2020 – a year out of the ordinary
Up until March there was no indication that the waste industry would experience anything but a normal year. Then COVID-19 arrived and turned Europe upside down.
If we turn the clock back to January, the start of a new decade looked promising both for Geminor and other industry players. A healthy market meant expectations of significant growth in 2020 and onwards. Suddenly and without warning we were hit by what is referred to as the most severe civil crisis since World War II. A state of shock spread to many businesses all across Europe, and the waste industry was no exception.
The COVID situation was something no one had ever faced before, and many were rightly concerned. One of the first challenges addressed was whether the industry would be able to collect, handle, transport, store and recover waste during a COVID pandemic. By the end of spring the situation gradually came under control in most of Europe, but phase two of the Corona pandemic has created challenges for many industry players: There is now a substantial reduction in the waste volumes that many EfW plants are dependent upon.
The UK has, for a while, been a market that European countries have relied upon for waste for energy recovery. However, a dramatic drop in commercial and industrial waste during COVID has led to a deficit in waste volumes that the increasing amounts of household waste cannot compensate for. The absence of volumes from the UK has affected the international market for months, but waste volumes – whilst reduced by COVID – are also impacted by the ever increasing UK incineration capacity.
The pandemic hit the Nordic market in March, which coincided with the seasonal end for WtE plants in the regions. The losses in volumes occurred gradually, which maintained a certain balance in a market and simultaneously giving the industry time to find necessary volumes of waste for recovery elsewhere in Europe. The second wave arrived at a more critical time in terms of both seasonal variations and available volumes for energy recovery but has so far not had the same shocking effect.
It will be interesting to follow the development in the markets over the coming winter months. Germany is among the countries that are now “shutting down” until 5. January, and both France and Italy are introducing immediate measures to limit the spreading of infection. It is still very unclear what impact this “lockdown” will have on waste volumes and regional demand from incineration plants. EU and regional COVID-measures will affect the availability of waste quantities, which also will affect delivery and prices when waste volumes have to be replaced in the spot market. Hence, we are expecting a busy and demanding winter season with markets in imbalance due to both COVID and Brexit.
Needless to say, the importance of finding new, stable and tailored waste streams is increasing. Hence, Geminor has increased efforts throughout 2020 by expanding company presence in new markets such as Poland, France and Italy – a crucial move in order to maintain stability in markets for both waste for recovery and material recycling.
Chemical recycling, paper and waste wood
A lot of exciting things have happened in the waste industry in 2020. One of them is chemical recycling, which finally is becoming a buzzword. In 2020 Geminor has strengthened its collaboration with the Norwegian company Quantafuel, which opened its first commercial plant for chemical recycling of plastics in Skive, Denmark. Throughout 2020, we have had a strong focus on plastics, and run a comprehensive test for pre-treatment of waste plastics. The goal is to make new, “virgin” plastic from used plastic packaging material. We expect strong development in both plastic sorting and recycling in the coming years, a development Geminor wants to be part of.
With a halt in the export of cardboard and paper to China, we have seen an increasing need to find off-takers for these fractions in Europe. Hence, we are investing in this market and in 2020 we have brought an expert on paper trading to our team, Yasser Ismail from Germany. We are now building a stronger European supplier service to become a more attractive partner for regional paper producers in Europe.
The waste wood market has been characterized by full stock, a warm autumn and bark beetles that create challenges for the forest industry in Europe. In the Nordics, the focus has been on sufficient sorting to increase the quality of waste wood, and by this increasing the share of wood for material recycling – predominantly for the panelboard industry. Previously, waste wood in countries such as Norway has largely been used for local energy recovery, but 2021 will bring a change towards a more international market. This year we have commenced the export of Norwegian recycled waste wood to the UK, where it will be used to produce new panelboards for the construction industry. Geminor is investing in wood chips and is planning to increase production from around 250,000 tonnes in 2020 to over 400,000 tonnes in 2021.
With a vaccine on the way we now look forward to 2021. Some of our most important goals for the new year are to help develop new and better waste fractions, contribute to an increasingly well-functioning waste market and to help develop a greener industry with reduced reliance on landfill all across Europe.