Waste & Circular Economy: Deciphering green & sustainable challenges and opportunities of waste management
This report explores the essential role played by waste management in transitioning the economy towards a more circular model. The concept of “circular” economy, based on maintaining over time the utility and the value of materials and products, appears as an increasingly appealing alternative to our current linear “take-make-consume-dispose” economic model. Nonetheless, sustainability credentials of various waste management options differ considerably. The concept of waste hierarchy ranks the six broad categories of waste management options - waste prevention, minimization, reuse, recycling, energy recovery, disposal – from the most environmentally virtuous to the least. From the environmental standpoint, it is always preferable to prevent as much waste as possible by reducing its quantity at source thanks for “circular” or “eco-friendly” design. The “second best” option is to minimise the amount of waste by reducing the quantity of materials used in production and/or by using products more efficiently. After that follows reuse of product or its components for the same purpose, which is followed by recycling, which refers to recovery and reprocessing of waste regardless its purpose. Energy recovery refers to conversion of waste into heath or electricity or fuel. Finally, the least favoured option of waste management from the environmental standpoint is waste disposal, either through landfilling or incineration without energy recovery. To further complicate matters, there is a plethora of waste types in terms of their source and composition as well as regional regulatory differences putting emphasis on different ranks of the waste hierarchy. This results in a wide variety of waste management technologies and business actors, some offering specific solutions locally, others at a global scale.
In order to decipher the sustainability challenges and opportunities of the fragmented and manifold waste management landscape, this report has a triple purpose:
- Understanding the importance of waste management in the ongoing shift to circular economy
- Making sense of the main types of waste in terms of their source, composition and management options
- Highlighting which currently available financial instruments and market practices are relevant for financing sustainable waste management
While there is still a long way to go on the pathway towards a circular economy, much progress can be made already today. The current waste management challenges and pathways for future improvement for are assessed for several prominent waste streams in the EU, namely waste from electrical and electronic equipment, plastic waste, construction and demolition waste and wastewater treatment. European waste management puts emphasis mainly on recycling while much waste in non-OECD is simply disposed of in landfills or incinerated. Whatever the starting point, moving higher up the waste hierarchy brings environmental and sometimes also socioeconomic benefits. This makes a compelling case for use of green, but also sustainability and possibly sustainability-linked bonds/loans for financing of “greener” waste management solutions. The indicators needed for structuring of such financial instruments are already available and existing market practices can be readily applied. Furthermore, the EU Taxonomy, for now focused on climate change mitigation and adaptation, will be further extended in the upcoming years to assess the “circularity” of economic activities.