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New waste income streams but market set to decline

19 May 2017

Changing conditions have identified within the UK waste management contract market, leading to new revenue streams emerging, although local authority cuts are having a negative effect.

This was the outcome of a recent study of the sector by AMA Research, which indicates that the market peak of approximately £9.4bn in 2015 will reduce in size to around £9bn in 2018.

In addition to the central government cuts affecting local authorities, the impact of falls in global commodity prices on recyclable materials will continue to affect the market, said AMA.

Growth up to 2015 had been largely driven by the implementation of EU directives designed to reduce landfill waste volumes and raise levels of material recovery.

The fall in the price of crude oil over 2014 and 2015 saw a fall in prices for key commodities, such as steel, plastics and glass, leading to the fall in price of recyclable materials.

Although overall gate revenues were "constrained" through reduced volumes of higher value materials being accepted for treatment at recovery facilities, the report said the figures for some commodity and recyclate prices recovered at the end of last year and early 2017.

There was better news regarding growth in contractor annual revenues, which have been driven by income streams from segregated recycling collections, organic waste collections and involved in energy from waste (EfW) initiatives.

Further investment in these areas has assisted expansion in aggregate industry revenues, with contractors diversifying into new areas, including waste electronic and electrical equipment and mixed plastic packaging.

Around 45% of industry revenues are estimated to be accounted for by EfW, landfill and other non-hazardous waste treatment and disposal services.

The full report can be downloaded from www.amaresearch.co.uk


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