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Waste closer to home?

June 25, 2014

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 RojoWaste 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.

© Quantum Waste

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