Notable emergent commercial opportunities for the waste management and recycling sector are available and likely to increase over a medium to long-term timeframe.
The increased global demand for waste management and recycling technologies arises from public health and environmental concerns. Additionally, as populations grow and resource scarcity becomes more pronounced, countries increasingly seek waste management and recycling technologies and services to manage their national assets more effectively. The 2017 Environmental Technologies Top Markets Report provides a detailed assessment of the competitive landscape within the environmental technologies and services industry. The report includes information specific to the waste management and recycling sector and highlights the opportunities and challenges for U.S. environmental exporters in key markets. The primary objective of the report is to identify foreign markets where U.S. environmental industry opportunities could be improved by increased U.S. Government intervention and collaboration.
According to the Top Markets Report,1 China is the top economy for environmental technology exports. This suggests that targeted U.S. Government intervention may enable greater market access for American exporters there. However, there are other notable markets less frequently discussed that may provide unique opportunities for American exporters. Though U.S. environmental companies export goods and services to countries all over the world, highlighted in this article are three key overseas markets that exhibit characteristics that are conducive for targeted waste management and recycling exports. Overall, the U.S. solid waste management and recycling sector may benefit from many emergent and long-term international export prospects.
Brazil
Brazil is an important market that exhibits significant export potential for U.S. waste management and recycling firms. However, a notable challenge arises from the country’s recent economic recession, one of the worst in Brazil’s history, and the resulting funding gaps in the country’s national infrastructure and investment projects. Other challenges emerge from Brazilian tariff escalation and non-tariff barriers tied to local content requirements, which limit foreign investment and overall market access.
Although there are challenges, the Brazilian market may still provide opportunities for the industry. In 2010, the Brazilian government finalized its National Solid Waste Policy, Law 12,305, with the intention of limiting national waste production and improving solid waste management practices. Subsequently, investments in solid waste treatment technology and waste-to-energy projects in sanitary and hazardous landfills increased. The government has announced a plan to invest $870 million in solid waste treatment projects, including landfill replacement, the introduction of selective waste collection services and financing for cooperatives of waste collectors. However, due to the economic recession and political scandals, in addition to reduced municipal tax collections, investments in solid waste management have stalled in the past two years and deadlines set by Law 12,305 have not been met. Despite these hindrances, there may be market opportunities in the industry over the medium term.
Approximately 80 percent of solid waste management is conducted by the private sector in Brazil, and municipal solid waste management services are valued at $10 billion annually (although if Law 12,305 were fully enforced this amount would increase to $22 billion). These figures, in addition to the expected increase in income for the recycling industry from $1.1 billion to $4.7 billion annually, represent reasonable prospects for American exporters of solid waste management and recycling technologies and services.2
Additional commercial opportunities exist in both the hazardous and medical waste management sectors. As a result of an improved regulatory and legal framework, there has been an increased demand for hazardous waste management services. National and state-driven initiatives may provide long-term investment potential. Furthermore, with recent improvements in access to medical care in Brazil, there has been a rise in demand for medical waste management, as well as for chemical and biological waste management. According to the Brazilian Association of Urban Cleaning and Waste Treatment Companies, only 32 percent of the approximately 1 billion tons of healthcare waste generated per day currently is treated. Such factors may afford opportunities for U.S. hazardous and medical waste management companies.
The private sector plays a key role in handling industrial waste. Industry associations, in particular, enable feasibility studies, generating demand for consulting services. Moreover, industry associations outline industrial waste management practices, establish collection points and determine the specific industrial waste management technologies that will be deployed in practice. Coordination and involvement with these associations may afford U.S. companies increased access to opportunities. Although foreign investment and exports to Brazil face significant impediments, as outlined previously, the scale of the Brazilian market and recently introduced regulatory and legal frameworks are likely to engender opportunities for the waste management and recycling industry going forward.
Saudi Arabia
The Saudi Arabian market poses certain challenges to foreign exporters, such as local partnership requirements. An additional challenge is the lack of equivalence in obtaining certification and safety approvals, which generates redundancies and decreases project profitability.
However, Saudi Arabia has experienced an increased need for waste management technologies and services in recent years. The Saudi Arabian government has developed new regulatory frameworks to ensure the handling and disposal of municipal solid waste (MSW) is done in a manner more consistent with international norms. This has led to collaboration with the World Bank to structure a sound waste management strategy. Saudi Arabia generates approximately 15.3 million tons of MSW annually, with a significant portion left untreated and deposited in unsanitary landfills.3 The central government is investing a considerable portion of its $3 billion budget into the management, ecological disposal and processing of MSW.
The Saudi Arabian market also presents a unique prospect for solid waste management firms focused on incineration technology. The opportunity arises from the intention to prevent landfill creation, as well as Saudi Arabia’s greater focus on environmental protection goals, which are outlined in its 10th Developmental Plan (2015-2019). The continued growth of the healthcare sector also provides potential market openings. The Saudi Arabian healthcare industry produces an estimated 50,000 tons of medical waste each year, and with government plans to further expand medical facilities, even greater commercial opportunities may arise in the medical waste handling sector.4
India
The Indian government is increasingly focused on adapting its national and state economies to become more resilient and effective in resource management, which has led to a greater emphasis on recycling and waste management in recent years. Although the Indian market has relatively high tariffs and is fragmented across regions, there also are pronounced export opportunities for certain areas of the waste management and recycling industry.
Formal and industrial recycling processes are quite limited in India because of the scope of the informal recycling sector, which provides income to many of the nation’s poorest families. Thus, the solid waste management and recycling sectors currently are underdeveloped but may represent export potential in the long term, particularly with intended government investment of $1.11 billion for solid waste management in urban areas.5 This figure represents approximately a third of the total estimated amount necessary to fully manage India’s MSW, suggesting foreign investment and export opportunities may increase going forward.
Furthermore, MSW emerges as a sector with considerable export and investment potential because of the scope of waste generated and the subsequent national and state-level requirements. India produces approximately 62 million tons of MSW per year,6 which includes 5.6 million tons of plastic, 7.9 million tons of hazardous waste, 1.5 million tons of e-waste and 0.17 million tons of biomedical waste.7 Municipalities have primary responsibility for managing waste and receive assistance from the state. Although community and state cooperation exists, state enforcement of waste management standards is weak. The updated Municipal Solid Waste (Management and Handling) Rules outline significant new standards and criteria for waste treatment facilities and landfills that may necessitate the involvement of foreign industry experts in the process.8 Therefore, the recent legislation—if properly enforced—may generate opportunities for U.S. waste management equipment and service providers.
The Indian government also updated its E-Waste Management and Handling Rules in 2015 to formally outline the various responsibilities associated with safe handling and disposal of scrap electronics. The framework has generated an increased demand for expertise in discarded electronic waste management and effective recycling services.
In 2008, the Indian government implemented the Hazardous Wastes (Management, Handling and Transboundary Movement) Rules to provide a framework for proper treatment and disposal of hazardous and medical waste. Healthcare access has also increased in India, with the industry expected to grow from $80 billion dollars in 2012 to $280 billion dollars by 2020.9 Such rapid growth necessitates effective medical waste management technology and services.
Arising Opportunities
As the 2017 Environmental Technologies Top Markets Report indicates, challenges are still present in these important overseas markets, but notable export opportunities are also available and likely to increase over a medium to long-term timeframe. The waste management and recycling sector may, therefore, experience considerable benefits that arise from emergent and long-term export and commercial opportunities.
For more information about the services that the U.S. Commercial Service offers to assist U.S. exporters reach more than 100 overseas markets, visit www.export.gov.
To view the full Top Markets Report, including in-depth case studies for these and seven other key markets, visit www.trade.gov/topmarkets.
Contributors: Lindsay Steves, Amy Kreps, Yolinda Qu, Maureen Hinman, Hector Rodriguez, and Derrick Small from the U.S. Department of Commerce’s International Trade Administration.