The garbage industry has outperformed the market since 2015. Here’s why

Published

3 years ago

July 26, 2021

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In this article

A rising industry

America has long remained one of the most wasteful countries in the world, generating 239 million metric tons of garbage every year, about 1,600 to 1,700 pounds per person. While some view it as a threat to our environment and society, the solid waste management industry sees an opportunity.

“It’s a profitable industry,” according to Debra Reinhart, a member of the Board of Scientific Counselors for the EPA. “It’s a difficult industry but it is profitable if it’s done right.”

Two private companies, Waste Management and Republic Services, lead the solid waste management sector. Together they own about 480 landfills out of the 2,627 landfills across the United States. The two companies have seen staggering performance in the market, with the stock prices of both doubling in the past five years. Both Waste Management and Republic Services declined CNBC’s request for an interview.

“They’ve learned how to be best-in-class businesses,” said Michael E. Hoffman, a managing director at Stifel Financial. “Their publicly traded stocks outperformed the market handily between 2015 and 2019 and underpinning it is a meaningful improvement in their free cash flow conversion.” The stocks have continued to outperform.

Tipping fees

Since its inception, landfills have made a majority of their revenue via tipping fees. These fees are charged to trucks that are dropping off their garbage based on their weight per ton.

In 2020, municipal solid waste landfills had an average tipping fee of $53.72 per ton. That translates to roughly $1.4 million a year in approximate average gross revenue for small landfills and $43.5 million a year for large landfills just from gate fees.

Tipping fees have seen steady growth over the past four decades. In 1982, the national average tipping fee sat at $8.07 per ton or about $23.00 when adjusted for inflation. That’s nearly a 133% increase in 35 years.

While tipping fees make landfills sound like a risk-free business, they are still quite an expensive investment. It can cost about $1.1 million to $1.7 million just to construct, operate and close a landfill. For this reason, private companies have replaced municipal governments to own and operate the majority of the landfills across the U.S.

“I think it’s because the trend has been to go larger and larger so the small neighborhood dump can’t exist because of the regulations and the sophistication of the design,” Reinhart said. “So we are tending to see large landfills, which do require a lot of investment upfront.”

Privatization of landfills

Private companies have also played an important role in discovering new ways beyond tipping fees to turn a profit out of garbage. Landfill mining and reclamation, a process of extracting and reprocessing materials from older landfills, is one of them.

In 2011, a private scrap metal company contracted with a nonprofit landfill in southern Maine to mine precious metals. In four years, they recovered more than 37,000 tons of metal worth $7.42 million.

But it isn’t always a success story. In 2017, the city of Denton, Texas, ended its landfill mining program before it could even start after realizing that the benefits weren’t worth its $4.56 million price tag. According to experts, economics is usually the biggest challenge to make landfill mining work.

“There’s virtually no way I can see how that makes money,” said Hoffman. “The commodity values would have to be at such higher levels than they are today for whatever it is you’re trying to get your hands on.”

Meanwhile, some experts argue that landfill mining can be profitable if done correctly by recovering more space for tipping fees.

“Many people are mining but they’re not reusing the space,” according to Sahadat Hossain, professor of civil engineering at the University of Texas at Arlington. “If you do the operation right, you’re never going to be involved and it will always make you money.”

Landfill gas to energy

Modern chemistry has also allowed landfills to be mined for energy, using methane gas that is produced from decaying trash. According to the U.S. Energy Information Administration, landfill gas generates about 10.5 billion kilowatt-hours of electricity every year. That’s enough to power roughly 810,000 homes and heat nearly 547,000 homes each year.

“The landfill gas operations that are known as low or medium DTU which are the predominant form of capturing the gas and turning it into electricity or steam and then selling it? Those are very good returns on capital projects,” Hoffman said.

While revenue from generating energy and fuel isn’t quite impressive, landfills that participate do benefit greatly from generous subsidies. The tipping fee, combined with various mining techniques and government subsidies have altogether transformed the landfill industry into a booming business.

The solid waste management industry will only continue to expand as long as there are those who view garbage as a resource rather than waste. Because when it comes to landfills, one man’s trash is quite literally another man’s treasure.

“Waste is not a waste, but it’s a resource,” emphasized Hossain. “World has limited resources. If we don’t reuse and recycle these, we cannot talk about a circular economy. That will always be a talk in the tabletop discussion.”

Environment

One of the US’s first solar peaker plants – with Tesla Megapacks – just came online

Published

4 hours ago

November 21, 2024

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One of the US’s first solar peaker plants – with Tesla Megapacks – just came online

Arevon Energy has kicked off operations at Vikings Solar-plus-Storage – one of the US’s first utility-scale solar peaker plants.

The $529 million project in Imperial County, California, near Holtville, features 157 megawatts of solar power paired with 150 megawatts/600 megawatt hours of battery storage.

Vikings Solar-plus-Storage is designed to take cheap daytime solar power and store it for use during more expensive peak demand times, like late afternoons and evenings. The battery storage system can quickly respond to changes in demand, helping tackle critical grid needs.

Vikings leverages provisions in the Inflation Reduction Act that support affordable clean energy, strengthen grid resilience, boost US manufacturing, and create good jobs.

The Vikings project has already brought significant benefits to the local area. It employed over 170 people during construction, many local workers, and boosted nearby businesses like restaurants, hotels, and stores. On top of that, Vikings will pay out more than $17 million to local governments over its lifespan.

“Vikings’ advanced design sets the standard for safe and reliable solar-plus-storage configurations,” said Arevon CEO Kevin Smith. “The project incorporates solar panels, trackers, and batteries that showcase the growing strength of US renewable energy manufacturing.”

The project includes Tesla Megapack battery systems made in California, First Solar’s thin-film solar panels, and smart solar trackers from Nextracker. San Diego-based SOLV Energy handled the engineering, procurement, and construction work.

San Diego Community Power (SDCP) will buy the energy from the Vikings project under a long-term deal, helping power nearly 1 million customer accounts. SDCP and Arevon have also signed an agreement for the 200 MW Avocet Energy Storage Project in Carson, California, which will start construction in early 2025.

Vikings is named after the Holtville High School mascot, and Arevon is giving back to the local community by funding scholarships for deserving Holtville High students.

Arevon is a major renewable energy developer across the US and a key player in California, with nearly 2,500 MW in operation and more than 1,250 MW under construction.

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Environment

BYD chases Ford and Toyota with its latest EV plant set to open in Cambodia

Published

4 hours ago

November 21, 2024

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BYD chases Ford and Toyota with its latest EV plant set to open in Cambodia

China’s EV giant BYD is aggressively expanding overseas. As it finalizes plans for yet another EV manufacturing plant, this time in Cambodia, BYD will set up shop next to newly opened Ford and Toyota facilities.

BYD’s impressive growth streak is not slowing down. In October, BYD sold over 500,000 new energy vehicles (NEVs), its fifth straight record sales month and the first time it has crossed the half-million mark in a single month.

With China’s auto market becoming flooded with low-cost competitors, BYD is looking to key overseas markets to drive growth.

After opening its first plant in Thailand earlier this year, a booming EV region, BYD plans to open up shop in another major Southeast Asian market.

According to Khmer Times, BYD is nearing a deal to establish a new EV manufacturing plant in Cambodia. Prime Minister Hun Manet said on Wednesday that the Council for the Development of Cambodia (CDC) is in the final stage of negotiations with BYD to build a new electric vehicle facility in the region.

“We may be aware that BYD is a giant Chinese company specialising in EV production, comparable to Tesla, the largest EV manufacturer in the United States,” Mr Hun Manet said at the event.

BYD closes in on deal for a new EV plant in Cambodia

BYD will follow Toyota, which opened an assembly plant in Cambodia in May, and Ford’s first assembly plant in the region, which opened in June 2022.

Cambodia’s prime minister stressed the importance of attracting new investments. With geopolitical tensions rising, many companies are looking to new locations.

Southeast Asia is expected to become a major electric vehicle hub. The Cambodian government unveiled plans earlier this year to raise automotive and electronics exports to over $2 billion while creating more than 22,000 new jobs.

BYD opening a new EV plant would be “excellent news” for Cambodia, Natharoun Ngo Son, Country Director of EnergyLab, told Khmer Times.

BYD-milestone-10-millionth-NEV — BYD Dolphin (left) and Atto 3 (right) Source: BYD

An EV manufacturing plant will “provide an excellent opportunity to reskill or upskill the Cambodian workforce” for new higher-paying jobs. EnergyLab is launching a new skills development program early next year to prepare the Cambodian workforce for the auto industry’s shift to EVs.

The news comes after BYD launched its first electric pickup, the Shark PHEV (BYD Shark 6), in Cambodia last month.

BYD-EV-plant-Cambodia-Shark — BYD launches Shark PHEV pickup in Cambodia (Source: BYD)

BYD is also planning to open EV plants in Mexico, Brazil, Pakistan, Hungary, and Turkey as it competes with Ford and Toyota in the global auto market.

Electrek’s Take

According to a recent Bloomberg report, BYD is quickly catching up to Ford in global deliveries. BYD outsold Ford in the third quarter by around 40,000 units.

While Ford is cutting more jobs in Europe as part of its restructuring, BYD has been on a major hiring spree as it ramps up production to meet the higher demand.

BYD is known for its low-cost EV models, like the Seagull, Dolphin, and Atto 3, but the Chinese auto giant is expanding into pickup trucks, midsize smart SUVs, and luxury EVs.

Ford is well aware of BYD’s rise in the global auto ranks. CEO Jim Farley has warned rivals in the past about losing significant revenue if they cannot keep up with China. Farley said he was shocked by the advanced tech he saw after a trip to China in early 2023.

Although Ford is shifting gears to focus on smaller, lower-cost EVs, it may be too little too late. Ford is developing what’s promised to be one of the most efficient EV platforms in California, but its first model based on it, a midsize electric pickup, isn’t due out until 2027.

Will BYD overtake Ford in the global auto ranks? Let us know what you think in the comments below.

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Environment

Researchers develop EV battery that charges 0-80% in 15 minutes

Published

5 hours ago

November 21, 2024

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Researchers develop EV battery that charges 0-80% in 15 minutes

EV battery charges 15 minutes — Photo: University of Waterloo

Researchers at Canada’s University of Waterloo have developed a new lithium-ion EV battery design that can charge from zero to 80% in just 15 minutes and has a longer lifespan.

The new design also allows batteries to handle up to 800 charging cycles, significantly increasing their lifespan.

Yverick Rangom, a professor in Waterloo’s Department of Chemical Engineering, said, “If we can make batteries smaller, charge faster, and last longer, we reduce the overall cost of the vehicle. That makes EVs a viable option for more people, including those who don’t have home charging stations or who live in apartments. It would also increase the value of second-hand EVs, making electric transportation more accessible.”

The secret sauce here is in the anode, which traditionally relies on graphite. The researchers designed a method to fuse graphite particles together to improve conductivity. This tweak enables lithium ions to move fast without causing typical degradation or safety hazards associated with fast charging.

What’s cool is that they didn’t reinvent the wheel in terms of materials; the team worked with the same lithium-ion components already used in EV batteries today.

“We’re just finding a better way to arrange the particles and providing new functions to the binders that hold them together such as state-of the-art electron, ion, and heat transfer properties,” explained Michael Pope, co-lead of the research and professor at Waterloo’s Ontario Battery and Electrochemistry Research Centre. “This approach ensures that the technology can be scalable and implemented using current production lines, offering a low-cost solution to battery manufacturers.”

The next step? The research team is optimizing the manufacturing process and putting prototypes to the test to gauge industry interest. The goal is to make sure this new battery design isn’t just effective – it has to be scalable and ready for widespread industry adoption.

“It’s crucial that it can be implemented within the existing infrastructure for both battery production and charging stations,” added Rangom, lead researcher for the Battery Workforce Challenge.

The University of Waterloo researchers’ findings are published in the journal Advanced Science.

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