PART 3
CASE STUDY: UNITED STATES - THE ECONOMICS OF TRASH
WHY TRASH IS WORTH MILLIONS?
In 2019, the North American waste management market reached a staggering $208 billion, with expectations to grow to $229 billion by 2027.Â
This growth is driven by strict environmental regulations and an increase in the volume of waste produced.Â
The United States remains one of the most wasteful countries globally, generating 239 million tons of garbage annually, approximately 1,700 pounds per person. While some view this waste as an environmental threat, others see it as a profitable opportunity.
Modern Landfills: Engineering Marvels:
Design and Regulation: Modern sanitary landfills feature reinforced plastic liners, liquid removal pipes, and compaction equipment, regulated under the Solid Waste Disposal Act of 1965 and the Resource Conservation and Recovery Act of 1976.
Environmental Monitoring: Landfills are monitored for up to 30 years to ensure safety.
Financial Aspects of Landfills - Tipping Fees:
Landfills generate significant revenue primarily through tipping fees, which are charged based on the weight of the waste. The tipping fee is a fee that is paid by those who dispose of waste in a landfill. To simply put it, tipping fees are paid by the waste generators.
When we say waste generators, we mean businesses and industries that produce the waste in the first place. The tipping fee helps to offset the costs of running a landfill and helps to pay for the costs of disposing of waste.
 In 2020, the average tipping fee was $53.72 per ton, translating to approximately $1.4 million in annual revenue for small landfills and $43.5 million for large ones.Â
Tipping fees have seen steady growth over the past four decades, varying widely depending on the region.
Region | Average Tipping Fee (2020) | Example States |
South Central | $39.66 per ton | Arkansas: $30.53 per ton |
Northeast | $68.69 per ton | Delaware: $85 per ton |
Investment and Profitability:
Costs: Building and operating a landfill costs between $1.1 to $1.7 million.
Private Sector Dominance: Companies like Waste Management and Republic Services dominate, showing significant stock market growth and improved cash flow from 2015 to 2019.
Financial Overview of Waste Management Companies (2015-2019):
Company | Number of Landfills | Stock Performance | Free Cash Flow Growth |
Waste Management | 300 | Doubled | Significant |
Republic Services | 180 | Doubled | Significant |
Other Innovative Revenue Streams:
Landfill Mining: Valuable recyclable materials formerly regarded as waste can be mined from landfills, providing a new source of such materials like metals from older landfills, e.g., $7.42 million worth of metal was recovered in Maine between 2011 and 2015.
Landfill Gas-to-Energy: LFG is extracted from landfills using a series of wells and a blower/flare (or vacuum) system. This system directs the collected gas to a central point where it can be processed and treated depending upon the ultimate use for the gas. From this point, the gas can be flared or beneficially used in an LFG energy project. To simply put, methane is captured to generate electricity or fuel, producing 10.5 billion kilowatt-hours annually, enough to power 810,000 homes.
Overview:
Revenue Source | Description | Example |
Tipping Fees | Charges based on the weight of waste disposed | Average $56.80 per ton in 2023 |
Landfill Mining | Extracting and reprocessing materials from older landfills | $7.42 million worth of metal recovered in Maine |
Landfill Gas-to-Energy | Capturing methane gas and converting it into electricity or fuel | Generates 10.5 billion kilowatt-hours annually |
The waste management industry in North America, particularly in the United States, has transformed garbage disposal into a lucrative business. With advancements in landfill technology, innovative revenue streams, and government support, the industry continues to grow, highlighting the potential of viewing waste as a resource rather than a problem. As the industry expands, it remains crucial to balance profitability with environmental sustainability and public health considerations.
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