1. Tendencies in the Dutch waste market. 2 nd Flemish Waste Conference Workshop 3 Michiel Westerhoff 29 maart 2007 Mechelen

2. ©2007 Deloitte Consulting B.V. All rights reserved 2nd Flemish Waste Conference2 Agenda 1.Introduction 2.Dimensions Dutch waste market 3.Waste collection 4.Waste treatment

3. ©2007 Deloitte Consulting B.V. All rights reserved 2nd Flemish Waste Conference3 Shifting tasks and responsibilities? Tasks and responsibilities of companies and authorities are split where the collection, incineration and land filling is concerned. Which domains should be subjected to market forces or should be managed by public authorities has had many attention in the past years. The 1,3 billion Euro acquisition in 2006 by private equity of AVR( incineration and recycling) followed in 2007 by the acquisition of van Gansewinkel (collection) has had its influences on the Dutch waste market. What indications are there for future developments?

4. ©2007 Deloitte Consulting B.V. All rights reserved 2nd Flemish Waste Conference4 Highlights from two recent surveys into the Dutch waste market Survey with 100 municipalities about the future organisation of waste collection (presented January 2005). Survey with public shareholders about the future organisation of waste incineration ( presented June 2006). Both surveys focussed more specific on household waste

5. ©2007 Deloitte Consulting B.V. All rights reserved 2nd Flemish Waste Conference5 Agenda 1.Introduction 2.Dimensions Dutch waste market 3.Waste collection 4.Waste treatment

6. ©2007 Deloitte Consulting B.V. All rights reserved 2nd Flemish Waste Conference6 In total 61,6 Mtonne waste is collected, 8,8 Mtonne is household waste Totaal 61,6 MtonTotal 8,8 Mton Household wasteTotal amount collected waste Source: Senternovem Construction and demolition waste 23,8 Industrial waste- 24,9 Other waste 4,1 Household waste 8,8 Total 61,6 Mton Paper 1,1 Organic 1,3 Other; 1,4 Bulky waste 0,8 Glass; 0,3 Combustable waste 3,9

7. ©2007 Deloitte Consulting B.V. All rights reserved 2nd Flemish Waste Conference7 Agenda 1.Introduction 2.Dimensions Dutch waste market 3.Waste collection 4.Waste treatment

8. ©2007 Deloitte Consulting B.V. All rights reserved 2nd Flemish Waste Conference8 Public entities dominate the collection of household waste Source: AOO % Uitvoerder afvalinzameling in gemeente % huishoudens % gemeenten 39 21 40 26 37 01020304050 Private collectors Municipality’s own collection service Municipality joint ventures and public undertakings % household % municipalities

9. ©2007 Deloitte Consulting B.V. All rights reserved 2nd Flemish Waste Conference9 Private collectors most active in smaller municipalities % municipalities * 60.000 inhabitants Private collectors Source: Deloitte research Municipality’s own collection service Municipality joint ventures and public undertakings

10. ©2007 Deloitte Consulting B.V. All rights reserved 2nd Flemish Waste Conference10 Cost reduction, continuity and better service are the most important reasons for outsourcing Small Middle Big % Municipalities Source: Deloitte research % Municipalities 050100 050100 050100 Service Continuity Cost reduction

11. ©2007 Deloitte Consulting B.V. All rights reserved 2nd Flemish Waste Conference11 Financial advantages of outsourcing have diminished over the last years €/year Waste collection costs per household Jaar Private collectors Municipality joint ventures and public undertakings Source: AOO 150 200 250 300 2001200220032004 Municipality’s own collection service

12. ©2007 Deloitte Consulting B.V. All rights reserved 2nd Flemish Waste Conference12 Concern about less control most important obstacle for outsourcing % municipalities Three most mentioned disadvantages of outsourcing Source: Deloitte research 0102030405060708090100 Price/quality ratio Less service Less control

13. ©2007 Deloitte Consulting B.V. All rights reserved 2nd Flemish Waste Conference13 Only a minor part of the municipalities expect to outsource to private collectors Do you expect that your local authority will outsource the collection of waste within 2 years? Total number of municipalities: 102 Source: Deloitte research Only middle sized municipalities yes; 16% no; 84%

14. ©2007 Deloitte Consulting B.V. All rights reserved 2nd Flemish Waste Conference14 Shifts in local policies seem to have bigger effects on costs per household than outsourcing Unit-based pricing policies (used in 25% of the municipalities) have shown cost reductions of 10- 20% dependant of the used system. Policies on stimulating the better separation of waste ( supported by subsidies from national government)

15. ©2007 Deloitte Consulting B.V. All rights reserved 2nd Flemish Waste Conference15 Conclusions waste collection market Size local authority influences type of organisation Privatisation has slowed down: -diminished financial advantage -concern about control More emphasis on local waste policies and there effectiveness Scale public entities and public cooperation tends to grow

16. ©2007 Deloitte Consulting B.V. All rights reserved 2nd Flemish Waste Conference16 Agenda 1.Introduction 2.Dimensions Dutch waste market 3.Waste collection 4.Waste treatment

17. ©2007 Deloitte Consulting B.V. All rights reserved 2nd Flemish Waste Conference17 Treatment of household waste Mton Expected treatment Dutch waste Incineration Composting Export Landfill Sludge treatment Sources: Vereniging Afvalbedrijven/AOO: Afvalverwerking in Nederland, 2004; Vereniging Afvalbedrijven, Statusrapportage 2004; VROM, LAP 2002-2012; VROM, Voortgangsrapportage Landelijk afvalbeheersplan; research Deloitte Since 2005 prohibition of landfill for combustible waste in Germany. The export diminished structural Result is a growing demand for incineration capacity in the Netherlands. Because of uncertainty on regulations, capacity had not been invested in Capacity shortage leads to higher prices Market developments

18. ©2007 Deloitte Consulting B.V. All rights reserved 2nd Flemish Waste Conference18 Incineration will stay the most important treatment of household waste Market tendencies in the treatment of waste Composteren Export Storten Slib Separated collection of organic waste seems to have stabilized New national legislation leaves local authorities more policy freedom for the separated collection of organic waste Higher tariffs for incineration will stimulate new investments. New generation incineration capacity with high energy output and maximum. Inciniration will stay the dominant treatment Source: Senternovem Totaal 3,9 Mton Treatment of combustible wastel Landfill 8% Incineration 92%

19. ©2007 Deloitte Consulting B.V. All rights reserved 2nd Flemish Waste Conference19 About half of the municipalities qualify the incineration of household waste as a core (public) task Is incineration a core public task? All waste Only household waste Source: Deloitte research YesNo 0% 25% 50% 75% 100% Core task

20. ©2007 Deloitte Consulting B.V. All rights reserved 2nd Flemish Waste Conference20 A limited number of public shareholders expect the sale of their incineration facility in the short run Chance of a take over within two years Source: Deloitte research % shareholders 0 25 50 Surely notNot likelyProbablySurelyNo opinion

21. ©2007 Deloitte Consulting B.V. All rights reserved 2nd Flemish Waste Conference21 Conclusions waste treatment Incineration is the dominant treatment of household waste Short time shortage New capacity investments with high energy output Despite the major take-over('s) by private equity, there seems to be much support for public ownership of incineration capacity.

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