Wasted value capture – the untapped potential of biowaste
Axel Sointu, Junior Analyst at PBI
The Finnish government is committed to the European Union’s targets for reuse and recycling of municipal waste. These targets aim to promote a circular economy and reduce landfill waste and waste incineration. By 2025, 55% of all municipal waste needs to be recycled, and 65% by 2035. To achieve the outlined targets, Finland needs to witness a significant improvement in recycling behaviour, as current estimates indicate a mere 40% recycling rate for municipal waste. Likewise, municipal waste companies need to see clear value in processing increased amounts of separated waste.
Reaching higher rates for recycled biowaste has significant impacts on overall recycling rates, as biowaste constitutes around one third of all produced municipal waste. If Finland, and the EU for that matter, expect to increase overall recycling via improved biowaste separation and collection, new operational models capturing the value of biowaste need to be developed and supported. For example, can we create new ways that allow residents to better collect and separate their waste in their homes? Can we improve incentives for consumers to separate their waste? Can we improve how we educate consumers and market the benefits of recycling? Most importantly, can we create business models around increased recycling of biowaste that are attractive investments; can we create a truly sustainable circular economy?
Biowaste is an energy resource, and incineration of this resource for energy is far from efficient when compared to biogas production. In fact, the latter is capable of recovering 60% more energy from biowaste, than direct combustion[1]. Biowaste, and food waste in particular, often has a high moist content. Incineration technologies operate best with dry materials and the gains become marginal from burning very wet biowaste.
The total amount of waste produced is difficult to decrease in near future scenarios. Instead, in line with outlined ambitious recycling targets, we are likely to witness a decrease in mixed waste and an increase in recycled biowaste. This shift will affect the ecosystem of actors involved and clearly holds vast potential in terms of new business models supported by innovative technologies and solutions, enablers.
Environmental aspects should form a strong overarching value driver incentivizing this transformation for all actors in the ecosystem. However, it is not enough that environmental sustainability is achieved. The effects need to also be measurable in money in order to create incentives for stakeholders to take action to increase recycling. One of the key actors, municipal waste management companies, are often charged based on €/tonnes for the mixed waste they transport to incineration facilities. They will have to answer the question: What is the quantified monetary value for a municipal waste management company to reduce its share of mixed waste? Taking a step further down the “left-over food chain”, what is the quantified monetary value for biogas production facilities of having access to larger amounts and higher quality biowaste?
PBI works with financing of industrial investments and business development in the energy sector, including modelling and quantification of market potential. We also have a long track record of helping clients overcome challenges with steering their business ecosystem towards a sustainable outcome.
1 Valorgas (2014) Valorisation of food waste to biogas, Pg. 33
Be among the first to know when new blog posts and white papers are added to the PBI Library.