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Interview with Stephen Jones, CEO of Covanta

The role of waste management companies is constantly evolving and with that we have seen significant innovation and investment in the sector. Ahead of the World Waste to Energy and Resources Summit, we caught up with Covanta CEO, Stephen Jones to discuss the changing role of waste management companies and where he sees the greatest potential for growth.

What is the greatest challenge facing the waste sector?

The greatest challenge facing the waste sector is changing the status quo and effectively communicating that there are better, more sustainable ways of managing waste than burying it in the ground. It is critical for the world to move forward with more recycling, less landfilling and energy recovery for what remains. It’s getting more regions of the world to embrace the advanced technologies that make sustainable and responsible waste management possible. In my view, this is our greatest challenge.

The most sustainable countries in the world recycle 65 percent or more of their waste stream and then recover energy from the waste left over at Energy-from-Waste (EfW) plants. However, in the U.S., for example, it’s unfortunately the opposite, with the majority of waste still going into landfills, leading to increased greenhouse gas emissions. Yet, by practicing more sustainable waste management – the 4Rs – we could reduce greenhouse gases by 1 gigaton – the equivalent of closing 1,000 large coal-fired power plants or building 2 million, 1 megawatt windmills. But due to the large amount of land available there, it’s a challenge to evolve the thinking in the absence of supportive governmental policies.

However, we see growth opportunities in the UK and China where the policies for sustainably managing waste that can’t be recycled and using it to generate renewable energy, are much more supportive. In these regions EfW is viewed as a superior alternative to landfills in its ability to reduce greenhouse gases and combat climate change, while generating clean, renewable energy.

How has the role of waste management companies changed as a result?

With more and more companies being held accountable by their executive leadership and by their customers to be environmentally accountable for the products they produce and the processes they use for producing their products, the more forward-thinking waste management companies are seeing the need to support this with an expanded array of environmental services and solutions for waste disposal that will help customers achieve their sustainability goals.

We are moving toward a mindset where it isn’t enough to simply remove waste from a commercial site or a resident’s curb and dispose of it in the cheapest way possible. Increasingly, there is a need to supply consumers of waste services with documentation that their waste was managed in the most sustainable manner possible.

Where do you see the most potential for growth within the waste to energy market?

We’re seeing real opportunities emerge overseas in favorable markets, particularly in the UK and China, due to supportive governmental policies.

Which areas of technology are most exciting?

One of Covanta’s areas of focus has been on finding ways of pulling more value out of each tonne of waste processed at our facilities, such as recovering a greater amount and higher quality of metal from ash that remains after combustion, which then commands a higher value in the commodity markets. We have made significant strides in refining our metals recovery techniques and in turn, have succeeded in extracting more value from this revenue stream. We are also making great strides in ash reuse in the U.S., which we envision bringing to other markets. Beneficial reuse of the ash by-product from the EfW process has been an industry pain point. We are actively working on processing and recycling the ash from our facilities and turning it into a usable aggregate material that meets environmental quality standards for beneficial reuse in construction applications. Making this sustainable construction material available provides a two-fold benefit – helping to avoid the cost of ash disposal while helping companies tell a better sustainability story that focuses on preserving natural resources.

Covanta originally withdrew from the UK market but has now resurfaced with a new pipeline of waste to energy plants. Can you tell us about your decision to enter into a partnership with GIG for the development of plants across the UK?

Our initial involvement in the UK focused on participating in large, drawn-out PFI procurement bids with municipal clients, where we would do a great deal of work in an attempt to win contracts for waste to fuel and large waste to energy development projects. We stepped back from this approach and reassessed our strategy. Our re-entry into the UK market takes a decidedly different approach. Rather than going it alone, this time we are leveraging the value provided by a network of partnerships with complementary capabilities. This time, rather than serving solely municipal clients, we are have partnered with leading waste companies in the UK, such as Veolia and Biffa, that have waste collection infrastructure in place and manage a considerable amount of waste. We can do what we do best – operate Energy-from-Waste facilities – and let others that are already established in the market supply the waste.

GIG is an ideal partner for us in that they are a specialist in green infrastructure investments, project delivery and the management of portfolio assets and related services. GIG is dedicated to supporting the growth of the global green economy and our joint venture enables us to create a platform for developing and investing in new opportunities for EfW project development or acquisitions in the UK and Europe, with the head-start of a combined project pipeline with initially six development projects representing two million tonnes of annual capacity. Covanta and GIG will jointly develop EfW projects, initially focused in the UK, and with the potential to pursue opportunities in other international markets. Since I joined Covanta, one of my primary goals has been to drive successful international development and meaningful growth on a consistent and repeatable basis, and this partnership brings that goal to reality.

What else should we expect to see from Covanta over the coming months?

In the UK, we are focused on ramping up to full construction of our Rookery project and hope to have two other projects in construction by the end of the year – Newhurst and Protos.
In the U.S. we continue to grow our Covanta Environmental Solutions business, which works with commercial and industrial customers to find the most environmentally beneficial and efficient sustainable waste management solutions, including secure destruction and energy recovery, recycling, composting, industrial wastewater treatment, consumer product de-packaging, as well as industrial field services and transportation and logistics support.

What new trends or market activity are you watching in the industry? Any future predictions for the sector that you would like to share?

More and more companies are driving the notion of sustainable waste management and extended producer responsibility. We are seeing an increased focus from companies evaluating their environmental impact and an increasingly concerted effort to ensure waste isn’t going to landfill, but instead, something more sustainable is being done with it – such as converting it into energy. Today, a large number of Fortune 500 companies have sustainability goals and are looking for help in surmounting difficult environmental challenges that help minimise their risk and enable them to achieve their goals.

And finally, if you could summarise the waste sector in three words, what would they be?

Innovative. Evolving. Essential.

Don’t miss out on Stephen Jones, CEO of COVANTA speaking on the CEO Waste Management Debate at the World Waste to Energy and Resources Summit in London this May 23-24.

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