Landfilling is out of favour and recycling is in. A hole in the ground is no longer considered an appropriate place for Australia's rubbish, unless it is used to produce renewable energy.
Over the past few years, a number of state government strategies have been announced, which aim to reduce the volume of waste generated and increase the amount of waste recycled and recovered. A national group of packaging producers has renewed its commitment to higher levels of recycling. Industry operators are responding by increasing their investment in recycling and alternative disposal facilities.
An important driver of industry growth is the volume of generated waste that requires collection and disposal. Australians are the second-highest producers of waste per person in the world. It is estimated that in 2009-10, the volume of municipal solid waste (MSW), commercial and industrial (C&I), and construction and demolition (C&D) waste generated nationally totalled about 45 million tonnes, up from 32.4 million tonnes in 2002-03. This equates to about 2 tonnes of waste produced by each Australian every year. The economic downturn has not effected a major difference in the volume of waste generated.
Collection of household and business waste is the largest and most reliable source of revenue for this industry. Revenue generated from waste disposal is estimated to be decreasing as a share of waste management revenue, while recycling revenue has been growing. A large contributor to recycling revenue growth has been the high prices received for recyclable commodities over the past few years. Overall, the industry is expected to generate revenue of $10.19 billion in 2010-11, up 10% from the previous year due to a boost from the one-off impact of severe flooding in eastern Australia. Over the five years through to 2010-11, real revenue is expected to grow at an average rate of 5.8% per year. Employment will reach about 36,000, while establishment numbers will remain relatively steady.
Over the next five years, industry revenue is expected to grow at an average annual rate of 5.2% to reach $13.09 billion in 2015-16. Revenue growth is expected to result from the increasing level of collection and treatment of recyclable material. The economic downturn in Australia is not expected to have an ongoing impact on industry performance
Industry outlook
Over the next five years, some significant changes are expected in this industry. There will be stronger demand for recycling and recovery of waste, increasing revenue from the adoption of waste-to-electricity and waste-to-gas technologies, and growing economies of scale and scope available to industry players. Expanding waste diversion targets at the state government level and the likely introduction of a carbon pollution trading scheme (or tax) will have a major impact on this industry.
Over the five years through 2015-16, industry revenue is expected to grow at an average rate of 5.2% a year to reach $13.09 billion. Revenue growth is expected to result from the increasing level of collection and treatment of recyclable material. The economic downturn is not expected to have a lasting impact on industry performance.
Waste what
Victoria produces about 10.4 million tonnes of waste per year. Projections by the Victorian Government's 'Towards Zero Waste' estimate that by 2030 an additional 456,000 households in the city could produce an extra 235,000 tonnes of waste, and over half that amount again in recyclable waste. Sydney currently produces about 2.0 million tonnes of household waste. SITA estimates that this amount could increase to 2.1 million tonnes by 2014.
Solid waste generation is forecast to reach 47 million tonnes nationwide by 2015-16. The population is expected to keep growing at historically high levels, providing a key driver of expanding waste volumes. Growth in the number of households will occur, due to population growth and the increased rate of household formation resulting from a decline in the average number of people per household. Growth in the amount of waste produced by households will be positively affected by a rise in per capita consumption of highly processed (and packaged) foods and a rise in the home delivery of goods (i.e. goods that tend to involve high levels of packaging).
Factors that will have some dampening effect on household waste services over the next five years include an ageing population (older people tend to generate less waste) and a continued trend toward medium and high density housing (e.g. reducing average garden waste levels per household). In addition, construction activity influences demand for waste management services both directly (from construction and demolition waste) and indirectly (by boosting building materials manufacturing activity). Sluggish construction activity early in the near-term could dampen waste volumes and demand for some recyclable commodities.
Public environmental concerns, combined with a trend for businesses to outsource their waste management, are likely to create expansion opportunities for industrial waste management specialists. Trends in waste minimisation, diversion and recovery have resulted in residual waste streams becoming more concentrated and more difficult to treat. This will provide opportunities for innovative industrial waste management organisations, particularly hazardous waste management operators.
