A Ton of Changes

Michael Fickes

The waste management business isn't what it used to be. Once upon a time, haulers simply collected a household's or a businesses' trash and took it to a landfill. Done.

Today, communities and businesses are seeking to divert more and more material from landfills. “There are many recycling trends underway today,” says Ted Neura, senior director of sustainable business planning and development with Phoenix-based Republic Services. “Six Sigma programs emphasize lean organizations and part of getting lean is squeezing waste out of the system. Legislative initiatives are setting up producer responsibility rules about taking back e-waste, for instance. Renewable energy and climate change initiatives are swirling around. Cities and businesses are setting zero-waste goals for themselves. All of this is driving us toward more granular approaches to waste management.”

Sigma programs emphasize lean organizations and part of getting lean is squeezing waste out of the system. Legislative initiatives are setting up producer responsibility rules about taking back e-waste, for instance. Renewable energy and climate change initiatives are swirling around. Cities and businesses are setting zero-waste goals for themselves. All of this is driving us toward more granular approaches to waste management.”

According to Neura, a more granular approach means changing the destination of components of the waste stream to material recovery facilities (MRFs) and waste-to-energy (WTE) plants, for example. Also, increasing amounts of e-waste are making their way back to manufacturers.

Industry experts say the push toward increased waste diversion should only increase in the years ahead. With less and less material ending up in landfills, how should haulers respond?

Flatlining

Half a century ago, trash was trash. Back in 1960, according to the U.S. Environmental Protection Agency (EPA) publication “2008 Facts and Figures,” 88.1 million tons of municipal solid waste (MSW) were generated in the United States. Only 5.6 million tons — about 6 percent of the total — were recycled. In those days, waste companies didn't collect recyclables. If someone wanted to recycle something, he or she had to deliver it to a facility.

In 1980, the United States generated 151.6 million tons of MSW, almost double 1960's total. Likewise, the amount of material that ended up in a landfill surged from 82.5 million tons to 134.4 million tons. About 14.5 million tons — nearly 10 percent of the material — was recycled, and 2.7 million tons were sent to waste-to-energy facilities.

The growth trend between 1960 and 1980 suggested that both the amount of waste generated and landfilled would grow dramatically in subsequent years. However, while 249.6 million tons of MSW were generated in 2008, “only” 135.1 million tons of that material was disposed of in landfills. “Disposal at landfills essentially flatlined for the past three decades,” Neura says.

Before long, the amount of landfilled trash will actually start to decrease. “Sometime over the next 10 to 15 years, solid waste generation will begin to decline,” says Bryan Staley, vice president of environmental programs at the Alexandria, Va.-based Environmental Research and Education Foundation. “Eventually, [the amount of landfilled material] will decline to the level produced in 1970: about 112.7 million tons.”

Since 1980, the waste stream has stratified into material that is disposed, recycled, sent to a WTE facility or composted. Additionally, the definition of recyclables has expanded, as construction and demolition (C&D) debris, tires and e-waste have joined paper, glass, metals and plastics.

In 2008, according to EPA, 114.5 million tons of the waste stream were recycled (60.8 million tons), composted (22.1 million tons) or incinerated to generate energy (31.6 million tons).

In the midst of all this, more communities and businesses have adopted zero-waste programs, meaning, at least in theory, that they intend to divert all of trash they generate from landfills. When asked for a definition of San Francisco's zero-waste initiative, Mark Westlund, a program manager with SF Environment, the city's environmental department, says, “Zero waste means nothing going to landfill.”

While that may sound unreasonable, San Francisco's diversion rate increased from 35 percent in 1990, when the city first started tracking those numbers, to 72 percent last year. According to the SF Environment Web site, the city aims to get to 75 percent next year and 100 percent by 2020.

In 2005, Bentonville, Ark.-based Wal-Mart adopted the goal of eventually sending zero waste to landfills. Last year, the retailer diverted more than 57 percent of the waste generated by its stores and Sam's Club facilities. “As more companies, municipalities and other organizations research zero waste, they are going to find out what we've learned,” said Mike Hagood, senior director of store innovation and operations development for Wal-Mart, in a written response to e-mailed questions. “Reducing what is sent to a landfill reduces costs while benefiting the local community and environment.”

For example, Wal-Mart's deli pizza boxes are made of recycled cardboard supplied by Wal-Mart itself. That program redirects the equivalent of 8,600 tons of waste from landfills, reduces Wal-Mart's costs and even creates more durable boxes. “We are always looking for similar solutions with our products and packaging,” Hagood wrote.

Trashing Your Business Plan?

As the waste stream divides into more segments, haulers, recyclers, composters and others will discover opportunities to diversify their businesses. At the very least, companies that only haul trash had better start to diversify, lest they find tonnages declining in weight and spreading out across a bigger map, dragging revenue down and raising costs.

These changes are beginning to rewrite traditional waste company business plans. Republic Services, for example, has developed a range of new services. “Today, our business provides education to residential and commercial customers,” says Will Flower, executive vice president of communications with Republic Services. “It includes evaluating waste streams and determining the most environmentally sound and cost effective solutions for the material. We also provide a range of options for customers — different services at different prices.

“A zero-waste program, for instance, involves more transportation and more processing, which mean increased costs,” Flower says. “As waste stream tons evolve, they suggest new services. Every time you add another process for another slice of the waste stream, you add a service and a cost to the overall package of waste company offerings.”

Flower points to services required on projects seeking Leadership in Energy and Environmental Design (LEED) certification. LEED awards points for C&D recycling, a Republic service. To earn the certification points, however, recycled materials must be tracked and recorded for a report. The reporting service comes at a cost.

Does all of this mean that smaller companies that only offer hauling services will be cut out of this evolving business? “No,” says Flower. “Small haulers will see the same opportunities to provide new services. Companies that focus on recycling services will find new opportunities, too. A small business that processes traditional recyclables, for instance, might decide to take in e-waste as well.”

Bruce Parker, president and CEO of the National Solid Wastes Management Association, agrees with Flower's analysis. “The large, integrated firms are already becoming resource management companies,” he says, pointing to Houston-based Waste Management's subsidiary WTE and recycling companies.

“There is no question that less and less of a ton of trash is going to the landfill,” Parker says. “As that continues, small haulers will see opportunities to pick up both trash and recycling. They can buy more trucks or figure out how to use their existing trucks to do it.”

Those are obvious ways for a small waste firm to grow its business, but Parker also believes that imagination can create additional opportunities. “What if a small hauler partnered with a small MRF, a landfill and a regional composter?” he says. “They can pursue new business together.

“A landfill can go into the business of recovering methane and generating electricity for sale to the grid, just like Waste Management landfills do. That same landfill might install anaerobic digesters at the landfill, start collecting food wastes and use the digesters to generate even more methane.”

The changing shape of the U.S. waste stream represents an evolving series of business opportunities on which haulers and other companies can capitalize. Tomorrow's trash business will be different than today's, and it's time to start writing new business plans.

Michael Fickes is a Westminster, Md.-based contributing writer.

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