Italian industrial waste market: value at 5 billion and structural challenges

The Italian market for waste produced by companies and industries is currently worth around 5 billion euros and could reach 5.5 billion by the end of the decade. A resilient sector, capable of recovering from the shock of Covid in just two years, but which is now faced with a structural problem: the quantity and complexity of waste are increasing, while the treatment and disposal capacity is struggling to keep up.

This is what emerges from a new analysis by Bain & Company on the industrial and commercial waste market in Italy and Europe. The study shows that around 195 million tonnes of waste are produced in Italy every year, a volume destined to grow gradually. It's not just the economic trend that's driving this. The aging population increases healthcare waste, while the energy transition and electrification are creating new flows that are difficult to treat.

In particular, the first significant wave of end-of-life photovoltaic panels installed during the Energy Bill is expected between 2028 and 2030. The first large quantities of electric vehicle batteries will arrive between 2030 and 2035.

The problem is that supply is not growing at the same speed. Landfills are running out of available capacity and building new plants requires long authorization processes. The most critical situation concerns hazardous waste: according to Bain, just 11 dedicated landfills are operational in Italy, with a total capacity of less than one million tonnes per year and destined to run out within the next five years.

"The industrial waste market in Italy has unique characteristics: on the one hand the demand is structurally stable and correlated to the economic cycle; on the other the supply is chronically insufficient, especially in the treatment of hazardous waste", explains Alessandro Cadei, senior partner and head of EMEA Energy & Utilities at Bain & Company.

A tension that affects the whole of Europe. Over 2 billion tonnes of waste are produced on the continent per year and, to achieve the European objectives of recycling and reducing landfill by 2035, Bain estimates necessary investments of over 110 billion euros.

The Italian market is divided into two segments. Non-hazardous waste is worth around 4 billion euros, 80% of the total, and shows relatively stable growth. The dangerous ones are worth around a billion, but they are growing more rapidly, with a rate estimated at around 4% per year until 2030.

What also makes the sector interesting is its fragmentation. More than 7 thousand companies operate in Italy and the top six players overall control just around 10% of the market. In recent years, M&A operations and the interest of private equity funds have increased.

Scale also matters to profitability. According to Bain, vertically integrated operators, present from collection to final treatment, achieve average EBITDA margins of around 21%, compared to 13% of operators integrated only upstream and 11% of specialized ones.

The next frontier will be the technological one: from hydrometallurgy to recover critical metals to the depolymerization of plastics and chemical recycling, up to digital technologies for waste traceability.