What does waste management have to do with achieving a circular economy?
Oakwood & Drehem Capital Pte. Ltd.
Founded in 2018, Oakwood & Drehem Capital is a compliance, corporate finance and valuation expert based in Singapore.
The waste management industry refers to the reduction, collection, transportation, handling, and disposal process of human waste. Within the industry, the waste is referred to as municipal solid waste (MSW) and includes non-hazardous waste generated in households, commercial establishments, and institutions, non-hazardous industrial process wastes, agricultural waste, and sewage sludge.?
While waste management companies collect MSWs and filter out the recyclable components, the remaining non-recyclable MSWs are then sent to incineration plants to be burned. In Singapore, any remaining MSWs that are not suitable to be recycled or incinerated are transported to the Semakau landfill. At the current rate of our waste growth, the remaining landfill space will be non-existent by 2035.?
Due to Singapore’s physical features as a small island, our focus on waste management is narrowed into recovery and treatment before incineration. Additionally, in 2019, Singapore announced the Zero Waste Master Plan, which by 2020, seeks to reduce the amount of waste sent to the Semakau landfill by 30%, and ultimately increase the lifespan of our only landfill.?
The environmental awareness and efforts conveyed by consumers and companies alike acts as a catalyst for greener alternatives and approaches. In consequence, this decreases the number of wastes being produced, leading to weak growth in the waste management industry. In 2020 alone, the compound annual rate of change of the waste generated between 2016-2020 was calculated to be -0.6%.?
However, these improvements were overturned by the ban on solid waste imports by China and the global pandemic. In January 2020, China, the largest importer of recyclables, announced its mission to mitigate pollution by announcing its plans to ban solid waste imports to zero and discontinue? issuing import licenses for solid wastes. As 34% of Singapore’s recyclables are exported, the status of the external market and restrictions on recyclables enforced by other countries has significantly impacted our recycling rate.?
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Compounding this situation,? the enforcement of lock-down restrictions, online food delivery, and shopping dramatically increased packaging wastes. Nonetheless, at the peak of the pandemic in 2020, Singapore was ultimately unable to export packaging wastes because of China’s ban. Therefore, recyclable waste was being incinerated in Singapore, resulting in a decrease in the overall recycling rate.
As Singapore contributes 1.2% of the East and Asia Pacific market, we make up 0.28% of the global waste management industry. Taking into account the Compound Annual Growth rate from 2020-to 2027 (5%), the global waste management market is estimated to reach S$3.08 trillion by 2027. Based on this prediction, Singapore’s waste management will be S$8.6 billion in 2027.?
Key drivers for growth in the waste management industry are population growth, high disposable income, and increased demand for online retail. In addition, the Asia Pacific is also a key contributor to marine plastic pollution, as the materials involved among others, include plastic bottles, plastic bags, single-use plastic items, and plastic packing. As we advance into the new normal, this will continue to be the result of our increased consumption and production patterns of waste.?
That said, with the government’s Zero Waste Plan, the waste management industry will play a crucial role in increasing the waste recycling rate and decreasing the volume of waste being sent to the incineration plants and landfills. Only by successfully initiating and implementing these initiatives, Singapore can step forward to achieve its goal- a circular economy.