Planned changes to Landfill Tax could hit UK ports with major new costs and threaten investment in maritime infrastructure and the clean energy transition.
A study by consultancy firm Oxera, warns reforms due from April 2027 would sharply increase the cost of disposing contaminated dredged material by restricting the current tax exemption to dredgings alone.
Materials added to stabilise waste before disposal would instead face the standard Landfill Tax rate currently £130.75 a tonne and expected to rise again.
That matters because stabilisers are used in large volumes to safely treat contaminated dredgings.
Industry data cited by Oxera shows an average of 4.1 tonnes of stabiliser is needed for every tonne of dredged material creating a far bigger taxable volume than many may expect.
Maintenance dredging is essential to keep ports safe and navigable. Oxera said for every 100,000 cubic metres of annual dredging where just 1% needs landfill disposal, the rule change could add £750,500 in tax costs.
The bigger concern is capital dredging used to deepen channels expand ports and unlock redevelopment. These projects are often linked to offshore wind growth logistics upgrades and regional regeneration.
Oxera said extra costs could run from millions to tens of millions of pounds with some projects facing tax liabilities that nearly double total capital expenditure.
Individual schemes could see additional costs of up to £29.5 million.
The report argues that could make marginal projects unviable delay investment and weaken the competitiveness of a sector that supports 125,600 jobs and contributes £10.8bn to the economy.
Industry groups have now raised the issue with Exchequer Secretary Dan Tomlinson urging ministers to rethink the policy before implementation.
They argue a tax change intended to support environmental goals could instead stall the port upgrades needed for trade growth and the clean energy transition.
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