Presentation of the speaking held by Vito Gamberale, CEO of F2i - Fondi Italiani per le Infrastrutture, on the conference Italia Decide, 4 April 2014, Turin.
Vito Gamberale - A Structural Reform for the Waste Management System
1. A STRUCTURAL REFORM FOR THE WASTE
MANAGEMENT SYSTEM
«Italia Decide» Meeting
Turin, April 4th 2014
Vito Gamberale
2. Waste: volume and trend
Waste production in Italy (thousands of tons)
– Each year around 160 thousand tons of waste are produced in Italy, 20% of which are urban solid
waste (USW), and 80% are special waste (SW).
– Following a contraction in the volume of waste in 2009 due to the economic crisis, the amount of
produced waste now seems to have stabilised. Over the next upcoming years, a minor growth is
expected based on a much desired increase of the Italian GDP (which is a recognised driver for waste
production)
2
Source: ISPRA BCG data elaborated by F2i
122
130
140 141
169 170
172
161 164 163 162
30 30 31 32 33 33 33 32 32 31 30
92 100 109 109
136 137 139 129 132 132 132
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011E 2012E
SUW SW
The Italian
market
3. Comparison with major European countries
– Below is a comparison of key data* on waste production in the main European countries
3
The Italian
market
*Data refer to 2010, latest available data
Italy Germany France UK Spain
Total production (mill of tons) (1)
164 363 355 164 137
SUW production (mill of tons) (1)
32 36 29 32 23
Population (mill inhabitants) (2)
58.1 82.3 64.8 62.3 47
Total production per person/year (kg) 2,823 4,412 5,481 2,630 2,946
Total production per person/day (kg) 7.7 12.1 15.0 7.2 8.1
SUW production per person/year (kg) 551 441 452 505 499
SUW production per person/day (kg) 1.5 1.2 1.2 1.4 1.4
GDP (bil €) (2)
1,548 2,565 1,872 1,896 1,195
GDP/total production (bil € /1 mill of tons) 9.4 7.1 5.3 11.6 8.7
GDP/SUW production (bil € /1 mill of tons) 48.4 70.7 63.9 60.2 51.5
(1) Eurostat data
(2) Data by Index Mundi
4. Waste sorting
– At the end of 2012, waste sorting in Italy accounted for an average of around 39.9% across the
national territory (an increase in comparison to an average of 37.7% in 2011)
– The most progressive European countries, such as Germany and Austria, have achieved a waste
sorting rate of over 60% by the end of 2012
– The significant differences that still characterise Italian regions account for the gap between Italy and
the most performant European countries:
4
Source: ISPRA
Piedmont is the fourth
Italian region for waste
sorting, with a rate of
around 53% at the end
of 2012.
The Italian
market
Wastesorting(%)
Target 2012
Target 2011
Target 2009
5. Fragmentation of the operators
Main operators on the Italian market
– The Italian waste market presents high levels of «pulverisation»: the nine main operators handle only
7% of the total volumes
– On the contrary, the European waste management market – particularly in France, Germany and UK –
is made of large operators:
France: a consolidated market, with two major operators (Veolia and Sita Suez) controlling over 60%
of the system
England: five major operators hold over 60% of the market share
Germany: big country-level operators, such as Remondis and Biffa, launched international growth
strategies
The Italian market is now facing a transitional phase that should lead major operators to extend
their scope of action to a national – and potentially international – level, based on the examples of
other European countries.
Main European operators
Source: corporate budgets. Analysis by The Boston Consulting Group
Mill tons of managed waste
Media escluso
perimetroF2i: € 113 ton
98
115
126
103
125
161
106,6
Rea
Dalmine
Acegas
Trieste
Acegas
Padova
Hera
Ferrara
Tecnoborgo
Piacenza
PAI Parma TRM Torino
IAM (49% F2i) TRM (60% F2i in trasparenza)Including TRM S.p.A., acquired in December 2012
60
27
18
13
Veolia Remondis Sita Suez Biffa
Mil tons of managed waste
Source: The Boston Consulting Group
5
Biffa, the smallest among the big
European operators, handles
volumes comparable to those
managed by the nine largest Italian
players combined.
The Italian
market
3.4
2.8
1.8
1.5
1.1
0.6
0.3 0.2 0.1
Hera A2A AMA
Rome
Iren Veolia Acea APS
Acegas
Waste
Italia
ACSM
6. Sixteen Italian regions are
dealing with unsuitable
plants
Waste disposal in Italian regions
6
Overview
− Only a few regions (all in Northern Italy) have adequate infrastructures for the disposal of waste
produced in their respective areas
The deficit in plants
and structures
Balanced plant situation
Inadequate plant situation
Significant unbalances
7. 7
− The market fragmentation, as well as the fundamentalist environmentalism that slowed (and is
still slowing) down the sector’s development, prevented Italy to develop adequate plants for waste
disposal (in particular waste to energy plants)
− The currently operating waste to energy plants are characterised by limited dimensions, if
compared to those of the major European countries (especially France and Germany)
Currently operating WTE plants WTE plants average capacity
F2i analysis based on BCG and Eurostat
data
Waste to energy plants in Italy
52
70
130
Italia Germania Francia
52
70
130
Italia Germania Francia
52
70
130
Italia Germania Francia
100
429
154
Italia Germania Francia
(thousands of tons of disposed USW/year)(no of plants)
The deficit in plants
and structures
52
70
130
Italy Germany France Italy Germany France
8. 8
− The lack of WTE plants makes Italy the only country, out of all big European countries, to resort
most to landfills for waste disposal (over 50% of its total solid urban waste production)...
SUW disposal techniques (2011 data)
− …which leads to constant environmental emergencies (Naples, Palermo, Rome, etc.).
Eurostat data
Waste disposal in landfills The deficit in plants
and structures
49%
1%
28%
17%
37% 35%34%
62%
37%
Italy Germany France
Landfills Waste to energy Recycle and composting
9. 9
– A general lack of information (also) contributed significantly to Italy's current waste
management landscape:
– The creation of WTE plants was opposed by utopian (and misleading) theories, which
believed the whole waste production could be recycled through waste sorting. These theories
were proven to be wrong by the fact that even countries that achieved the «zero landfill» target
(eg. Germany) still resort to WTE disposal for a third of their waste volume.
– Fostering waste sorting is an important objective but it cannot provide for an overall
resolution to the waste management problem. Landfills are the only alternative approach to
WTE plants but they are potentially polluting (and will soon be made illegal in Europe). Another
option is moving waste abroad, which is highly expensive.
To date Italy is still behind when it comes to shutting down existing landfills
and sending waste abroad or outside the regional territory – consequently
paying extremely high fines and rates.1 All this represents a (sometimes
hidden) burden on end-users.
1 In 2007 the city of Naples paid 215 €/ton to send its waste to Germany – compared to a regular rate for waste disposal into WTE plants of 100
€/ton. Today Italy pays up to 170 €/ton to have its waste disposed outside its territory.
Improper burden on end users
Negative
repercussions
on the system
10. 10
– There are four ongoing European infringement procedures against Italy related to exceeding
assignment of waste management, and illegal or unregulated landfills.
– Infringement procedure 2003/2077 – the most advanced one, currently pending at the European
Court of Justice – addresses 218 landfills in 18 Italian regions that need restoring.
– Italy might be facing a fine of 61.5 million Euros plus a daily fine of 256,819 Euros for each day
starting from the procedure sentence until restoration is completed.
– Other procedures are pending with the region of Campania, already sanctioned with a yearly claim of
10.25 million Euros, an amount that has now reached 34 million after 3 years.
– In addition, a currently ongoing specific procedure focuses on the waste cycle processing in the
region of Lazio, with the landfill in Malagrotta (closed on last October 1st).
– Infringement procedure 2011/2215 related to 102 illegal landfills in 14 Italian regions is currently at
the stage of reasoned opinion.
Violations to European regulations and possible
sanctions for Italy
Negative
repercussions
on the system
11. 11
– The development of the waste sector over the following 5/10 years should match the example showed
by other big European countries.
– The Italian market is now facing a transitional phase, and following the pattern of Germany, France and
the UK, the country should be expecting a new period of consolidation. This would bring the main
operators now operating at a province/regional level, to aggregate and extend their scope of action
at national and, potentially in the future, international level.
– The waste sector, however, also needs significant investments in order to increase the waste to
energy capacity to match European levels. To be able to achieve the same results as Germany (i.e.
disposal of one third of the produced SUW through WTE plants), Italy should establish an additional
capacity of at least 7 thousand tons, which would need an investment of around 5-7 bil € (representing
an investment of 700-1,000 €/ton).
– The current players on the market cannot provide for such resources, as they are too small and
are controlled mainly by public shareholders that are now facing increasingly pressing financial issues.
The waste sector needs a centripental drive towards a market consolidation
based on three «national champions», that may eventually be supported by
private assets.
A necessary evolution
12. – In December 2012, F2i and Iren won the tender organised by the Turin municipality for TRM S.p.A.,
and then acquired 80% of the company shares on December 21st 2012.
– Despite a background of difficult creation of waste disposal infrastructures in Italy, thanks to the TRM
transaction the acquisition of the fourth biggest plant in Italy could be achieved.
12
The investment in TRM
WTE plants in Italy per managed volumes (kilotons)
F2i activities in the
waste sector
TRMComune di
Torino
75%
€ 95 mln
25%
€ 31 mln
20%
Veicolo
TRM
80%
€ 126 mln
Gruppo IrenF2i Ambiente SpA
Banca IMI -
Unicredit
Finanziamento BtE a
F2i Ambiente SpA
Turin
municipality
TRM
vehicle
13. Overall considerations Serviced area: Turin ATO
– The province of Turin has a total of 2.3
million inhabitants in 316 municipalities
– Waste sorting accounts for over 50%
– The disposal capacity needed for the
urban solid waste of the Turin province
alone accounts for 530,000 tons/year
(2011 data)
– The area is divided in eight consortia
– To date, only the assignments of the plant
for the Turin municipality and for the
southern part of the province have been
confirmed
– Considering the lack of plants in this
territory, an expansion of the area serviced
by TRM and other consortia is planned in
the middle term
13
TRM S.p.A. – Reference pool
Consortia that confer/should confer to TRM
F2i activities in the
waste sector
14. – F2i partnership with Iren allows TRM to benefit both from Iren's industrial expertise in the environmental
sector and from its control over the entire waste industry – considering Iren's concomitant acquisition of
AMIAT, the company operating in the waste collection in Turin
– The Iren Group is the fourth Italian operator in the environmental sector: it handles activities in the field
on a multi-regional basis and provides services for a pool of over 2.3 million inhabitants
– The Iren Group operates on the entire waste management industry with the collecting, sorting, treating and
disposal of around 1.5 million tons of urban and special waste
– The Group manages 15 disposal plants, including Piacenza and Parma's WTE plants
– Controlling the waste collection sector has become an essential strategic element to ensure the plants'
capacity saturation, especially in a time of decrease in produced waste and when considering the strong
increase of waste sorting
Activities of Iren AmbienteIren Group's activities in the waste
industry
Environment
Environment
14
The partnership with Iren
F2i activities in the
waste sector
Collection /
transportation
Selection Treatment / Waste to energy Disposal
Collection /
transportation
Selection Recycling Composting Treatment WTE Landfill
UW
SW SW
15. The partnership with Iren (2)
– The partnership of F2i and Iren in the management of TRM is part of a broader cooperation plan in
the waste disposal sector that involves TRM and Iren Ambiente
– F2i aims to contribute, in the middle term, to create a «national champion» that originates from
traditional branches within the Iren Group, and that could operate in the various segments of the
waste industry, ranging from more traditional activities (collection and final disposal) to more advanced
services (treatment and recycling), which will play an increasingly strategic role also thanks to the
growth of waste sorting
15
Iren Group: current activities in
the waste industry
Iren Group: strategic expansion areas
F2i activities in the
waste sector