The waste disposal market is broken.
I’ve spent quite a lot of time recently writing about why I think that is the case. Landfill capacity has reduced. Energy from Waste plants offer wildly unreliable availability and have become increasingly selective about what they’ll accept. Regulation is tightening. Outlets that waste businesses have relied upon for years have disappeared, while others have become far more expensive, more restrictive or simply less reliable.
So when waste businesses say they’re struggling because the disposal market has changed, I believe them. And I’ve been shouting about it on their behalf as loudly as anyone.
But I think there’s a danger in all of this. Because once we decide that ‘the market’ is the problem, it becomes remarkably easy to blame the market for everything.
In my view, not everything that’s hurting waste businesses at the moment was done to them.
Some of it comes from decisions they made themselves.
A Good Market Hides Bad Decisions
One of the great luxuries of a buoyant market is that it lets businesses get away with things.
If there’s plenty of disposal capacity around, it doesn’t matter quite so much that you’ve become heavily dependent on one or two outlets. While gate fees are predictable and relatively stable, it’s easier to carry customers whose margins aren’t really good enough. And if somebody somewhere is always willing to take whatever comes off the end of your processing line, there’s often not much incentive to question whether you should be producing that material in the first place.
Because… it all just works.
And when something works for long enough, we have a habit of assuming not only that it was a good idea, but that it’ll last forever.
Well… hello Blockbuster – nothing lasts forever.
The really interesting thing about the current disposal crisis is that it isn’t simply making waste more expensive to move. It’s exposing a range of decisions that were made by waste businesses over many years: some operational, some commercial and many involving millions of pounds of capital investment.
Those decisions might have worked perfectly well in the market that existed at the time. But were they good decisions?
And I’m not saying this with the benefit of hindsight. The problem isn’t simply that some of those decisions haven’t aged well. It’s whether some pretty important questions were asked – and properly answered! – before the money was spent.
Why Did Anyone Want What Came Off the End?
I’ve written previously about how the changing disposal market could affect the valuation of waste businesses, and one of the points I made was that a processing plant doesn’t have value simply because it cost £5 million. It has value because somebody still wants what comes off the end of it.
Today, I’m asking why, before spending that £5m, the following important question wasn’t asked?
Will somebody reliably want what comes off the end of it?
Waste businesses have spent enormous amounts of money over the years on increasingly sophisticated sorting and separating equipment. And understandably so. A manufacturer arrives with a presentation showing greater recovery, faster throughput, less labour, cleverer separation and a lovely spreadsheet explaining the payback period. What’s not to like?
Except the machine doesn’t actually create value by sorting things.
It takes one collection of materials and turns it into multiple piles of materials. Every tonne that goes into the front of the plant has to come out somewhere, in some form, and, crucially, somebody has to want it. The clever spreadsheet tells you what the machine will save if everything around it stays broadly the same. Whereas, I’m rather more interested in what has to stay the same for the clever spreadsheet to be right.
That’s where the investment calculation becomes rather more interesting than the plant manufacturer’s spreadsheet suggests.
Because if I’m financing that machine over ten years, I’m not just betting that the machine will still work in ten years’ time. I’m betting that somebody will still want what it produces over that period too.
Further, I’m betting that the outlets will still exist. That specifications won’t change beyond what my plant can achieve. That regulation won’t make the material more difficult to move. And that the economics which make that output viable and profitable today, will still make some sort of sense at the end of the finance agreement’s life.
That’s quite a lot of bets hidden inside one investment decision.
Nobody Has a Crystal Ball
Now, there is an obvious danger of being clever with hindsight here.
I’m not suggesting that anybody buying processing plant ten years ago could have known exactly what the disposal market would look like in 2026. And even businesses investing in new plants much more recently couldn’t have predicted precisely how quickly some parts of the market would change. Regulations change. Governments change their policies. Tax regimes change. Facilities close. New facilities open. Markets move.
But the more recently that investment decision was made, the harder that defence becomes.
Because many of the pressures we’re experiencing today didn’t suddenly appear in 2026. The direction of travel around regulation, disposal capacity, material specifications and the long-term availability of some outlets has been visible for some time.
You definitely cannot run a business by refusing to invest because something might be different one day, but if you’re committing millions of pounds to an asset that you expect to operate for the next decade, surely part of the investment decision has to be asking what happens if the market around that asset changes.
- What happens if our main outlet closes? Is its operating life set by a planning permission, for example?
- What happens if its specification changes? Today’s environmental concern can become tomorrow’s government policy; what might affect the longevity of this material over the next 5–10 years?
- What happens if regulation changes the economics?
- What happens if nobody wants this particular material anymore?
And perhaps the question I like most:
What else can this plant make?
Because if the answer is not very much, you haven’t necessarily invested in ten years of processing capability. You may have invested in ten years of hoping today’s disposal market continues. Those aren’t the same thing.
And this isn’t peculiar to waste. Businesses everywhere have a habit of confusing the way the market works today with the way the market works.
Sometimes a particular set of circumstances hangs around for so long that we stop recognising it as for the specific situation that it is. It just becomes normal. Business models grow around it. Investments are justified by it. Debt is taken on because of it.
Until something changes. And suddenly what looked like a very efficient business model starts looking rather different.
Efficient at Doing What?
This is where I think we need to be careful about the way we talk about processing efficiency.
Imagine you’ve got a processing line that does exactly what it was designed to do. Throughput is excellent. Recovery is high. Labour requirements are low. Availability is good. The engineering team finds it easy to keep thing running beautifully.
On every operational dashboard you’ve got, it’s an efficient plant.
But then the market for one of its principal outputs disappears. Is it still efficient?
Technically, yes. Commercially, I’m not so sure. You could go out today and build the most efficient VHS production line in the world. It wouldn’t make VHS tapes valuable again.
The purpose of processing waste isn’t simply to make it into something different. It’s to make it into a product that’s more useful, more valuable or easier to place. If you’ve spent millions making something extremely efficiently that the market increasingly doesn’t want, then continuing to make it even more efficiently isn’t necessarily the answer.
At some point, somebody has to question what you’re making.
And that’s a management question, not an engineering one.
The Market Can’t Control Everything
There are plenty of things happening in the disposal market that individual waste businesses can do absolutely nothing about.
You can’t create landfill capacity that doesn’t exist. You can’t stop an EfW operator shutting down for six weeks or reducing its acceptable CV range. You can’t dictate government policy or tell the regulator how to regulate.
But what you can do is decide what waste you accept.
You can understand which customers are producing the materials that cause you the greatest problems downstream. You can decide whether you’re charging enough to deal with them. You can look again at the way materials move through your plant and whether the outputs you’ve spent years trying to maximise are still the outputs you actually want to produce. I have met too many waste operators who want to offer every service to everyone, without really considering how many loads’ profit are destroyed by accepting one load of something troublesome.
You can look at your dependency on individual outlets. You can revisit contracts written when the disposal cost £X… and now costs £Y. You can change your pricing. You can change your customer mix. You can change the way you process material.
You can even accept that a piece of plant you spent a fortune on isn’t quite the strategic asset you once thought it was. None of those are particularly comfortable conversations.
But that’s management.
Two Things Can Be True at the Same Time
None of this changes my view about what’s happening in the wider waste market.
I still think we have a serious capacity and resilience problem. I still think government needs to understand the consequences of policy decisions that progressively remove disposal options without necessarily ensuring sufficient alternatives exist. I still think some regulatory decisions are creating unintended consequences. And I still think parts of the disposal sector need to think much harder about the impact their commercial and operational decisions have on the rest of the waste chain.
None of the agencies and organisations which own those issues should be let off the hook.
But I’m not sure waste businesses should use this as an excuse to let themselves off the hook either.
Because two things can be true at the same time.
The market can be broken.
And your business can be badly positioned for the market that now exists.
One requires an industry response.
The other requires management.
I suspect that distinction is going to become increasingly important over the next couple of years. Because the businesses that come through this period strongest won’t necessarily be those that were best configured for the disposal market we used to have.
They’ll be the ones that adapt fastest to the one we’ve actually got.
So go ahead and blame the market for the things the market has caused. Challenge government where government has got it wrong. Challenge regulators where regulation creates unintended consequences. Challenge disposal operators when their decisions make an already difficult situation worse.
But don’t allow any of that to become a reason for avoiding the uncomfortable questions inside your own gate.
Because the market may have changed the rules.
But the market didn’t sign your plant financing agreement.
About Gerald Price
Gerald Price is a business change consultant and interim managing director specialising in business turnarounds, operational improvement and commercial performance, especially within the waste and recycling industry.
Having worked with operators across the sector, he regularly writes about leadership, strategy, waste policy and the commercial realities facing UK waste businesses.
More articles and insights can be found at www.gpcp.co.uk and https://www.linkedin.com/in/geraldprice/
