Where there's muck there's brass

Henderson's Seb Beloe lays waste to the claim that British companies are not doing their bit for the environment. In fact the waste management industry has been undergoing a complete revolution.

I find the waste management industry fascinating.

This has always been something of a ‘dirty' secret (and something that has elicited concerned looks from benevolent colleagues!), but it is undeniably true.

We produce enormous volumes of the stuff. In 2010 the UK produced 278.3 million tonnes of waste.

Volumes have actually declined significantly in recent years, down 14% since 2006 which represents one of the major environmental achievements of the past few decades.
 
EU and UK legislation has been behind this shift - encouraging municipalities as well as private businesses to reduce and divert waste away from landfill and towards other forms of treatment such as recycling.

A tax on landfill which increased another £8 on 1 April 2011 and now stands at £56/tonne of waste has been a key driver in this process.
 
The tax has forced a revolution in waste management. In the year 2000 approximately 80% of the UK's waste was sent to landfill with less than 10% being recycled.

In the latest figures for the first quarter of 2011, the volume of waste going to landfill has been reduced to just over 50% with recycling up at approximately 40% and the balance being incinerated with energy recovery.
 
One of the big beneficiaries of these shifts has been the UK listed company Shanks.

I was lucky enough to be given a tour of their facilities in East London and then across the channel just outside Amsterdam.  In East London the company has a 25 year contract taking 180,000 tonnes of municipal waste per annum from the East London Waste Authority. The waste is shredded and dried (using heat generated by the decomposing rubbish itself) and then separated into organic waste, Solid Recovered Fuel (SRF), recyclable materials and a residue for landfill. When the contract began in 2002, 86% of the waste was sent to landfill and only 14% was diverted to other uses. Today these figures are 36% with 27% being recycled, and a total of 64% being diverted to other uses.

The Amsterdam facility is even more impressive. Using anaerobic digestion (AD) the company takes organic wastes and ferments them in large tanks producing methane, which is burnt to produce electricity, and an organic rich residue.  The business produces a 20% margin by capturing value from tipping fees, energy production and from the sale of the organic residue. The company adds further value to the organic residue by culturing ‘biostimulators' such as naturally occurring fungi that help to protect agricultural crops from diseases - commanding prices fives times higher than compost alone.

AD has only recently been introduced at commercial scale in the waste industry in the UK - and Shanks along with other companies like TEG Group are looking to establish strong positions in this country.  The Government too is keen to encourage the technology committing "to promote a huge increase in energy from waste through anaerobic digestion" in the coalition agreement. 

The waste industry today is already unrecognisable from 10 years ago, but all the signs are that even more radical changes lie ahead.

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