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Recycling: Cost Benefit Analysis

Executive Summary

1 Introduction

2 Approach to Analysis

3 Waste Volumes

4 Benefits of Recycling

5 Markets and Value of Materials

6 Costs of Recycling

7 Net Benefits of Recycling

8 Conclusions

Annex 1: Landfill Assumptions

Annex 2: Willingness to Pay Survey

Annex 3: Analysis of Willingness to Pay Results

3 Waste Volumes

This section analyses total waste flows in New Zealand as used in analysis.

3.1 Waste flows to landfill

The amount of waste flow to landfill has been estimated using data in the 2002 Landfill Review and Audit published by MfE.¹² This document contains data on annual landfill tonnage, by region, for 2001/2002. These quantities are then updated by applying regional population growth factors (Stats NZ), to obtain an estimate of approximately 3.25 million tonnes of waste being disposed to landfill in 2006 (Table 1).¹³

Table 1: Annual waste to landfill by region (2002)

Source: Ministry for the Environment (2003) 2002 Landfill Review and Audit; Covec estimates.

These regional estimates of waste tonnage to landfill are then disaggregated further to a TA level. The allocation is based on population estimates. In certain cases, where a TA straddles multiple regions, the waste estimate is allocated on the basis of the population of the TA contained within a specific region.

Estimates of the composition of waste to landfill are derived from surveys of disposal facilities reported by WasteNot Consulting (Table 2). We have applied these proportions to our estimated tonnage to obtain estimates for the tonnage of specific waste products going to landfills in 2006.

Table 2: Composition of waste to landfill

Source: WasteNot Consulting (2006) Waste composition and construction waste data. Prepared for the Ministry for the Environment.

3.2 Waste recycled

The annual tonnage of diverted waste is estimated by combining data on household recycling with data on business recycling.

The annual tonnage of household waste that is diverted is estimated from the data in the NZWS Targets TA Survey. The data in this survey includes estimates by the TAs of the amount of inorganic and organic waste diverted by them. The inorganic waste collected is then further broken down into separate waste product streams (Table 3).

Table 3: Proportion of waste products in diverted inorganic waste

Source: New Zealand Packaging Accord 2005 Progress Report.

The NZWS Targets TA Survey also contains data provided by the TAs about the amount of organic waste diverted. We use these data in our organic waste analysis. Using this approach, the estimates of household waste diverted are shown in Table 4.

Table 4: Household recyclable material quantities

We have estimated the amount of annual diverted business waste from data provided by MfE for total waste diverted (Table 5) and subtracting the estimates of household waste diverted as calculated above. The resulting estimates of business waste diverted are shown in Table 6.

The difference between the above numbers and the estimated amount of diverted household waste (from the NZWS survey) for a specific product is then allocated to the TAs according to population.

Table 5: MfE’s best estimate of materials diverted from landfill and cleanfill

Source: Ministry for the Environment

Table 6: Commercial recyclable material quantities

3.3 Landfills

In 2002 there were an estimated 155 landfills accepting approximately three million tonnes of waste, but it is estimated that only 43 will remain by 2010 (Table 7). In 2002 only 20 per cent had engineered containment whereas this was expected to increase to 67 per cent of landfills by 2010. In 2002 only 83 per cent of landfills measured the quantity of waste and 82 per cent charged for it; these figures are expected to increase to 100 per cent by 2010.¹⁴

With a reduction in the number of landfills, they are increasing in size. Approximately three million tonnes of waste going to 115 landfills (2002 data) results in an average rate of disposal of 26,000 tonnes. However recently-opened landfills include Hampton Downs, south east of Auckland that accepts 200,000 tonnes per year and Kate Valley near Christchurch, opened in 2005, that will take 300,000 tonnes per year.

Table 7: Total landfills

View total landfills (large table).

For analysis, we have made assumptions both about the size and location of landfills so that transport costs can be estimated also (see Annex 1). The basis for the analysis is the 2010 projections of 43 landfills in total and the regional location of these. This was used to define the location of individual landfills and was combined with waste generation data to define the size of these landfills and thus their costs (see Section 4.3).

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