Waste closer to home?

25 Jun 2014

Waste closer to home?

June 25, 2014Uncategorized

Empowering local communities to make the best uses of their resources can be a powerful economic driver – if only waste companies would cotton on, says Javier Rojo

Waste management companies have traditionally lacked the skills to differentiate their business models, with many of the big players offering similar services. In an environment where the only distinguishing factor is price, margins are inevitably squeezed.

This lack of vertical integration across players and geographies means that the industry’s competitive dynamics are focused on economies of scale and ever larger logistic networks and treatment facilities. Concentrating massive amounts of waste in specific locations not only gives rise to environmental concerns and planning and permitting processes, but increases delivery costs and makes it difficult to find off-takers for recovered materials and energy.

However, a game changer may be in the making. The current balance of costs and prices is now creating an opportunity to provide local waste management services that focus not on economies of scales, but on maximising value added services. Such approaches – based on simplicity, reduced costs and revenue generation – are now possible.

This strategic shift is underpinned by a number of factors. The first is simpler collection systems. Current technology means it is now possible to recover all materials under just two types of waste streams: organic waste and everything else (residual waste). Once food/green waste has been removed from the material stream, the residual can then be easily sorted and recycled. These two well differentiated options will make it far easier for customers and householders to understand and participate fully in the recycling process.

The second element is simpler treatment of the waste. Technology is helpful, but only at the right dose. Machinery has typically a high upfront cost, requires specialised maintenance and in the UK is penalised by a 20% VAT burden. Machinery works well for repetitive tasks and homogeneous materials – that is often not the case for waste streams.

Too much focus on technology can reduce operational flexibility and create bottlenecks. The processing and treatment of organic waste is a good example here. Why should we rely on machinery when millions of years of evolution provide us with efficient bacteria that can do the job for us? The right amount of human intervention can ensure that materials are properly sorted and that only organic waste goes into the production of organic fertiliser, maximizing quality and value.

The third factor is co-location. Recyclable waste tends to be bulky and compression requires energy and makes sorting much harder. Food waste is 70% water and a similar percentage of the solid fraction is made up of carbon and oxygen. This means that transporting waste over long distances is not efficient and significantly increases the carbon footprint of its recovery. The same can be said for the delivery of the recovered materials or renewable heat. Very often demand for materials and energy is precisely where the waste is being produced.

Lastly, consider local networks. Decentralised and localised treatment will give raise to new business opportunities. When a new waste management facility opens at a particular location, resources and raw materials start to become visible and will help create a driver towards a circular economy. Empowering local communities to make the best uses of their resources can be a powerful economic driver that could efficiently compete with the economies of scale driving the globalization approach.

The UK is in a particularly good position to lead on this due to its strong regulatory environment such as landfill tax, ROCs, and the Renewable Heat Incentive and various financial incentives coming from organisations like the Green Investment Bank.

Javier Rojo is a director at Quantum Waste.

Via edieWaste