Worked Example 5: Waste Recycling
Driven by rapid urbanization and growing populations, 353 million tonnes of plastic waste generated in 2019.1 Only 9% of the plastic waste is recycled while 50% was landfilled, 22% was disposed in the environment and 19% was incinerated.
Therefore, solid waste management is important for the protection of public health, safety and environmental quality. Even though awareness of waste management is increasing, local governments face obstacles such as affordability, scarce urban land for landfill and other challenges associated with the development and maintenance of an adequate waste collection and disposal infrastructure.
This Worked Example looks at a hypothetical plastic recycling project in a developing country which is a collaboration between the public and private sectors
Project scope: With a goal to increase waste recycling and advance a circular economy, local government, private sector, and communities joined together to develop an environmentally friendly plastic road-building project. The project will reuse plastic waste and reduce plastic waste ending up in the ocean, which is a critical environmental problem. The result of the project will be a highly resistant plastic waste road that is more durable and stronger than typical roads.
Identifying CVC opportunities in waste recycling:
Core services: The project will help reduce the amount of waste going to landfill and tipping fee to be paid by the local government.
Commercial potential and demand: There is strong demand for innovative solutions and CVC opportunities to reduce and recycle waste and find potential end use of plastic that are socially and environmentally sustainable. There is also strong demand for government to save costs and reduce public spending on solid waste management including tipping fees and landfill requirements as land near urban centre becomes increasingly costly and scarce.2
Beneficiary and stakeholder needs mapping:
Groups | Description | Need | CVC Opportunities | Saving |
|---|---|---|---|---|
| Users | Households benefiting from better solid waste management | Reduce pollution related to plastic waste | N/A (core revenue) | Reduced cost relating to waste management |
| Stakeholders | Government seeking to reduce solid waste management cost | Reduce budget on tipping fee | Increase recycle rate, sales of recycled waste, find other innovative commercial use for recyclable waste | Reduced amount of waste going to landfill resulting in reduction in budget for tipping fees |
| Stakeholders | Transport agency/local government which need to spend significant budget on road pavement annually | Find more cost-effective solutions to road construction | The government can reduce plastic waste by using plastic waste in paving road | Lower cost of road pavement resulting in reduced budget on road construction |
Assessing the policy, legal, institutional readiness in the country
Areas | Assessment | Level |
|---|---|---|
| Policy and planning |
| High opportunity: Policy, legal and institutional framework are supportive and allow for CVC to be considered in the project. Next Step: Identify and analyse CVC in feasibility stage. |
| Legal Framework |
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| Institutional readiness |
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Technical design: Additional facilities related to waste sorting, recycling, and processing of plastic waste are needed to collect plastic waste that can be used for paving roads. Plastic waste needs to be mixed with asphalt in a mixer belonging to a private company. For each road, the amount of plastic required for the physical road space will need to be designed at the planning stage.
Commercial feasibility: Based on a hypothetical financial assessment, CVC will result in cost saving in tipping fee for the local government from the reduced amount of waste that needs to be transferred to landfill. From the perspective of the government agency responsible for road construction, the use of plastics in paving roads can lead to lower road construction budgets as the life of the plastic road doubles that of roads paved by typical bitumen and upgrading/repaving costs are not required for plastic paved road. In addition, there could be additional benefits from reducing environmental costs from direct leakage of post-consumer waste plastics into the environment.3
Revenue Category | Revenue Item | Expense Items | Net Cost Saving4 |
|---|---|---|---|
| A. Core Services - Saving | |||
| User Fee | Saving in tipping fee from reduced waste |
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| B. CVC - Saving | |||
| Asset use optimization | Saving from using plastic to pave road instead of bitumen |
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Implementation: The CVC is piloted through a partnership between a private company or technology owner and the local government, waste collectors and local communities.
Risks of the project: Government needs to set the standard requirements to ensure the road paving quality and carefully assess the negative environmental impacts of plastic roads such as the release of microplastics, photo-degradation and the release of fumes if heated beyond recommended temperatures.
Footnote 1: The Organisation for Economic Co-operation and Development (OECD), Global Plastics Outlook: Economic Drivers, Environmental Impacts and Policy Options, February 2022
Footnote 2: Can plastic debris help pave the way to a more sustainable future?
Footnote 3: The Organisation for Economic Co-operation and Development (OECD), Global Plastics Outlook: Economic Drivers, Environmental Impacts and Policy Options, February 2022
Footnote 4: The Worked Examples is hypothetical project business cases and include hypothetical financial assessments with key project information.
