Keeping the circular economy spinning – Infrastructure Investor

Global Waste Management and the Pursuit of Sustainable Development Goals

The Challenge to SDG 11 and SDG 12

A significant challenge to achieving Sustainable Development Goal 11 (Sustainable Cities and Communities) and SDG 12 (Responsible Consumption and Production) is the global generation of two billion tonnes of municipal solid waste annually. The current linear economic model is unsustainable, as evidenced by the Circularity Gap Report 2025, which states that only 6.9 percent of materials used globally originate from recycled sources. This highlights a critical gap in achieving SDG Target 12.5, which aims to substantially reduce waste generation through recycling and reuse.

Regional Disparities in Waste Generation

The highest per capita waste generation occurs in North America, Australasia, and Western Europe. Regulatory frameworks in these regions are increasingly promoting resource efficiency and landfill diversion, aligning with global sustainability commitments. However, progress and methodologies vary significantly, impacting the global effort towards a circular economy.

Investment Landscape and Regulatory Frameworks

The Case for Infrastructure Investment in Waste Management

Investment in the waste management sector is considered a core infrastructure strategy due to its essential nature and significant barriers to entry. The sector’s stability is reinforced by strong regulatory support, which is crucial for creating a level playing field and ensuring adherence to stringent environmental standards. This public-private dynamic is essential for mobilizing the capital needed to achieve the SDGs, reflecting the principles of SDG 17 (Partnerships for the Goals).

• Essential Service: Waste management is a fundamental requirement for public health and environmental protection.
• Regulatory Support: Clear and enforced legislation provides a stable environment for long-term investment.
• Economic Linkage: The sector is linked to GDP, but investors must manage volume-related risks by ensuring flexible cost structures, a consideration for sustainable economic growth under SDG 8.

The Central Role of Policy in Achieving SDG 12

The primary driver for investment and innovation is the societal and regulatory push to divert waste from landfills and incinerators. This directly supports SDG Target 12.5. While high-value materials like glass have achieved high recycling rates in Europe, creating viable secondary markets for more diverse and lower-value waste streams remains a significant challenge. Policy interventions, such as grants and incentives for mineral recovery, are becoming critical for building resilient domestic supply chains and advancing the circular economy, in line with SDG 9 (Industry, Innovation, and Infrastructure).

Regional Approaches to Circular Economy and Waste Management

North America

In North America, progress towards landfill diversion has been slow, with approximately 50 percent of municipal solid waste still directed to landfills. Regulatory incentives have not been sufficient to significantly alter this trend. However, the private sector is a key driver of change.

• Corporate commitments to beneficial reuse and repurposing are advancing the principles of SDG 12.
• Strategic investments are being made in integrated industrial waste businesses and lithium-ion battery recycling, contributing to both circularity and the infrastructure for a green transition under SDG 9.

European Union

The EU employs a robust, top-down regulatory approach to enforce circularity and achieve its sustainability targets. This creates a predictable investment pipeline for infrastructure focused on the SDGs.

1. Ambitious Targets: The EU has mandated that by 2035, a maximum of 10 percent of municipal solid waste can be sent to landfills.
2. Legislative Innovation: Belgium’s Vlarema legislation has demonstrated success, enabling one platform to increase its commercial waste recycling yield from 15 percent to over 60 percent.
3. Climate Action Integration: The potential inclusion of municipal waste incineration within the EU’s Emissions Trading System (ETS) from 2028 would directly link waste management to SDG 13 (Climate Action) by pricing greenhouse gas emissions.

Australia and New Zealand

Australia has set ambitious recovery targets of 70 to 80 percent but faces an infrastructure deficit in source separation and processing facilities. Progress is being driven by economic instruments like landfill levies, which have helped push the national recycling rate above 60 percent. Future strategies focus on source-separating organics and constructing modern resource recovery facilities to meet national goals aligned with SDG 11 and SDG 12.

Challenges and Opportunities in Advancing the 2030 Agenda

Overcoming Barriers to a Circular Economy

Achieving a fully circular economy requires addressing several systemic challenges that hinder progress towards the Sustainable Development Goals.

• Infrastructure Deficits: A lack of modern pre-sorting and resource recovery facilities impedes higher recycling rates.
• Secondary Market Viability: Establishing stable and economical secondary markets for materials like plastics is difficult without mandated recycled content targets.
• Transitional Pathways: Moving directly from landfill to comprehensive recycling is often unfeasible, necessitating transitional infrastructure like waste-to-energy incineration, which must be managed to align with climate goals under SDG 13.

Future Investment and Growth Trajectories

The waste management sector presents significant opportunities for investment that directly contributes to the 2030 Agenda. The market remains highly fragmented, offering considerable scope for consolidation and growth through acquisition.

• Modernization and Innovation: Investment is needed for the construction of advanced resource recovery facilities, a key component of SDG 9.
• Decarbonization: There are growing opportunities to decarbonize waste treatment and processing, with carbon credits emerging as a potential revenue stream that supports SDG 13.
• Integrated Platforms: The strategic goal is to develop integrated waste businesses that progressively shift from landfill and incineration towards higher-value sorting and recycling, creating a clear pathway to achieving the targets of SDG 12.

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

1. SDG 11: Sustainable Cities and Communities
   • The article directly addresses the management of municipal solid waste, a critical component of urban sustainability. It opens by stating that “two billion tonnes of municipal solid waste is generated globally” each year, highlighting the scale of the urban waste challenge. The discussion revolves around how cities and regions (North America, Europe, Australasia) manage this waste, whether through landfills, incineration, or recycling, which is central to creating sustainable urban environments.
2. SDG 12: Responsible Consumption and Production
   • This is the most prominent SDG in the article. The entire text is framed around the concept of a circular economy, which is a core principle of sustainable consumption and production. It critiques the current linear model by citing that “only 6.9 percent of the materials used globally are produced from recycled sources.” The article extensively discusses methods to “substantially reduce waste generation through prevention, reduction, recycling and reuse,” such as diverting waste from landfills, improving recycling rates for various materials (glass, plastics, organics), and creating secondary markets for recycled materials.
3. SDG 9: Industry, Innovation, and Infrastructure
   • The article is written from the perspective of infrastructure investment in the waste management sector. It details how infrastructure investors like Igneo Infrastructure Partners, Macquarie Asset Management, and EQT are funding and acquiring waste management companies and facilities. It discusses the need to build new infrastructure, such as “modern resource recovery facilities,” and upgrade existing systems to support a circular economy. This directly relates to building resilient infrastructure and promoting sustainable industrialization.
4. SDG 13: Climate Action
   • The article connects waste management practices to climate change mitigation. It mentions the potential inclusion of “municipal waste incineration within the ETS, the EU’s system for trading greenhouse gas emissions.” This policy measure aims to price the carbon emissions from waste treatment. Furthermore, it notes that investors are eyeing “opportunities to decarbonise waste treatment and processing,” including the use of carbon credits as a revenue stream, which directly integrates climate change measures into the industry’s strategy.

2. What specific targets under those SDGs can be identified based on the article’s content?

1. Target 11.6: By 2030, reduce the adverse per capita environmental impact of cities, including by paying special attention to air quality and municipal and other waste management.
   • The article’s focus on the generation of “municipal solid waste” and the fact that “North America, Australasia and Western Europe today create the most waste per capita” directly relates to this target. The entire discussion on diverting waste from landfills and improving recycling is aimed at reducing the environmental impact of urban waste.
2. Target 12.2: By 2030, achieve the sustainable management and efficient use of natural resources.
   • The promotion of a circular economy, where only “6.9 percent of the materials used globally are produced from recycled sources,” is a direct attempt to achieve this target. The goal is to move away from a linear take-make-dispose model to one where materials are reused and recycled, ensuring more efficient and sustainable use of resources.
3. Target 12.4: By 2020, achieve the environmentally sound management of chemicals and all wastes throughout their life cycle… and significantly reduce their release to air, water and soil in order to minimize their adverse impacts on human health and the environment.
   • The article emphasizes the societal and regulatory push to “divert waste streams away from landfills and incinerators.” The EU’s mandate that “no more than 10 percent of municipal solid waste should end up in landfills” by 2035 is a clear policy action towards the environmentally sound management of waste to prevent soil and water contamination.
4. Target 12.5: By 2030, substantially reduce waste generation through prevention, reduction, recycling and reuse.
   • This target is central to the article. It highlights various efforts to increase recycling rates, such as Europe’s glass recycling rate of “above 80 percent” and Australia’s overall recycling rate of “above 60 percent.” The investments in companies like Renewi, which “raised the recycling yield of commercial mixed residual waste from ~15 percent to above 60 percent,” are practical examples of working towards this target.
5. Target 9.4: By 2030, upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies and processes…
   • The article details significant private investment from firms like Macquarie, EQT, and Igneo into upgrading waste management infrastructure. This includes the “construction of… modern resource recovery facilities” and investments in advanced recycling businesses like lithium-ion battery recycler Cirba. This represents a clear move to make the waste industry more sustainable and efficient.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

1. Circular Material Use Rate:
   • The article explicitly states that “only 6.9 percent of the materials used globally are produced from recycled sources.” This percentage is a direct indicator of the circularity of the global economy and can be used to measure progress towards Target 12.2.
2. National and Material-Specific Recycling Rates:
   • Several specific rates are mentioned: Europe’s glass recycling rate (“above 80 percent”), Australia’s overall recycling rate (“above 60 percent”), and the improvement in commercial waste recycling yield by Renewi in Belgium (from “~15 percent to above 60 percent”). These figures serve as direct indicators for Target 12.5.
3. Proportion of Waste Sent to Landfill:
   • The article provides data on the percentage of waste being landfilled, which measures the effectiveness of waste diversion strategies. It notes that in North America, “around 50 percent of municipal solid waste ends up in landfills.” The EU’s target that “no more than 10 percent of municipal solid waste should end up in landfills” by 2035 also serves as a benchmark indicator for Target 11.6 and 12.4.
4. Waste Recovery Rate:
   • Australia’s ambition for “70 to 80 percent recovery levels in the coming decades” is mentioned. This recovery rate, which includes recycling and energy recovery, is a key performance indicator for waste management systems and progress towards Target 12.5.
5. Regulatory and Financial Mechanisms (Implied Indicators):
   • The article implies that the presence and stringency of regulations are indicators of progress. Examples include the EU’s push for “mandated recycled content targets,” Belgium’s “Vlarema legislation,” and the potential inclusion of incineration in the EU ETS. The size of landfill levies in Australia is another financial indicator of policy commitment.

4. Summary Table of SDGs, Targets, and Indicators

Source: infrastructureinvestor.com