Plastics-to-fuel is a huge opportunity for waste management.
It can transform waste management and turn waste into a product and commodity like oil and natural gas.
1. There are more players in the waste market.
The waste management industry is under enormous pressure throughout Europe and North America. New technologies have come onto the market that are disrupting old industries. One such technology is pyrolysis, which can be used in addition to gasification technology to produce hydrogen from waste. But that is not all.
More and more we are seeing new processes being developed to produce diesel from plastic waste. These technologies are not yet economical, but the pressure is increasing all the time. We can guess when these technologies will become key players in the waste sector. But it is likely that they will begin to have an impact on the waste business as the circular economy becomes more and more important.
Sustainability is an important trend. This trend will shape our perception of waste from something we want to get rid of to something we want to process to create something of value. This is a trend that will not disappear anytime soon. With the new generations and talents coming into waste management, we will change our perception of how we think and perceive waste. We used to think that waste is something that has to be disposed of permanently. In the future we will see waste as a resource that is a commodity.
2. Waste hydrogen plants will play a central role in waste management.
The waste disposal system works in such a way that the recipient is paid by the waste producer. This means that the party that has the waste pays the other party to get rid of the waste. This is a system based on the idea that waste has a negative value and that waste is not a product or commodity. We will discuss later whether waste is a commodity that can be traded.
Let us take a closer look at the waste recipients. For example, we have the waste incineration plants that use the waste to generate energy. With new technologies that use waste to produce hydrogen and diesel, the business model is rapidly changing. One possible outcome is that the waste producer may no longer be willing to pay for disposal. In the future the waste producer can be paid to sell the waste. This means that the waste becomes a product, a commodity that is traded.
3. Systems that convert plastics into fuels are becoming the key to modern waste management.
In addition, plastics processing plants are gaining more and more importance in the European waste market. Currently, it is not yet financially profitable to use plastic for diesel production. However, this can change quickly if crude oil prices rise, partly due to peak oil. The counter-argument to falling oil prices would be as follows: Falling oil prices will stimulate consumption, increase economic growth, and generate more waste. Recycled plastic would be used to produce diesel.
We believe it is more likely that a high oil price will lead to the commercialization of waste-to-fuel plants that convert plastics into fuel. However, an increase in the price of oil would not only lead to the commercialization of plants that convert plastics into fuel, but also to the commercialization of plants that convert waste into hydrogen. The processes are similar, and it is easy to imagine that a player in the waste-to-fuel industry could imagine playing a central role in waste-to-hydrogen as well.
4. Cement factories can accept a larger proportion of municipal solid waste.
Cement plants may increase their intake. I see the difference in the fact that the cement factories produce a product. To produce cement (the product), factories need enormous amounts of energy. The material must have a high calorific value, often greater than 20 MJ / kg. This is due to the high plastic content. In contrast, the materials that enter the waste incinerators have a low calorific value of only 9 to 12 MJ / kg. The material that enters the cement plant is rather SRF (Solid Refuse Fuel) and not substitute fuels.
Alternative fuels are generally produced from the remaining amounts of household waste, that is, amounts that cannot be recycled or reprocessed. The remaining amounts are then ground to less than 300 mm and mixed. These quantities are then baled or delivered in bulk to waste incineration plants. Cement plants have special requirements for the quantities delivered, but these requirements are not as stringent as those of waste incineration plants.
Cement plants need alternative fuels (fuels derived from high calorific value waste or solid fuels) to meet their climate goals, and because coal is so expensive. Of course, cement plants would prefer coal, but unfortunately it has become very expensive. It should also be taken into account that hard coal has a predictable, stable and little variable calorific value.
The calorific value of alternative fuels and solid waste fuels is constantly changing and subject to fluctuations. Here, countermeasures have to be taken time and time again. This also explains why cement factories have a substitution rate of around 60%, the rest being coal. This means that 60% of the energy demand is covered by waste.
5. A big opportunity is district heating.
The heat from the combined production of heat and electricity can be used in the chemical industry. The quantities delivered (heat) are guaranteed by long-term contracts. This is particularly useful in areas with particularly high numbers of industrial plants, chemical converting plants and paper mills. Alternatively, the energy from cogeneration can also be used for cooling, for example in cold rooms. Energy for cooling is very useful in African countries.
6. The industry is becoming international.
With the new French government of Emmanuel Macron, the French economy is increasingly privatized. Large French waste management companies in France may have to prepare for a wave of privatization. The French state plans to sell its shares in large waste disposal companies or, failing that, to create a large French waste disposal group. SUEZ and Veolia Propreté will thus merge their waste management activities into a single group to create an international giant. France is therefore an example of the internationalization of the waste management and incineration industry.
Great Britain, on the other hand, is an example of deregulating a local market. Foreign investors like Covanta Energy from the United States have invested a lot of money in the United Kingdom. Many other foreign companies are active in the UK waste management market and the UK waste incineration market, including Veolia and SUEZ. In particular, the EPC (Engineering, Procurement and Construction) contractors commissioned by the builders to build the waste incineration plants are almost all based in the European Union and do not come from the United Kingdom. This means that with deregulation there is also a loss of know-how in the UK.
Both deregulation and internationalization make it difficult for traditionally managed waste incineration companies to operate in an organized, private sector oriented and globalized waste incineration market.