THE Landfill Allowance Scheme (Lats), which was introduced by the Government two years ago, is aimed at reducing the amount of waste councils send to be disposed in landfill.

A directive by the EU will slash the amount of landfill waste by 2020 to only 35 per cent of the total produced in 1995.

Under the scheme, councils are granted an allowance in tonnes of the amount of biodegradable municipal waste they can send to landfill, which reduces progressively year-on-year to 2020.

Until 2010, this is based on how much was sent to landfill in 2001-2 - the so-called base year - with councils who sent the most that year being granted the smallest allowances.

Local authorities can trade their allowances with other authorities if they feel they have more or less than they need.

They can also bank allowances for future years, or borrow future allowances for earlier use.

Councils can be fined if they send more than their allocation to landfill without buying extra allowances from other authorities.

All waste disposal authorities in the North-East and North Yorkshire met their Lats allowances in the first year of the scheme.

However, the Lats set-up has been criticised by Friends of the Earth (FoE), which says that, until 2010, councils which incinerate their waste will actually see their landfill allocation increase.

It describes these as "clear winners" under the scheme, and says they are effectively being rewarded for incinerating.

After 2010, allocations are based on the proportion of waste arising in each local authority.

Although authorities with incinerators must then begin to reduce the amount they send to landfill, they will still have plenty of spare allowances to sell at a profit to other councils.

FoE cites three councils which incinerate in the North-East - Hartlepool, Middlesbrough and Stockton - who will be permitted send more to landfill in 2020 than they do today.

It gives the example of Stockton Borough Council, which sent 3,416 tonnes of biodegradable municipal waste in 2001-2, and will be permitted to send more than five times this amount (16,981 tonnes) in 2020 under Lats.

Dr Anna Watson, FoE's waste campaign officer, said: "There have been long-standing fears over landfill sites - not least the fact that they produce methane, a powerful greenhouse gas, while they also pollute soil and water.

"The problem is that at the moment it is difficult to see how Lats is changing a drive in some councils' behaviour in terms of landfill.

"However, it has only been going a year-and-a-half and things may change."