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February 2007

Global waste market totals $120 billion a year

Veolia Environmentals waste-to-energy plant is located in Marchwood, UK.

The value of the municipal solid waste market in developed countries around the globe – including collection, landfill, incineration, composting and recycling markets – totals around $120 billion a year, according to a recently published market study.

The total value is for the 30 members of the Organization for Economic Co-operation and Development. Member countries produce almost 60 percent of the world's goods and services. The market for secondary materials is about 600 million metric tons, according to the report "From Waste to Resource: 2006 World Waste Survey."

Paris-based waste management company Veolia Environmental SA teamed up with the French research institute Cyclope to publish the 240-page report.

Denis Gasquet, executive vice president at Veolia, said the report provides a comprehensive description of the world's waste economy, from collection to recovery and recycling "The changes that the waste management economy is currently undergoing, must be seen against a background of diminishing resources," Gasquet said.

"This study demonstrates that each year the world produces as much waste – at least 2.5 billion metric tons – as it does cereals and steel." The world currently produces around 2 billion metric tons of cereals annually and 1 billion metric tons of steel.

"This worldwide production of waste needs to be seen as a huge potential source of energy, organic resources and raw materials. Transforming waste into energy and agronomic resources or into recycled raw materials, by means of the various methods of disposal and recovery, is a major challenge for sustainable development, one which Veolia Waste Management takes up willingly and comprehensively," Gasquet said.

The market study was researched, compiled and written by Philippe Chalmin, a professor at University Paris-Dauphine and managing director of Cyclope, along with researcher Elisabeth Lacoste, an agronomist with a doctorate in economics. Clyclope's research focuses on the international raw materials and commodities markets.

Gasquet said the report provides the most comprehensive vision yet of the world’s waste economy. The authors used both internal resources of Veolia, which includes a network of experts in 33 countries, and external sources. Gasquet said the report took a year to complete due to the huge amount of data that was compiled and analyzed.

"Because waste management is still a very locally based sector of activity, which has a great many country-specific aspects, global studies of this kind are still rare," Gasquet said. "This book gives us a tool for future reflection and constitutes a strategic communication device, which sets us apart from our main competitors."

Cyclope estimated that the amount of collected waste worldwide – not including construction and demolition, mining and agriculture –at between 2.5 and 4 billion metric tons. The authors were not able to arrive at a more accurate worldwide figure because the amounts reported by emerging countries are often sketchy and unreliable. Industrial waste is also hard to determine because reporting is not uniform across the globe.

"The calculation of municipal waste seems more reliable and the figures are therefore more relevant," Cyclope reported. The global figure for municipal waste of 1.2 billion tons is gathered from statistical data from most developed countries. The rest of the data is then based on samples of certain developing countries and extrapolated data based on indicators such as gross domestic product and the rate of urbanization.

In absolute value, the main producers of municipal waste are Europe and the United States. Each collected more than 200 million metric tons of waste in 2004, according to Cyclope. After the United States are Australia, Japan, and then South Korea.

The markets with the highest value are the United States at approximately $46.5 billion, Europe at $43 billion and Japan at approximately $30.5 billion, Cyclope reported.

The secondary materials market is estimated at 600 million metric tons. "Taking into account the average prices for recovered scrap metals, and recycled cellulose fibers, the values of these world productions largely exceeds $100 billion," Cyclope reports.

John Skinner, executive director and chief executive officer of the Solid Waste Association of North America attended the conference held by the International Solid Waste Association in Copenhagen last year where the report was first unveiled.

Skinner said the relatively low recycling rate worldwide was somewhat surprising. "One would believe from reading the popular press that the recycling rates in Europe and Japan are very high compared to North America," Skinner said.

"However the data presented in this report show that the recycling rate in Japan is very low, about 15 percent. In the European Union the recycling rate is about 35 percent which is not that much higher than in the United States, which was 28 percent." Skinner estimated that the recycling rate in the United States is a bit higher, currently about 32 percent annually.

What did Skinner take home from the presentation? "I think the results indicate that there could be some very good business opportunities in the international solid waste market as the economies develop in various countries around the world," he said.

Skinner said the report shows a very strong correlation between the waste generation rate and gross domestic product (GDP) per capita. "If you look at the figures for countries such as India and China, both the waste generation rate and GDP per capita are about 10 percent of the United States figures," he said. "As the economies in these countries grow, waste generation rates will increase as well, creating a huge need for waste management infrastructure."

Skinner said that he hopes that the research efforts continue and that the report is updated every few years. He noted that one of the report's authors, Philippe Chalmin, would make the keynote presentation on this report at SWANA's Solid Waste Managers Trends and Challenges and Landfill Symposium in San Diego on June 25, 2007.

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