Waste Management Services
Waste Management Services
Business Model Description
Provide waste management services, such as collection, transportation, and disposal of waste, and provide new waste collection, sorting, and recycling plants and equipment through Public-Private Partnerships (PPPs). The collected waste could be reused as a substitute for raw materials or in the process of waste-to-energy solutions. The government provides regulatory oversight and contracts, while the private company is responsible for the day-to-day operations of the waste management system and provides a source of funding for capital investments. Investors must fulfill the permits prescribed by the Environmental Protection Ministry (34).
Expected Impact
Reduce waste and illegal landfills, eliminate pollution and soil contamination, and provide better protection of the environment and public health.
How is this information gathered?
Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.
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Country & Regions
- Serbia: Šumadija and Western Serbia
- Serbia: Vojvodina Autonomous Province
- Serbia: Belgrade Region
- Serbia: Southern and Eastern Serbia
Sector Classification
Infrastructure
Development need
Progress towards target SDG 9.1 indicates contradictory trends. Progress is made in road and air transport, and movement away from the target in rail, pipeline, and inland waterway transport. Concerning target SDG 11.6, a decrease in the municipal waste recycling rate is registered (2). The poor state of water infrastructure is identified (3).
Policy priority
The aim of the high-level policy Spatial Plan of Serbia (2021-2031) is better accessibility of traffic, infrastructural, social and communal services, and integrated infrastructure; higher quality of life; economic development and functioning of all/critical activities based on sustainability, circular development and mitigating the impact of climate challenges (4).
Gender inequalities and marginalization issues
About 70% of Roma men and women in the Republic of Serbia live in spatially and socially segregated settlements, in deplorable and inadequate living conditions, and without access to basic infrastructure. The majority of homeless people are women over 65 years old, and about 31% are Roma men and women. Young LGBT* people who mostly live in families that do not approve of their sexual orientation also encounter difficulties, and young people increasingly end up homeless after "outing" (5).
Investment opportunities introduction
Policies of Serbia are focused on the implementation of traffic networks, reconstruction and development of infrastructure; increase in electricity generation and lift energy efficiency (4). 4 billion EUR are planned to be invested in reconstructing the railway infrastructure (7). Renovation of rural infrastructure for 70 million EUR is planned (8).
Key bottlenecks introduction
The age and inefficiency of the transmission and distribution power grid and facilities and the quality of trade and transport-related infrastructure show a decreasing trend (3, 6). Only few local governments have waste collection centers ("recycling yards") (1).
Waste Management
Development need
Serbia's coverage of municipal waste collection services is 91.4 % of the population, according to the Environmental Protection Agency for 2021. Waste treatment before disposal in landfills would reduce the total percentage of municipal waste in landfills, which now stands at 65.73% (1).
Policy priority
Policies are focused on developing a sustainable waste management system to preserve resources and reduce negative environmental impacts. These include preventing waste generation, reducing the amount of recyclable waste disposed of in landfills, and reducing the share of biodegradable waste in disposed municipal waste (1).
Gender inequalities and marginalization issues
Specific problems in rural areas result from inadequate infrastructure, availability, and organization. Most local governments have machinery and vehicles for waste collection. However, there needs to be more appropriate equipment for separate waste collection (1).
Investment opportunities introduction
Recycling and reusing materials that previously ended up in waste will lead to a reduction in demand for primary production, which, to the extent that these materials were once imported, will stimulate an increase in local competitiveness. It will create employment opportunities related to collecting and recycling secondary materials (1).
Key bottlenecks introduction
There needs to be systematically organized separate collection, sorting, and recycling of municipal waste in Serbia. Although primary separation in the Republic of Serbia is established by law and provides for separating plastic, paper, glass, and metal in specially marked containers, separate collection rarely works (1).
Waste Management
Pipeline Opportunity
Waste Management Services
Provide waste management services, such as collection, transportation, and disposal of waste, and provide new waste collection, sorting, and recycling plants and equipment through Public-Private Partnerships (PPPs). The collected waste could be reused as a substitute for raw materials or in the process of waste-to-energy solutions. The government provides regulatory oversight and contracts, while the private company is responsible for the day-to-day operations of the waste management system and provides a source of funding for capital investments. Investors must fulfill the permits prescribed by the Environmental Protection Ministry (34).
Business Case
Market Size and Environment
USD 100 million - USD 1 billion
< 5%
According to the latest data from the Waste Management Program of Serbia for the period 2022-2031, the total investment costs required for the implementation of the program targets during the period 2022-2049 will reach around 1,23 billion Euro. The biggest part of the investment shall come during the program duration 2022-2031, totalling to about 940 million Euro.
The total value of infrastructure construction for municipal solid waste disposal in the Republic of Serbia is USD 280 million (EUR 265 million) (11, 12).
The CAGR of waste management businesses revenue from 2021 to 2030 is less than 5%. The selected range corresponds with the CAGR of waste management on the global market of 3.4% from 2021 to 2030 (39).
Indicative Return
5% - 10%
Waste management services tend to achieve ROIs of 5-10%, mostly near 5%. Larger waste management companies tend to have higher returns due to the economics of scale (39).
Investment Timeframe
Long Term (10+ years)
With an ROI below 10%, the expected payback period for waste management service provision is over 10 years (39).
Ticket Size
> USD 10 million
Market Risks & Scale Obstacles
Capital - CapEx Intensive
Market - Volatile
Impact Case
Sustainable Development Need
In 2020 in Serbia, a total of 55.9 million tons of waste was generated. In 2021, the country generated 69.6 million tons of waste (33). Of the total amount, 53.6 million tons (95.8%) were disposed of instead of being professionally managed and recycled, and only 2.3 million tons (4.2%) were reused (22).
There is a large number of illegal landfills, over 3,500, which are outside the control of municipal utility companies, with very different dimensions and risk factors. About 20% of the municipal waste generated in Serbia is dumped in wild dumps (1).
The amount of recycled waste used as fuel for energy production increased by 7.5% in 2020, and the amount used for backfilling increased by 33.0% compared to the 2019. In comparison, the amount of recycled waste decreased slightly by 2.4% in 2020 compared to 2019 (22).
Gender & Marginalisation
In most cases, illegal landfills are located in rural areas. They result from a need for more funds to expand the waste collection system and insufficient waste management organization at the local level (1).
The legislation does not regulate the activities of the informal sector in Serbia. It is estimated that the informal waste collection sector in Serbia consists of 30,000 to 50,000 individual collectors who operate according to the principle of the informal economy, exposing them to significant risks (1).
Expected Development Outcome
Waste management services reduce the amount of waste sent to unmanaged landfills, decrease the need for new resources to be extracted, and reduce greenhouse gas emissions (GHG) associated with waste disposal (1).
Waste management system create jobs and increase waste treatment and share of reused generated waste (1).
Gender & Marginalisation
An organized waste management system reduces illegal landfills. It promotes the activities of formal waste collecting by providing additional fees on top of existing ones, which are expected to be part of a future incentive scheme. The purpose is to make illegal landfills more expensive than legal landfills (1).
Investment in waste management can offer new skills, training and increased employment and engagement of women, having in mind that they have a significant roles in public institutions , but also in households where their influence is important in waste management activities and in product and service habits that can be part of circular supply chains.
The importance of raising awareness and working on the education of women and vulerable groups as an important group for promoting and accelerating the development of waste management at the local level can have a positive effect on reducing the negative effects on human health, particularly improving the health outcomes for marginalized communities.
Primary SDGs addressed
3.9.3 Mortality rate attributed to unintentional poisoning
0.3 per 100,000 population (2021) (23).
N/A
11.6.1 Proportion of municipal solid waste collected and managed in controlled facilities out of total municipal waste generated, by cities
N/A
N/A
12.5.1 National recycling rate, tons of material recycled
16.8 % (2021) (24).
N/A
Secondary SDGs addressed
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Planet
Corporates
Public sector
Indirectly impacted stakeholders
People
Planet
Corporates
Public sector
Outcome Risks
Waste management if not managed well may create environmental risks associated with waste-to-energy solutions, such as air and water pollution or the release of hazardous chemicals (39).
Health risks to people in the waste management industry and those near waste plants if waste is not managed properly (39).
Health risks for women working in waste management industries and economic risks due to higher potential fees for lower-income people (1).
Impact Risks
Limitations may occur because of a high degree of dependence on Government policies in waste management, which may lead to limited uptake and scale due to potential fee changes (1).
Waste management may create economic risks, which include increased costs for municipalities or businesses responsible for managing waste and recycling (39).
Limited awareness of the population of waste management's positive environmental effect may limit the uptake of the waste management services (39).
Impact Classification
What
Waste management in Serbia can lead to reduced waste and illegal landfills, eliminates pollution and soil contamination, and provides better protection of the environment and public health.
Risk
Waste management services may carry stakeholder participation risks due to low ecological awareness or service coverage, health risks, and affordability risks.
Impact Thesis
Reduce waste and illegal landfills, eliminate pollution and soil contamination, and provide better protection of the environment and public health.
Enabling Environment
Policy Environment
Action Plan for 2022 – 2024 for the implementation of the Waste Management Programme in the Republic of Serbia for 2022 -2031, based on which are followed activities in sustainable waste management of the existing program (40).
The National Environmental Protection Program, 2010, indicates that the extraction of recyclable components from waste and recycling is prescribed by law. The development of the recycling industry creates conditions for the creation of new jobs (28).
The National Strategy for Approximation in the field of environment for the Republic of Serbia (NEAS), from 2011, deals with the issues of challenges related to the implementation of EU regulations and provides a sound basis for Chapter 27 accession negotiations (29).
The report on environmental protection of the Environmental Protection Agency provides an annual overview of the state. It enables insight into achieving the goals and measures of the environmental protection policy defined in strategic and planning documents (30).
Financial Environment
Financial incentives: Incentives for the waste management sector are awarded through public competition for the treatment or reuse of certain types of waste and for the production of plastic bags. Resources for such incentives and public investments come from the state budget (1).
Financial incentives: Fees for the provision of municipal waste management services. Waste management services, such as municipal waste collection and disposal, are paid for by users. Fees are calculated per m2 of residential or commercial space. Fees for households are collected monthly (1).
Financial incentives: Fees for particular waste streams for which special compensation is paid. The mandatory fee for plastic bags, following the law on costs for the use of public goods, is an economic instrument aimed at preventing waste generation (1).
Financial incentives: Serbia offers subsidies, loans, and grants for sustainable waste management, including building treatment facilities. Subsidies cover equipment, while loans offer low-interest rates and long repayment periods. Grants are available from European Uniton (EU) programs (1).
Fiscal incentives: Tax benefits are granted to investors who make special importance investments: improve competitiveness / regional development, invest USD 5.2 million / 500+ jobs (developed areas) or USD 2.1 million / 100+ jobs (less developed areas), support common priorities, or have bilateral agreements (10).
Other incentives: Investors in waste management are required to obtain environmental permits, which ensure compliance with environmental regulations and standards. The Serbian government provides stabilization clauses in contracts, which protect investors from changes in law or regulations.
Regulatory Environment
The Law on Waste Management, no. 95, 2018 sets out the framework for waste management in Serbia. It lays out the responsibilities of the government, local authorities, and citizens concerning waste management, including the collection, transport, treatment, and disposal of waste (25).
The Law on Environmental Protection, no.76 and 95, 2018 sets out the framework for protecting the environment and includes provisions relating to waste management. It lays out the responsibilities of the government, local authorities, and citizens concerning preserving the environment (27).
The Law on Packaging and Packaging Waste, no.95, 2018 regulates the conditions of environmental protection in the management of packaging and packaging waste in the Republic of Serbia (26).
Marketplace Participants
Private Sector
Eko Unija Sn Doo, Doo Đaković Novi Sad,Jugo-Impex Doo Niš, Ce-Za-R Doo Beograd, Monbat Plc Doo Inđija, Inos - Balkan Doo Valjevo, Steel-Impex Doo Petrovaradin, Kappa Star Recycling Doo, Metalopromet Doo Kula.
Government
Ministry of Construction, Transport and Infrastructure, Ministry of Public Investments, Ministry of Environmental Protection, Ministry of Health, Ministry of Economy and Rural Development.
Multilaterals
National Alliance for Local Economic Development (NALED), Europe Union (EU), Western Balkans Investment Framework (WBIF).
Non-Profit
United States Agency for International Development (USAID), German Agency for International Cooperation GmbH (GIZ), Association of Recyclers of Serbia, an engaged platform for the environment SRDA.
Public-Private Partnership
The Law on Waste Management allows the Waste Producer or other waste holder to treat waste through a PPP, following Article 6 of this Law (25). The Commission for PPPs gave a positive opinion of the proposals for four PPP landfill projects (21, 37).
Target Locations
Serbia: Šumadija and Western Serbia
Serbia: Vojvodina Autonomous Province
Serbia: Belgrade Region
Serbia: Southern and Eastern Serbia
References
- (1) Ministry of Environmental Protection, Waste management program in the Republic of Serbia for the period 2022-2031, 2022. https://ekologija.gov.rs/sites/default/files/2022-02/program_upravljanja_otpadom_u_rs_za_period_2022-2031._god_0_2.pdf
- (2) Statistical office of the Republic of Serbia, Progress Report on the Implementation of Sustainable Development Goals by 2030 in the Republic of Serbia, 2022. https://www.stat.gov.rs/media/353537/progress-report-on-the-implementation-of-sustainable-development-goals-by-2030-in-the-republic-of-serbia.pdf
- (3) Ministry of Construction, Transport and Infrastructure, Strategy for Sustainable Urban Development of the Republic of Serbia until 2030, 2019. https://www.pravno-informacioni-sistem.rs/SlGlasnikPortal/eli/rep/sgrs/vlada/strategija/2019/47/1/reg
- (4) Ministry of Construction, Transport and Infrastructure, Draft of the Spatial Plan of the Republic of Serbia from 2021 to 2035, 2021. https://www.mgsi.gov.rs/sites/default/files/PPRS%20Nacrt.pdf
- (5) Ministry of Labour, Employment, Veteran and Social Affairs, Strategy of Prevention and Protection Against Discrimination for the period from 2022 to 2030, 2022. https://www.pravno-informacioni-sistem.rs/SlGlasnikPortal/eli/rep/sgrs/vlada/strategija/2022/12/2
- (6) Sustainable Development Report 2022, Sustainable development report 2022-Serbia, 2023. https://dashboards.sdgindex.org/profiles
- (7) B92.net, Serbia invests 4 billion euros: The complete reconstruction of the railway is planned, 2019. https://www.b92.net/biz/vesti/srbija/ulaze-se-cetiri-milijarde-evra-u-planu-celokupna-obnova-zeleznice-1563466
- (8) Cordmagazine.com, Renovation of rural infrastructure for 70 million euros, 2022. https://cordmagazine.com/sr/srbija/obnova-seoske-infrastrukture-za-70-miliona-evra/
- (9) Cordmagazine.com, Renovation of rural infrastructure for 70 million euros, 2022. https://cordmagazine.com/sr/srbija/obnova-seoske-infrastrukture-za-70-miliona-evra/
- (10) Law on investments. 2023. https://www.paragraf.rs/propisi/law-on-investments-republic-serbia.html
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- (12) "Clean Serbia", n.d. https://cistasrbija.rs/
- (21) Commission for Public-Private Partnership, Public-Private Partnership Project proposals with or without elements of concession which received the positive opinion of the Commission for Public-Private Partnership, n.d. http://jpp.gov.rs/content/projekti/spisak/spisak-odobrenih-projekata.pdf
- (22) Statistical office of the Republic of Serbia, Generated and treated waste, 2020, 2021. https://publikacije.stat.gov.rs/G2021/Pdf/G20211172.pdf
- (23) Good Health | SUSTAINABLE DEVELOPMENT GOALS, Good Health: The Sustainable Development Goals, n.d. https://sdg.indikatori.rs/sr-latn/area/good-health-and-well-being/?subarea=SDGUN030903&indicator=03090301IND01
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- (26) "Official Gazette of RS," The Law on packaging and packaging waste, 95/2018. https://www.paragraf.rs/propisi/zakon_o_ambalazi_i_ambalaznom_otpadu.html
- (27) "Official Gazette of RS," The Law on Environmental Protection, 76 and 95/2018. https://www.paragraf.rs/propisi/zakon_o_zastiti_zivotne_sredine.html
- (28) "Official Gazette of RS," Decision on Establishing the National Environmental Protection Programme, 2010. https://www.ekologija.gov.rs/sites/default/files/2021-01/nacionalni-program-zastite-zivotne-sredine-r.srbija.pdf
- (29) "Official Gazette of RS," National Strategy for Approximation in the field of Environment for the Republic of Serbia, 2011. https://www.pravno-informacioni-sistem.rs/SlGlasnikPortal/eli/rep/sgrs/vlada/strategija/2011/80/1/reg
- (30) Ministry of Environmental Protection, Report on the State of the Environment in the Republic of Serbia, 2021. http://www.sepa.gov.rs/download/IZVESTAJ_2021.pdf
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- (34) Ministry of Environmental Protection of the Republic of Serbia, Waste management, n.d. https://www.ekologija.gov.rs/lat/dozvole-obrasci/upravljanje-otpadom
- (35) Biznis.rs, Application for reporting illegal landfills in Serbia, 2021. https://biznis.rs/preduzetnik/aplikacija-za-prijavljivanje-divljih-deponija-u-srbiji/
- (36) Sepa.gov, Register of illegal landfills, n.d. http://nrizgis.sepa.gov.rs/kdd/
- (37) 021.rs, After the Public-Private Partnership for the water factory, Zrenjanin is embarking on the project of rehabilitating the landfill, 2022. https://www.021.rs/story/Info/Vojvodina/308767/Posle-javno-privatnog-partnerstva-za-fabriku-vode-Zrenjanin-se-upusta-u-poduhvat-sanacije-deponije.html
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- (39) Peterhof Consulting stakeholder consultations online on 3rd of February, 2023.
- (40) Action Plan for 2022 – 2024 for the implementation of the Waste Management Programme in the Republic of Serbia for 2022 -2031, 2022. https://srda.rs/wp-content/uploads/2022/04/Akcioni_plan-za-period-2022-2024.-godine-za-sprovodjenje-programa-upravljanja-otpadom-2021-2031..pdf