Table of contents
The waste management market comprises businesses which collect, transport, process, recycle and/or dispose of different waste types, including metals, organic waste, plastics, paper, glass and textiles among others. Accordingly, we segmented the European market based on the material type(s) processed into (i) diversified, (ii) specialist - metal and (iii) specialist - non-metal.
The European waste management market is highly fragmented. A few large multinationals (e.g. Veolia, Remondis, FCC) are followed by a long tail of regional, often privately-owned small players. The market participants also include state- or municipality-owned waste managers, which have not been covered in this research. The industry is consolidating, driven by multiple arbitrage opportunities for smaller buy-and-build targets, as well as succession problems and regulations (e.g. EU metals export control) disproportionately impacting smaller players.
Sponsor-led activity has been moderate, with ~30% of identified assets being backed by financial sponsors (December 2022). Investors are typically hesitant to invest in the space due to limited pricing power, capital-intensive operations and inherent dependence on state regulations. Nevertheless, low exposure to economic cycles, recurring revenue streams and the potential for a favourable sustainability positioning have proven to be attractive factors for certain sponsors.
ESG topics are centred around the positive environmental influence of recycling activities, i.e. extending materials’ economic life and decreasing share of incinerated and landfill waste. However, the waste exports to developing countries and frequent regulatory breaches have tainted the industry’s reputation on the social and governance fronts.
European Commission (September 2022) indicated that the EU countries generated 2,151m tonnes of waste in 2020 (-15.3% vs. 2016), equivalent to ~4.8 tonnes per capita (-4.0% vs. 2016)
The global waste recycling services market was valued at $57.7bn in 2021 and is forecasted to reach ~$90bn by 2030, growing at a ~5% CAGR (Statista, March 2022)
Technavio (August 2021) projects the European industrial waste services industry to grow from $25.2bn in 2020 to $32.2bn in 2025 at a 6.3% CAGR during the period
Regulations and government initiatives (e.g. EU’s 2050 carbon neutrality goal) aimed at increasing the recycling rates. These legislative changes are both driving the waste collection fees up and forcing producers to increase the share of recyclable products (interview by Gain.pro; Notes From Poland, January 2021)
The emergence of smart waste management methods is expected to support margins. The introduction of sorting robots, chipped recycling bins, GPS-operated compactors and other novel technologies are set to cut ongoing costs for waste managers (McKinsey, May 2022; EEA, January 2021)
Strong growth opportunities in the underdeveloped and relatively untapped plastic recycling niche (interview by Gain.pro). In 2020, ~38% of plastic waste in Europe was recycled (Eurostat, October 2022), compared to the EU target of 55% by 2030 (European Commission, January 2018)
Negative second-order effects from the growing environmental consciousness of consumers. The longer product life cycles and reductions in household waste are expected to lower the total demand for waste collection and recycling services (interview by Gain.pro)
The EU ban on exports of recycled metal and plastic materials threatens industry development (Argus Media, December 2022). The regulation will lead to oversupply in the European market, subsequently damaging the profitability of local waste managers (EURACTIV, May 2022)
The European energy crisis threatens margins in the coming years. The waste managers are highly exposed to electricity and oil prices due to energy-intensive collection and recycling processes (EUWID, September 2022) with limited ability to pass costs on to buyers (interview by Gain.pro)
Read the full report on Gain.pro
Request a 7-day free trial to gain in-depth knowledge on the Waste management industry.
With the full report, you have access to…
Detailed assessments of the market outlook
Insights from c-suite industry executives
A clear overview of all active investors in the industry
An in-depth look into 144 private companies, incl. financials, ownership details and more.
A view on all 556 deals in the industry
ESG assessments with highlighted ESG outperformers
And much more!