Businesses have been making huge losses by failing to capture the value of industrial waste, but applying circular economy strategies, enabled by new technologies, could create cost-saving opportunities as well as profitable new revenue streams. The waste generated by residential buildings may seem enormous, but the waste produced by factories is an awful lot more. In Europe, factories produce 46 million metric tons more waste than households every year. Surprisingly, unlike households, they are not as incentivized to reduce and retrieve waste. European Union waste legislation, for instance, contains targets that focus mostly on household waste whilst industrial waste landfilling is still often cheaper than incineration or recycling. In France, for example, the average cost of recycling, excluding taxes, is $156.10 per metric ton compared to $113.82 for incineration and $73.71 for landfilling.

Many companies believe their industrial waste management is under control because they have contracted with a waste management company or, perhaps, they have carried out lean manufacturing processes to improve efficiency. But in most cases, businesses fail to retrieve waste in great volume. Even if they efficiently manage standard waste flows, such as plastics or cardboard, they overlook others, such as wastewater, spent chemicals or used equipment. The materials these companies see as waste often contain value that can be recaptured. For instance, most breweries sell spent grains as low-value animal feed while these grains contain high-value components, such as proteins, polysaccharides and fibers that could be reused as nutritional and pharmacological ingredients. In addition, factories claiming to achieve zero waste to landfill often incinerate most of their waste.

Overlooking industrial waste comes at a cost. In the United Kingdom, the actual cost of waste for companies is typically 4 to 5 percent of turnover and can be as high as 10 percent (PDF). The true cost of waste is not simply the cost of discarded materials; it encompasses inefficient use of raw materials, unnecessary use of energy and water, faulty products, disposal of by-products, waste treatment and wasted labor. Cost of waste is not only high, it is also increasing, especially in Europe. In Austria, the landfill tax for industrial waste increased from $3.25 to $94.30 per metric ton between 1996 and 2014. In France, the General Tax on Polluting Activities is expected to increase from 32 to 65 euros per metric ton for landfill by 2025. In the U.K., the landfill tax already has reached $109.48 per metric ton. For environmental and economic reasons, businesses cannot overlook industrial waste anymore. They need to implement circular economy strategies in order to design out waste and keep materials in use.

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Author: Rémy Le Moigne, GreenBiz
Photo; Shutterstock