Going digital to accelerate the Circular Economy
By Manuel Albaladejo and Pía Alonso Ribas
Smart waste management systems in Latin America have nurtured a new generation of tech firms in the region.
The circular economy aspires to a wasteless world, but in the short run, efficient waste treatment should be one of the top priority areas for a just circular economy (CE) transition in Latin America. The World Bank estimates that the region will generate the most waste per capita in the developing world by 2050 (see figure below) with an average recycling rate of only 4.5 per cent – the lowest among developing regions.
Failed waste management systems in the region are the result of a range of factors including high urbanization rates, weak institutions, lack of a regulatory framework, limited public–private partnerships, low levels of environmental awareness among citizens, and information asymmetry between waste generators, collectors, transport companies, treatments plants, and municipalities.
With 145,000 tons of waste a day disposed of in open dumpsites, the circular economy agenda in the region should prioritize the concept of ‘waste as a resource’ by bringing discarded materials back to industrial processes through reusing or recycling, or as an input to bioenergy generation as a substitute for fossil fuels.
The circular economy meets the Internet of Things (IoT)
There is no one-size-fits-all solution to the waste management system in Latin America. However, most successful cases, both in and outside the region, have something in common: they try to establish waste information systems for efficient decision-making, relying on Internet of Things (IoT) technologies to generate, exchange and process large amounts of data.
The IoT refers to the interconnection of physical products, systems and processes – including sensors, software and appliances – that allow the exchange of information through the internet. Because keeping products and materials in use requires constant tracking of waste flows, as well as timely and harmonized information-sharing among all stakeholders, IoT technologies can act as a key enabler to speed up the circular economy transition.
Knowledge of the location, condition and availability of materials is at the core of smart waste management systems. For instance, sensor technologies, normally located in trash containers, can monitor waste type and condition in real time and prompt collection trucks to collect waste at the right time using the most efficient route, optimizing the entire waste collection process by reducing costs and avoiding unnecessary emissions and traffic jams.
Knowing the location, condition and availability of materials is at the core of smart waste management systems.
Returning used products to retailers and manufacturers in the supply chain process is known as reverse logistics. Having an efficient reverse logistics result in specific waste stream treatment plants, adding value by converting waste into second use recycled products. In addition, advanced analytics based on waste data can help municipalities better understand and fine-tune waste management practices, while also shedding light on consumers’ behavioural patterns, highlighting the education and information needs in the community.
Latin America’s move towards smart waste management systems
Over the last few years, Latin America has launched several pilot initiatives for efficient waste management using IoT technologies. For example, in 2016, Santiago de Chile implemented the Bigbelly solar-powered compacting bins in its Metropolitan Park – one of the largest parks in South America. The pilot used smart bins to collect data, assess metrics and send notifications when the bins were full, thereby allowing for efficient collection schedules.
Bigbelly’s Distribution Partner in Chile, GreenCargo, has also worked hand-in-hand with the Department of Cleanliness of the Metropolitan Park to achieve the best possible results. With Bigbelly’s smart bins, for example, the Department of Operations of the Metropolitan Park reduced their collection runs from 20 to 3.4 times per week during the high season in 2016.
The constant search for IoT-based solutions to waste problems in the region has also nurtured a new generation of tech firms, such as Brazil´s Eureciclo (former New Hope EcoTech) and Colombia’s VALOPES. Eureciclo (former New Hope EcoTech) has developed an online data system to track waste flows (e.g. type and volume) between informal street collectors, small recyclers, treatment plants, and consumer goods manufacturers. Collectors are paid for the waste they remove while other agents in the chain benefit from a reverse logistic certification that is sold to manufacturers. The company utilizes technology, such as blockchain, to ensure the traceability and transparency of the certificates issued.
VALOPES is a startup focusing on recovering value from industrial waste streams and unused material through cloud-based data-management systems. Through the digitalization of the sector, and the interconnectedness of companies and waste service providers, VALOPES estimates a reduction in waste management costs of 35 per cent.1
There is no doubt that speeding up the circular economy transition can be facilitated through the advancements of IoT technologies. Smart waste management systems, which combine circularity principles with tech-based solutions, will slowly but surely take center-stage in the circular economy discourse in the years to come, and Latin America will be no exception. Yet, there are challenges ahead.
Conflicts between informal recyclers, municipalities and waste management companies remain a major issue, particularly when establishing new, more advanced systems that disrupt the status-quo. Analog solutions to waste management, which are more akin to the informal nature of the existing sector, may deter policymakers from implementing more sophisticated IoT-based solutions.
Another challenge is the cost and scalability of smart waste management systems, as IoT technologies can be costly and need high connectivity infrastructure and tech-savvy stakeholders. There are pockets within the region, and within cities, that have such preconditions, but it is unrealistic to think that smart waste management systems will be fully mainstreamed throughout Latin America.
International trade rules should not raise barriers for secondary raw materials.
A final challenge is to do with regulation: reverse logistics to transform waste into a resource can be expensive, hence jeopardising firms´ use of inputs from recycled sources. This calls for a normative framework that incentivizes waste collection and valorization without creating further financial burdens to the productive sector. Internationally, trade rules should not raise barriers for products resulting from the circular economy (e.g. secondary raw materials).
Given Latin America’s current and future waste problems, policymakers need to embrace the circular economy. Transforming waste streams into resources will spur job creation and boost incomes while reducing society’s environmental impact. IoT-based solutions will certainly speed up this transition. Although the region faces significant challenges, the increased number of Latin American pilots using IoT technologies indicates that smart tech is the future of waste management in Latin America.
Disclaimer: The views expressed in this article are those of the authors based on their experience and on prior research and do not necessarily reflect the views of UNIDO (read more).