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Preparing for Municipal Solid Waste Charging in Hong Kong
by Samantha Woods  swoods@csr-asia.com
15 Mar 2017

Hong Kong has a serious waste problem

Hong Kong is running out of space to stash its trash. Over the last 30 years, municipal solid waste (MSW) – waste from households, public areas, shops, restaurants, offices and factories – has increased by 80% whilst the city’s population has grown by 36%. The average Hongkonger now throws away over 30% more than before. Currently, just over one third of the MSW generated is recovered for recycling, but the rest ends up at the landfills. A staggering 15,102 tonnes1 of solid waste was sent to landfills for disposal every day in 2015. At this rate, our landfills will be exhausted by 20202.

The government plans to introduce waste charging

Recognising this urgent problem, the Hong Kong Government published its Blueprint for Sustainable Use of Resources in 2013, which outlined a suite of proposed policies and measures to reduce waste, promote recycling and invest in additional waste treatment infrastructure. The Government’s overall target to reduce the daily per capita MWS disposal rate by 40% to 0.8kg by 2022 from 1.27kg in 2011. A chief component of this plan is the much-debated MSW charging scheme, which will be tabled for discussion by the Legislative Council (LegCo) later this month.

Putting a price on waste has proven a highly effective driver for behavioural change and waste reduction. Taipei City and South Korea both saw significant reductions in waste generated once volume-based waste fees were introduced. Similar success can be seen in Hong Kong with the 60% reduction in construction waste and 25% drop3 in the number of plastic shopping bags sent to the landfills after implementation of their respective charges.

Waste disposal rates in Hong Kong, Taipei City and South Korea (per capita)

Whilst no specific charges have been decided, the Business Environment Council (BEC)4 estimates a fee of HK$400-HK$499 per tonne of commercial and industrial waste and HK$ 30-40 per month for the average household would be suitable, based on the current cost to the government of MSW disposal (around HK$1.3 billion per year excluding the costs of land and construction5). For rubbish collected by the Food and Environmental Hygiene Department (FEHD)’s vehicles or delivered to their collection points, stakeholders would be required to use a pre-paid rubbish bag of set volume and costs would be calculated based on the number of bags used. For rubbish collected by private waste contractors, a "gate fee" based on the weight of the trash collected would be charged upon delivery to landfills or refuse transfer stations.

Businesses and individuals should act now to prepare

Given the time required to pass a bill through LegCo and the 12-18 months buffer time that will be provided, MSW charging is not expected to come into full effect until mid-2019 at the earliest. In the interim, prudent businesses will use the next two years to develop a waste management strategy to mitigate the impact of waste charges on profitability. Individuals should also take initiative to get informed and start trying to reduce the waste they send to landfills.

One of the major challenges property management companies will face will be figuring out how to fairly apportion waste charges to their tenants. Across Hong Kong, pilot projects funded by the Environment Conservation Fund6 are being implemented to simulate the waste charging scheme and test the mechanics of its implementation. At a Hong Kong General Chamber of Commerce event last Monday, the Airport Authority Hong Kong (AAHK) shared its experience of participating in one such pilot. Waste generated at the airport comes from many different sources, most significantly 45% from aircraft cabin waste and 26% from the many restaurants, food courts and lounges in the terminal buildings. There are also multiple cleaning contractors handling waste at the airport, many of which are not directly employed by AAHK. The first step of the pilot involved working with a consultant to engage with the large number of tenants, cleaning companies and other stakeholders operating at the airport to build an understanding of the flow of waste from source to disposal. A simple system using barcoded bags was devised to track waste flow, and the waste collected was weighed daily. Using the data collected, charges were calculated and a monthly mock invoice was produced for participating companies so that they could see how the waste charging scheme might affect them in future. The data collected can also be used to set targets for waste reduction. AAHK has set a target of achieving 50% total waste recycling/recovery rate by 2021.

There are opportunities for new business models

Business can also choose to look at the waste problem as an opportunity for innovation. Globally, companies are rethinking the linear value chain model and opting to explore the circular economy. Adidas is making shoes from recycled ocean plastics, Fuji Xerox designs machines so that parts can be disassembled and recycled easily, and H&M has committed US$5.8 million to research into technology that will enable them to recycle blended textiles into new clothing.

There are also opportunities in Hong Kong. For example, the Zero Waste Alliance comprises eight restaurant and café operators that are committed to minimising, as much as possible, the waste generated through their business operations. They have established systems to collect food waste, but are struggling to find an affordable service provider to transport and process it. Food waste comprises 33% of the total daily MSW disposed at landfills, and when the government’s new Organic Waste Treatment Facilities come online later this year, many more companies will be looking for similar services. The government has also established a 20-hectare EcoPark to provide affordable land leasing and a HK$1 billion Recycling Fund to promote recycling.

At an individual level, the zero waste and minimalist movements are gaining global popularity thanks to figures like Bea Johnson and Marie Kondo. As the prospect of waste charging looms, consumers in Hong Kong are already putting pressure on companies to take responsibility for their waste, for example, this recent story about excessive packaging in supermarkets. Companies that enable consumers to reduce waste will have a competitive advantage.

 

Related CSR Asia Weekly articles:
Tackling food waste in Hong Kong: http://csr-asia.com/csr-asia-weekly-news-detail.php?id=12553
Electronic waste is piling up in Asia: http://csr-asia.com/csr-asia-weekly-news-detail.php?id=12653


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