A new geography of the resource

Jean-Marc BOURSIER: The answer is “No, but…”. In theory, waste doesn't travel, since powerful regulatory barriers are opposed to this happening. Non-hazardous waste is managed locally. In France, the NOTRe Act sets the regulatory framework and since January 1, 2017, waste has been managed at the regional level. The principle is the same in Belgium: non-hazardous waste doesn’t travel, not even between Wallonia and Flanders. In addition to regulatory barriers, waste transfer between countries would in fact be limited by transportation costs.

That said, some frontiers open up when two neighbouring countries decide to do it. That’s the case with Germany and the Netherlands: non-hazardous Dutch waste can be treated in Germany and vice versa. SUEZ has built an energy recovery unit on the frontier between the two countries, with one entrance in Germany and another in the Netherlands, in order to benefit from this special cross-frontier situation. Given this particular context, our Group derives a clear advantage from its presence in both countries. 

As for hazardous waste, it may benefit from European free-movement authorization to be exported to other countries, then treated there. Not all countries have the necessary equipment and expertise. The creation of IWS, our pan-European business unit specially dedicated to the treatment of hazardous waste, enables us to optimize the saturation of our industrial resources throughout Europe.

JMB: You understand that, with some exceptions, the rule remains that non-hazardous waste doesn’t travel. On the other hand, “resources” travel, as long as we’re talking about a product that can replace a virgin product. Interpreted in this way, Sweden is not importing waste but rather energy resources with high calorific power. These resources have already been through an initial sorting process that has transformed them into a useful fuel for producing heat. And clearly, Sweden is right to import these sustainable resources rather then cutting down its beautiful forests or using fossil fuels. 

The issue is therefore to know at what moment in the value chain the waste becomes a resource. If I take the example of a plastic bottle, it becomes waste when I throw it into a garbage can for sorted waste. However, once it has been sorted, washed and transformed into granules that can be used as a secondary raw material in the production of new bottle, it becomes a product because it can be compared with granules of virgin plastic. These recycled granules are free to travel. So there is almost always a specific moment in the transformation chain when the waste becomes a product, a resource.

Erik ORSENNA: When we talk about waste, we imagine a removal cost of around 100 euros a tonne. However, once the waste has been recovered and has become a resource, it has a price and no longer represents a cost.

JMB: Erik’s remark is very pertinent. To better understand the complexity of recovering waste and how it becomes a resource, let’s take another example. In one and the same garbage can, there are a sheet of paper and a banana peel. The waste cannot be transported beyond the regulatory management area, regardless of whether we’re talking about a region or a country. However, if I sort and separate the sheet of paper and the banana peel, I can count them as two materials, each of which can be transformed again.

JMB: This is a subtle regulatory question that SUEZ must deal with on a day-to-day basis. In Europe, the regulations are very strict: the waste must be collected, treated and eliminated or recovered in a certain way. It’s up to each country to decide at what moment in the process the waste becomes a raw material, a resource. If the banana peel and the sheet of paper are mixed, they constitute waste and their export is forbidden. But once they have been separated and recovered, the law says that compost made from the banana peel can be exported. The same is true for recycled paper. SUEZ exports large quantities of paper from Europe to China.

EO: I have worked on paper, which is a fascinating subject. The Chinese are much in need of paper, specifically cardboard to package the products that they export. However, they lack wood from which they could extract the cellulose needed for the manufacture of cardboard and therefore they need to import paper. That’s why containers that arrive in Europe loaded with consumer goods return to China filled with packaging paper and cardboard.

JMB: We should bear in mind that in late 2016, it cost SUEZ less to ship a container from Europe to Shanghai than it did to send a truck from Paris to Reims. That’s not as true now as it was then.

JMB: Not necessarily. Let’s take the example of the UK, which has undertaken a procedure to withdraw from the European Union. If you remember, I said last week that the EU has set a goal for its members: by 2030, they should have a material recovery rate of 65%, limit the storage rate to 10% and allocate only the remaining 25% to energy recovery. By leaving the EU, the United Kingdom has de facto given itself the right to ignore these objectives and may perfectly well decide to more broadly privilege energy recovery. If this were the case, the UK could limit its waste exports to the Netherlands and Scandinavia, with the goal of using them internally and developing its own energy industry. The British Minister of State for Climate Change and Industry, whom I recently met with, is already thinking about this issue, with a dual objective in mind: ensuring his country’s energy independence and creating local jobs.

EO: Yes, your car for example. Imagine that every year, in France alone, two million end-of-life motor vehicles must be treated and recovered. SUEZ treats some of them on its site in Romorantin, France. The first outlet is the resale of spare parts: electrical networks, doors... In short, the entire vehicle. Engines are successfully sold around the world. They may be reused in Africa in an entirely different function – as water pumps, for example.

Some vehicles will be put in working order and resold. 

JMB: Erik is referring to the partnership we have with Renault in Indra. Renault has gained a substantial advantage in environmental matters by taking a dual approach. First, the idea was to reduce its environmental footprint by limiting the number of vehicles piling up in automotive scrapyards, thereby deteriorating the brand’s image. Second, Renault wanted to take part in the resale of spare parts, a growing market from which it was absent.

This movement was accompanied in France by a change in regulations, which now requires garage operators, as of 1 January 2017, to sell used spare parts as an alternative to new parts. With Indra, SUEZ and Renault have the capacity to certify that spare parts re-injected into industry channels comply with quality standards. These parts are thus going to be authorized for a second life in the used-part market.

In the end, Indra is sending some of the parts and vehicles to Africa, while another portion is reintroduced on the French second-hand market.

EO: I also saw this approach in the aeronautics industry where SUEZ has created a joint venture with Airbus and Safran for recycling end-of-life airplanes. The reasoning is the same: airplane manufacturers didn’t want to see piles of planes in the desert. That would tarnish their industry's environmental image. In addition, they wanted to control the resale market. That’s the case in particular for engines, which are certified and offer traceability.

JMB: In line with our positioning on the resource revolution, we define ourselves as a supplier of secondary resources and renewable energy. In 2016, we recycled and resold 8.5 million tonnes of secondary raw materials in Europe. This included roughly 2.7 million tonnes of cardboard, 2 million tonnes of ferrous and non-ferrous metals, 1 million tonnes of wood, 1 million tonnes of organic matter, 600,000 tonnes of glass and 350,000 tonnes of plastic. What’s more, our presence in all major European and world markets enables us to take advantage of these international material transfers.

Our downstream customers are very demanding and expect three things from us: 

1. Quality. This means being able to guarantee that secondary resources will be impeccable and fully meet their expectations.
2. A competitive price. We need to develop new sales channels whose cost must be comparable to – or less than – that of virgin material. The success of “green” growth must not come at the expense of our customers’ competitiveness.
3. Recurrence and traceability, as the law requires. In this respect, SUEZ Trading plays a key role.

I am convinced that in the new world that is opening up to us, SUEZ indeed holds the keys to success.

> [Dossier] Journeys to the countries of the new resource with Erik Orsenna

> The challenges of plastic
> Recovering energy to serve a low-carbon world