Future Watch update on emerging circular economy business models and future opportunities in South Africa

1. PROMOTING A CIRCULAR ECONOMY IN SOUTH AFRICA
FUTURE WATCH

2. AUTHORS
Future Watch Report2
At Business Finland, we create new growth by supporting companies to go global, as well as funding innovations.
Our top experts speed up the identification of business opportunities around the world and help transform them
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www.marketopportunities.fi
Zahil Jackpersad
Consultaing Analyst
Lehlohonolo Mokenala
Consultant

3. WASTE SECTOR
TOPICS
Future Watch Report3
1 DEFINING WASTE?
2 SOUTH AFRICA’S WASTE SECTOR
3 IMPLICATIONS AND FUTURE OPPORTUNITIES FOR TEAM FINLAND

4. WASTE SECTOR
FEW KEY DEFINITIONS
Future Watch Report4
Organic Metals
Plastic
Paper
Glass &
Other
Source: World Bank, South Africa State of Waste Report, Waste Amendment Act, 2014
Sources Of
Solid Waste
Waste is defined in this study as
“any substance, material or
object, that is unwanted,
rejected, abandoned, discarded
or disposed of by the holder of
the substance, material or
object, whether or not such
substance, material or object
can be re-used, recycled or
recovered” in terms of the
Waste Amendment Act (2014)
Definition

5. WASTE SECTOR
ABOUT THE SCALE: THE GLOBAL PRODUCTION OF WASTE IS EXPECTED TO
GROW AT A CAGR OF 3.94% TO 2025
Future Watch Report5
0
1,000,000
2,000,000
3,000,000
4,000,000
5,000,000
6,000,000
7,000,000
2010 2025
SAR OECD MENA LCR ECA EAP AFR
Global waste production
(tonnes/day) is forecast to
grow at a CAGR of 3.94%
globally for the period 2010-
2025
Africa’s daily waste
production is forecast to grow
at a rate of 7.1%, and is
expected to be a much more
significant contributor to
global waste production by
2025
Source: World Bank
Daily Waste Production By Region (Tonnes/day)
3.5 million
6.1 million

6. WASTE SECTOR
HIGH INCOME COUNTRIES TEND TO PRODUCE THE LOWEST ORGANIC
WASTE, WITH A DROP IN INCOME LEVEL RESULTING IN AN INCREASE IN
SHARE OF ORGANIC WASTE SHARE IN TOTAL WASTE PRODUCTION
Future Watch Report6
Organic
Others
Metal
Glass
Paper
Plastic
Source: World Bank, IFC
Waste Production By Product Type
608 MT 686 MT
243 MT 426 MT
2010 2025
High
Income
Upper
Middle
Income
While total waste
production may be
lower for lower income
grouped countries,
they tend to produce a
significantly higher
share of organic waste
Due to the higher
production, a focus on
collection and
processing of organic
waste is critical for
these countries

7. WASTE SECTOR
THE GLOBAL E-WASTE PRODUCTION IN 2016 WAS 44.7 MT, OF WHICH
ONLY 20% WAS DOCUMENTED AS COLLECTED AND RECYCLED
Future Watch Report7
40
42
44
46
48
50
52
54
2016 2017E 2018E 2019E 2020E 2021E
Global E-waste generated
E-waste (Electronic waste) refers to electronic and electrical equipment and all parts thereof
which have been discarded as waste with no intention of re-use. E-waste may contain harmful
and hazardous components which could have a detrimental effect on the surrounding
environment, as it may contribute to air, water and soil contamination which would pose a
health risk to all. Roughly half the worlds population is currently online, more than doubling
over the last 10 years, if this trend continues E-waste will grow tremendously in the near
future
Source: The Global E-waste Monitor 2017
7.5 Bn
Global population currently
connected to the Internet
Connected

8. WASTE SECTOR
WASTE TO ENERGY AND BUILDING A BIO-ECONOMY HAS BECOME A KEY
FOCUS IN GLOBAL WASTE MANAGEMENT
Future Watch Report8
Waste to Energy (WtE) to refers to the conversion of non-recyclable waste into various
forms of energy, such as heat, fuel and electricity
Source: Statista, World Energy Council
Waste to Energy
There are currently 3 technologies used in WtE conversion
Thermal Biological Chemical
Benefits of Waste to Energy
Recycling of non-
recyclable waste
Recovering energy from
waste using high
temperatures, such as
combustion, incineration,
pyrolysis or gasification
Biological conversion
technologies and processes
are used to transform
biodegradable waste such as
food and agricultural waste
Esterification is commonly
used to produce Fatty acid
methyl esters (FAME), the
primary component in
biodiesel
Clean Energy
Generation
Green house gas
reduction1 2 3

9. WASTE SECTOR
TOPICS
Future Watch Report9
1 DEFINING WASTE?
2 SOUTH AFRICA’S WASTE SECTOR
3 IMPLICATIONS AND FUTURE OPPORTUNITIES FOR TEAM FINLAND

10. WASTE SECTOR
THE VALUE OF THE WASTE SECTOR IN SOUTH AFRICA IN 2014 WAS
ESTIMATED AT 1.08 BILLION US$
Future Watch Report10
Source: World Bank, IMF, ESA, DEA (2012), DST, (2014)
Population, 2017: 56m
Nominal GDP, 2017: US$ 349bn
GDP Growth (2017-2022) 1.7%
Population Growth (2017-2022) 2%
Urbanisation (2017-2022) 1.9%
Key Facts and Figures About South Africa
Unclassified Hazardous General
Waste Generated in South
Africa, 2011
108m
tonnes
/year
South Africa’s formal waste sector was estimated to be
valued at 1.08 Billion US$ by the Department of Science
and Technology in 2014
The National Waste Information Baseline estimated 108
million tonnes of waste was generated in 2011, of which
10% was recycled (with recycling possible for 65% of the
total generated waste)
One of the key challenges facing the sector is the lack of
reliable data, which has led to the use of out-dated data
points when reporting on the sector
Note: R14.05 = 1 US$

11. WASTE SECTOR
WASTE TO VALUE HAS THE POTENTIAL TO BECOME A KEY SECTOR IN
SOUTH AFRICA
Future Watch Report11
Waste to value presents an opportunity to
establish an entirely new value chain in
South Africa. Municipal solid waste and
biogas are of particular interest to the
country
A number of sectors in the country
produce organic waste that can be
converted into energy, potentially
reducing both waste-to-landfill and fossil
fuel consumption
Rising landfill gate fees, the current
landfill ban on abattoir waste and
corporate sustainability obligations and
targets could drive this sector going
forward
Source: GreenCape
Sectors
currently
producing
Organic
Waste in
South Africa
Local
Sectors
Currently
Producing
Organic
Waste
Municipal Landfills
Pulp & Paper
Fruit
Processing
Breweries
Sugar Production

12. WASTE SECTOR
APPROPRIATE EXPERTISE ARE NEEDED TO MANAGE SOUTH AFRICA'S
WATER AND WASTEWATER WASTE
Future Watch Report12
South Africa currently has 824 private and municipal wastewater treatment works located throughout the
country, with a current theoretical capacity of 6 510 ML, and current demand of 5 129 ML. The primary waste
type produced by these plants is sewage sludge
Eastern Cape
Western Cape
Northern Cape
KwaZulu
-Natal
Free
State
North
West
Mpumalanga
Limpopo
Gauteng
Source: South Africa State of Waste Report Draft Report, DEA
Province Number of WWTW Capacity
Western Cape 158 1025
KwaZulu-Natal 141 1085
Eastern Cape 124 489
Free State 93 401
Northern Cape 79 139
Mpumalanga 76 321
Gauteng 58 2573
Limpopo 58 187
North West 37 190
South African Map
An audit done by the DWA between 2009-2013 inspecting all 824 of these WWTW sites based on key
performance areas such as risk management, asset management, and process control provided alarming
results. The audit indicated that only 8.3% of WWTW plants were compliant in terms of effluent quality, and
less than half (42.2%) were compliant in terms of local regulations
WWTW Statistics per province (Estimates)

13. WASTE SECTOR
APART FROM THE MUNICIPAL SOLID WASTE, ALL OTHER WASTE IS
COLLECTED BY PRIVATE PLAYERS
Future Watch Report13
Domestic
Commercial
Industrial
Medical
Natural
75% of all waste is gathered by the City of
Cape Town (CoCT) as a municipal service.
Collection only occurs in certain parts of the
city
The CoCT collects commercial waste on a
contractual basis, with the rest of the collection
waste outsourced to private providers
(hazardous included). This does not apply to
whale carcasses, which are collected by the
COCT
- Refers to hazardous waste
Source: City of Cape Town (CoCT), 2015, Frost & Sullivan

14. WASTE SECTOR
TOPICS
Future Watch Report14
1 DEFINING WASTE?
2 SOUTH AFRICA’S WASTE SECTOR
3 IMPLICATIONS AND FUTURE OPPORTUNITIES FOR TEAM FINLAND

15. WASTE SECTOR
FINLAND ARE REGARDED AS ONE OF THE GLOBAL LEADERS IN CLEANTECH
INNOVATION
Future Watch Report15
0 1 2 3 4 5
Denmark
Finland
Sweden
USA
UK
Netherlands
China
India
Brazil
South Africa
Turkey
Saudi Arabia
Indonesia
Finland is amongst the front running
countries globally with respect to Cleantech
Innovation, ranking 2nd in the Global
Cleantech Innovation Ranking, while South
Africa ranked 31st with a score of 1.13
South Africa’s Cleantech market is in it’s
nascent stages, however recent efforts to
improve the country’s Cleantech innovation
such as the GCIP (Global Cleantech
Innovation Program) being incorporated
into the Technology Innovation Agency
(TIA) could provide an opportunity for
Finland’s expertise in the sector
Source: WWF
Global Cleantech Innovation Score

16. WASTE SECTOR
FINLAND’S WATER SECTOR HAS A TURNOVER GREATER THAN 3 BILLION
EURO’S, WITH OVER 70 EXPERT COMPANIES PRESENT IN THE SECTOR
Future Watch Report16
Finnish Water Sector Strengths
• Monitoring and
measuring sensor
technology
• System
management
• Process
optimization
• Recycling water &
nutrients
• Design,
automation
• Nutrient removal
• Network
management
• Flow monitoring
and control
solutions
• Water quality
solutions
• Industry specific
solutions
Smart Water
Water
Efficiency
Wastewater
Treatment
Industrial
W&WWT
Water and waste water treatment is a key strength of the Finnish water industry. With the poor
compliance to both local standards and water quality in amongst the W&WWT in South Africa,
Finland could become an ideal partner to improve the quality and management of the W&WW
sector in South Africa
Source: Cleantech Finland

17. WASTE SECTOR
SOUTH AFRICA’S BIOGAS SECTOR IS STILL IN IT’S NASCENT STAGES,
FINLAND CAN BECOME AN IDEAL PARTNER GOING TO GROW THE SECTOR
Future Watch Report17
Eastern Cape
Western Cape
Northern Cape
KwaZulu
-Natal
Free
State
Gauteng
Existing Biogas Projects
With a capacity of 23 000 tonnes, Finland is
home to the largest Biogas plant in the world,
located near an existing coal plant in Vaasa,
Finland can leverage it’s expertise in a
consulting and advisory roles through
partnering with local players
The Department of Energy’s Assessment of the
sector’s four main biomass resources (invasive
alien, plants, bush encroachment, bagasse and
plantation forestry residue) indicated over 22
million tons available throughout the country,
with the only current restraint being the sparse
distribution of these resources
Finnish company, the WOIMA
corporation have already been
involved in various waste-to-energy
feasibility studies in Africa
Source: WOIMA Corporation, The State of South Africa Waste, SAEON, Vaasa Biogas Plant

18. WASTE SECTOR
THE WESTERN CAPE HAS THE MOST DEVELOPED WASTE SECTOR BY
PROVINCE IN SOUTH AFRICA, WITH MULTIPLE OPPORTUNITIES EXISTING
CURRENTLY
Future Watch Report18
0
500000
1000000
1500000
2000000
2500000
3000000
City of Cape Town Cape Winelands Eden West Coast Overberg Central Karoo
Tonnages
Municipal Solid Waste
Commercial/Industrial
Waste generation by municipality, 2016
Source: GreenCape
Within the Western
Cape, market
opportunities of
particular interest to
Finland exist in multiple
sectors
Municipal
Public Private
Partnerships
Organic
Waste
Treatment
Alternative
Waste
Treatment

19. WASTE SECTOR
SOUTH AFRICA HAS VARIOUS FUNDING MECHANISMS AND INCENTIVES
AVAILABLE TO THOSE LOOKING TO ENTER THE WASTE SECTOR
Future Watch Report19
Waste Specific Incentives General Incentives
• PETCO: PETCO can assist SMME’s with support via
the following:
o PET (Polyethylene Terephthalate)
Infrastructure and equipment provision
o Collector training and development
o Education and awareness
o Special projects and joint ventures
• Polyco: Funding mechanisms are available either
in the form of grants or interest-free loans. The
purpose of the funding is to support the entire
recycling industry value chain, from collections
through to end user development
• Reduced Corporate Income Tax Rate: a reduction
in corporate tax of 15%. from the current rate
which is 28%
• VAT and Customs Relief: Businesses qualifying for
this will be eligible for VAT and customs relief in
accordance with the current VAT customs
legislation
• Employment Tax Incentive: Companies would be
allowed to claim back a certain portion of tax for
employing young low salaried employees,
through a cost sharing mechanism with the
Government
• Building Allowance: Businesses operating within
approved SEZs are eligible for an accelerated
depreciation allowance of buildings
• 12I Tax Allowance: This is designed to support
greenfield and brownfield investments, through
capital investments and training
Source: Greencape Waste MIR 2018, SARS, the dti , PETCO, Polyco

20. WASTE SECTOR
CURRENTLY. THE BEST OPPORTUNITIES FOR FINNISH COMPANIES TO ENTER
THE LOCAL BIOENERGY MARKET ARE THROUGH PARTNERSHIPS WITH
LOCAL CONSULTING ENGINEERS, EQUIPMENT SUPPLIERS AND EPC PLAYERS
Future Watch Report20
EPC: Engineering, Procurement and Construction contracts (EPC)
Source: Business Finland Southern Africa
Partnering with local consulting engineers
Finland could partner with local engineering consultants as either an equipment supplier or to
provide further expertise on various projects, focusing predominantly on the private sector
Partnering with local equipment suppliers
South Africa provides all equipment which can be used to manufacture housing structures for
bioenergy plants, however much of the plant equipment is imported. Finnish companies could
capitalize on this and become import partners with local suppliers to bridge this gap, especially within
the private sector
Partnering with local EPC players
EPC players within the country are responsible for procurement of all necessary material and
equipment. This presents a further opportunity for Finnish companies to partner with these players
and supply equipment and materials

21. WASTE SECTOR
THERE ARE MULTIPLE PLAYERS ACROSS THE WASTE SPACE WHO COULD
BECOME POTENTIAL PARTNERS FOR FINLAND
Future Watch Report21
Potential Partners in South Africa for Finnish Players in the Waste Space
Equipment Suppliers
Consulting Engineers
Industrial Waste and Side Streams
Plant Owners
Source: Frost & Sullivan, Business Finland South Africa

22. Cerqueira Mendes Inês
Senior Advisor
ME & Africa
ines.mendes@businessfinland.fi