A fall in the value of the waste sector in 2016 was partly offset by investment in new technologies and energy-from-waste (EfW) revenue streams, according to the latest analysis.
A report from AMA Research says the sector’s decline last year was partly due to cuts in local authority environmental services budgets and falls in global commodity prices for recyclable materials.
The report, which looks ahead to 2021, says the waste managment market was worth around £9.5bn in 2015 and is expected to contract to around £9.bn in 2018. Commodity prices have recovered somewhat but councils continue to grapple with spending cuts.
On the brighter side, the researchers attribute growth in contractors’ annual revenues to the development of relatively new income streams, including segregated recycling collections, organic waste collections and the development and operation of EfW plants.
“Investment in the expansion of EfW and recycling infrastructure capacity has contributed towards growth in aggregate industry revenues from these sub-sectors, while diversification into new areas of product recycling, such as WEEE, end-of-life vehicles and mixed plastic packaging, have also stimulated growth.”
AMA Research says EfW, landfill and other non-hazardous waste treatment and disposal services are estimated to account for up to 45% of industry revenues, with collection and recycling services each contributing around a quarter of the total.
However, it adds that because many municipal, commercial and construction waste services are delivered under bundled contracts, these are only broad estimates.
“There is still a need for the UK to improve commercial and industrial waste recycling although, in recent years, there have been improvements in recycling rates, mainly driven by voluntary initiatives, there being far fewer legislative drivers than for municipal waste,” it says.
The report adds that the creation of added-value income from the sale of recycled materials, compost, electricity and refuse-derived fuel has also brought in entrants from the energy, facilities management, composting and manufacturing sectors.
Keith Taylor, director of AMA Research, said: “In the short term, industry prospects will still be determined by EU legislation. However, now that Article 50 has been signed, there may well be a possible slowdown in household spending combined with rises in imported goods, driven by uncertainties surrounding Brexit and likely volatility in the economy.”
Waste Management Market Report – UK 2017-2021 Analysis is published by AMA Research www.amaresearch.co.uk.