If you’re at all familiar with Waste Management, you’re aware that it’s not just a garbage company anymore.
In this era of zero waste frenzy, Waste Management is doing just that — helping its customers get to zero. But the Houston-based firm also has a presence in the renewable energy, biofuels and chemical sectors, and you can count it as a major investor in next generation of technologies designed to maximize the value of the materials it collects.
That’s because for Waste Management, garbage isn’t just garbage anymore.
“You can begin to extrapolate some pretty interesting business models when you think of waste as a resource,” said Tim Cesarek, managing director of Waste Management’s Organic Growth Group.
I met with Cesarek recently when he was in San Francisco for the Bio-Industrial Symposium. As he began to describe the different areas in which the company now plays, I was surprised to hear him compare Waste Management’s business model to a fully integrated petrochemical business.
It begins to make sense when you consider the petrochemical model is made of upstream (exploration), midstream (process and transport) and downstream (refining, sales) parts. Similarly, Waste Management is putting in systems upstream to collect the waste before it recovers the materials and converting it into other products downstream.
“There are technologies that are becoming more and more proven that ultimately could further enhance our downstream position,” Cesarek said.
Breaking Up Is Hard to Do
One of the company’s biggest challenges involves dealing with a waste stream that is extremely heterogeneous, forcing the company to either deal with it as a whole, or get it to a more homogenous form through some intermediate step that separates materials from one another. This is also challenging Waste Management to re-imagine how it services its customers to perhaps help them perform some of that separation, put in new processes that do the separation or find “that silver bullet someday that will take everything,” he said.
“If you think about it, the Waste Management of the past, it was a traditional truck that was designed to pick up trash and it wasn’t thought of as a resource,” Cesarek said. “But now as you begin to think about it being a resource and ultimately being a commodity, that means you’ve got to be the lowest-cost producer associated with the end commodity that’s being made, from soup to nuts, meaning from production, from upstream across the supply chain, the midstream side of the business, to the downstream processing.”
In the downstream area, Waste Management has invested in and partnered with several companies to test and develop technologies to convert waste into commodities.
“It’s taught us that we had to think about our waste streams differently in terms of how they’re handled, i.e., wet versus dry,” Cesarek said of the partnerships.
Conversion technologies are based on what he characterized as pathways, such as a fermentation process suited to wet waste streams.
“There are many things made in a fermentation process today,” he said. “If we can get at those sugars, we can make acids, we can make alcohols. And there’s also the simple fermentation of organic materials to make biogas. That’s anaerobic digestion.”
Organic acids, alcohols and biogas are all commodities. “There are all kinds of chemical chains that can be built off of those intermediate fundamental chemicals that I just mentioned, simply starting with a wet stream of waste,” he said.
Source: GreenBiz.com
By Tilde Herrera