Waste Disposal Costs – What Should We Expect In 2024?

Dan Pegram

Published: 07/02/2024

As economies worldwide continue to expand, the demand for labour intensifies, resulting in increased wages. A recent article from the Office of National Statistics, published on January 16, 2024, reported a notable surge in regular earnings, which rose by 6.6% between October and December 2023 alone, with similar increases anticipated for 2024. This upward trajectory directly affects waste management companies, as a significant portion of their operational expenses is allocated to labour costs.

Fluctuations in fuel prices exert a direct influence on the expenses linked to waste collection, transportation, and processing. According to a comprehensive analysis by Fuel Oil News, as of the latest published data, the average fuel cost in the UK has surged by over 25% throughout 2022. Corporate fuel giant Allstar has released predictions for 2024 indicating potential oil production cuts to manage the balance between demand and supply. Whether this will lead to a sustained moderation of fuel costs from the highs of 2023 remains uncertain. The waste industry relies on fuel oil across various operations, extending beyond just fleet vehicles. Facilities for waste transfer and materials recovery impose substantial demands on the grid, often necessitating the use of diesel-powered generators. The withdrawal of ‘Red Diesel’ subsidies for these operations continues to impact many operators, particularly in cases where connecting to the grid proves cost-prohibitive.

Despite the energy market sitting at a two-year low, the delay in the adjustment of energy tariffs means that those who locked in rates during periods of high pricing may still be burdened by elevated tariffs. Consequently, the relief from lower rates won’t be experienced until these high-rate contracts expire, maintaining pressure on affected businesses. Energy markets are highly susceptible to global events, and therefore it is impossible to predict the energy prices to stabilise – particularly amid ongoing global conflicts and the forthcoming US election.

In a recent article published by Letsrecycle, insights into the shifting dynamics of recycling demand and rebate values revealed a stark decline in the value of cardboard and paper for recycling. In 2023, Letsrecycle reported that the export value of cardboard plummeted from a peak of £123 per tonne to a mere £78 per tonne. Both cardboard (OCC) and plastic film (98:2) have experienced a significant drop in rebate prices over the past 8 months. Cardboard rebates, previously at £123, have now dwindled to £55, reflecting the challenges prevailing in the global export market. Similarly, plastic film rebates have seen a staggering 70% decrease, directly impacting the revenue streams of waste management companies engaged in recycling operations, which, in turn, are crucial for maintaining the affordability of waste collection services.

Recent analyses indicate a decline in PRN (Packaging Waste Recovery Note) prices in the UK, with the average price experiencing a downturn in 2024. This reduction in value adds further strain on waste management companies as they strive to fulfil regulatory obligations amidst dwindling financial returns. Should this trend persist throughout 2024, the industry must promptly adapt to these evolving market dynamics to ensure compliance with recycling and recovery mandates. The significance of PRN revenue for recyclers cannot be overstated, as the income generated from PRN sales has traditionally provided a dependable source of funding for investment in new equipment and enhanced efficiency for recycling collections, thereby supporting the entirety of our recycling initiatives.

Industry experts foresee additional challenges for the waste and recycling sector in 2024. With the UK embracing Extended Producer Responsibility (EPR), waste disposal companies are anticipated to bear a significantly heavier burden. As sustainability requirements evolve and regulations change, waste management enterprises must prioritise investments in innovative technologies and operational efficiency to maintain resilience in a rapidly evolving global landscape.

While there may be some stabilisation in the cost of waste collection transportation due to fuel cost adjustments, the escalating rates of labour will undoubtedly impact collection expenses. Throughout 2024, gate fees are expected to rise to offset various factors, including energy, labour, and operational costs, which pose significant challenges. Recycling rates are projected to decline further, alongside the diminishing cost of PRNs—a phenomenon presenting both challenges and opportunities. Obligated companies have the opportunity to alleviate financial strain through strategic procurement and improved planning to capitalise on fluctuating prices.

We prioritise providing our customers with the most competitive and reliable waste management services. Our Account Managers monitor markets, conduct internal price analysis reviews, and monitor service providers collection success rates. We’re constantly ensuring the service you’re receiving is both cost effective and running smoothly. While doing all of this, our team keep a focus on sustainability, ensuring the highest possible recycling rates for the waste produced on your site.

We keep your costs down by:

• Continuous market price monitoring and evaluation.
• Engage in supplier negotiations to guarantee the most cost-effective services for all customers.
• Utilise technology and reporting for optimal waste handling.
• Continuously evaluate your waste for best combination of services.
• Set and monitor recycling plans.

All costs associated with our services will be explicitly outlined in the quotations and contracts we provide to you.