Revenue buried in the waste industry

Revenue buried in the waste industry

The recycling sector accounts for only ten percent of the waste industry, yet it can help unlock resources worth R17 billion. MARISKA MORRIS finds out more

Currently, the waste industry is estimated to generate revenue of R15 billion. While municipalities are responsible for household waste, the private sector manages most of the commercial and industrial waste. Interestingly, recycling makes up only ten percent of the waste industry, which leaves ample room for growth.

In its 2017 Market Intelligence Report on the waste economy, Green Cape notes: “R17 billion worth of resources could be unlocked if 100 percent of the identified 13 waste streams could be recycled.” These streams include: metal, animal waste,
wood, paper, chemical and medical waste, glass, plastic and e-waste – which refers to discarded electronics.

The National Waste Information Baseline estimates that around 108-million tonnes of waste was generated in South Africa during 2011 alone. An estimated 65 percent of waste can be recycled, but a lack of funding makes it difficult for government to capitalise on the benefits of recycling.

According to the report, municipalities in the Western Cape spend more than R1 billion just to meet disposal service delivery goals. A further R1 billion will be needed to implement alternative waste-treatment infrastructure in order to achieve a 20 percent diversion rate by 2019. Government therefore needs to look to the private sector for assistance.

Paper and metal recycling are the strongest sectors in the waste industry. Around 1,7-million tonnes of paper is produced, with 68 percent (or 1,2 million tonnes) diverted from landfills. Up to 80 percent of metal waste is diverted. The metal sector’s success is due in part to the international demand for metal.

By law, only 30 percent of recycled metal needs to be resold to the South African market and most of the scrap metal is exported. While the government is attempting to introduce amendments to the current legislation, which will force more of the material to stay in the local market, Green Cape believes this will not make a drastic difference.

“It is unlikely that this issue will be resolved in the short term, as there is a technology gap between South Africa and the global market, which can offer higher prices for scrap material and process it at a cheaper rate,” it notes in the report.

The weakest performing sector is e-waste. Of the 322 000 t of e-waste produced, only 38 000 t, or
12 percent, is diverted.

Part of this sector’s underperformance is due to the exporting of e-waste. In an interview with ITWeb, chairman of the e-Waste Association of South Africa (eWasa), Keith Anderson, notes: “Because South Africa does not have the required technology to process e-waste on a large scale, it is being exported. The other reason is the exchange rate.”

South African e-waste companies earn more revenue by exporting the waste as they are paid in foreign currencies. This results in the country losing valuable resources like metal. While the sector is underperforming, it also offers opportunities for growth. According to Green Cape, there were only two large e-waste recyclers in South Africa in 2009. By 2016, there were more than 20 companies.

“This is a sector that can generate significant growth, as an eight-percent increase in e-waste diversion can result in a market potential of R22 million,” Green Cape comments. To encourage recycling, government introduced the National Pricing Strategy for Waste Management (NPSWM) last year.

“The NPSWM recognises that there is currently an under-pricing of waste services,” Green Cape notes. With the support of the government and legislation, it is possible that the private sector could generate billions of rand while making a huge contribution to saving the environment – one computer, bottle, piece of plastic or paper at a time.

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