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Waste-to-energy market globalisation continues with Asia taking the lead

In 2017, more than 80 new waste-to-energy plants (WtE) with a combined annual capacity to treat about 25 million tonnes went online. About 90 percent of this capacity was constructed in Asia, where China remains the strongest market, all according to the most recent market study from Germany-based ecoprog GmbH.

The Minato waste to energy plant, one 21 WTE facilities in Tokyo operated and managed by Clean Authority of Tokyo.
The Minato waste to energy plant, one 21 WTE facilities in Tokyo operated and managed by Clean Authority of Tokyo.

According to the ecoprog study “Waste to Energy 2018/2019“, the growth of the thermal waste recovery market in Asia has spread to more and more countries for some years now. Nevertheless, China remains in the lead when it comes to the number of projects.

In the past months, projects were also planned or even commissioned in South America, Africa and Australia. The European market has shown some signs of an increasingly dynamic development as well.

Grate the dominant technology

This growth has resulted in almost 2 440 operational incineration plants worldwide in late 2017. They reached an annual treatment capacity of over 360 million tonnes. Most of these facilities are equipped with grate firing technology; only about 15 percent of the plants worldwide use fluidised bed (FB) combustion.

With a share of about 5 percent, the use of alternative technologies such as municipal solid waste (MSW) gasification or pyrolysis continues to be of marginal importance. This dynamic growth will keep up in the years to come.

According to ecoprog, about 70 new plants per year with an average thermal treatment capacity of about 20 million tonnes will be realised worldwide until 2027.

Asia dominates WtE market

Asia will continue to dominate the WtE market in the future. In China, many additional plants are expected to be constructed, especially in the next years and until the goals of the current 13th Five-Year Plan have been reached. Initially, this was planned until 2020. However, ecoprog expects a delay, as the goals of the previous 12th Five-Year Plan were also realised almost 2 years late.

After that, the growth in China will slow down. On average, this results in waste treatment capacities of almost 12 million annual tonnes to be constructed each year. Additionally, by 2027, approximately 1.5 million annual tonnes of waste treatment capacities will be constructed in India.

Busy street scene of Shinjuku district in Tokyo, Japan.
Tokyo is one of the 23 cities that has committed to significantly reduce the amount of municipal solid waste (MSW).

Apart from a continuously growing Asian market, new waste treatment markets in South America, Africa and the Australia and Pacific region show indications for a market upturn. The South American waste market was stimulated by large-scale projects in Mexico and Brazil. As in Asia, this region has numerous metropolitan regions where waste amounts are increasing and space for landfilling is running out.

In Africa, a first waste incineration plant was commissioned in Addis Ababa, Ethiopia. If operated successfully, this project could unfold a signal effect for neighbouring African agglomerations. In the Australia and Pacific region, the Chinese import ban for 24 selected waste streams, introduced in early 2018, has increased the number of WtE projects.

The ban stimulated plans for new waste incineration capacities in Australia especially. In 2017, about 1.3 million tonnes of municipal and industrial waste was exported to China that is no longer allowed since early 2018.

New EU legislation

In Europe, EU waste legislation continues to be the most important market factor for the construction of waste incineration plants. The adoption of the Circular Economy Package in May 2018 was a new milestone in this respect.

The Forsbacka municipal resource recovery and landfill site in Gävle, Sweden.
MEP’s adopt new EU waste rules with no more than 10 percent of municipal waste generated going to landfill.

As the continuation of the Waste Framework Directive, the law envisages, amongst other targets, a maximum landfilling share of 10 percent of the overall MSW amounts until 2035. Another market factor the study highlights is the ageing plant asset, causing a need for modernisation measures in traditional markets such as Germany and Denmark.

On average, this will result in about 3 million tonnes per annum of capacities to be newly constructed and replaced in Europe.

Sluggish in North America

The North American market, by contrast, remains sluggish. Low energy prices have been putting a lot of pressure on thermal waste recovery for years. Furthermore, the current government cannot be expected to enforce stimuli for landfilling restrictions. The plant asset has been shrinking for many years and this trend will continue.

The competition also reflects the globalisation on the waste incineration market. Most projects in cost-sensitive markets like India, Thailand and Malaysia are realised by Chinese technology providers. Chongqing Sanfeng Covanta, the Chinese licensee of Martin, was assigned for the project in Brazil and the commissioned plant in Ethiopia.

As matters stand, Chinese general contractor Power China has not managed to enter the European market. Its subsidiary Shanghai Electric Power handed in the most competitive offer for the expansion of the Warsaw WtE plant in Poland, however, the awarding was annulled as the company is lacking experience in the WtE sector.

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