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Insight: Global opportunities in waste

Rapid urbanisation across the globe is representing a real opportunity for waste management companies to spread their wings.

A major by-product of the urban lifestyle is municipal solid waste (MSW), and the growth of MSW is currently higher than the rising rate of urbanisation. MSW is expected to double worldwide during 2012-25, from an annual 1.3 billion tonnes to 2.2 billion, according to a World Bank report ‘What a Waste (March 2012)’.

The table opposite shows that waste per capita in urban settings will increase significantly in all but the most developed countries (OECD).

Figures such as these led to a recent Confederation of British Industry (CBI) report on overseas public procurement which predicted that foreign spending on recycling equipment would be one of the three fastest growing areas of overseas procurement by 2030, increasing 250%.

Waste composition - 2

waste compostion by national income - high

George McFarlane, CBI senior policy adviser, who wrote the report on 12 emerging economies, told MRW that there were two main potential areas of growth: services (waste management) and knowledge-intensive manufacturing (recycling equipment).

McFarlane said the dozen countries all have growing populations and their waste problems are becoming as unsustainable as those in the western world.

“They realise that and [their] governments need to address it,” he warns. “The UK is well placed in knowledge-intensive manufacturing because that is what the economic fundamentals tell us we are good at. We punch above our weight when it comes to exporting manufactured goods that require a lot of knowledge and high-tech processes.”

The CBI also identified that winning contracts in foreign countries could be an uphill battle so consultancy expertise in waste was also invaluable.

Learn from the UK approach

Dr Adam Read, Ricardo-AEA’s practice director for resource efficiency and waste management, spoke to MRW during a visit to Saudi Arabia. He was meeting officials in Riyadh to discuss how to approach waste management from a relatively undeveloped system (pictured above).

He said that Saudi Arabia could learn from the progress of waste management in the UK, and introduce building blocks such as taxation systems and incentive schemes to get through the process more quickly.

But he cautioned: “You don’t just go from A-Z in five minutes by deciding that you are going to be a zero waste economy.” He has proposed energy-from-waste (EfW) as an option because there is “a nexus between energy demands and modern cities like Riyadh”.

Read cites four main barriers to successful waste projects in foreign countries:

  • Cultural difference: understanding specific needs of diverse societies
  • Governance: many countries lack democratic governments or investment in recycling and waste collections
  • Composition: waste is highly variable, with problems such as high moisture levels in humid countries, which can compromise certain technologies.
  • Local economic situation: communities may not find sufficient economic benefit in a waste project

Read said that, on around 30-40 occasions in the past 15 years, he had seen brand new in-vessel composting plants built and then stripped bare within six months, because local people found more value in the facility’s metals, corrugated iron, nuts and bolts than in the plant’s operation.

Nevertheless he said that, in some respects, developing countries were in a better position to make the circular economy happen because they are not trapped by fixed regulations or infrastructure.

Long-term contracts

Alban Forster, board director of global operator SLR Consulting, said there were a number of opportunities abroad for domestic businesses because the UK has experience of moving from 80-90% landfill as a primary waste management route in the 1980s to about 80% non-landfill today.

He said that for municipal waste this was achieved primarily off the back of long-term public sector contracts and public or public-private finance mechanisms (PFI/PPP).

Although the early years were challenging, Forster claimed that PFI/PPP initiatives helped to create much greater consistency in establishing management solutions that required long-term, high-capital cost infrastructure.

Waste composition - 2

waste compostion by national income - low

For example, SLR has been working on a waste manage-ment system in Kuala Lumpur with the Malaysian government, using PFI/PPP equivalents. With much of the legal, financial and technical advisory team being UK-based, the collective expertise and know-how will be exported internationally.  

“Our skills are relevant across the world in terms of providing advisory support, business planning and technical solutions for improving waste manage-ment,”said Forster. “The export value for this home-grown expertise is enormous - in the many billions of pounds - during the next few decades, and one that we should capitalise upon.”

A common theme among those in the industry speaking to MRW about global opportunities was a sense that the domestic progress of waste management puts the companies involved in the driving seat for assisting developing countries.

Forster said: “In the past 10 years, the UK has been the most dynamic marketplace for waste infrastructure across the world.

“The likes of Germany, Netherlands and Denmark have long since built most of their key waste infrastructure and, while they continue to develop, it is nowhere near the same rate as in the 1980s, 90s and 2000s.

“We are still going through a transition from being landfill-led to infrastructure-led, and I think the skills developed in these transition years are highly relevant and highly exportable.”

  • See next week’s issue for a feature on the opportunities for waste projects in Egypt, and the delicate issues surrounding the informal recycling and collection population known as the ‘Zabbaleen’.

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