Waste to Materials: Recovering Value
Contents
Introduction
Trash to treasure
Market Forces
Facts and Figures
Investment Opportunities and Market Segments
Impact
Reducing hazardous waste
Market movers
Leaders & fast followers
Investors
VC / PE / Funds
Waste as a Resource
How can we optimize our trash?
When throwing out that used plastic water bottle or discarding those old pillows, you probably don’t give a second thought to what happens next. But as it turns out, materials such as these can linger and pollute the environment for centuries to come. While our current system allows for such viable materials to waste away in landfills, in reality, those wasted feathers could have been reused to create insulation to help preserve perishable foods.
The old saying “one man's trash is another man's treasure” needs to be applied on a larger scale as the unprecedented growth of municipal solid waste (MSW) surpasses 2.24 billion tonnes annually, with no intention of slowing down (estimates predict an increase of 73% from 2020 levels to 3.88 billion tonnes in 2050). The truth of the matter is waste is inevitable. But changing the narrative on what waste can do could make all the difference.
The process of turning waste to materials has opened up a new chain of production — a circular one at that. Adopting a circular model of waste management could turn this “garbage” into something usable in a system that strives to maximize the value of circulating materials, minimize material consumption, prevent waste from being generated, and reduce hazardous materials in waste and products. Reduce, Reuse, Recycle.
The untapped market of waste-to-material production has the potential to be a breeding ground for sustainable investors. For instance, in the past two decades, companies have found ways to replace leather goods with wasted pineapple leaves, create palm oil out of used coffee grounds, and even produce board games made from old fishing nets. The possibilities are endless when we look at garbage as the solution rather than the problem.
The Circular Model of Waste Management. Courtesy: European Union
Market Trends: Facts, Figures, Forces
Market Forces
Rapid population growth, urbanization, improper management strategies, and the “take-make-waste” mentality that has always accompanied economic growth have resulted in the overexploitation of natural resources.
In Sub-Saharan Africa, waste generation will double and triple, respectively, by 2050 due to urbanization and economic growth.
Roughly 37% of all waste ends up in landfills, a sizable portion of which represents a loss of material that could be reused to displace the use of virgin materials.
In its effort to reach zero waste by 2040, the city of Austin, Texas, has generated the Austin Materials Marketplace initiative, an online materials exchange platform.
Aligning with circular economy principles, materials and products are kept in use and out of landfills in order to reduce the cost of waste management.
Market Facts
Economic and environmental benefits need not be mutually exclusive.
It is feasible to tackle the immediate needs of waste mitigation, derive the full value of materials, and set up a sustainable system for the future.
The circular economy strives to create more economic, environmental, and social value of waste by extending product life cycles and moving toward a new generation of regenerative materials.
Market Figures
Rather than paying for valuable materials to be sent to a landfill or openly burned, turning waste into materials can be a profitable and sustainable practice.
A study focused on Southeast Asia estimates the economic cost of uncollected household waste that is burned, dumped, or discharged to waterways at $375 per tonne.
Costs associated with integrated waste management systems range between $50 and $100 per tonne.
There is more gold in electronic scrap, pound for pound, than in gold ore.
Every tonne of used clothing collected could generate revenue of $1,975 (at current secondary-market prices), which outweighs the cost of $680 required to collect and sort each tonne.
Investment Opportunities and Market Segments
The waste-to-material component of the circular economy encompasses a variety of segments, each offering opportunities to investors according to their risk profile: collection and extraction, manufacturing and processing, distribution, and disposal.
Collection and Extraction
In essence, our current forms of trash collection and open dumping are unacceptable, warranting a new management structure and collection network to address the most pressing problems.
There is a need for up-to-date facilities equipped with premier sorting technology.
AI-powered robots can discover and sort high-quality materials from waste streams at a fraction of the cost and time it takes the current system.
As a result of improved sorting tactics high-purity material recovery is maximized and facilitates a circular market by selling materials in the aftermarkets.
Processing and Manufacturing
The next step is processing and manufacturing waste into new products. Once materials are sold off to different companies or reverted to energy generation, new products can be developed.
Innovative products, such as Piñatex, whose commercial success is integrated with, and promotes, social, ecological, and cultural development are produced.
Sustainable alternatives to both mass-produced goods and polluting synthetic materials are employed.
Gasification, which produces gasses and tars that can be used like building blocks for the creation of a range of higher value materials, including polymers and various plastics, is one of the top methods of converting waste into energy.
The global gasification market in 2021 was valued at $464.05 billion and is expected to grow at a compound annual growth rate (CAGR) of 5.3% to reach a total market size of $663.72 billion by 2028.
Distribution
The complexity of the distribution of waste-to-materials generation offers investors a range of opportunities.
Marketing can be an effective and lucrative tool to promote sustainable products made from waste.
Packaging’s potential is twofold, using repurposed waste to house products made from waste.
Biomass usage for packaging expected to more than double by 2030
Transportation is a key component of any supply chain.
Enhanced Disposal
To continue the cycle of a circular economy, once a product has been used to its full potential, it must then be disposed of properly and sent back into the collection and extraction process.
Having specific bins separating waste at the consumer level can help cut down on sorting costs.
Waste collection vehicles should have distinct compartments for different types of waste, similar to the already present dual stream waste compactors.
Impact
Replacing such waste-disposal practices as open burning and landfilling with processes that turn trash into products can help alleviate pollution and other health hazards
Primary waste management concerns include hazardous and chemical wastes entering air and water bodies and methane emissions from landfills
The Recycling and Economic Development Initiative of South Africa (REDISA) estimates that, by 2020, it will have generated an annual environmental benefit of $22 million — and the employment it is creating will have grown further, to approximately 1,900 full-time jobs.
Market Movers: Current and Future Heavy Hitters
Market Leaders
Rubicon (U.S.) is a technology company using software to improve waste management and sorting processes. Its customers include 7-Eleven, Wegmans, Starbucks, and the City of Atlanta.
Ananas Anam (U.K.) is a food-waste recycling company that has developed Piñatex, a natural alternative to leather that is made from waste pineapple leaves and has been used by over 1,000 brands worldwide, including Hugo Boss, H&M, and the Hilton Hotel Bankside.
AeroPowder (U.K.) is an animal-byproduct recycling company that focuses on repurposing waste feathers to create novel materials. Their first product, pluumo, uses feathers to make thermal packaging materials for food delivery.
ZenRobotics (Finland) is a global leader in robotic waste recycling solutions and the world’s first robotic waste sorting system.
Future Heavy Hitters
Revive Eco (U.K.) converts waste coffee grounds into a sustainable alternative for palm oil.
TyreFlow (U.S.) is an emerging company within the tire recycling industry whose mission is to create a full end-to-end solution for scrap tires. View the Boundless environmental impact reports on their products here.
Novoloop (U.S.) uses chemical recycling to transform plastics into high-market-value chemicals that can be used as building blocks to manufacture new products. The technology focuses on the 50% of plastics that are considered “unrecyclable” due to economic or technological reasons.
AMP Robotics (U.S.) creates robotic systems that sort MSW and recyclable material at a fraction of the cost of the current technology.
Smarter Sorting (U.S.) uses machine learning to automate the decision-making process for the disposal of unsellable retail products by identifying items in regulated waste streams and then turning that waste into products.
Recovered Carbon Black
A product of TyreFlow, which Boundless conducted assessments for. View them here.
Venture Capital/PE and Other Fund Investors
Suez Group is a leading market player among water, recycling, and recovery businesses backed by a technological portfolio and extensive environmental expertise. Suez is a lead investor in Rubicon.
Sequoia Capital led a $16 million Series A funding for AMP Robotics. As of 2021, the company has $80.7 billion in assets under management (AUM).
Closed Loop Partners, a New York-based firm that invests in the circular economy, has $327.3 million in AUM and is an investor in AMP Robotics.
MMC Ventures funds and helps scale technology companies that work toward a circular economy.
Circularity Capital invests in the circular economy with a focus on reducing and recycling plastic waste to create higher-value materials.
WRAP (Waste & Resources Action Programme) is a climate action NGO driving environmental change by maximizing the value of waste in the food, textiles, and plastics sectors.
MassChallenge is a non-profit organization dedicated to supporting innovation and entrepreneurship through collaboration and development. It is a lead investor in AeroPowder.
Final Thoughts
For all its benefits of waste to material generated, the system has at least one major drawback: how to turn garbage into gold when individuals don't know what they are throwing out. From the get go, the system effectively helping to save time and money has been predicated on individuals and businesses sorting their trash, which means further education and bin initiatives to provide proper disposal metrics are necessary. Other keys to a successful waste-to-materials system include organizing supply chains at high levels of operational efficiency and environmental and societal effectiveness, along with the ability to aggregate waste flows into income flows around which businesses can be developed.