The waste management market will be shaped by legal solutions. In order to implement waste management goals, it is therefore important that the market follows legal requirements so that the policy will be implemented through the market. It can be assumed that the market will follow the law, however those who are responsible for shaping the law should aim to create good conditions for market development, which may significantly support and ensure implementing the goals.
Economic and the market factors in the process of modernizing municipal waste sorting plants
The market should be viewed as its participants, that is, entities operating on the market and the relationships between them. Wherein, it is important to pay attention to entities of the public sector as well as those of the private sector. Each of these sectors has its own nature. Entities in the public sector will first focus on managing the waste produced in a specific area and thus satisfying collective citizens’ needs in the field of waste management and, in the longer term, on economic indicators (balancing the system). In turn, entities of the private sector, through managing the waste, will first pursue economic indicators (profits) while fulfilling the scope of services assigned to them by the public sector. The differences between these two sectors are a result of the different natures of both types of entities, and also set the basis for decision-making by the entities. Of course, this will play a role when it comes to the construction and modernization of waste sorting plants. For instance, if public entities focus on a specific area of activity, commercial entities will pursue market expansion and creating an advantage on the market. However, it is not necessarily in the interests of public entities to pursue obtaining increasingly larger waste streams, because it is enough for them to meet the local needs. In turn, the calculation of private entities includes the effects of the law of scale. According to this law the investment cost of every subsequent ton per hour of throughput of a technological installation decreases as the throughput of such an installation increases. Numerous calculations and analyses confirm that, with the well-chosen technology, considering also economic aspects, the economic effects might be multiplied.
Decreasing marginal efficiency and EPR’s subsidy
Looking from the economic point of view, one more thing should be taken into account — decreasing marginal efficiency, which influences investors’ decisions. The occurrence manifests itself in this way: the efficiency of the additional percentage point of the recovered raw material fractions decreases as the intensity of the sorting process increases. For example, an investment in a system that enables a separation of 80% of PET, PE, PP, etc. from a medium-sized fraction of municipal waste generates higher unit profits than a continued investment and an attempt to get further percentage points of the raw material fractions. At some point, investing in additional separating systems on a technological line does not generate any extra profits and, from an economic point of view, is not justified. Then, we are in a situation where it is not profitable to keep on investing in extra percentage points of recovery, and the system, from an economic point of view, reaches its optimum. However, it depends on conditions, for instance, the Extended Producer Responsibility (EPR). Therefore, if the waste policy aims at maximizing the recovery of raw material fractions, it is crucial to direct the policy towards motivating economic entities to act for the goal with the usage of market tools, to which EPR’s subsidies belong. Subsidies from EPR, promoting recovery while being directed to installations, bring about increased profitability of separating each additional ton of raw materials and justify higher investment expenses incurred to increase the recovery level.
Specialization and external conditions – important factors in the direction of the modernization of municipal waste sorting plants
Shaping the market through law and the ongoing waste policy results in another occurrence, and that is specialization. It is not just about the specialization of each market entity but also about the technological specialization. A few years ago it was justified to prioritize building multifunctional installations (this justification still occurs in specific conditions). However, these days, due to the plurality of waste streams, their specificity, and the applicable law of scale, it becomes justified to build or modernize installations oriented around managing specific fractions. For instance, focused on: selectively collected plastics, mixed waste, selectively collected paper, alternative fuel production lines, installations preparing the waste stream for biological treatment or thermal utilization, and then also: new areas of technology development, sorting construction and demolition waste, bulky waste, wood, or textiles.
Speaking of the market and looking from a construction or modernization perspective, the attention needs to be paid to machinery and technology suppliers. Suppliers of equipment and technological solutions have their own experience and means, which should be recognized and utilized during the construction or modernization of a waste sorting plant. Recipients of the products sorted in installations also play a significant role. They determine the possibilities and terms (including prices) of product sales and the costs incurred to manage the residues after sorting. In turn, for comparative analyses of different investment variants, other market factors are important, for instance, labor costs and electricity prices. Including the factors in the analysis, in the comparison of different technology and investment variants, is essential to properly prepare for the investment and the decision-making process.
Individual conditions shape the investment
The directions of modernization of sorting plants, or, more broadly, waste sorting infrastructure, will be determined by such factors as legal, these related to waste management policy, and market. Whereas, interpreting these factors will always take place through the perspective of the individual situation. Things that make up the situation are, among others, the entity’s experience , the level of its development, and the condition of the currently existing technological infrastructure of the sorting plant. There are more to these conditions, including expected waste streams delivered for treatment, their morphological composition. And also: existing limitations such as the hall size, possibility to use the land, surroundings, issued permissions, logistic, budget, time and other limitations. It is worth mentioning personal characteristics of the management staff, such as awareness, engagement, or will to begin and manage projects (including investments).
Just as legal and market conditions determine directions, so do individual factors shape the specific investment. For instance, if an entity has a waste stream of selectively collected plastics, but does not have a proper installation, the investment will be oriented around constructing such an installation. If another entity has a several-year-old installation that is partially automated, then the investment will be oriented around expanding and modernizing the installation. Additionally, other situations may be indicated, for example, if somebody has a several or several dozen years old, exploited installation, then perhaps it will be worth using only the existing hall and constructing new and modern facility in the building, of course, after previously dismantling the exploited and technologically worn out line.
The modernization of the municipal waste sorting plant – a decision preceded by looking at process, technological, and economic analyses
The existing situation may be looked at in another way. It is about looking at the installation independently of the age and the exploitation, and, instead of that, taking into account process, technological, and economic results, achieved recovery levels in comparison with waste potential. In this case, such a question may be put: what investment would be economically justified? Yet another way, a needs’ point of view allows us to conclude which technological segment requires improvement. Is it essential to adapt the line to new needs, e.g., a new or increasing waste stream? In turn, for some installations, it is needed to look for ways to increase throughput, additionally in connection with: increasing recovery levels, improving segregation (separating more raw material fractions), or the addition of a waste shredding segment.
In the context of individual conditions determining the directions of modernization of a sorting plant, attention should be paid to another important aspect – subjective, connected with people who decide about operating and development of a plant. Every investment, including modernization of a sorting plant, requires an initiative, a decision, and subjective actions, that is causative actions, which makes somebody take the responsibility. This is a difficult yet significant element of a good investment, modernization, if it is to serve development. A pro-development, active, and investment attitude is the opposite of a conservative and passive attitude, which is focused only on administration and drawing benefits from the current situation. While looking at it, we should pay attention to the fact that some investors, even during the investment process that they have initiated, take a different attitude: they see the conditions and the need for modernization, but they entrust their subjectivity, decisiveness, self-agency to third parties, as if they have redeemed their liability. Perhaps, they forget that in the future they will be left with consequences that cannot be assigned to a third party: investment funds spent, financial liabilities, dedicated time, and developed space. It is about the belief that a third party will take care of the investor’s interests better than she/he does alone. However, experience shows that no one will take better care of the investment than the investor who is active, engaged, open to collaboration and dialogue, searching for solutions, able to discern conditions and evaluate the situation, also able to verify available and proposed solutions, but above all identifying with the plant, guided by the goals set for the installation, and acting in her/his own, defined interest.
Long-term thinking changes the perspective
There is another attitude that may be taken that will influence investment decisions, or perhaps the lack thereof. For example, a large city sorting plant, a stable waste stream of selectively collected waste and mixed waste, an exploited, several or several dozen year old, manual sorting plant, tens of millions of PLN paid for the utilization of the caloric fraction (mostly unsorted raw materials), annually lost millions benefits due to unrecovered raw materials. The sorting plant is not on a list of investment’s priorities. Even if somebody is not financially prepared for an investment, it is obvious that in such a case, with proper technology that is focused on efficiency, the investment could pay off in a few years, moreover, improve the financial condition of the plant, and enable to accomplish other projects that are on the investment’s priority list.
What is the source of such a continued attitude? Short-sightedness? A lack of awareness? A lack of strategic and development approaches? A lack of economic reasoning? Or perhaps the ongoing policy? Somebody, in such a situation, would quickly realize that there is a chance of transforming the problem into a profitable project, which would improve the condition of the plant, provide funds for other projects and enable to achieve higher recovery levels. Long-term thinking changes the perspective. It gives a chance to look at the problem in a macro-scale perspective, strategically manage, prepare a program and investment actions.
The specific conditions of a given plant
Therefore, specific conditions of a sorting plant, but also an individual approach to every investment, and the approach of the staff, overlap each other and create an original specificity for every investment, decision, direction of modernization of a sorting plant or the whole waste treatment plant. And these are also the factors that determine the directions of a sorting plant modernization.
