Waste Market Overview – USA

Posted on November 15, 2012 by DrRossH in Landfills and Disposal

 Components of the Waste Stream
According to Waste Business Journal’s Waste Market Overview & Outlook 2012, the total volume of wastes being handled by licensed non-hazardous waste management facilities in the US grew to 621.5 million tons in 2011 up from 610.2 million tons in 2010. This figure includes municipal solid waste (MSW) generation of 429 million tons, construction and demolition debris generation of 117 million tons and industrial and special wastes generation of 76 million tons.

Of the 429 million tons of MSW generated, 141 million tons (33 percent) were recycled in 2011, up from 134 million tons (32 percent) in 2010. The higher recovery rate slowed the growth of waste otherwise destined for landfills which totaled 264 million tons, up less than 1 percent from a year earlier. The remaining 26.4 million tons of waste was burned in waste-to-energy plants.

Pricing Holds Steady
Despite the decline in volumes and pressure from cash strapped municipalities, waste firms have generally managed to hold the line on pricing and win 2-3 percent increases to maintain positive revenue amid slow volume growth. Municipalities have had to follow suit by raising prices as well, especially to cover revenue shortfalls elsewhere in their budgets. The average price to landfill a ton of MSW rose to a national average price of $44.23, up from $43 a year earlier. Prices vary greatly among various regions according to population density, economic activity, regulation and other factors as detailed in the report.

These and other vital industry statistics and analysis are part of the Waste Market Overview & Outlook 2012, which offers a thorough examination of the various segments of the business, the major players, and the evolving nature of the industry, and changing role of the private sector. It includes detailed statistics of waste generation, recovery and disposal volume, pricing and capacity by state and region that include historical statistics back to 1992, and include our projections through 2016.

Industry Segments and Key Players
Waste collection represents the largest segment and is itself a $34 billion business accounting for 61 percent of industry revenues. Transporting and processing waste and recyclables was a $6 billion business in 2011, representing 11 percent of industry revenues. Waste disposal including landfilling ($13 billion) and waste-to-energy ($2.7 billion) comprise 28 percent of industry revenues.

The top two companies, Waste Management and Republic Services accounted for 39 percent of total industry revenue. All of the publicly traded companies together comprised 61 percent of total revenues. All told, the private sector represents 78 percent of the industry while the municipal sector controls the remaining 22 percent. This is a sharp contrast to 1992 when municipalities controlled 35 percent of industry revenue.

Recent mergers including that of Veolia’s US waste business by Advanced Disposal, promises a reshaped industry much further along its path of privatization. The companies understand that one way to deal with turbulent economic times amidst rising fuel, labor and equipment costs is to streamline operations and vertically integrate their markets.

Rising costs have focused company managers on disciplined price increases especially now that the industry is more consolidated, more attentive to return on invested capital, more rational about valuing existing landfill capacity and mindful of lessons in the past when pricing was sacrificed.

The volatility of fuel costs implies that surcharges and hedging programs are likely to remain in place. Expect to see continued focus on controlling vehicle maintenance and insurance costs while investing in fleet upgrades and worker safety programs. Additional cash from operations will likely go towards “tuck-in” acquisitions, asset swaps and other vertical integration measures for which companies can reap immediate cost savings.

Relatively low natural gas prices together with a growing infrastructure of fueling facilities is leading companies and municipalities to invest in converting their fleets to compressed natural gas (CNG) and liquefied natural gas (LNG) powered vehicles. Other benefits including lower emissions and quieter engines makes the fleets more welcome to the communities they serve.

Waste Conversion and Energy from Waste
The rising price of oil together with higher costs of landfill disposal is raising interest in conversion technologies including traditional sources such as mass-burn and landfill gas-to-energy, as well as more exotic methods such as gasification, plasma arc gasification, hydrolysis, and pyrolysis. Strategic investors from outside the industry as well as those within, including Waste Management are making a number of bets to see which ones will prove economically viable, particularly at scale, and which will be best suited to particular situations. Similarly, there is renewed interest in organics waste diversion, recovery and conversion, particularly given the high Btu value of these wastes which are increasingly prohibited from landfills.