tendencies in the dutch waste market. 2 nd flemish waste conference workshop 3 michiel westerhoff 29...

Tendencies in the Dutch waste market.

2nd Flemish Waste ConferenceWorkshop 3

Michiel Westerhoff29 maart 2007Mechelen

2 ©2007 Deloitte Consulting B.V. All rights reserved2nd Flemish Waste Conference

Agenda

1. Introduction

2. Dimensions Dutch waste market

3. Waste collection

4. Waste treatment


Shifting tasks and responsibilities?

• Tasks and responsibilities of companies and authorities are split where the collection, incineration and land filling is concerned.

• Which domains should be subjected to market forces or should be managed by public authorities has had many attention in the past years.

• The 1,3 billion Euro acquisition in 2006 by private equity of AVR( incineration and recycling) followed in 2007 by the acquisition of van Gansewinkel (collection) has had its influences on the Dutch waste market.

• What indications are there for future developments?


Highlights from two recent surveys into the Dutch waste market

• Survey with 100 municipalities about the future organisation of waste collection(presented January 2005).

• Survey with public shareholders about the future organisation of waste incineration ( presented June 2006).

• Both surveys focussed more specific on household waste


Agenda

1. Introduction


3. Waste collection

4. Waste treatment


In total 61,6 Mtonne waste is collected, 8,8 Mtonne is household waste

Totaal 61,6 Mton Total 8,8 Mton

Household wasteTotal amount collected waste

Source: Senternovem

Construction anddemolition waste

23,8

Industrial waste-

24,9

Other waste 4,1 Household waste

8,8

Total 61,6 Mton

Paper 1,1

Organic 1,3

Other; 1,4

Bulkywaste

0,8

Glass; 0,3

Combustablewaste

3,9


Agenda

1. Introduction


3. Waste collection

4. Waste treatment


Public entities dominate the collection of household waste

Source: AOO

%

Uitvoerder afvalinzameling in gemeente %

huishoudens

% gemeenten

39

21

40

26

37

37

0 10 20 30 40 50

Private collectors

Municipality’s owncollection service

Municipality jointventures and publicundertakings

% household % municipalities


Private collectors most active in smaller municipalities

39

60

36

11

40

29

37

42

2111

27

47

0

50

100

Netherlands total Small* Middle** Big***

% municipalities

* < 20.000 inhabitants** 20.0000-60.000 inhabitants*** > 60.000 inhabitants

Private collectors

Source: Deloitte research

Municipality’sown collection service

Municipality joint venturesand publicundertakings


Cost reduction, continuity and better service are the most important reasons for outsourcing

Small Middle Big

% MunicipalitiesSource: Deloitte research

% Municipalities % Municipalities0 50 100 0 50 1000 50 100

Service

Continuity

Cost reduction


Financial advantages of outsourcing have diminished over the last years

€/y

ear

Waste collection costs per household

Jaar

Private collectors

Municipality joint ventures and public undertakings

Source: AOO

150

200

250

300

2001 2002 2003 2004

Municipality’s own collection service


Concern about less control most important obstacle for outsourcing

% municipalities

Three most mentioned disadvantages of outsourcing


0 10 20 30 40 50 60 70 80 90 100

Price/quality ratio

Less service

Less control


Only a minor part of the municipalities expect to outsource to private collectors

Do you expect that your local authority will outsource the collection of waste within 2 years?

Total number of municipalities: 102


Only middle sized

municipalities

yes; 16%

no; 84%


Shifts in local policies seem to have bigger effects on costs per household than outsourcing

• Unit-based pricing policies (used in 25% of the municipalities) have shown cost reductions of 10- 20% dependant of the used system.

• Policies on stimulating the better separation of waste ( supported by subsidies from national government)


Conclusions waste collection market

• Size local authority influences type of organisation

• Privatisation has slowed down:- diminished financial advantage - concern about control

• More emphasis on local waste policies and there effectiveness

• Scale public entities and public cooperation tends to grow


Agenda

1. Introduction


3. Waste collection

4. Waste treatment


Treatment of household waste

0

3

6

9

12

15

2000 2003 2006 2009 2012

Mto

n

Expected treatment Dutch waste

Incineration

CompostingExport

Landfill

Sludge treatment

Sources: Vereniging Afvalbedrijven/AOO: Afvalverwerking in Nederland, 2004; Vereniging Afvalbedrijven, Statusrapportage 2004; VROM, LAP 2002-2012; VROM, Voortgangsrapportage Landelijk afvalbeheersplan; research Deloitte

• Since 2005 prohibition of landfill for combustible waste in Germany.

• The export diminished structural

• Result is a growing demand for incineration capacity in the Netherlands.

• Because of uncertainty on regulations, capacity had not been invested in

• Capacity shortage leads to higher prices

Market developmentsMarket developments


Incineration will stay the most important treatment of household waste

Market tendencies in the treatment of waste

Composteren

Export

Storten

Slib

• Separated collection of organic waste seems to have stabilized

• New national legislation leaves local authorities more policy freedom for the separated collection of organic waste

• Higher tariffs for incineration will stimulate new investments.

• New generation incineration capacity with high energy output and maximum.

• Inciniration will stay the dominant treatment

Source: Senternovem

Totaal 3,9 Mton

Treatment of combustible wastel

Landfill8%

Incineration

92%


About half of the municipalities qualify the incineration of household waste as a core (public) task

Is incineration a core public task?

All waste

Only householdwaste


YesNo

0%

25%

50%

75%

100%

Core task


A limited number of public shareholders expect the sale of their incineration facility in the short run

Chance of a take over within two years


% s

hare

hold

ers

0

25

50

Surely not Not likely Probably Surely No opinion


Conclusions waste treatment

• Incineration is the dominant treatment of household waste

• Short time shortage

• New capacity investments with high energy output

• Despite the major take-over('s) by private equity, there seems to be much support for public ownership of incineration capacity.


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tendencies in the dutch waste market. 2 nd flemish waste conference workshop 3 michiel westerhoff 29...

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