In the dynamic world of waste management, the year 2023 brings with it a continuation of an intriguing trend – industry consolidation. For several years now, larger waste management companies have been acquiring smaller operators, a trend driven by a variety of factors including labour and supply chain challenges, the ripple effects of the pandemic, and the increasing involvement of private equity buyers or investment funds motivated by Environmental, Social, and Governance (ESG) considerations. But what does this mean for the industry and, more importantly, for you, the consumer? In this blog post, we’ll delve deeper into this trend, exploring its implications and what it could mean for the future of waste management.
Consolidation in the waste management industry is not a new phenomenon, but its persistence and the factors fuelling it make it a fascinating topic. Labour and supply chain challenges, compounded by the pandemic, have made it difficult for smaller operators to keep pace. Additionally, private equity buyers and investment funds, driven by ESG considerations, are keen to expand in a market that has proven resilient to recessions. But, there’s a question that needs to be asked: what happens when the number of new companies starts to dwindle due to high capital requirements for market entry and operating fatigue pushing others to sell?
The implications of this ongoing consolidation are twofold. On one hand, if the number of new companies declines and existing players continue to consolidate market share, particularly on the post-collection side, it raises questions about the cost and variety of services being offered. Will this lead to a modernisation of collection technology and improved service, or will it result in higher costs for customers to receive similar services? On the other hand, what will be the impact on how waste material is managed? Will it lead to the same amounts of waste being directed to a smaller number of disposal sites, or will we see a significant change in waste management practices?
As we navigate these changes, it’s essential to remember that while consolidation might lead to fewer companies, it does not necessarily mean a decline in innovation or service quality. On the contrary, as companies merge, they often pool their resources, leading to improvements in technology and efficiencies in service delivery. In fact, it could result in an industry-wide modernisation of collection technologies and improved services, leading to a more efficient and streamlined waste management process. Furthermore, there’s also the potential for changes in costs. It’s possible that as companies consolidate, they can achieve economies of scale that may lead to cost savings – savings that could be passed on to consumers. However, it’s equally possible that reduced competition could result in price increases.
In the midst of this evolution, one thing remains certain – the waste management industry is not static. It is an industry in constant flux, responding to changes in regulations, market forces, and societal expectations. As we move into 2023, we can anticipate that the trend of consolidation will continue to play a significant role in shaping the industry. We can expect more changes and challenges that will shape its future, and we can be assured that the industry will continue to adapt and evolve in response to these changes. As consumers, it’s crucial that we stay informed about these developments to understand how they might impact our waste management practices and, ultimately, our contribution to environmental sustainability.
Plastic is one of the most controversial materials in recycling right now, and 2023 is poised to be a significant year in terms of policy and practice. Indeed, this could be the year that further polarises the industry, while simultaneously revealing signs of potential viability for new and emerging business ventures. A fundamental question at the heart of these developments is this: Which types of plastic are truly recyclable? It’s a question that challenges our common perceptions and demands a nuanced understanding of the complexities of recycling.
Across the United States, various states are spearheading initiatives aimed at addressing this question. States such as California and Oregon, for instance, have initiated rulemaking processes to determine the recyclability and labelling of certain plastic packaging. These decisions are not made in isolation – they have the potential to significantly affect future markets for plastic packaging materials, and could spur Material Recovery Facility (MRF) operators and haulers to change their operational strategies.
In tandem with these state-level initiatives, the Federal Trade Commission is also taking decisive action. They’re expected to start collecting public comments on how to update its Green Guides in the coming year. The Green Guides are critical as they provide guidelines on how to market environmental claims without being deceptive. This move could lead to more transparent and honest marketing in the industry, which in turn could influence consumer behaviour and the overall demand for recyclable plastics.
Policy experts anticipate numerous pieces of legislation this year aimed at curbing, eliminating or regulating plastics. This could involve a broad spectrum of measures, from stricter regulations on plastic production and use to new initiatives aimed at promoting recycling and reuse. One particular area of interest is the potential for new Extended Producer Responsibility (EPR) for packaging bills. These bills could fundamentally shift the burden of waste management onto the producers, thereby incentivising more sustainable business practices.
State lawmakers, recognising the unique challenges and opportunities in their respective jurisdictions, are likely to introduce EPR bills with provisions tailored to their state’s dynamics around recycling infrastructure. These bills could address a range of issues, from the handling of post-consumer waste to the design of packaging materials, potentially driving significant changes in the industry.
Another topic that will be increasingly under the spotlight in 2023 is chemical recycling. This process, which involves converting plastic waste back into its original components, has been hailed by some as a promising solution to the plastic waste crisis. Proponents see this legislation as a key business opportunity and an outlet for plastics that would otherwise end up in landfill or incineration.
However, the potential of chemical recycling is not without controversy. Environmentalists argue that these technologies, while innovative, do not actually reduce plastic production and instead may contribute to pollution in communities that are already overburdened with environmental hazards. The debate around chemical recycling is thus likely to heat up in the coming year, with important implications for the future of the waste industry.
Major waste companies continue to commit to a range of sustainable fleet goals, suggesting a greater shift towards compressed and renewable natural gas. The Solid Waste Association of North America advises investigating opportunities around operators’ “unique position of being able to generate both electricity and CNG from the solid waste that they collect.” However, keeping existing fleet assets up and running has been a challenge, with parts and maintenance technicians not always readily available. The coming year could see manufacturers catching up on these backlogs.
Environmental justice has been gaining traction, with activists in environmentally overburdened communities fighting against pollution. State and federal entities have been passing environmental justice laws and directing more resources to this issue. The impact of these investments and what that could mean for waste operations will be a major topic in 2023.
As we navigate through 2023, it’s clear that the waste industry will continue to evolve, with new trends and challenges emerging. But with these challenges come opportunities for innovation and improvement. At Widdington Recycling Ltd, we remain committed to staying abreast of these trends and doing our part to protect the environment. Stay tuned to our blog for more updates on these exciting developments.