Opponents Say NIMBY, But Enforcement Of Environmental Legislation Provides Momentum In Waste-to-Energy Plant Market

The waste-to-energy industry is finding itself confronted with growing opposition from environmental pressure groups and objections raised by Nimbys - those campaigners who proclaim Not In My Back Yard – against the siting and development of major waste facilities, especially thermal treatment plants.

In addition to voicing concern over emissions and ash disposal, critics claim that thermal treatment of waste reduces the incentive to recycle materials as waste-to-energy plants need to maintain the throughput of commercial and industrial waste to ensure viability.

The NIMBY syndrome is particularly evident in environmentally conscious countries and across nations with poorly developed internal treatment and disposal capacity. The high degree of continued resistance is hampering the construction of new waste-to-energy facilities.

Despite this opposition, growth in the European waste-to-energy market will be sustained throughout the coming decade. According to a new study by Frost & Sullivan, the international market consultancy, a number of European countries have embraced waste-to-energy, with approximately 340 plants processing annual volumes of around 50 million tonnes of municipal waste in 2002.

"Each household discards around a tonne of waste on a yearly basis and Frost & Sullivan's projections indicate that we will require twice the current number of waste management facilities by 2020," says Matthew Barker, Industry Analyst at Frost & Sullivan.

"The introduction of landfill bans to further improve rates of recycling - most prominently the adoption of the EU Landfill Directive – is poised to stimulate growth in the European waste-to-energy plant market. We believe that 166 plants will be commissioned across Europe between 2003 and 2009, when the overall market will be worth $313.6 million," Mr Barker notes.

The market is currently dominated by grate (mass burn) plants, but it is anticipated that diversification of plant types and variations in sizes will be largely stimulated by the robust growth rates expected to derive from the emerging pyrolysis and gasification plants market and further development of the fluidised bed plant market.

Strong emphasis on the waste hierarchy principle, favouring waste minimisation over disposal by re-using or recycling as well as thermal, biological and, as a last resort, landfill methods, will brighten prospects for the European waste-to-energy plant market.

Furthermore, the growing ubiquity of increasingly demanding European and national waste planning policies, crucial to the fulfilment of governmental obligations, offers a path for the development of the market.

Frost & Sullivan cautions that the maturity of some municipal solid waste services markets could adversely affect Europe-wide revenues and competitive pricing. The study cites the Alpine region and Germany, which have historically been spearheading the implementation of new methods of treatment and disposal (such as thermal and biological treatment), as key examples.

Frost & Sullivan points to a lack of political will as another serious stumbling block to the waste-to-energy plant construction. While at EU level, Directives have been passed to improve packaging recycling, limit the environmental impact from incinerators and reduce the impact of waste on landfill, the commitment to these issues at a national level is debatable.

Buyers in this market, such as waste treatment companies and municipalities, have come under increasing pressure to prove and communicate their green credentials. Those responsible for purchasing or specifying within an organisation are taking an increasingly environmentally aware approach to purchasing.

Choosing a supplier with a strong brand image and green accolades will help restore buyers' potentially tarnished reputation which could be caused by the detrimental effect of safety or environmental incidents occurred in plants or other waste treatment options associated with the buyer. "These considerations may prompt companies to pay more than the minimum waste treatment costs in order to obtain dependable technology from a reliable brand name," Mr Barker explains.

Plant suppliers' growing involvement in the operation and management of plants necessitates broader responsibility to ensure the overall success of waste-to-energy contracts.

Generating awareness and acceptance amongst stakeholders such as local communities, municipalities and councils through public relations initiatives will help overcome misconceptions. Activities must be aligned to suppliers' key strategic priorities to avoid delays or even cancellation of projects whose implementation could fall victim to local objections.

Deeply rooted values which are represented by the overwhelming affinity with local companies, as well as the belief that local companies can provide the best level of service, constitute key barriers to market entry for international companies seeking to penetrate new markets.

The differences between countries on these cultural dimensions, particularly apparent in France, Germany and the Alpine region, pose great difficulties for any company wishing to develop as a European player. Frost & Sullivan highlights the importance of understanding and operating according to local market needs and characteristics in an effort to overcome cross-cultural conflicts.

The competitive landscape of the European market for waste-to-energy plants currently comprises around 40 companies, ranging from huge multinational turnkey power plant suppliers to smaller, more dedicated waste-to-energy equipment suppliers.

CNIM/Martin is the undisputed market leader in terms of treatment capacity added over the period 2000 to 2002, accounting for around 47.0 per cent of total revenues on the strength of the company's involvement in over 17 plants and strong visibility across the European market. Trailing behind in second and third position are Foster Wheeler and VonRoll Inova, accounting for 9.5 and 9.2 per cent of the market respectively.

Publication Date: February 2003
Report Code: B087 Background
Frost & Sullivan is an international marketing consulting company that monitors a comprehensive spectrum of high-tech markets for trends, market measurements and strategies. This ongoing research is utilised to complement a series of research publications to support industry participants with customised consulting needs. Interviews and free executive summaries are available to the press.

For more information contact:
Kristina Menzefricke, Public Relations Department
Tel. +44 (0) 20 7343 8376 or Fax. +44 (0) 20 7343 8380
(kristina.menzefricke@fs-europe.com)



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