Recycling of plasterboard waste – from “nice to have” to necessity !

Henrik Lund-Nielsen, MBA, CEO

Gypsum Recycling International A/S

Recycling of plasterboard waste – from “nice to have” to necessity ! Agenda

1. Background/about GRI

2. Legislative drivers

3. Pressure from the customers/market

4. Scarce supply of inexpensive raw materials

5. Closing remarks

About Gypsum Recycling International A/S: Summary

• Worldwide the leading recycler of gypsum/plasterboard waste

• The preferred partner for recycled gypsum raw materials for the top 5 plasterboard manufacturers in the world

• Active in 10 countries on 3 continents, including the US and Japan

• 100% growth p.a. the last 5 years

• Recycling units in Europe, North America and Asia

• Only focussed on gypsum/plasterboard waste

• Winner of the prestigeous Cleantech Award 2007; given to

“The most promising Danish Cleantech Company”

• “Environmental Gazelle of 2007” = Fastest growing environmental company in Denmark (Borsen; the leading Danish business newspaper)

About GRI: Largest plasterboard recycler in the world – active on three continents

2001 – Denmark

2003 – Sweden

2003 – Norway

2004 – Holland

2005 - Ireland

2005 - UK

2005 – USA

2006 – Belgium

2007 - Japan

2007 - Switzerland

In total 10 countries – on 3 continents = far more than anybody else

In cooperation with the best

Knauf - 2001

BPB - 2003

Lafarge - 2004

US Gypsum – 2004/5

National Gypsum – 2004/5

GRI serves all the top 5 plasterboard groups in the world. In total 20 different plants are under contract with GRI for the supply of recycled plaster-board waste.

The reasons for the success

• Win-win offer to the plasterboard industry; no investments nor cost for the plasterboard companies, just materials at a better price and the possibility of obtaining a better environmental image

• Complete SYSTEM, not just recycling technology

• Own developed collection and logistic solution, with specialised containers and trucks, drives down transport cost and assures quality

• Superior patented technology in the recycling units producing materials 99% as good as virgin materials allowing the plasterboard plants to use up to 25% recycled materials in the raw materials mix

• Mobile recycling units allowing fast and easy expansion

• Ability to handle ALL kinds of plasterboard waste; from new construction and from demolition, dry or wet waste!

This is how it works

Legislative drivers

• All over the world legislation aimed at securing the environment and/or promoting recycling is being implemented

• Typically the following instruments are used in the legislation

The legislative instruments and what they aim for

Promote recycling

Secure the environment / safe handling of the waste

Landfill regulations XLandfill taxes XFixed recycling targets XExtended producer responsibility (for waste)

X

Legislative drivers

Landfill regulations

• Aimed at securing the environment and assuring safe handling and storage of waste in general (all waste). Virtually all countries in the world have such.

• Special demands on landfilling of gypsum waste in more and more countries due to the perceived risks connected to the landfilling of gypsum.

Organic waste Rain water

Legislative drivers: What is the concern about gypsum waste in the landfills ?

No oxygen

Gypsum = CaSO4 2H2O (calcium sulphate dihydrate)

S = Sulphur

Leachate going into ground water

• Sulphur will be mixed with organic waste and water in an environment without oxygen• Leachate will contain sulphur and water

Gypsum = CaSO4 2H2O (calcium sulphate dihydrate)

H2S gas

Gypsum Organic waste

Rain water

• Potentially lethal hydrogen sulfite gasses (H2S) will develop in the landfill !!

Consequently gypsum waste should not be landfilled in the same landfill cell as organic/biodegradable waste; mono-cells for gypsum are required for safe landfilling

• In addition leachate from gypsum waste will contain sulfur that could contaminate the ground water

Consequently gypsum waste should only be diposed of in landfills with membranes and the proper leachate management systems = not inert landfills

Legislative drivers: Gypsum waste is considered to be very problematic in the landfill

No oxygen

Legislative drivers

Landfill regulations – the consequences• In EU:

• From 2005 (in reality 2009) gypsum waste may not be landfilled in landfills without membranes (risk of groundwater contamination) = can no longer be landfilled in the inexpensive inert landfill type

• From 2005/2009 gypsum waste may only be landfilled in landfill cells where there is no organic waste

• 1/3 of all landfills in Europe will cease operations in 2009

• Across Europe presently less than 10 special cells for gypsum waste exist right now – where is the rest of the gypsum waste going to go ????

• In Japan & Korea:

• Gypsum waste only in the most modern/most expensive landfills

Legislative drivers

Landfill regulations – the consequences• In Canada

• Ban on landfilling of gypsum waste for over 20 years in the provence of British Columbia (Vancouver)• Ban on landfilling of new construction gypsum waste in Toronto, Ontario

• In the US• Ban on using daily landfill cover materials that contains gypsum in many states

• Possibly a ban on landfilling coming in Massachusetts (Boston)

• Generally

• More and more difficult to find landfills that will accept plasterboard waste

• The price of landfilling plasterboard waste will increase significantly

• The plasterboard customers will have to pay more for using the plasterboard products as disposal cost increases

Legislative drivers

Legislative instruments aimed at promoting recycling:• Landfill taxes• Fixed recycling rates• Extended producer responsibility

Why is it an aim to promote recycling virtually all over the world ?

• Support a sustainable development where resources are reused instead of thrown away

• To secure continued economic growth: There is not enough resources available for continued growth if the resources are not reused

• To limit the waste by decoupling the creation of waste from economic growth (there will be too much waste if the economic ambitions are realised without this)

• Avoid global warming

Legislative drivers – Global warming will be main driver in the years to come• Climate change is a result of man-made greenhouse gasses. CO2

(carbondioxid) is responsible for app. 70-80% of the greenhouse gasses (depending on country)

• Methane is also a greenhouse gas and is responsible for app. 20-30% of the climate change (depending on countries)

• Methane is 20 times more damaging per ton than CO2 !

• Waste in landfills in all countries is the biggest or second biggest generator of methane:• Landfills are responsible for 7% of all greenhouse gas generated in the US• Landfills are responsible for 3% of all greenhouse gas generated in the EU• As a comparison the “critised”airline industry is responsible for less than 3%

• Politicians all over the world are “competing” to suggest the strongest and best ways to reduce the emissions of greenhouse gasses

• Disposal at landfills have been (in the UK) and will be targeted in most countries – and harsh measures will be implemented to avoid landfilling. “Stop landfilling” to avoid climate change might become the single most important driver for establishing plasterboard recycling in the future !

Legislative drivers

Landfill taxes

• EU:• Increases fast in most countries• Is already 70 euro per ton in Holland and will be more than 70 euro in UK, doubling the cost of disposal of plasterboard waste !!!• EU is considering a EU wide minimum landfill tax

• The US:• Not widely used• Where used still low, typically less than 10 us$ per ton

• Other countries:• Used in virtually all developed countries, ie. Norway, Switzerland, Australia, New Zealand etc.• Outside of Europe the tax level is still low

Legislative drivers

Fixed recycling rates

• EU:• Suggestion from the parliament that by 2020, 70% of all C&D waste must be

recycled (revision of waste directive, decision by early 2009)

• The US:• Already in place in some cities, like Chicago and San Diego.• Typical aim is for 50% recycling of C&D waste within 3 years

• Other countries:• Some countries have regulations stating that all that can be recycled must be

recycled

Extended producer responsibility

• Only considered in the EU (waste directive revision)

• If passed member states MUST make national laws to ensure that the manufacturers take responsibility for their own waste, ie. by offering take back systems or similar.

Legislative drivers

Summary – the consequence of the legislative drivers• In virtually all developed countries legislation is directly and indirectly pressing the

plasterboard industry to get involved with recycling.

• By taxing waste send to landfill more and more and by putting tough demands on how plasterboard waste can be landfilled – if at all – it will be more and more difficult to send plasterboard waste to ordinary landfills and the cost of sending waste to landfill will become a bigger and bigger burden on the customers of the plasterboard plants.

• Particulars for EU:• The landfill regulations (the landfill directive) will make it very hard to find landfills

that legally can accept the plasterboard waste• This together with the increasing tax on waste that is landfilled will make the cost

of plasterboard waste disposal 2-5 times higher in most countries in the future. Are the customers just going to accept this ??

• By 2009 forced recycling programs – also for plasterboard waste - may be imposed upon the industry in each country due to the extended producer responsibility.

• Particulars for the US and Canada:• Fewer instruments are used than in the EU, but at the same time more frequent

use of the ultimate instrument: ban on landfilling of plasterboard waste. More bans are likely in the future

• Particulars for other countries:• More and more countries are taking an EU approach by

taxing waste and promoting recycling

Plasterboard customers and the market in general wantrecycling to occur for the following 3 reasons:

• The increasing disposal cost for plasterboard waste at the landfills (as explained previously); an economic concern. • There is only party to pay for the increased cost of landfilling and that’s the

customers, who in turn start demanding that the manufacturers take responsibility for the waste from their products, including finding cheaper disposal routes for it

• General wish for sustainable buildings by re-using waste; an environmental concern. • The customers want to have a “green” image and therefore demand that the

waste they generate is recycled

• The concern for global warming; an environmental concern.• The customers do not want to be seen as contributing to global warming by

sending waste to landfill

Pressure from the market/customers

Consequences of the pressure• US/Canada

• The LEED system (Leadership in Energy & Environment Design), where points can be gained by recycling plasterboard

• Some US plants have on a case by case basis taken back waste from their products at new construction sites due to demands from LEED customers

• LEED projects now account for app. 5% of all new buildings, but growing very, very fast. In some states is has reached more than 10%

• EU• The plasterboard manufacturers have committed to becoming involved in and

promote recycling:• The Ashdown agreement in the UK in 2007 between Lafarge, Knauf and BPB ,

promising a 50% recycling rate from new construction waste in 2010• The French agreement between the same companies promising to improve the

recycling rate in France for plasterboard waste (is virtually zero now)• The initiative from the Dutch environmental ministry trying to get the

plasterboard plants, the waste and collection industry to commit to recycling targets

• The market pressure already has made it a necessity for plasterboards plants to become involved in recycling in the EU and US !! The same consequences in more countries are likely to follow

Pressure from the market/customers

There is more and more a lack of inexpensive gypsum materials making recycled materials look more and more attractive

• Locally there is no mine nor FGD/DSG gypsum available• The gypsum has to be transported in from far away• The plants can cut their cost by using recycled materials made locally

• The landed cost of other gypsum has increased dramatically recently• Cost of transportation has skyrocketed recently• In certain areas the volume of FGD/DSG has been significantly reduced• The demand for gypsum has increased while supply has been stable• Some plants have seen increases of 50% in just 3 years

• At the same time there is more and more recycled materials available • In the Nordic countries some plants are now using 25% recycled materials

Pressure from the market/customersScarce supply of inexpensive raw materials

Consequences:

• Locally there is no mine nor FGD/DSG gypsum available• In the Nordic countries, Japan, Korea, Eastern Australia, New Zealand, the

Northern Coastal areas of US and in Canada sourcing recycled materials made locally is very attractive as they can be sourced at a price significantly lower than that of the “imported” normal materials

• The landed cost of other gypsum has increased dramatically recently• The plants cannot really influence the cost of energy – but they can influence

the cost of the raw materials by buying them locally from recyclers. • Especially important for plants that get their materials from far away • Plants that have been used to relying on FGD/DSG, especially in Northern

Europe, are now turning to recycled gypsum to fill the gap that the lack of sufficient amounts of FGD/DSG has created

• At the same time there is more and more recycled materials available • The Nordic plants are saving more than 1 million yearly due to their usage of

recycled gypsum• The recycled gypsum is no longer just “nice to have” -

without it, it would be impossible to maintain the plants’ competitiveness and profits

Pressure from the market/customersScarce supply of inexpensive raw materials

Closing remarks

Recycling of plasterboard waste – from “nice to have” to necessity !

In a situation where the plasterboard industry is under pressure from:• Legislation• The customers/market• Scarce supply of inexpensive materials

The solution is actually not that hard to find:

Closing remarks

Closing remarksClosing remarks

Recycling of plasterboard waste – from “nice to have” to necessity !

Henrik Lund-Nielsen, MBA, CEO

Gypsum Recycling International A/S