22 Business Models for Resource Recovery : Making Money from Waste

Justin Dupré-Harbord explains 22 teasers offering an insight into its research into successful business models for turning wastes into money.

Recently, some crazy scientists in Bristol, UK have discovered how to charge their smartphones with their own pee. By using micro-organisms which feed off their urine and generate electrons as a by-product, they have managed to produce enough electricity to charge a phone or power some lights.

Although we can question the utility of this technology, considering the very small amount of energy produced, there may still be method to these scientists’ ‘madness’. People generate millions of tonnes of waste every day, and with rapid urbanisation and population growth, this will only increase.

Urban areas already account for 75% of the world’s natural resource consumption and produce 50% of global waste. In most countries, especially low- and middle-income nations, the waste management systems currently used to collect, process and recycle this waste are insufficient and cannot meet demand.

Untreated rubbish is already having terrible effects on the environment and human health, and if not properly contained, could lead to a global disaster with people literally drowning in their own garbage. The global community is realsing the urgency of this problem, with many of the Sustainable Development Goals supporting waste and water reuse.

The recent World Water Week in Stockholm focused on “Water and waste: reduce and reuse.” Technologies and approaches that productively reuse urine or other waste will be crucial in determining our capacity to achieve sustainable growth in the future.

Recovering energy, nutrients and water

In fact, there are many practical waste reuse projects already being implemented all around the world. For example, in Nairobi, Kenya a community-based organsation in the city’s biggest slum, Kibera, is using poo to generate energy in the form of biogas.

With the assistance of an NGO, the organsation has set up a toilet complex that not only serves as loos for about 1000 people every day, but also provides showers, a meeting hall, business spaces and cooking facilities for local vendors. Using bio-digesters, the poo collected is decomposed and fermented, creating a gas byproduct. This gas is then used as biogas for the cooking facilities; excess could also be sold to households or business as a cheap source of energy.

This project has improved sanitation in Kibera while changing people’s attitude towards reusing human waste, and is now being replicated in other areas in Kenya. Rubbish can also be reused to grow food.

In Bangalore, India, the company Terra Firma uses a variety of approaches to produce compost from municipal solid waste, including windrow composting, where waste is kept in piles to decompose and then sieved. The company then sells this compost to farmers who use it as organic fertiliser in their fields.

Along with a variety of other activities, including selling recyclables and providing consultancy services to other firms, this has allowed Terra Firma to construct a sustainable business from waste reuse, as well as reduce Bangalore’s waste management costs and human exposure to hazardous garbage. Finally, the hot topic of this year is reusing wastewater.

Worldwide, more than 330 cubic kilometers of municipal wastewater is generated annually. With urban populations demanding more and more resources, this wastewater could theoretically be used to irrigate 40 million hectares of cropland or to power 130 million households through biogas generation.

In the city of Monastir in Tunisia, wastewater is being reused to cultivate food for the local market. For a fee, the city wastewater treatment plant transfers about a quarter of its reclaimed water to tree plantations managed by 40-56 farmers who grow olives, peaches and pomegranates. This provides farmers with a secure supply of water for irrigation while reducing the costs of the treatment plant.

The importance of business thinking

So if, as we have seen, reusing waste can be done in many different settings, what is stopping these types of initiatives from being implemented in cities around the world? In short, the answer is money. Although developing countries already spend $46 billion annually on waste management, it is estimated they need another $40 billion to adequately cover service demand.

This is why, apart from reusing waste, another important factor that links the three previous examples is their ability to partially or fully recover their costs. In Kenya, the toilet complex generates enough money from user fees to cover its operation costs and is set to pay back the investment costs in three years. In Tunisia, the treatment plant recovers 40% of its operation and maintenance costs from the money it charges plantation farmers for treated wastewater.

In India, Terra Firma has actually been making profits almost every year since its inception. These cases are important examples for how business planning can relieve the public sector from full subsidy based operations to attract private finance and overcome poor waste management services in low- and middle-income countries.

So far, there has been very limited business thinking in the waste and sanitation sector, which still mainly relies on insecure public finances. In this context, there is great opportunity for entrepreneurs to apply the concept of resource recovery and reuse (RRR) in order to create revenue, while also providing an important service for society and the environment.

The potential for this new market is very high; for example, the World Economic Forum has estimated the potential global revenue from the biomass value chain (i.e. the process of converting organic material to energy) to reach up to USD 295 billion by 2020.

Business models for waste reuse

To highlight these potential business opportunities, WLE’s lead centrer, the International Water Management Institute (IWMI) and partners have studied a large set of existing RRR businesses and compiled their business models and relevant case studies in an upcoming book, Resource Recovery from Waste: Business Models for Energy, Nutrient and Water Reuse in Low- and Middle-Income Countries.

As a teaser, the authors prepared 22 business model profiles for World Water Week that show examples for the private and public sectors to recover costs or even make money from reclaiming rubbish.

Each model explains the value proposition and value chain of the business, the institutional set up and risks in terms of viability and safety, as well as providing a case study to showcase how it can be implemented.

We hope that these models and cases will give students in business development or engineering inspiration to engage in opportunities in the waste and sanitation sectors, and provide the impetus for a new system in which rubbish becomes an attractive resource for investment.

The models will also offer an evidence base for governments and businesses to work together in providing sustainable waste management in support of human and environmental health.

So next time you go to the toilet or throw something in the bin, take a second to think about what you are flushing or throwing away, and how that rubbish could have been used to make money in the supply of energy, food or water.

Justin Dupré-Harbord works on resource recovery and reuse at the International Water Management Institute in Colombo, Sri Lanka. For more information on the 22 business models can be found here: www.tinyurl.com/ycben6sh