Consumer spending and construction will fuel recycling in 2022, according to Capstone report.

Pandemic tailwinds, including the resurgence of per capita income and healthy business activity, are expected to provide a favorable outlook for the waste and recycling industries in 2022, says Capstone Partners, a middle-market investment banking firm with headquarters in Boston and Denver, in its recently released February 2022 Waste and Recycling Update.

Consumer spending, which accounts for two-thirds of U.S. economic activity, is expected to remain high, supported by wage growth and ample savings, and to bolster waste and recycling demand, the company says.

Construction and manufacturing activity also have trended upward, creating healthy waste volumes. In addition, recycled material volumes are rising, driven by increased consumer awareness and environmentally friendly policies in certain regions of the United States. Growing demand for recycling services and circular economy solutions represent a promising opportunity for sector participants. However, despite the favorable demand backdrop, the nationwide labor shortage is expected to challenge the industry as elevated waste volumes drive overtime costs higher, Capstone says.

Sector merger and acquisition (M & A) activity surged in 2021, increasing 65 percent year over year, as buyers consolidated competitors to establish regional dominance and sellers sought to maximize take-home earnings ahead of a potential capital gains tax increase. Add-on deals and public strategic acquisitions accounted for the lion’s share of transactions as large players and private equity- (PE-) backed companies executed roll-up strategies. Waste and recycling companies have increasingly sought financial support from PE firms to execute growth strategies and capture market share.

In its report, Capstone says it expects buyers to continue seeking companies offering innovative solutions as automation, artificial intelligence, robotics and machine learning technology become integral factors in cost-cutting and green practice solutions.

“M&A activity surged in 2021 driven by pent-up deal demand, the desire for founders to seek liquidity and the need for owners to position their companies for expanded growth opportunities,” says Capstone Partners Managing Director Doug Usifer. “Profitable and growing companies that offer recycling, automation efficiency, and environmentally-friendly waste solutions are particularly attractive.”

Capstone says the report also describes how the proliferation of circular economy measures present opportunities for innovative, environmentally-minded companies. It also details performance and growth strategies from leading players’ third-quarter 2021 earnings calls.

The report includes a client case study, highlighting the Capstone-advised sale of Pioneer Recycling Services to Delos Capital and The Silverfern Group.

The project is expected to reduce the city’s reliance on fossil fuels, generate clean energy and achieve sustainability goals.

Van Nuys, California-based Capstone Green Energy Corp., a provider of energy-as-a-service solutions, has announced it will provide a 1-megawatt microturbine system to be installed in a landfill gas-to-energy project for a solid waste facility in New England. The renewable energy project will convert the gas generated by waste at the landfill to electricity that will be redistributed to the electrical grid and used by the city to power its municipal facilities.  

The waste-to-energy project is expected to be commissioned in early 2023. The company says the landfill generates and flares about 350 standard cubic feet per minute of landfill gas. The new project will convert all of this gas into electricity using the Capstone C1000S microturbine system. The conversion process will generate 1 megawatt of clean electricity and deliver a continuous renewable source of revenue for the city.  

Bringing this project to fruition is expected to reduce greenhouse gas emissions in New England by 3,500 tons annually, according to Capstone. Vergent Power Solutions, the company’s distributor for the upper Midwest, New England and Eastern Canada was responsible for securing the contracts for the system.

“Vergent Power dedicated many years to develop this important project, which reflects the New England region’s path towards decarbonization,” says Darren Jamison, president and CEO of Capstone Green Energy. “The project clearly demonstrates Capstone microturbines’ ultra-clean emission and beneficial product features such as UL1741 SA-certified power electronics that enable simplified interconnection with the utility grid as well as potential future microgrids in the area. We look forward to many more innovative, carbon-reducing projects from Vergent Power in New England in the future."

After a thorough analysis comparing various distributed generation technologies, officials ultimately chose low-emission Capstone Green Energy microturbines for their scalability, resiliency and ability to reduce energy costs to taxpayers.  

“Vergent Power is proud to support this municipal customer and its progressive efforts to have 100-percent-renewable power in 2023," says Justin Rathle, president of Vergent Power Solutions. "Utilizing renewable biogas generated by wastewater treatment plants and landfills is an excellent way for communities to transition to renewable energy. This 1-megawatt plant will be Vergent Power’s 11th renewable energy system in our North American operating fleet comprising more than thirty microturbines running on biogas."

The acquisition will allow Waste Harmonics to expand its service offerings and grow its cloud-based analytics footprint.

Waste Harmonics, a national managed waste service provider based in Rochester, New York, recently announced the acquisition of Meridian Alliance Partners, a certified solid waste and recycling specialist based in Scottsdale, Arizona. The company says Meridian implements no-cost sustainable waste and recycling programs to reduce hauling costs and increase recycling credits.  

With the acquisition, Waste Harmonics says it will expand its service offerings, leveraging sustainable waste and recycling programs to implement green initiatives and provide its customers with waste management services. The acquisition will also allow the company to grow its strengths in cloud-based analytics, monitoring and reporting by continuing to expand the footprint for deploying iWaste monitoring devices.  

“Companies are thinking about sustainable waste management differently because it’s critical to the environment we live in,” Waste Harmonics CEO Michael Hess says. “This partnership puts us in a great position to enhance and complement our efforts, specifically in sustainable waste and recycling programs, while leveraging our industry expertise and extraordinary service to our customers.”   

The collaboration between Waste Harmonics and Meridian Alliance Partners will offer various services in waste and recycling, blending analytics, rightsizing and optimizing environmentally sound and cost-effective recycling solutions.   

Waste Harmonics provides an outsourced waste management consolidation service for companies and corporations with up to 5,000 locations. Waste Harmonics says it works with business clients across North America to deliver cost savings, consolidation of invoicing and communications and recycling and sustainability strategies.  

The company offers a wide variety of services with all types of equipment, including large and small container services, compactors, balers, construction services and recycling. 

The report from SWANA's Applied Research Foundation provides guidance on managing waste and recycling collection services. 

The Solid Waste Association of North America (SWANA), Silver Spring, Maryland, has released a report highlighting best practices to address truck driver shortages and a declining availability of waste and recycling collection personnel.   

The report, which was released by SWANA’s Applied Research Foundation (ARF), presents tools and best practices to provide waste and recycling collection services optimally and efficiently. Called “Efficient Management of Waste & Recycling Collection Resources,” the report follows a study released in December 2021 called “Encouraging Better Curbside Recycling Behaviors,” which assessed the effectiveness of “recycle right” educational programs.  

“In the wake of the COVID-19 pandemic, the efficient allocation of personnel and equipment resources in the provision of waste and recycling collection services is more essential than ever,” says David Biderman, SWANA executive director and CEO. “This new report provides solid waste, recycling and sustainability managers with useful guidance and benchmarks for streamlined collection operations.”  

According to the report, capital costs are estimated to account for 19 percent of total collection deployment costs, while labor costs account for 39 percent of total costs. ARF says collection services should be managed so that no routes are uncollected because of the lack of functioning collection equipment.   

Furthermore, analysis in the report indicates annual maintenance and repair costs are roughly equivalent to the annual capital costs. As a result, deferring the purchase of new vehicles at the end of optimal service life likely will increase total service costs.   

The report notes that solid waste collection vehicles have a “useful” life, after which they should be retired from service and replaced with newer vehicles. The optimal life of a solid waste collection vehicle will vary depending on average annual miles driven/hours of operation, local operating conditions, local maintenance practices, vehicle make and manufacturer. 

Additional research findings the report presents address various questions regarding the efficient use of personnel and equipment in the delivery of waste and recycling collection services. SWANA recommends that local governments collect and analyze on-route productivity data to evaluate the productivity and performance of their collection crews compared to their peers.   

Additionally, the report says governments should budget for and develop equipment and labor backup strategies that enable them to staff and serve routes every collection day. They should also determine and adhere to equipment service lives that minimize life cycle costs associated with their collection equipment.   

Finally, SWANA says operators should take advantage of new routing software to develop daily routes quickly and efficiently for on-demand services. 

“We are proud to be able to provide this report that addresses such an important and timely topic for SWANA ARF subscribers,” says Jeremy O’Brien, SWANA director of applied research. “SWANA would like to recognize and thank the organizations that comprise the ARF’s collection group subscribers that identified and voted on this topic as well as supported and assisted in the research.”  

The full report is currently only available to SWANA ARF subscribers. SWANA members receive free access to the report one year after publication. Download the executive summary here. 

The majority of new capacity is for mills producing linerboard and corrugated medium.

The Northeast Recycling Council (NERC), headquartered in Brattleboro, Vermont, has released an update to its “Summary of Announced Increased Capacity to use Recycled Paper” report, which it says reflects continuing progress toward using more recycled paper in North America and includes completed projects as well as those approaching projected opening dates.

NERC first published the list in 2018, which at the time included new capacity projects at 17 mills—three of which had been completed. The previous update was in June 2021, and the most recent update includes 28 new mills, including four new mills among 17 completed projects. Much of the new capacity is occurring at existing or closed mills. In some instances, mills are adding new capacity, and, in other cases, they are converting existing papermaking machines to produce different end products. This list includes two mills that are consolidating production from existing facilities and one that will use food-contaminated paper from commercial sources.

According to NERC, the announcement of a new mill does not guarantee it will be built because of the high costs of siting, permitting and building a new mill. Economic circumstances and demand for final products will determine the viability of each project.

The following projects have been completed since the June 2021 update to the report:

According to NERC, the following projects have been announced and are awaiting completion:

The majority of new capacity increases are for mills producing linerboard and corrugated medium and will use old corrugated containers (OCC) as their primary feedstock. According to NERC, the facilities are unlikely to use mixed paper unless their stock preparation systems allow for its uses, but about half of the announced mills plan to use some mixed paper.

If all projects are completed, they will use more than eight million tons per year of OCC and mixed paper.

The full report can be accessed online.