This article is extracted from the report 'Removing Waste from UAE Construction'

The UAE’s ambition to divert 75 per cent of solid waste from landfill by 2021 as part of its Vision 2021, echoes growing global interest in improving waste management. 

To move the emirate closer to its target, the UAE’s Ministry of Climate Change & Environment issued a resolution in February 2019, addressing the use of recycled aggregates from construction and demolition (C&D) waste for road construction and other infrastructure projects carried out by the public and private sectors in the UAE. 

The resolution outlines environmental prerequisites for recycling cement, concrete, steel, bricks, gravel, sand, asphalt, timber, and gypsum waste into new high-value materials. It also mandates local departments to ensure contractors collect and sort the waste that they generate.

But while it may be possible to separate construction waste on site, the region does not have the infrastructure, or indeed the market, to effectively deal with the materials generated. 

“If there was a value to that waste and you could obtain financial benefit from it, that would incentivise people to segregate properly,” says Christian Millar, director of the sustainability and environment division of Kuwait-based KEO International Consultants. 

“But…where the virgin aggregate is cheaper than C&D waste in this part of the UAE, they have failed.”

The global market for waste management is projected to grow about six per cent a year, and will be worth an estimated $530bn by 2025, according to US-based Allied Market Research. But the UAE is underperforming in terms of waste management and recycling in comparison to the leading markets, and needs to develop the infrastructure to tap into this value.

... While it may be possible to separate construction waste on site, the region does not have the infrastructure, or indeed the market, to effectively deal with the materials generated. 

“If you structure the legislation, you can incentivise a market that will bring in public-private partnerships to build your infrastructure, and that will offset the costs.” 

Guaranteed prices

A reliable return on investment is a deciding factor for investors. Regulating prices for products from a recycling facility for a set period of time would help make investment in waste infrastructure an attractive proposition.

In Scotland, the government considered a brokerage system to balance the cost of recycled plastic for a 10-year period. 

“This presented the opportunity for people to invest in that 10-year window,” says Millar. “It could guarantee a return on investment before, say, year two. So, it is not rocket science to say [that] if you can fix the import
cost of virgin plastic higher than the purchase cost of recycled plastic for 10 years, you have created an investable window.” 

Adopting a similar approach to fixing the cost of recycled construction materials is one way to enable investment in crucial waste infrastructure in the region.

Recycling mandate

It is difficult to find definitive rules for the use of recycled construction materials in the UAE. Abu Dhabi has mandated recycling of construction materials, stipulating the inclusion of 10 per cent recycled aggregate on government projects. Meanwhile, Ras al-Khaimah requires 20 per cent of the fuel for cement kilns to come from renewable sources “if available”. 

Without legislation in place, construction clients and contractors are unlikely to go to great lengths to use recycled components and materials on a development. 

“If there is no enforcement of the mandate, then people won’t do it,” says Sheridan. “We are working throughout the region reviewing legislation and they often fall at the same point with the enforcement.” 

Establishing an overarching ministry to create legislation and empowering municipalities to enforce it would require substantial budget allocation at a time when government finances are coming under increasing pressure.

Ministry coordination

The lack of coordination between different authorities in the UAE and across the region is a significant barrier to creating and enforcing effective recycling and waste management regulations.

In the UAE, a no objection certification (NOC) is required to transport waste between emirates and there are travel limitations on certain types of waste. 

Moreover, the capacity to handle and recycle waste material varies widely across the country. “If the barriers were removed today,” says Millar, “you could quite quickly see everybody was going to go to [dispose of waste in] the cheapest emirate. So how do you balance that?”

Despite the lack of legislation however, KEO has seen a growing interest in entities in the region wanting to invest in waste infrastructure. 

“Suppliers are saying in a year and a half it will pay for itself,” says Millar. “You have to maintain it, but it will operate for 20 years. So, you are going to get 18.5 years of money rolling in off the back of this. And it will work. But it needs to work in a semi-mature environment.” 

Led by government-backed entities Sharjah-based Bee’ah and Abu Dhabi-owned Masdar, the UAE is increasing its focus on recycling and solid waste management as part of its drive to reduce its carbon footprint and achieve the sustainable growth ambitions of Vision 2021. And, with appropriate government action, there are set to be some lucrative opportunities for investors.   

“I think it is a really exciting time in the Middle East for the progression of waste,” says Millar. “We’re just waiting for it all to happen, and it will happen very soon.”

This report is produced under the MEED Mashreq Construction Partnership.To learn more about the report or the partnership, log on to: www.meedmashreqindustryinsight.com