Singapore’s Waste Management System – Trash Talking by Joyce Li, CFA – Matthews Asia
On a recent research trip to Singapore, I visited a waste-to-energy plant that has proven to be an effective way to reduce the need for landfills in many land-starved areas. Operated under a public-private partnership initiative, the plant is able to generate about 22 megawatts of electricity from treatment and incineration of 800 tons of waste daily.
The complex issue of waste management highlights the dark side of urbanization in Asia, and infrastructure that falls far behind economic developments is part of this darker story. The rapid growth of municipal solid waste suffocates cities. There are mountains of solid waste, rivers clogged with floating garbage and agricultural land beside open dumps. Challenged by a shortage of landfills, many cities ship their waste to less developed neighbors.
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In addition to environmental risks, rudimentary disposal takes away precious land that could otherwise be used for city development. For example, the Deonar dumping ground in eastern Mumbai, where a large portion of the city’s municipal waste goes, takes up over 300 acres.
In this context, Singapore’s integrated waste management system is impressive. Space-constrained Singaporeans recycle 60% of municipal solid waste and burn 38% in their four waste-to-energy plants to supply 3% of Singapore’s power. Only 2% of its waste goes directly to landfill.
Asia’s developing countries can learn a few things from Singapore in trying to improve their own waste management. Firstly, shift more attention to non-residential waste. Most cities spend heavily in dealing with residential waste but do not invest sufficiently to recycle waste from businesses. Better technology and processes can quickly improve recycling rates for non-organic waste as they have in Singapore. By contrast, the recycling rate of household waste remains low due to complexities involving collection and treatment.
Secondly, consider waste-to-energy incineration as an effective way to deal with the issue of landfill shortage. Singapore’s waste-to-energy plants cut waste volume by 90%, significantly lowering the need for additional landfills. However, this is only possible when citizens are confident in the government’s ability to monitor and enforce emission standards. Previously, in other parts of Asia, the failure of governments to demonstrate such credibility has led residents to protests over air pollution from incineration plants.
It is difficult to predict the volume and composition of waste that a city can generate on a given day. In order for such public-private initiatives to be successful, private entities should be responsible for planning, designing, operating and financing the plants while the government, as in Singapore’s case, should promise long-term service payments and bear the risks of indeterminate amounts of power generated. Otherwise, as we have seen in a few failed examples elsewhere in Asia, operators may be caught cutting corners on emissions control when faced with a shortfall in energy generation revenue.
Lastly, waste management evolves when consumption changes. For example, as both a major manufacturer and consumer of electronics, the Asia region now has a high demand for the safe disposal and recycling of electronic waste. Singapore has taken early steps to deal with the challenge. Attractive investment opportunities may arise among companies with the technological and operational expertise to address this demand.
Joyce Li, CFA
Senior Research Analyst