WtE industry barometer: Industry defies COVID-19 crisis
The sentiment in the Waste-to-Energy (WtE) industry has significantly deteriorated as a consequence of the COVID-19 crisis. But compared to the overall economy, this slump remains clearly limited.
by CEWEP / ecoprog GmbH
Especially the operators of thermal waste treatment plants report comparably good business data. The current business situation is considered much better than is the case for the overall economy.
Plant operators report stable business situation
With just under 25 out of a possible 100 points, the current business climate for WtE plant operators declines significantly compared to last year’s all-time high, thus representing the poorest rating since 2014. Still, this figure clearly exceeds the reference value for the overall economy which, according to the ifo business climate index from August 2020 reaches only 2.4 points.
Especially the current business situation is still regarded by the operators as being comparatively positive. 95% of the operators assess the business situation to be good or satisfactory. 62% of the operators report a relatively high level of capacity utilisation for their plant, while only 3% refer to an insufficient capacity utilisation.
Despite the COVID-19 crisis, more than 80% of the plant operators indicate that capacity utilisation of their plant remained the same in the past 12 months, another 15% even reported an increase in capacity utilisation.
This is also due to the fact that waste quantities remained comparatively stable during the COVID-19 crisis.
The assessment of the coming months remains moderate as well. Even though the balance of business expectations turns out to be slightly negative (-5,6), there is in fact a tendency towardsincreasing prices and hiring more employees. The vast majority of the WtE plant operators expect a stable business situation.
Industry remains optimistic
The WtE industry also assesses the situation rather moderately. With a balance of +23.7, the business climate is still perceived very positively although it deteriorated noticeably compared to last year’s reference value (+47,2) which admittedly represented the all-time high of this survey carried out since 2012. Compared to the ifo value indicating a balance of 2.4, the assessments remain very positive.
Despite the COVID-19 crisis, more than 80% of the plant operators indicate that capacity utilisation of their plant remained the same in the past 12 months, another 15% even reported an increase in capacity utilisation.
This is also due to the fact that waste quantities remained comparatively stable during the COVID-19 crisis.
The assessment of the coming months remains moderate as well. Even though the balance of business expectations turns out to be slightly negative (-5,6), there is in fact a tendency towardsincreasing prices and hiring more employees. The vast majority of the WtE plant operators expect a stable business situation.
Industry remains optimistic
The WtE industry also assesses the situation rather moderately. With a balance of +23.7, the business climate is still perceived very positively although it deteriorated noticeably compared to last year’s reference value (+47,2) which admittedly represented the all-time high of this survey carried out since 2012. Compared to the ifo value indicating a balance of 2.4, the assessments remain very positive.
Despite the crisis, about three quarters of the industry report a sufficient or even high plant inventory. Approximately 40% of the respondents have even experienced a growing demand in the past 12 months, 32% state an increased volume of orders.
This development reflects the positive general market as represented in the previous years because of, for instance, increased waste amounts, the introduction of landfill bans or increased landfill taxes in different countries of the EU. In addition, an increasing modernisation of the by now aged plant inventory in Europe can be observed. So far, all these positive market factors with longgoodterm impacts have only been partially affected during the comparatively brief period of the COVID- 19 crisis.1
Waste quantities during the crisis: Predominantly shifting
According to the WtE plant operators, waste amounts remained relatively stable during the COVID-19 crisis. More than 50% of all operators did not observe any substantial changes concerning the amounts of municipal and commercial wastes. Although about 30% report that commercial waste declined by up to 10%, 39% of the operators at the same time noticed that municipal solid waste quantities grew by a similar percentage. This logical results from the fact that more people stayed at home during the COVID-19 crisis due to short-time work or home office.
In addition to that, the market share of energy recovery is higher in the case of municipal solid waste as more mixed wastes accrue in this field which at present are not eligible for material recycling. It is true that there were clearly less manufacturing wastes during the crisis because, for instance, the factories were standing still – nevertheless, the market share of energy recovery is significantly lower for this latter kind of waste.
This development reflects the positive general market as represented in the previous years because of, for instance, increased waste amounts, the introduction of landfill bans or increased landfill taxes in different countries of the EU. In addition, an increasing modernisation of the by now aged plant inventory in Europe can be observed. So far, all these positive market factors with longgoodterm impacts have only been partially affected during the comparatively brief period of the COVID- 19 crisis.1
Waste quantities during the crisis: Predominantly shifting
According to the WtE plant operators, waste amounts remained relatively stable during the COVID-19 crisis. More than 50% of all operators did not observe any substantial changes concerning the amounts of municipal and commercial wastes. Although about 30% report that commercial waste declined by up to 10%, 39% of the operators at the same time noticed that municipal solid waste quantities grew by a similar percentage. This logical results from the fact that more people stayed at home during the COVID-19 crisis due to short-time work or home office.
In addition to that, the market share of energy recovery is higher in the case of municipal solid waste as more mixed wastes accrue in this field which at present are not eligible for material recycling. It is true that there were clearly less manufacturing wastes during the crisis because, for instance, the factories were standing still – nevertheless, the market share of energy recovery is significantly lower for this latter kind of waste.
Projects and tenders are postponed
The repercussions of the COVID-19 crisis on project activities differ. 17% of the plant operators state that repair and modernisation works are prioritised as far as this is possible under the circumstances of the pandemic. Such measures are feasible if interruptions of plant operation lead to intermediate standstills. A similarly small proportion of the operators suffers from the fact that planned measures (e.g. those that need third-party employees) cannot be realised as intended as a consequence of the COVID-19 crisis. This is confirmed by those 70% of the industry respondents who report that projects already commissioned are being postponed or delayed, as a result of travel restrictions, amongst other reasons.
Almost 50% of the industry respondents say that awards have also been decreasing. Due to the existing volume of orders (and their complicated processing), this development can obviously still be cushioned in many places, as can be deducted from the positive business situation.
Disposal of medical waste has increased
The importance of energy recovery of medical waste has significantly increased which is confirmed by 31% of the operators and corresponds to almost 50% of all the plants entitled to treat that kind of waste according to their acceptance catalogue. About 17% of all plants – that is about one quarter of all plants that are accepting medical waste – have introduced additional measures for this purpose in the last months.
The repercussions of the COVID-19 crisis on project activities differ. 17% of the plant operators state that repair and modernisation works are prioritised as far as this is possible under the circumstances of the pandemic. Such measures are feasible if interruptions of plant operation lead to intermediate standstills. A similarly small proportion of the operators suffers from the fact that planned measures (e.g. those that need third-party employees) cannot be realised as intended as a consequence of the COVID-19 crisis. This is confirmed by those 70% of the industry respondents who report that projects already commissioned are being postponed or delayed, as a result of travel restrictions, amongst other reasons.
Almost 50% of the industry respondents say that awards have also been decreasing. Due to the existing volume of orders (and their complicated processing), this development can obviously still be cushioned in many places, as can be deducted from the positive business situation.
Disposal of medical waste has increased
The importance of energy recovery of medical waste has significantly increased which is confirmed by 31% of the operators and corresponds to almost 50% of all the plants entitled to treat that kind of waste according to their acceptance catalogue. About 17% of all plants – that is about one quarter of all plants that are accepting medical waste – have introduced additional measures for this purpose in the last months.
Focus on Europe
In 2020, as every year, the WtE industry has also been asked about the regional markets that are most important to them. As always, the European market is predominant in the responses to this question which this time is even more true as all other global markets have become, albeit only slightly, less important.
On the one hand, this is certainly due to the fact that primarily European companies have been interviewed in this survey, although many of them have a global presence. On the other hand, this assessment of course also reflects the positive market perception in Europe as expressed, for instance, by the WtE plant operators.
Eventually, projects in regions like India or the rest of Asia keep failing, e.g. due to financial constraints. This is all the more true in times of crisis as these days.
The WtE industry barometer was elaborated for the first time in 2012. For the survey in 2020, we have questioned about 500 operators of thermal waste recovery plants and more than 700 plant manufacturers and suppliers in the WtE industry worldwide. Participants could choose to either complete an online questionnaire or to answer via fax. The survey was carried out between early August and early September.
ecoprog GmbH carried out the survey and the evaluation. As a respected industry expert, ecoprog assists clients from Germany and abroad in dealing with implementation-oriented management issues with political, technical or economic backgrounds in the sectors of environmental and energy technology. We work in the fields of strategy consulting, market and competition analyses as well as multi-client studies.
In 2020, as every year, the WtE industry has also been asked about the regional markets that are most important to them. As always, the European market is predominant in the responses to this question which this time is even more true as all other global markets have become, albeit only slightly, less important.
On the one hand, this is certainly due to the fact that primarily European companies have been interviewed in this survey, although many of them have a global presence. On the other hand, this assessment of course also reflects the positive market perception in Europe as expressed, for instance, by the WtE plant operators.
Eventually, projects in regions like India or the rest of Asia keep failing, e.g. due to financial constraints. This is all the more true in times of crisis as these days.
The WtE industry barometer was elaborated for the first time in 2012. For the survey in 2020, we have questioned about 500 operators of thermal waste recovery plants and more than 700 plant manufacturers and suppliers in the WtE industry worldwide. Participants could choose to either complete an online questionnaire or to answer via fax. The survey was carried out between early August and early September.
ecoprog GmbH carried out the survey and the evaluation. As a respected industry expert, ecoprog assists clients from Germany and abroad in dealing with implementation-oriented management issues with political, technical or economic backgrounds in the sectors of environmental and energy technology. We work in the fields of strategy consulting, market and competition analyses as well as multi-client studies.
[1] These and all of the following interpretations are assessments made by ecoprog. Therefore, ecoprog is
solely responsible for these statements.
solely responsible for these statements.
published: www.cewep.eu, 7|2022
Keywords: Energy Recovery, Mixed Waste, EU
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