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Waste sector will require investment of up to £35bn over next decades, says Suez

Waste management company Suez recycling and recovery has released a report analysing how the waste and resources sector will change over the next 20-30 years.

Released yesterday (12 September), the report, entitled ‘The Economics of Change in the Resources and Waste Sector’, outlines the current economic drivers in the sector, before highlighting how changes in the sector will require significant investment as it undergoes ‘dramatic change’ in the next few years.

A Suez EfW site at Haverton Hill, Stockton-on-Tees
Suez's EfW facilities at Haverton Hill, Stockton-on-Tees

The report envisages the need to make sizeable investments in a range of new technologies, such as chemical recycling and turning residual waste into fuels and chemicals, new infrastructure to process dry recyclables not currently collected and new systems of data collection, in order to fulfil obligations in helping to achieve net-zero carbon emissions by 2050 and to protect biodiversity.

Assessing the expenditure and budgets of local authorities in England, the report reveals that, in the year 2017/18, 37.3 per cent of net costs were incurred in the treatment of residual waste, 17.2 per cent net in the collection of waste, and 11.5 per cent in the net cost of recycling.

Over the past 10 years, the sector has invested in excess of £10 billion in technologies to move waste away from landfill, including recycling, energy-from-waste and anaerobic digestion, according to the report.

Looking to the future of waste management, the report asserts that developments over the next 20-30 years will require investment of up to £35 billion.

According to Suez, a significant portion of this investment will go towards diverting residual waste away from landfill, with the report stating that the need to build six to eight million tonnes of new capacity to avoid a residual waste treatment gap will require £6-8 billion to complete.

The report also claims that when the current energy-from-waste facilities reach the end of their asset lives and require replacement, the installation of new facilities will cost £18-£23 billion over the next 25-30 years.

Furthermore, the report states that increase in activity at recycling sorting facilities and domestic reprocessing facilities could require investments of between £750 million and £1.5 billion.

In terms of food waste, with the expected introduction of separate food waste collections for every household, between 30 and 100 new anaerobic digestion (AD) facilities will be required to deal with the additional tonnages of organic material, involving investments of between £500 million and £1 billion. However, the report warns against over-building AD facilities, given the government’s ambition to reduce food waste by 50 per cent by 2030, which would reduce the amount of material available for processing and raises the prospect of the need to retire facilities.

‘A revolution in the resources and waste sector’

Commenting on the report, David Palmer-Jones, CEO of Suez, said: “We are facing a revolution in the resources and waste sector. With radical new policies on the horizon, new value will be found in niche waste streams, which will demand new technologies and products. Furthermore, our sector will need to consider what we do, and how we do it, in light of carbon targets and the need for restorative action on natural capital, biodiversity and the general environment.

“The resources and waste sector has seen massive change over the past decade, and actors in our sector have invested more than ten billion in the transition away from landfill, moving waste materials further up the waste hierarchy.

“However Suez believes, as is set out in this short report, that the coming transition over the next twenty years will be even more radical, and will require accelerated investment more than three time greater than that made over the past decade or so.

“The money flows and economics of future resource management systems will be fundamentally different to today, in support of new objectives and through new participants in the sector, drawn in by new legislation and regulation.

“The weight-based metrics we have used to date have taken us so far, and resulted in more sustainable practices as material has shifted away from landfill, but new more sophisticated metrics, seeking to directly address the major environmental challenges – climate change and the loss of biodiversity and natural capital – will change the game significantly. Full net Cost Recovery producer responsibility and new methods of harvesting materials, like deposit return schemes, will change revenue and material flows and will require new consumer behaviours – which we know from the last decade of recycling, are not easily or quickly changed.

“We welcome the challenge though and, with the support of Government, through transparents, consistent and ambitious policy, there is no reason why the sector cannot deliver the investment, skills and technologies required for a more sustainable future.”

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