x Abu Dhabi, UAE Friday 21 July 2017

Delay in green investment is a waste of opportunity

Property may be dormant and the stock markets fluctuating, but the waste industry is now booming.

Five years ago I started a recycling company in the UAE, and ever since I have consistently heard the classic adage: "It's a dirty job, but someone's got to do it."

The fact that it's a cliché doesn't change the truth. Property may be dormant and the stock markets fluctuating, but the waste industry is now booming.

Each emirate produces mountains of waste on a daily basis. In fact, the UAE is one of the largest consumers and dumpers per capita on the planet.

Current estimates have each resident disposing of an average of 2.1 kilograms of waste per day.

This disposal rate, combined with the consumption patterns of businesses, means the UAE has the largest per-capita ecological footprint on the planet, according to the World Wildlife Fund.

Five years ago, waste management was not on the public agenda and "environmentally responsible" usually meant "LEED certified" (low energy electron diffraction). At the time, the country's economy and population was growing so quickly that there was no time for local governments to slow down and allow environmental infrastructure to catch up.

There were more economic opportunities in property than waste management, there was more money to be made selling designer products than recovered plastics, and it was definitely more exciting to invest in the stock market than in rubbish bins.

Things have changed since then. The waste management industry is looking pretty good for entrepreneurs and investors.

Residents and businesses have taken up the green cause and are demanding outlets for their environmental beliefs. Local and international media outlets have been steadily increasing their coverage of environmental issues.

With each new recycling programme that is introduced in the community, demand increases for additional green solutions. This is one of the most exciting indicators for the environment industry. Grass-roots demand for environmentally friendly programmes and outlets will drive government policy and private-sector initiatives in the UAE, as it has done in other parts of the world.

As a result, local governments and municipalities have moved environmental policies forward. Real and enforceable targets such as landfill diversion rates are now becoming the standard for most local governments. The largest emirates have been first to take action through the Centre for Waste Management in Abu Dhabi, Bee'ah in Sharjah and the Municipality of Dubai.

The recent announcement by the Abu Dhabi Government of a new tariff to be introduced in 2011 on the production of waste in the private sector is a huge step forward in public policy. Holding businesses financially responsible for the waste they generate has proven to be an essential component of a successful waste- reduction programme all over the world. With the implementation of this programme, fiscal success and environmental responsibility begin to align. There will become financial incentives for business owners and more willingness to reduce their environmental footprint.

Historically, the market size of the waste management industry has been difficult to assess, primarily because data collection has not been standardised nationally. However, with the recent increase in private-sector involvement, it has become reasonable to quantify the size of certain parts of the industry. As an example, based on waste characterisation studies conducted over the past three years, and using generally accepted municipal solid-waste generation volumes, it is reasonable to estimate that the annual value of recyclable materials in municipal solid-waste collection programmes is about Dh1.1 billion.

This estimate does not include commercial, industrial or construction and demolition waste, nor the value of the collection programmes associated with it.

Currently, only a small percentage of this recyclable material is being captured, processed and sold into post-consumer commodity markets or turned into new products, while the majority of the recyclable waste continues to go to landfills.

Although the private sector has started to pay attention to the waste management and recycling industry, the number of credible competitors is still very low.

A survey being conducted suggests there are less than 15 waste management companies in the UAE with about 100 total employees. The majority of these companies are focused on collection and transportation, leaving real opportunities at both the front and back end of the recycling process - before collection and after delivery to a treatment centre.

All of this is to say that entrepreneurs and investors should take a good look at the waste management and recycling industry in the UAE. The community is demanding green solutions, the governments are regulating and establishing standards to improve environmental performance and reduce waste, the private sector is being given incentives to invest in waste reduction, the market size is substantial and growing, and the competition is reasonable.

In other words, rubbish is gold.

 

Samer Kamal is CEO of Tactical Connections, a company that focuses on developing sustainable businesses. He is also the founder of Bee'ah, one of the leading environmental-management companies in the Middle East