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Essential workers. Market disruption. Social distancing. Economic crisis. These are the topics of the world we live in today and all businesses and industries are being affected in some capacity. However, one of the biggest casualties of the pandemic is waste diversion rates. As organizations walk a line between protecting employees and customers with single-use materials and continuing progress toward their sustainability goals, there are still strategies to reduce company waste.
When we think of waste, many might picture a truck, a recycling bin, and maybe a compost pile. But how does waste play into the bigger picture of our global economy? Consider this lifecycle: waste is generated from homes or businesses and gets sorted into different containers. The separated items get picked up by a waste collector and transferred to different processing facilities. After being further sorted, some materials, like plastics, metal, paper and glass, are then reused for new products, which are re-deployed into businesses and homes once more. However, COVID-19 is disrupting the typical waste cycle.
Recycling—especially of plastics—has slowed substantially this year. While the immediate driver for the slowdown is the perceived risk of COVID-19 transmission, other key factors include supply chain disruptions and reduced manufacturing and commercial activity.
There is a risk that the economic recession, combined with low commodity prices, may increase reliance on cheaper virgin raw material instead of recycled stock.
The waste industry has also seen an increase in residential and medical waste generation and a steep decrease in commercial volumes during the first several months of the global pandemic. This has caused unintended consequences:
These are just a few of the initial shocks that the waste industry has seen, and their long-term effects are still unfolding as the market continues to fluctuate.
Waste is an essential business, so waste collectors will continue to be there to serve, but they are also dealing with the health implications of COVID-19. Revenue in certain areas of business is also dropping as more people shift to working from home – all of the materials generated in an office are now replaced with home delivery services like boxes from Amazon and other online retailers, which are all placed in residential containers. Commercial revenue is dropping and waste collectors will likely be looking for avenues to bring that back, either through new fees, increased collection rates, or other creative charges.
Given the ripple effects of the pandemic, what happens for example when:
How does that impact waste generation and waste collection needs?
Some industries, like grocery, have seen increased volume and service as a result of shifting purchasing practices. Others have been particularly hard hit, like hospitality, retail, and food service. In many of those cases, we’re looking at drastic waste service reductions, even suspensions.
In order to manage these fluctuating business models, companies must focus on reducing the waste they produce, as well as tightening up waste services to keep costs as low as possible. By managing resources, identifying savings, monitoring services, and communicating with waste collectors to ensure that services are running smoothly, or in this unique case, are being slowed down in the appropriate areas, business are able to improve their long-term resiliency.
By acting fast in the face of change, one hospitality business reaped big benefits by reducing waste services across their portfolio. This proactive collaboration with the haulers has yielded over $100,000 in savings since the start of the pandemic.
In moving the needle towards a more sustainable waste economy, the pandemic has certainly halted progress for understandable reasons. Markets that were previously gearing towards increased recycled content are competing with lower priced virgin materials in the face of fluctuating waste collection rates. Waste Dive reported that slowed collection and processing of coveted food-grade plastics could cut back on the amount of resin in the recycling system. And when life becomes more normal again, the market could flood with pent-up recycled polyethylene terephthalate (PET), the most widely recycled plastic in the world. Additionally, some waste-based mandates and regulations are being paused to provide relief to retailers. For example, in the U.S., New York has suspended its food recycling program until summer 2021 due to COVID-19-based budget cuts.
In Europe, as plastic waste volumes have experienced a strong increase from the use of personal protective equipment (PPE), delivery services and packaging, plastic recycling plants have been forced to curb operations. Besides plastics, glass and paper recycling have also been strongly impacted during the pandemic. In this context, it is even more important to separate waste and ensure the flow of clean streams of recyclables towards the waste treatment facilities. However, the good news is that companies still appear on track to meet a voluntary goal set by the European Union to use 10 million tonnes of recycled plastics in new products by 2025, as reported by The EU Environment Commission.
Smart and Final, a North American grocery store chain is one of the businesses going above and beyond. The chain has been preparing an initiative to cut down on emissions and waste collection costs by backhauling food waste, using reverse logistics to centralize it at the distribution centers. The food waste will then be picked up directly by a composting partner, which cuts out the need for an additional container and hauler at each grocery store.
This approach streamlines the operation, gets all stores onboard in the same way, satisfies California’s food waste mandate and saves money.
The chain has rolled out this initiative in Southern California and will be expanding throughout the state soon. Despite the recent influx of grocery store operations, the chain was able to keep their program on the forefront and accomplish the pilot.
In Europe, retail companies in particular are also optimizing logistics and tightening their supply chain. This will allow companies to meet the increasing demand for local production and a more circular approach, using recycled materials. At the same time, a more local production process will allow companies to adjust more quickly to fluctuations in demand caused by COVID-19 lockdowns.
In summary, COVID-19 is teaching the world a new definition of resiliency, and while it’s difficult to fully predict the implications of the pandemic on the waste industry and supply chains long term, there are still plenty of opportunities for companies to optimize waste services, re-evaluate where materials are being directed and enhance long-term business resiliency.
The authors would like to thank Amelia Fujikawa, Amanda Soh and James Albrecht for their contributions to this article.
Learn more about ENGIE Impact’s approach to waste management, and contact us today to get started.
