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Incinerating and dumping rubbish is no longer sustainable. From society’s point of view, it’s no longer acceptable. As a business model, it no longer works. We are guided by laws and regulations, rightly so. You have to look for a future-proof approach. Read all about how you can do that as a waste management company or responsible government in this longread.
A clean, hygienic city
The average member of the public in Europe produces 500 kilogrammes of household waste a year. It’s almost twice that in the States. Local government is responsible for disposing of rubbish. Aim: a clean, hygienic living environment.
But what do we do with that rubbish? Who has a role to play in the waste chain? And how do we make waste processing affordable and sustainable?
Why do we dump or incinerate waste?
To get this clean, hygienic living environment, the government engages waste collectors and waste processors. They are paid by the ton to get rid of it. The result is a clean city. Waste is a residual product, as it were. The most obvious way to get rid of waste is to dump it in landfills outside built-up areas. Or to burn it, because landfills are also becoming a problem in densely populated areas. To this day, more than half of all waste is still disposed of in this way.
Incinerating waste has become popular in recent decades, particularly in Europe. The heat is used to generate green energy and the waste heap is reduced to about 20% of its original size.
But that requires very expensive plants. To justify this investment, the public pay taxes or are billed based on kilogrammes and wheelie bins. And long-term contracts are concluded between those with the incinerators and the local authorities.
But this model is obsolete. There are many reasons why we no longer view incineration and landfills like we used to:
- Mechanical separation of waste has taken huge steps forward in recent years.
- People are aware now that we have to be prudent with raw materials.
- Dumping and incineration have a severe adverse impact on the environment.
Dumping and incineration will soon be banned
Any support that dumping and incineration may have had is disappearing fast. At the same time, that business model is collapsing. EU legislation is ensuring that governments have to start recycling. The targets are challenging. The intention is that 65% of the packaging material must be given a new lease on life as raw material by 2025. The targets for 2030 are even more ambitious.
And that’s a good thing. That way, every ton of recycled plastic saves 2.5 tonnes of carbon emission. This is because working with new raw materials requires much more energy to extract and process. Take recycled steel: you can save 75% in energy by using recycled steel. What’s more, landfills emit dangerous methane gasses, and recycling can prevent that.
If our aim is to reach our climate targets, then we have to cut down on the dumping and burning of waste.
Tax on dumping and incineration, mandatory demand for secondary raw material
There’s even more bad news for the old way of processing waste. More and more governments are introducing taxes on burning or dumping waste. And the EU is working on legislation to make it obligatory for producers to use certain percentages of secondary raw materials. So the old waste model is getting more expensive and ultimately it will be unaffordable.
A new model
Ambitious targets mean that, as a waste management company or local authority, you have to find a new, future-proof model. And that model is to hand.
It’s mainly about raw materials. The business case for waste must no longer focus on collection and processing, but on creating raw materials. The attention should no longer be on restricting the costs of getting rid of waste. Instead, investments should focus on separating streams and reprocessing raw materials. Those raw materials are becoming valuable. Important: it’s in everyone’s interest in the chain to work on high-quality raw materials and professional recycling.
Once you know what the waste supply consists of, you can use the available data to calculate how many types of raw materials can be separated, as well as the percentage that can be recycled and the quality of the raw material. And, with that, its value.
If you separate the waste mechanically, in theory it’s possible to recycle 95% of the entire household waste stream. In practice, this depends on the collection and processing method you’re using now, your current contracts in the processing chain and your investment capacity.
Business case: if you’re dumping waste now but intend to start recycling
Because landfilling requires relatively little investment, the challenge of the recycling business case is to recoup the investment in mechanical recycling plants by selling secondary raw materials on the market. This can be a growth model. The obvious place to start is with plastics, metals and paper, and to supplement that with processing organic material.
Business case: if you’re incinerating (or exporting) now but intend to start recycling
The advantage is that residents are already used to paying for waste disposal. And you can use this income to write off the incinerator over a period of 30 years. Recycling targets also have to be met, even if you have current contracts. The challenge is to make the transition with your business model. Separating plastics, paper and metals is a good place to start to keep a stream of raw materials out of the incinerator and to do well on the market in terms of sales and prices. The secondary raw materials chain for this stream is already well developed.
Six steps to a new model
- Have your waste examined in terms of volumes and types of raw materials
- Find out about the laws and regulations in your region
- Explore the market and prices for secondary raw materials like synthetic materials, paper and gas
- Analyse different scenarios; how much investment is needed for an x percentage of recycling and which streams should you start with
- Compare these scenarios with the current ones and take into account that taxes on landfill and incineration will rise, while the demand for secondary raw materials will grow.
- Develop the ideal dividing line
Banzo can help you analyse these scenarios and develop a business model.