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Circular Economy

Funding decentralised circular economy initiatives: The ‘Warwick Zero Waste’ composting pilot

June 12, 2024

Why composting?

In South Africa, 10 million tonnes of food go to waste every year – this is a third of the 31 million tonnes that are produced in the country annually. South Africa’s food waste contributes to the alarming global figure of more than US$1 trillion worth of food being thrown away every year. About 90% of waste in South Africa – including food waste and other organic waste – is disposed of in landfills. The organic waste in landfill results in the production of carbon-dioxide and methane gas – greenhouse gases. Methane gas is one of the largest contributors to climate change and global warming – over a 20-year period, it is 80 times more potent at warming than carbon dioxide. In addition, landfills in general cause surface and groundwater contamination, air and soil pollution, and negative impacts on local communities such as noise, foul odours and dust. Not only are these rising emissions extremely worrying, but the generation of these gases at landfills is unnecessary. There are opportunities to divert this waste from landfill through waste beneficiation processes such as composting. Composting can reduce methane emissions by 99% as methane-producing microbes are not active when there is enough oxygen present. 

Challenges in moving towards a circular economy

In South Africa, the large bulk of organic waste is still sent to landfill. With the climate crisis becoming increasingly dire it is important to shift from a linear economy model – where waste ends up in landfills as its final end – towards promoting more sustainable, circular economy models. There are challenges to making this shift. South Africa has relatively low costs for landfilling which is a driver of its popularity as the most common waste management method. As landfills are the predominant method of disposing of waste, and this is the status quo for all municipalities, it is challenging to change this, or for the private sector to get involved. In many cases, diverting waste from landfill is perceived to have high costs – often requiring high capital costs to set up and higher operating costs.  In addition, there is the perception that there are minimal benefits from alternative waste management and it is thus a challenge to create a shift in mindset towards transitioning to a more circular economy model. 

The Warwick Zero Waste pilot project

Creating attractive, feasible, and successful alternative models is the first step towards creating a shift in the status quo in South Africa. With this in mind, the Warwick Zero Waste (WZW) project was started in early 2021 with the aim to create an easy to replicate, zero waste to landfill case study for large informal markets commonly found in Africa, starting with the Early Morning Market (EMM) in Warwick Junction, Durban. The WZW project is being implemented by groundWork, the Durban University of Technology’s (DUT) Urban Futures Centre (UFC), and Asiye eTafuleni. Research undertaken at the EMM shows that, on average, each year, almost 400 tonnes of waste was being sent to landfill, with 84% of this being organic waste (i.e., fruit and vegetables). The goal of this project was to find a way to divert waste from the EMM in a small-scale, decentralised, and closed loop system, by setting up a composting site in a nearby site. Using the 2km radius from the EMM, Durban Botanic Gardens (only 1.5kms away) was identified as the best option to pilot this composting site. This reduces the travel distance of the waste by over 66 kms. In addition, the site already has brown and green garden waste from Botanic Gardens which could be combined to make high quality compost. After securing support from the Botanic Gardens team, the pilot process was started in June 2022, whereby 1 wheelie bin of food waste per week was combined with the garden waste from the Botanic Gardens, to create 16 compost heaps over a period of 4 months. Since then the WZW team has initiated a scale-up process, where a 1-ton bakkie was used to create a single large compost windrow. During March 2023, the WZW initiated a further scaling up, utilising two deliveries a week of food waste from a 4-ton truck to create 12 windrows, along with relevant drainage to capture leachate run-off. Given the success of the initial pilot project in creating a good quality compost product, the WZW team identified that significant potential exists to scale-up even further and divert a more substantial amount of food waste from the EMM into the production of compost.

Watch “People at the Heat of Change”, a beautiful short documentary about the Warwick Zero Waste project.

Cost-Benefit Analysis as a tool

In order to gain broader buy-in, the implementing team needed to garner the support of key stakeholders in the Municipality. An important way of doing this is to show the financial and other benefits of this alternative model. Lumec conducted a cost-benefit analysis to evaluate if diverting food and garden waste from landfill into compost production results in a net benefit or cost to the eThekwini Municipality. In addition to economic factors, this approach also considers the social and environmental costs and benefits of implementing this project. 

The analysis of the WZW project drew on data from research over a period of 3 years (2021-2023) and considered costs including: removing food waste from the Early Morning Market; removing plant waste from the Botanic Gardens; landfilling costs, including landfill airspace costs; external costs of landfill activities, and costs of greenhouse gas emissions from waste at landfill. Against these costs, three scenarios for an alternative composting project were modelled:

  1. Scenario 1: no building, with the composing occurring in the open with channels to capture leachate runoff;
  2. Scenario 2: a painted steel structure with a concrete base and roof structure; and
  3. Scenario 3: a galvanised steel structure with a concrete base and roof structure.

Various costs such as staff (4 people for every 400 tons of waste), machinery and equipment including a truck, wood chipper and chainsaw, and the various construction costs were then projected over a period of 10 years for all 3 scenarios. Significantly, findings show that over a 10-year period, all scenarios result in savings for the Municipality. While it is significant that there are positive financial outcomes, in addition to the savings for the Municipality, there are numerous other benefits, including: 

  • Reduced environmental and climate impact due to a reduction in methane gas emissions
  • New green employment opportunities in the city
  • The opportunity for reinvestment of savings into EMM infrastructure towards improved working conditions for the traders
  • Opportunities for training or awareness raising with students and the general public
  • A model for strong transversal partnerships within the municipality
  • Creation of a strong, circular economy model for replication across the city and country

Collaboration is key

What has been key to the initial and ongoing success of this project is commitment and buy-in by all relevant municipal units and departments. In eThekwini, the Business Support, Tourism, Markets, and Agri-Business unit, Parks, Recreation and Culture unit and Cleansing and Solid Waste unit signed an MOU which was approved by council, which stipulates that they are all committed to the scaling up of this pilot.

In 2024, the WZW team will be starting a pilot at another fresh produce market in Durban, the Bangladesh Market in Chatsworth. If successful, this could lead to a City-wide scaling of such projects at other fresh produce markets and parks. In addition, the proliferation of these small-scale, close loop decentralised composting sites are likely to be applicable to many other municipalities around the country. Decentralised models such as these would be key to diverting large amounts of organic waste from landfill, enabling circular practices which contribute to a more sustainable future.

Conclusion

The cost-benefit analysis (full report can be found here) resulted in a net benefit to the City when considering the savings from current waste disposal practices and the benefits of producing compost. This indicates that similar small-scale, decentralised composting initiatives would also produce a net benefit to the City. A new analysis will undertaken at the Bangladesh Market to test this hypothesis, and the results will be compared with those of the EMM pilot in order share insights and learnings from these two pilots.

This project and its scale-up is funded by the UMI Fund, with additional funding in 2024 from the Global Methane Hub.

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Circular EconomyRecycling

Determining the viability of business models for SMMEs in the recycling industry

October 3, 2022

Introduction

Lumec recently conducted a market and viability assessment for Green Corridors’ KwaMashu Beneficiation Centre (KMBC). The purpose of the study was to determine the market potential of 5 green products that have been prototyped at the KMBC and to assess the viability of each based on current alternatives in the market. 

Green Corridors is doing some amazing work at their KMBC, prototyping a range of products made from materials that are not easily or commonly recycled. Using materials such as Spanish Reed (an alien invasive plant) and spent grain from a local brewery (my personal favourite – That Brewing Co), they are making bokashi compost; they are also using non-recyclable plastic, crushed glass, street-swept sand and building waste to make green pavers.

Green Corridors have recently launched a Backabuddy campaign to raise funds to install 200 pavers at a school in KwaMashu, so please do support this great initiative! 

Goal 

The ultimate goal of the study was to determine if an SMME could viably produce any/all of the 5 products. This was done by comparing the market price of current alternatives to the cost at which these products can be manufactured and sold. To determine the latter, we developed a viability model that calculates the cost to produce each product using current KMBC processes as a baseline. Since they are testing a range of processes and using almost 30 materials as inputs into the 5 products, it was a really interesting process that required a unique approach. 

Viability Model

As a starting point, the value chain of each material was mapped to understand the unique process related to this, from source through to being in a state that can be input into the production process (i.e pre-processed). The model then calculated a cost per unit (either kilogram or litre) of each material based on sourcing costs, transport costs, and pre-processing costs. Pre-processing includes manual sorting processes (labour only) as well as machine-driven processes such as shredding, granulating, chipping, and crushing (labour and electricity). 

The cost of the specific processes that each material undergoes was calculated (e.g. R1 per kilogram to manually sort and then R0,5 to crush a single material). By adding the cost of each pre-processed material that goes into each product, this yielded a material input cost per product. For example, it costs R1.5 for one material and R2 for the second material, which results in a total material input cost of R3.5 for the product.

Thereafter, the cost of manufacturing each product was calculated by determining the cost of operating each machine required to produce the product (again, both labour and electricity costs), and adding this to the total material input cost to result in a total production cost. An average cost was calculated for overheads, as well as interest repayments and depreciation on equipment and machinery depending on each product, which resulted in an average cost per unit (e.g. R5 per product is overheads, R2.5 is interest repayment and R1.5 is depreciation).

Adding these all together, and then adding a profit margin, the retail cost of each product was calculated. This was then compared with the retail price of current market alternatives to answer the question of whether or not an SMME could viably produce these products. A few products were considered viable, while a few were not – this is mainly given that alternative products on the market, using virgin materials only, are significantly cheaper. In addition, products such as polystyrene are expensive to transport and process given their light weight, and push up the cost of each product. 

Conclusion

This process assisted Green Corridors (a) to understand the cost of producing recyclable materials as inputs into their various products, (b), to adjust the specific mix of recyclable materials to optimise viability, and (c) to determine which products have the greatest market potential. 

Learnings

From the process, the following learnings can be shared with other SMMEs in the recycling industry:

  1. It is very important to have a good understanding of the entire value chain of your business and the factors that influence the cost at each point of the value chain. This includes the cost of sourcing and transporting your materials and the cost of operating your machinery (especially labour and electricity costs). 
  2. Most recycling business models fall short due to the cost of transport, so sourcing materials as locally as possible is the key. Companies such as Ocean Plastic Technologies are looking at localised pre-processing solutions where plastic can be shredded on site to increase the viability of transporting plastic. 
  3. Developing a strong model based on a detailed value chain analysis will allow you to test the viability of different business models and approaches, which will support development of a rigorous financial model. Knowing the processes within a certain value chain where costs are too high, or which materials are pushing the price of your product out of the market, are essential in building a stronger business model.
  4. Doing some economic market research, even at a high level, will assist to build a robust business case for your business or product/s and boost your financial model. In our experience, most funders want to see a financial model that is supported by economic market research. Ultimately, if you can show that there is potential in your target market to sell X units per year and you can produce each product at Y rands, you can be fairly confident that your revenue projections are accurate and funders will be more likely to buy into your business model. 

If you are interested in finding out more, click here to contact us. 

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