New landfill restrictions and increased focus on economic recovery in Central and Eastern Europe bode well for the sector.
New analysis from London-based research firm Frost & Sullivan focusing on the European Construction and Demolition Recycling Services Market, finds that Central and Eastern Europe's construction and demolition sector is in a growth phase and is expected to develop rapidly, with a dynamic compound annual growth rate (CAGR) of nearly 10 percent from 2012 to 2020.
The region's C&D debris market has begun to exhibit changes and is set to provide growth opportunities over the coming years, according to the report. The report says that as the economic situation in the region improves, the market tenders vast investment into road and building constructions, which is expected to result in tangible volumes of C&D waste. In addition, the new EU member states in Central and Eastern Europe are in the process of setting up the necessary resources and infrastructure for the compliance of various EU Environment Directives and Standards which includes securing a recycling target of 70 percent of all C&D waste by 2020.
Currently, the C&D waste management in the region is concentrated on landfilling, according to the report, mostly because it is still not economical and profitable to direct C&D debris to recycling plants in those regions. This trend is expected to change as the majority of Central and Eastern European countries are introducing landfill restrictions. Available landfill sites are shrinking in number and capacity. Furthermore, an improvement of collection schemes, recycling plant infrastructure and also technological developments in terms of C&D processing systems are expected.
"Market development is strongly driven by the Waste Directive (2008/98/EC), wherein C&D waste must achieve a recycling target of 70 percent by 2020," says Frost & Sullivan Energy & Environmental Research Analyst Monika Chrusciak. "Market revenues will also get a leg up from the future optimization of collection and recycling technologies. Higher investments in these services will aid the optimal processing of recyclable waste and improve safety work standards as well."
However, local legislation is not uniformly structured despite strong European Union support for C&D recycling. Dissimilar local interpretations lead to high variations in regional market development, which ultimately could alter market dynamics and profitability.
"The current lack of smart collection and sorting solutions is affecting the quality and the value of recycled materials," notes Chrusciak. "Hence, quality and quantity of C&D waste material are crucial for long-term collaborations with final recycling companies."
Market participants need to develop optimal waste management processes in place as soon as possible, as Central and Eastern Europe is expected to experience increased infrastructure development. The region is emerging from a downturn with construction companies looking for recycled downstream aggregate as an alternative to relatively costly primary construction material in the pursuit of a circular economy. These trends, along with development of environmental standards (ISO 14000) and greater green building initiative development (LEED, BREEAM), bode well for the recycling services market, says the Frost & Sullivan report.
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