waste-only AD contracts since April 2025 achieved a median of £7/t, but the September market report describes processing capacity as highly constrained with no major capacity additions expected soon.
- Simpler Recycling is the market driver. Mandatory weekly household food waste collections began in England on 31 March 2026, with dozens of councils on transitional arrangements still to launch later in the year. More caddie tonnage is arriving in a market with little spare AD capacity, which is why prices are rising.
- Household caddie waste needs an ABPR-compliant route. It contains animal by-products, so open-air windrow composting is not an option. The real choice is AD or in-vessel composting.
- Judge delivered cost, not gate fee. On a 10,000 tonne a year stream, the September midpoint gap between AD and IVC is roughly £270,000 a year before haulage, contamination charges and risk are counted.
Simpler Recycling in 2026: Why This Decision Is Urgent Now
Simpler Recycling is the government’s reform of waste collections in England. For households it limits collections to a small set of streams: food and garden waste, paper and card, dry recyclables (glass, metal, plastic and cartons), and residual waste. The headline change for organics is that weekly separate food waste collection became mandatory on 31 March 2026. Press coverage on the day reported that 79 councils missed the deadline, with government agreeing transitional arrangements that let some authorities start later in the year.
The roll-out has been uneven. Earlier in the year, letsrecycle.com reported that more than 70 councils, about a quarter of those in England, were not ready, with 31 holding formal transitional agreements and at least 56 of the remainder targeting the end of 2026. The reasons given were demand for specialist collection vehicles, supply chain constraints and concern about long-term revenue funding. Defra had allocated more than £340 million in capital grants, which covered upfront costs such as vehicles, caddies and communications rather than ongoing operating costs.
That staggered start matters for treatment markets in three ways:
- Volumes are still ramping up. Each authority that launches or expands its service adds tonnage. Research cited by letsrecycle.com in September 2026 found that 57 per cent of respondents received and used a food waste collection, yet general waste remained the main disposal route for most food items. Capture rates, and therefore the tonnage looking for an outlet, have room to grow.
- Capacity was never sized for this. Industry commentators warned when the rules were announced that demand could outstrip food-waste-capable AD capacity, producing higher gate fees and longer hauls for councils. The September 2026 letsrecycle.com market report now describes that picture, with highly constrained AD capacity and no major projects due to add significant volume soon.
- Councils launching late are buying late. Authorities on transitional arrangements will be tendering into a market where AD prices have risen every month this year. A council that benchmarks against the WRAP 2025/26 medians alone is likely to under-budget.
For biogas operators, Simpler Recycling turns what was a buyer’s market into something much closer to a balanced one. For council officers, it means the treatment decision cannot be left until collections are bedded in. The rest of this article sets out the numbers that should inform it.
What the WRAP Gate Fees Report 2025/26 Says
WRAP’s nineteenth annual gate fees survey, published on 3 July 2026, is the standard benchmark for what UK local authorities pay for treatment and disposal. Press coverage of the report states that it draws on responses from 262 authorities, around 63 per cent of UK councils. The headline for organics is a continued fall in AD and most IVC fees, against rising energy-from-waste and landfill costs.
| Treatment route (WRAP median, £/tonne) | 2024/25 | 2025/26 | Change |
|---|---|---|---|
| Anaerobic digestion, food waste | £24 | £13 | -£11 |
| IVC, mixed food and garden waste | £73 | £66 | -£7 |
| IVC, food waste only | £72 | £77 | +£5 |
| IVC, garden waste only | £57 | £45 | -£12 |
Several details in the report matter for decision-makers:
- Some councils are being paid. Ten authorities reported negative AD gate fees (WRAP’s convention, meaning they receive income for delivered food waste) and two more reported a zero-cost arrangement.
- New contracts are cheaper still. Six authorities entered new food-waste-only AD contracts since April 2025, at a median of £7/t. Two of those were negative.
- IVC mixed range is wide. The mixed food and garden waste IVC median of £66/t sits in a reported range of £37 to £86/t.
- The food-only IVC figure is thin. WRAP’s food-only IVC median rose to £77/t, but the coverage describes it as based on a narrow range of reported values. Treat it as indicative rather than definitive.
- Residual alternatives are climbing. Landfill gate fees, excluding tax, rose to a £34/t median, and landfill tax rose from £103.70 to £126.15 a tonne on 1 April 2025, reinforcing the case for diverting food waste.
For context, the previous year’s report recorded an AD median of £24/t, up from £20/t, with reported fees running from -£42 to £78/t. At that time, WRAP noted that operators expected negative fees to disappear altogether as subsidies end, operating costs climb and demand for capacity grows with separate food waste collections. The 2025/26 data show the median still falling, but the market commentary since then points the other way.
What the letsrecycle.com 2026 Price Index Shows
The letsrecycle.com organics index provides a typical gate fee range each month for food waste at AD sites and for food and/or green waste at in-vessel composting sites. It is updated on the last Friday of each month. The table below reproduces the 2026 AD and IVC ranges published to date (latest update 25 September 2026), with a calculated midpoint gap.
A note on signs. letsrecycle.com publishes its ranges with a minus sign where the supplier of the waste is charged, so the 2026 IVC range appears on the site as -£40 to -£65. A positive number, which the site’s footnote on the AD row describes as meaning the supplier of the food waste could be paid, indicates the treatment plant paying for the material. In 2026 every AD, IVC and windrow figure is negative, so every one is a charge. To keep this article consistent with WRAP, which treats a negative gate fee as income to the council, the tables below show everything as a cost to the council: a positive number is what the council pays, and a negative number is what it receives.
| 2026 (£/tonne) | AD range | IVC range | Midpoint gap (IVC minus AD) |
|---|---|---|---|
| January | £1 to £16 | £40 to £65 | £44.00 |
| February | £2 to £18 | £40 to £65 | £42.50 |
| March | £4 to £20 | £40 to £65 | £40.50 |
| April | £5 to £20 | £42 to £67 | £42.00 |
| May | £5 to £20 | £42 to £67 | £42.00 |
| June | £7 to £23 | £42 to £67 | £39.50 |
| July | £10 to £25 | £42 to £67 | £37.00 |
| August | £15 to £30 | £42 to £67 | £32.00 |
| September | £20 to £35 | £42 to £67 | £27.00 |
The trend is unambiguous. The AD range has moved up in every month except where it was held flat in April and May, a rise of £19/t at the midpoint since January, while IVC has been essentially flat. Even at its September level, however, the top of the AD range (£35/t) is still below the bottom of the IVC range (£42/t).
The letsrecycle.com September market report explains why. It says the organics market has continued to move towards gate fees as growing volumes of food waste look for outlets following the rollout of mandatory household food waste collections. It also says available processing capacity remains highly constrained and that AD infrastructure is under pressure, with no major projects expected to add significant capacity in the near term.
The 2025 Turning Point: When AD Stopped Paying Councils
The 2025 index tells the other half of the story. At the start of 2025 the AD range ran from a payment to the council through to a modest charge, meaning an authority sending caddie waste to the right plant could earn income that offset part of its collection costs. Over the year the range slid steadily towards charges.
| AD gate fee range, as published | What it meant for the council | Midpoint cost to council (£/t) |
|---|---|---|
| January 2025: 10 to -5 | Paid up to £10/t, or charged up to £5/t | -£2.50 (income) |
| March 2025: 5 to -9 | Paid up to £5/t, or charged up to £9/t | £2.00 |
| June 2025: 3 to -15 | Paid up to £3/t, or charged up to £15/t | £6.00 |
| September 2025: 2 to -16 | Paid up to £2/t, or charged up to £16/t | £7.00 |
| December 2025: -1 to -16 | Charged £1 to £16/t. No payment left in the range | £8.50 |
| September 2026: -20 to -35 | Charged £20 to £35/t | £27.50 |
December 2025 was the first month in which the top of the AD range stopped being a payment, and January 2026 opened on the same range. Since then every AD figure has been a charge, and the midpoint has moved about £30/t in 21 months, from £2.50/t of income to £27.50/t of cost. IVC and open-air windrow, by contrast, have been charges in every published month of both years, because composting generates no energy income to share.
Why WRAP and letsrecycle.com Differ
It can look as if the two sources contradict each other: £13/t from WRAP against £20 to £35/t from letsrecycle.com. They do not, because they measure different populations. WRAP’s survey covers the contracts authorities actually hold, many of them signed years ago on terms that reflect an earlier, more competitive AD market. The letsrecycle.com index tracks what the market is quoting now. For a council re-tendering today, the index is the better guide to where bids will land, while WRAP is the right benchmark for judging whether an existing contract is good value.
Worked Example: 10,000 Tonnes a Year of Caddie Waste
To make the numbers concrete, the table below prices a 10,000 tonne a year source-segregated food waste stream (roughly a mid-sized unitary authority) on each dataset. These are gate fees only, with no haulage, transfer or contamination costs.
| Basis | AD annual cost | IVC annual cost | Annual difference |
|---|---|---|---|
| WRAP 2025/26 medians (AD vs food-only IVC) | £130,000 | £770,000 | £640,000 |
| WRAP 2025/26 medians (AD vs mixed food and garden IVC) | £130,000 | £660,000 | £530,000 |
| WRAP new AD contracts since April 2025 (£7/t) vs food-only IVC | £70,000 | £770,000 | £700,000 |
| letsrecycle.com January 2025 midpoints (AD paying £2.50 vs IVC charging £51) | -£25,000 (income) | £510,000 | £535,000 |
| letsrecycle.com January 2026 midpoints (£8.50 vs £52.50) | £85,000 | £525,000 | £440,000 |
| letsrecycle.com September 2026 midpoints (£27.50 vs £54.50) | £275,000 | £545,000 | £270,000 |
| letsrecycle.com September 2026, full ranges | £200,000 to £350,000 | £420,000 to £670,000 | £70,000 to £470,000 |
Two lessons stand out. First, AD wins in every row, so the question is how much, not which. Second, the saving is shrinking: on the same tonnage, the midpoint advantage fell from £535,000 in January 2025, when AD was net-paying councils at the midpoint, to £440,000 in January 2026 and £270,000 in September 2026. If your budget was built on 2025 contract prices, it needs revisiting before you go to market.
On gate fee alone, AD would have to climb to the IVC midpoint (about £54.50/t on the September index) before the two routes cost the same. That is some way off, but the direction of travel is clear enough that it should be tested as a sensitivity in any multi-year business case.
Can Councils Still Earn Income from Food Waste?
Collecting household food waste costs councils money, and the idea that AD income could offset it has been one of the attractions of the route. The evidence shows that income is real but is now the exception rather than the market norm.
- It still exists in specific contracts. WRAP’s 2025/26 survey records ten authorities with negative AD gate fees, meaning they are paid, and two at zero. Of the six food-waste-only AD contracts signed since April 2025, two were negative, and the median was £7/t.
- It has gone from the market index. The top of letsrecycle.com’s AD range was a £10/t payment in January 2025. Since December 2025 every figure has been a charge, reaching £20 to £35/t in September 2026.
- Composting will not replace it. IVC and windrow have been charges in every published month of 2025 and 2026. Without energy generation, composting is a net cost to the council on any realistic scenario, so the income opportunity belongs to AD alone.
The practical advice for officers is twofold. If you hold a contract with a zero or negative gate fee, check its term, tonnage commitments and price-review triggers, because it is likely worth more to you than the market now offers and may be hard to replicate on renewal. If you are tendering fresh, do not put income into the business case unless a bidder has committed to it in writing.
Beyond the Gate Fee: What Changes the Answer
Why AD Can Price Lower: Energy and Digestate Income
The structural reason AD has undercut composting is revenue. A digester converts food waste into biogas, which is burned in CHP or upgraded to biomethane, and into digestate that can be applied to farmland as a biofertiliser. Those income streams let operators accept food waste at a low gate fee or, in some contracts, pay the council for it. An IVC site has no energy income. It consumes electricity for aeration and odour control, and it depends on the gate fee and compost sales to cover costs. When energy and certificate revenues soften, or subsidy-era contracts end, AD gate fees have to rise to compensate. That is the dynamic WRAP’s operators anticipated and the 2026 index is now showing.
Feedstock Mix and IVC Pricing
The gap between WRAP’s food-only IVC median (£77/t) and the mixed food and garden waste median (£66/t) is consistent with composters needing carbon-rich bulking material to run a stable process, which garden waste supplies. If your authority collects food and garden waste together, or can co-collect, IVC is more competitive than the food-only figure suggests. That is a like-for-like comparison issue to resolve before reading any table.
Haulage and Transfer
A £27/t advantage can disappear with a long haul. AD capacity is constrained and unevenly distributed, so the nearest plant willing to take your tonnage may be further than the nearest composter. Build a delivered-cost model: gate fee plus transfer station and bulking costs plus haulage per tonne-mile times distance. The break-even extra distance is simply the gate fee gap divided by your marginal haulage cost per tonne per mile.
Contamination and Rejection Terms
Caddie waste arrives with plastic bags, packaging and cutlery. AD plants typically de-package feedstock and pay to dispose of the rejects, while IVC sites screen it out. Whichever route you choose, read the contamination thresholds and rejection charges in the contract. A low headline gate fee with a punitive contamination clause is not a low-cost contract. Liner choice, caddie communications and crew feedback loops all feed straight through into cost.
Regulatory Fit and End Markets
Food waste that includes animal-derived products must comply with the ABPR sanitisation rules on both routes. Open-air windrow composting is only suitable for waste without animal by-products, so household caddie waste is realistically an AD or IVC decision. Check that the outputs have a secure, certified outlet (digestate to a recognised biofertiliser standard, compost to a recognised compost standard), because a site that cannot move its product eventually restricts the intake it will accept.
Capacity Security and Resilience
With capacity tight, the risk is not only price but availability. Ask what happens when the plant is down for maintenance, where your tonnage is diverted, and at what price. Contracts that commit the plant to accepting your tonnage, with named fallback sites, are worth paying a little more for.
What This Means for Biogas Plant Operators
- Your pricing power is rising. The era of paying councils for feedstock has ended on the index: the top of letsrecycle.com’s AD range was a £10/t payment in January 2025 and has been a charge in every month since December 2025. Legacy contracts with zero or negative fees will be hard to match on renewal.
- Be wary of long fixed-price deals struck at the bottom. The £7/t median on contracts signed since April 2025 sits well below the £20 to £35/t you can now see in the market. Build in review mechanisms or indexation for anything multi-year.
- Sell certainty, not just capacity. Councils will pay for guaranteed acceptance, fallback arrangements, clear contamination protocols and transparent rejection handling.
- Protect your composter-benchmark. IVC at £42 to £67/t is your price ceiling in practice. If you push towards it, councils will start to look seriously at the alternative, particularly where they can co-collect garden waste.
A Decision Framework for Council Waste Disposal Officers
- Confirm your Simpler Recycling position. Is your weekly food waste service live, or are you on a transitional arrangement with a later start date? Your tendering window, and the market you will tender into, depend on it.
- Define the stream. Is it food-only or food and garden mixed? Compare like with like, and project tonnage growth as collections bed in.
- Benchmark your current contract against WRAP. The 2025/26 medians (£13/t AD, £66/t mixed IVC, £77/t food-only IVC) tell you whether you are paying above or below the market median.
- Price the re-tender against the index. Use the latest letsrecycle.com range (£20 to £35/t AD, £42 to £67/t IVC in September) rather than WRAP medians, and re-check after the next monthly update on the last Friday of the month.
- Model delivered cost. Add haulage, transfer, bulking and expected contamination charges to each bid.
- Stress-test the contract. Look at length, indexation, price review triggers, tonnage guarantees, change-in-law clauses and what happens if the site is unavailable.
- Run sensitivities. Test AD at £7, £13, £20 and £35/t against IVC at £42, £66 and £77/t, and see where the decision flips once haulage is included.
The Verdict: Which Is Cheaper?
On the evidence published to date, anaerobic digestion remains the cheaper way to dispose of source-segregated household food waste. WRAP’s 2025/26 medians put it £53 to £64 a tonne below IVC, and the latest letsrecycle.com ranges still show AD at the top of its range below the bottom of IVC’s.
But the story is no longer a simple one. In early 2025 the index still showed AD plants paying councils at the top of the range. That has gone, and councils should not budget for income unless it is written into a contract. AD’s advantage has shrunk by roughly £17 a tonne at the midpoint in nine months, capacity is constrained, and the very low contract prices in WRAP’s survey were struck in a market that no longer exists.
Councils should plan for AD to remain cheaper but not as cheap, and secure capacity early. Operators should recognise that the market is moving in their favour while remembering that IVC sets the ceiling.
Figures are correct as at 10 October 2026 and drawn from the sources below. The letsrecycle.com organics index updates on the last Friday of each month, with the next update due on 30 October 2026. This article is for general information and is not procurement or legal advice.
Frequently Asked Questions (FAQs)
Is anaerobic digestion cheaper than commercial composting for household food waste?
On current published data, yes. WRAP’s Gate Fees Report 2025/26 gives a UK median of £13 a tonne for food waste AD against £77 a tonne for food-only in-vessel composting and £66 a tonne for mixed food and garden waste IVC. The September 2026 letsrecycle.com index shows AD at £20 to £35 a tonne against £42 to £67 a tonne for IVC. The gap is narrowing as AD prices rise.
What is the latest WRAP median gate fee for food waste AD and IVC?
The Gate Fees Report 2025/26, WRAP’s nineteenth annual survey, published on 3 July 2026, reports a median AD gate fee for food waste of £13 a tonne, down from £24. For IVC it reports £66 a tonne for mixed food and garden waste, £77 a tonne for food waste only and £45 a tonne for garden waste only.
Why do WRAP’s figures and the letsrecycle.com prices differ?
WRAP reports median gate fees across the contracts local authorities currently hold, many of which were signed in a more competitive market. The letsrecycle.com index is a monthly indicator of what the market is quoting now. For a new tender the letsrecycle.com index is the better guide to likely bids, while WRAP is the better benchmark for an existing contract.
Can household food waste go to open-air windrow composting?
No, not in practice. Open-air windrow composting is only suitable for waste that does not contain animal by-products, and household caddie waste usually does. Food waste containing animal-derived products must be treated in an ABPR-compliant facility, which in practice means anaerobic digestion or in-vessel composting.
Can councils be paid for food waste by AD plants?
Sometimes, under specific contracts, but it is no longer the market norm. WRAP’s 2025/26 report records ten authorities with negative AD gate fees, meaning they receive income, and two at zero. Two of the six food-waste-only AD contracts signed since April 2025 were negative. letsrecycle.com’s index showed the top of the AD range as a payment to councils of up to £10 a tonne in January 2025, but every AD figure has been a charge since December 2025, reaching £20 to £35 a tonne in September 2026. Composting has been a charge throughout.
How does Simpler Recycling affect the cost of food waste treatment?
Simpler Recycling made weekly separate household food waste collections mandatory in England from 31 March 2026. That is adding tonnage to a treatment market with constrained AD capacity, and letsrecycle.com’s index shows AD gate fees rising every month this year as a result. Councils that have not yet launched, or are on transitional arrangements, will be tendering into that tighter market.
Are AD gate fees likely to keep rising?
The signals point upward. The September 2026 letsrecycle.com market report says organics prices are moving towards gate fees as food waste volumes grow, that AD capacity is highly constrained and that no major capacity additions are expected soon. WRAP’s previous report also recorded operators expecting negative fees to disappear. Nobody can guarantee the trajectory, so model several price scenarios.
What costs should councils include besides the gate fee?
Include haulage and any transfer or bulking costs, contamination thresholds and rejection charges, contract length and indexation, tonnage guarantees, and fallback arrangements if the plant is unavailable. A lower gate fee at a distant site with strict contamination terms can cost more than a higher gate fee nearby.
Sources
- WRAP, UK Gate Fees Report 2025-26 (published 3 July 2026)
- letsrecycle.com, WRAP finds MRF gate fees on the rise as organics fees fall (6 July 2026)
- letsrecycle.com, Windrow, IVC and AD prices 2026 (updated 25 September 2026)
- letsrecycle.com, Market report: glass, metals, organics, plastics, textiles, wood, September 2026 (25 September 2026)
- letsrecycle.com, More than 70 councils not ready for food waste collections, finds BBC (25 February 2026)
- Circular Online, Household Simpler Recycling collections begin across England (31 March 2026)
- letsrecycle.com, Recycle Week 2026: the push to capture more recyclables (18 September 2026)
- letsrecycle.com, WRAP finds decrease in MRF gate fees (2024/25 report coverage)
- letsrecycle.com, Windrow, IVC and AD prices 2025
- letsrecycle.com, Organics price index overview
- Resource Media, MRF gate fees rise as anaerobic digestion costs fall, WRAP report finds (sample size)
