The waste sector can be made more efficient 

COWI has carried out an exhaustive analysis of the waste sector which has created considerable interest, because it evaluates factors that, up until now, have been impossible to compare.

"In simple terms, we have compared apples to pears and still obtained sensible results," explains Senior Project Manager Mette Bøgelund at COWI, who was responsible for the project.
 
"For example, we have taken both the environment and economy into account. This means that plants that have made significant environmental investments, and thereby incurred considerable costs, may still be regarded as efficient - a factor which is overlooked if financial key figures alone are analysed."

The analysis was commissioned when it became apparent to the Danish Ministry of Finance in 2000 that fees paid by consumers varied enormously. The Danish Environmental Protection Agency then requested an analysis of the differences, and COWI was awarded the project. After a year’s work, the analysis is now completed. It explains not only the variations in costs, it also points out possible areas for improving future operations.

Comparison with the best

The analysis, made in close cooperation with the sector, covers 85 per cent of the total waste incinerated in Denmark and 75 per cent of that deposited. A special comparison method was used, DEA Benchmarking

"It is a method that is very suitable for analyses where the comparison of key figures is inadequate," says Mette Bøgelund. "It is used for benchmarking production units that produce goods or services requiring many different resources, as for example in the supply or health sectors. The method gives a valid basis for comparison which can form the basis for political decisions, for example, and rationalisation of a sector, liberalisation and similar developments."

The incineration sector is considerably larger than the waste deposit sector in terms of costs and waste handled, but in relative terms, the chances of improving efficiency are better at waste deposit plants than at incineration plants.

In hard cash, incineration has a rationalisation potential of some DKK 135-155 million a year - corresponding to 8-10 per cent of total costs. Waste deposit, however, can be rationalised by some DKK 55-90 per cent annually, which is 25-40 per cent of overall costs.

The analysis has attracted a great deal of attention in the sector and some plants have already asked COWI for help in taking the next step.

Danish waste treatment policy gives the highest priority to quantity and then recycling, incineration and depositing, in that order. In recent years, total quantities of waste have grown, but amount of waste deposited has fallen because of a goal-oriented policy. Many plants, however, have not yet converted to the new quantities to be handled and the price per tonne deposited has therefore risen. The report gives the plants an incentive to compare themselves with the best in the sector.

Economics and sector knowledge

The analysis 'Rationalisation potential of incineration plants and waste deposits in Denmark' has given the sector and politicians a tool to make the sector even more efficient. "Similar tools can be prepared for other sectors. Benchmarking is an obvious technique in sectors such as electricity supply and hospitals," says Mette Bøgelund.

COWI, together with one of Denmark's leading researchers in the area, is increasingly using DEA Benchmarking in its analyses. It is a model that requires inter-disciplinary cooperation, because the economic comparisons necessitate an intimate knowledge of the sector concerned.

At the same time, the project uses methods that analyse the effects of increased private-public collaboration. In this way, the decision makers can determine whether this is the right course of action to follow. COWI has been actively involved in this problem in recent years. Among other things, it has led to COWI being asked to act as consultant in Belgrade for the privatisation of municipal waste handling. The assignment is a natural consequence of the fact that a COWI led consortium has been selected by the EU commission in 2001 to provide consultancy on public-private collaboration.

Published 28.05.2002