Waste Management in Chile

Carolina Ortega used to come to the Punto Limpio recycling center in Santiago’s upscale Vitacura district every Saturday morning, but since it has become too crowded on weekends she now tries to come during the week.

“I separate everything at home and then bring it all here,” she says. “I feel like I’m helping the environment, there are people who say it’s insignificant, but this is better than everything ending up in a landfill.”

Ortega, a Vitacura resident, has noticed an increase in the number of people, especially families with small children, who show up at the Punto Limpio with carloads of glass bottles, aluminum cans, plastic containers and newspaper, amongst other items.

Most municipalities in Santiago operate their own Puntos Limpios, but Vitacura’s is the largest and one of the few that accepts items like batteries and expired medication, as well as oversized rubbish like electronic appliances and scrap metal.

According to Manuel Valdés, who manages the Punto Limpio, other municipalities from all over Chile, and even other countries in Latin America have visited to see how it works.

“Sixty percent of everything we receive here is recycled,” he says. “The biggest problem is building debris, which is a cost because it ends up in the landfill, it doesn’t help anyone.”

Valdés is employed by Demarco, part of the Urbaser-Danner waste management group of Spanish and US investors, which has a contract from the Municipality of Vitacura to operate the center.

The municipality also has agreements with companies such as Gerdau Aza, Cristalerías Chile and Cementos Polpaico that collect and recycle the metal, glass and plastic, respectively. These companies do not pay the municipality directly but are required to make charitable donations each month, says Valdés.

The center has been operating since 2005 and today, on average, it receives 400 vehicles daily, which rises to 600-800 on the weekends. In fact, it has proved so popular – average annual growth is 25% – that Valdés is considering limiting entry to Vitacura residents only.

He attributes the growth to education. Information is available through the website and the municipality has launched an educational program in local schools. “It’s the kids who bring their parents,” says Valdés.

Ironically, Vitacura, which is one of the municipalities with the highest per capita income in Chile, also produces the most waste per capita – some 2.09 kilos per day in 2009, according a study by the National Environmental Authority (CONAMA), nearly double the national average of 1.3 kilos – but it is also leading the way in recycling.

Not in my backyard

Vitacura’s Punto Limpio is a special case, but it signals a changing attitude in Chile towards waste. Consumers, often encouraged by their children, are becoming aware of the benefits of recycling and are demanding that companies manage their waste responsibly.

But this change is very recent. As recently as 1995, all of the waste produced in the country ended up in unauthorized rubbish dumps, known as vertederos. Today, however, 69% of the waste generated by Chileans is trucked to landfills that meet environmental and sanitation norms, while 22% goes to vertederos that comply with older legislation and 9% ends up in illegal dumps.

At the same time, population growth and higher incomes mean Chileans are producing more rubbish. The first study on solid waste in Chile, carried out by CONAMA, showed the country generate 16.9 million tons of waste in 2009, up from around 12 million tons in 2000, of which 6.5 million tons was municipal waste, mostly residential and commercial, while 10.4 million tons was industrial.

About 10% of total solid waste is recycled, which is a big improvement on nothing 20 years ago, but is still much less than developed countries – in the United States about 34% of municipal waste is recycled or composted.

In Chile, municipalities are responsible for collecting and disposing of their own waste as they see fit. The majority award contracts to collection agencies that truck the garbage to privately managed landfills, usually located on the periphery of cities near to poor areas where land is cheap and residents are less likely to complain.

These contracts, as currently designed, offer no incentive to reduce waste since municipalities agree to pay an amount per ton that is lower for higher volumes of garbage.

“Most municipalities limit their management to final disposal of waste without considering possibilities for prevention or its potential valorization and recycling,” says Ricardo Irarrázabal, Chile’s Undersecretary for the Environment.

Currently, the Santiago Metropolitan Region has three landfills: Loma los Colorados (Til Til), Santiago Poniente (Maipú) and Santa Marta (San Bernardo), which receive waste from all over the city including districts like Vitacura and Las Condes that do not have landfills of their own.

Not only is transporting rubbish across the city expensive, says Irarrázabal, but the system perpetuates social inequality because cash-strapped municipalities like Maipu and Puente Alto have to maintain smelly, unsightly landfills that affect the quality of life of their inhabitants.

As for industrial waste, a small amount is hazardous including chemical powders and toxic liquids, which companies must transport to one of seven special treatment sites that are similar to sanitary landfills but with better insulation.

About 5% of hazardous waste is converted into alternative fuels, but the rest is buried in leak-proof containers. The waste is tracked through the online System for Declaring and Monitoring Hazardous Waste (SIDREP), but the problem is that this only works if the company declares the waste.

“If you don’t declare it, it doesn’t exist,” says Frederick Evendt, general manager of the Belgian-Chilean firm Hidronor, which specializes in hazardous waste with sites in Santiago, Antofagasta and Concepción.

As a result, some companies avoid the costs of treatment by dumping waste, and risking fines, in rivers or unpopulated areas. “Better monitoring and control would help reduce this practice,” says Evendt.

Focus on waste prevention

The legal framework for waste management in Chile dates back to 1967 and, through various amendments since then, Chile’s regulations are currently amongst the strictest in the region.

Historically, however, the emphasis has been on final disposal, in other words where to put waste where it is out of sight and mind. But the Ministry of the Environment is trying to change this to focus more on prevention.

“We believe we are ready to make a leap in waste management in Chile,” says Irarrázabal.

According to the Ministry, more than 50% of municipal waste could be reused or recycled, which would substantially reduce the amount that ends up in landfills – or is dumped illegally.

The Ministry’s national waste management strategy consists of five steps in an inverted pyramid with disposal at the bottom. Before that drastic final option, however, the more desirable steps are prevention, reutilization, recycling and energy valorization.

“The most important of these steps is preventing waste in the first place,” says Irarrázabal.

Apart from the positive environmental and social impacts, this strategy also aims to reduce the cost of for municipalities, which will then have more funds to spend on other programs.

Public education and initiatives at the municipal level, such as Vitacura’s program, are helping to increase consumer awareness, but for this strategy to work on a national scale, Chile needs to develop its recycling industry.

Producer responsibility

In its 2005 Environmental Performance Review of Chile, the Organization for Economic Cooperation and Development (OECD) recommended, amongst other things, that Chile strengthen the application of the “polluter pays” principle.

In other countries, this is known as Extended Producer Responsibility (EPR). This system, implemented in Europe in the 1990s, makes the producer or importer responsible for recovering products such as tires, oils, batteries and light bulbs at the end of their useful life.

But experts say Chile may not be ready for this type of system. Not only does it require strict controls and monitoring, but also a recycling industry with developed markets and a competitive cost structure, which is something Chile doesn’t have – yet.

An alternative proposal, included in the government’s tax reform bill, is a “green tax” that would charge producers or importers of certain items such as those listed above.

The tax, which would vary from US$1,000 for a kilo of batteries to US$60 for a liter of oil, effectively means that the cost will be paid by the consumer. According to the Environment Ministry, this would only increase the final price by 1-2%.

Part of the amount collected would be used to create a “green fund” to subsidise recycling initiatives. The details have yet to be ironed out, but this would finance all or part of the installation, operation and maintenance of recycling programs in the private sector.

The goal is to establish an EPR system to make companies responsible for their products “from the cradle to the grave”, says Irarrázabal, but first Chile needs recycling infrastructure, a culture of recycling and adequate collection planning.

Cleaning up Easter Island

Even though recycling is incipient in Chile, some municipalities like Easter Island have partnered with recycling companies to reduce their waste. 

In 2009, Chile’s largest steel recycling firm Gerdau Aza, a subsidiary of Brazil’s Gerdau group, signed an agreement with the Municipality of Easter Island to recycle the island’s scrap metal.

With 70,000 tourists annually, plus 4,000 permanent residents, generating around a kilo of rubbish each daily, the island is running out of room and illegal dumps are contaminating the water table.

“It’s the most isolated island in the world, which means waste disposal is a major issue,” explains Arturo Harlen, communications manager at Gerdau Aza.

Gerdau donated a waste compactor and in two years has removed 40 tons of scrap, mostly cars and broken appliances. Easter Island is the only part of Chile where cases of mosquito-borne Dengue have been reported, which means solid waste must remain in quarantine for at least six months, but the Chilean Navy ships the scrap to the port of Valparaiso free of charge.

“We are losing money on this venture, but we gain in many other areas that are immeasurable,” says Harlen.

Overall in Chile, 60% of scrap metal is recycled and around 20% of steel consumed is made from scrap. This is low by international standards – in the United States 52% of steel consumed comes from scrap, says Harlen – but this is changing as the public becomes more educated.

Clean Production Agreements

Other industries in Chile have much lower rates of recycling, especially products like tires, batteries and plastic. But the National Clean Production Council, a public-private initiative led by the Ministry of Economy, is working to change this by facilitating Clean Production Agreements (CPAs) with subsidies from Chile’s Economic Development Agency (CORFO).

“Today there is unfair competition because companies that don’t take responsibility for their waste have a lower cost than those that do,” says Jorge Morales, head of coordination of CPAs at the Council.

The green tax would create a level playing field, he says, because all companies would pay for waste management. But even without the law, some companies are investing in clean production as a matter of Corporate Social Responsibility.

For example, a CPA between 50 companies in the construction industry has created a new firm called Regemac, which is responsible for managing waste from building sites. Currently, around 35-45% of construction debris is recycled, mainly cardboard, metal, wood and plastic, but with greater economies of scale this could increase, says Álvaro Conte, Regemac’s general manager.

Transport, however, is a challenge. It accounts for around 60% of the cost of waste management and traffic, as well as the distance of building sites from landfills, has reduced Regemac’s efficiency, says Conte.

Outside major cities transport is more expensive since waste must be trucked to Santiago, Antofagasta or Concepción. “If your business is in Iquique or La Araucanía you have to go a long way,” points out Morales.

Another CPA formed by tire manufacturers including Goodyear, Pirelli and Michelin organizes the collection of used tires, which previously ended up in illegal dumps or were simply buried.

This agreement has given rise to a new business – making products from recycled rubber. Polambiente, a family business founded in 2010, receives the tires and processes them at its plant on the outskirts of Santiago.

“Recycling is not easy because it implies a change of habit, but we have overcome many obstacles,” says Lorena Torres, the company’s general manager. 

The market was very small initially but has quadrupled in just two years. Currently, Polambiente makes synthetic turf for playing fields, but in the future it could make other products, says Torres. “We are permanently on the lookout for creative products that use recycled rubber, and we are open to innovation.” 

Polambiente would consider exports, but unless companies pay for recycling Torres says it will be hard to compete with developed countries. ”There is no law in Chile, so we have to convince the companies one by one,” she says. “We’re in no-man’s land at the moment.”

The green tax would be a step forward, she notes, but it remains to be seen how the money raised will actually be spent. “We hope that within a year we will have a law that stimulates recycling in Chile.”

Waste-to-energy

Another part of the solution to Chile’s waste management problem is turning it into energy. This has the benefit that, unlike recycling, the market is well developed and the technology could pay for itself quickly.

“It’s nice to jump on the green bandwagon and say you’re saving polar bears and eagles but the bottom line is money,” says Carlos Hart, a managing partner at the Seattle-based industrial recycling firm Busy Beaver.

According to Hart, new technology is now focused on turning garbage into clean energy. “The ability to leapfrog the old business model and move right into energy production should make the recycling environment a great opportunity,” he says.

Last year, KDM Energía, another unit of the Urbaner-Dasser group, began operating a biogas project at the Loma Los Colorados landfill. The plant, which burns methane extracted from the landfill thereby reducing CO2 emissions, currently supplies 9 MW to Chile’s Central Interconnected System (SIC).

According to Verónica Martínez, an analyst at the Chilean Renewable Energies Center (CER), the project benefits from incentives under the Non-Conventional Renewable Energies Law and is an “attractive” investment at today’s high energy prices.

Biogas projects at other landfills, such as Santa Marta in Santiago, flare the gas and sell carbon credits under the Clean Development Mechanism, but do not generate energy.

Potential generation from landfills is estimated at around 50MW, which is a fraction of Chile’s energy needs, but if prices remain high more projects like Loma Los Colorados could be developed, says Martínez.

Meanwhile, some companies like forestry products manufacturer Arauco are supplying part of their energy needs by burning waste and selling the excess electricity to the grid. A new fund to be introduced by CORFO later this year will provide subsidies for these types of projects, says Martínez.

“Energy is one of the highest costs faced by industries in Chile and this could help reduce costs, especially for agroindustry firms,” she says.

Ultimately, waste management in Chile comes down to just that – costs. With recycling still expensive, converting biomass into fuel or electricity could be the best way for Chilean companies to make waste pay.

Recycling initiatives like Gerdau Aza’s Easter Island venture are good for public relations, but the benefits are hard to measure and, at any rate, these are isolated examples.

The Punto Limpio in Vitacura shows that when given an opportunity, consumers are willing to go out of their way to recycle. Whether they will also pay more for products that incorporate a green tax remains to be seen.

But, as Chile’s economy continues to grow, it will inevitably generate more waste and the cost of managing it responsibly must be borne by producers and consumers. It’s a bill Chileans must be prepared to pay now, or future generations will have to – with interest.

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