Waste Management Turns Trash to Cash

Waste is one of the things we want to minimize or even eliminate. The challenge is we generate tons of it everyday.  Steps on the consumer end must be taken to reduce waste, as the consumer is the waste producer. On the collection end, waste companies must find ways to recycle or reuse the materials collected.

Yesterday, Leon Kaye of TriplePundit reported on Waste Management’s investment in a plastics to oil company. It takes the waste of plastic and processes it to usable oil.  But how does this fit into the Waste Managements’ strategy? What are the missing pieces to this strategy?

Waste Management CEO David Steine hinted at his company’s strategies during the Fortune Brainstorm Conference 2011. His talk, entitled “Garbage In, Value Out” included steps his company is to making something of value out of the waste his company collects. He further says the beauty of business model is create diffent kinds of value from same trash: electricity and fuel.

One part of that strategy is harvesting landfill gas like methane and carbon. Steine claims that Waste Management’s current operation creates more energy than the entire solar industry combined. If this is true, that is quite a remarkable feat because it utilizes the current infrastructure that we have.

Waste Management is also making investments on startups focusing the conversion side of things. Conversion is the process of turning waste into a usable material or energy. This is similar to the plastics to oil investment.  Furthermore, one recent aquisition is Harvest Power. This start up “manages organic waste using advanced technologies to produce renewable energy and high value soil and organic fertilizer products.”

A big company like Waste Managememt, with all it’s resources, cannot do it all on it’s own. The company has its core strength. It knows what it is good at, managing the collection and disposal process. It is tough to innovate in such an environment, hence the strategic move to partner with smaller and more nimble startups.

The one key area, or as Steine calls it, the holy grail for Waste Management, is finding an efficient and effective way to decontaminate the waste components. For example, has yet to discover an easy and cost effective way to split up organic waste, plastics, metals, electronics.

Many times, these materials are all just piled into the same bin and thrown in the landfill. Steine already has investments and technologies that handle the conversion process. But it is the front end that needs the most work. All they need is the “clean” waste inputs. The conversion technology is there.

So, I will put this out to you. Do you know of any ways to decontaminate the inputs/waste on the front end? Do you know of any startups that are taking up this challenge? If so, perhaps there is a collaboration waiting not to be wasted with Waste Management or other waste handling companies.

Jonathan Mariano is an MBA candidate with the Presidio Graduate School in San Francisco, CA. His interests include the convergence between lean & green and pursuing free-market based sustainable solutions.

3 responses

  1. Off the top of my head – I would look to industries like scrap metal for some clues. They deal with contaminated metal (from stamping processes and others) that they will eventually transform into valuable raw material. Bottom line though, there must be better organization of the waste materials. But currently, there exist no trash management operations in the US, compared to Germany for example, that works with the consumer to make sure trash is properly segregated. Also, manufacturers have no plans for the end of their products’ lifecycles. Too bad because there is a lot of value that is being wasted, not to mention the environmental impact that is caused by using newly mined or processed material instead of recycled inputs. Lastly, there are companies that are employing microbes found in nature to break down trash. The whole debate over owning patents on life (like the GMO food debate) began in the late 70s (I think) when a scientist from General Electric tried to patent a bacteria that consumed oil. It would be employed during an oil spill, for example. The problem was that it ate other beneficial mmicrobes along with the petroleum. Therefore, it was not used. Nonetheless, GE fought hard and got a patent for it – the first patent on life. Companies are also using microbes to construct everyday materials that are traditionally made from, for example, petroleum-based products. Interesting moves by WM.

    1. Thanks for the thoughts Mauvaisoeil. This is definitely a place to look at the entire lifecycle, or even to change that lifecycle for cleaner inputs.

  2. During my MBA studies, I volunteered to help an entrepreneur with a well developed process that could do exactly what Waste Management now needs.
    The irony is that he approached them approximately ten years ago with the idea and was told that WM was not interested. WM agreed that the process is completely viable, but at the time WM saw more value in stuffing garbage in holes than in generating additional value streams.
    WM’s shortsightedness seems to be biting them now. What a shame.

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