Business Case for an EPS recycling initiative
Holberg Shire Council
This is a hypothetical business case for a mythical NSW Council. It is provided in the Guide to
assist those planning to introduce EPS Recycling to consider what might be in their business
case. While it is written from the perspective of a public landfill operator, the way it is
constructed and the issues it raises will provide a useful example for other key people in the
various target audiences of the Guide to Setting up EPS Recycling.
Holberg Shire Council is situated in the Central West of NSW. The Shire has a population of
9,200 with almost 15% of these being from the indigenous community. Population is 68% urban,
spread across one main urban centre and four villages. 32% live and work on the land, outside
of the urban areas. Provided that rain is regular, this is a thriving community with an economy
based primarily on agriculture and tourism. There is also one large mine in the LGA. Holberg
Shire is situated within 60 km of a major regional centre, Booring City Council (population
55,000).
As far as waste management is concerned, Holberg Shire offers no kerbside recycling service,
but it does offer a weekly garbage collection service in the main urban centre only. People in the
villages and on the land manage their own waste, in the main through regular visits ‘to the tip.’
Holberg landfill, near the major urban centre, has recently been converted into a Materials
Transfer Facility (MTF) under license by the Environmental Protection Authority. Work is
progressing to establish Material Transfer Facilities at two other landfills located near two of the
villages. For the time being, the remaining landfill in the LGA will remain just as a landfill.
Using a series of drop off cages, sited before the landfill fence itself, Council collects the
following for recycling:
-
Metal. Steel, steel frames tables and chairs, tanks, drums, bikes, wire and netting (posts
to be removed), fridges etc, excluding timber, household rubbish, brick and rocks.
Green waste. By ute or trailer load.
Hardfill bricks, concrete, dirt etc. By truck or trailer load
Plastics
Paper and cardboard
Glass and aluminium
eWaste
HOLBERG
Shire Council
The following rules apply:
-
-
All loads must be covered, including caged trailers. Uncovered loads will be refused
entry or a penalty of $650 may be imposed.
Illegal dumping is not permitted on the site, and across the LGA and Council has a
strong enforcement team in place to discourage illegal dumping. It remains a problem
though, especially around the villages and near the outlying landfill sites, especially
outside of their business hours.
Tipping vehicles are required to separate their load, so that recyclables can be
separated.
Collection of green waste is restricted to car trailer or ute-loads.
The MTF operates from 7am to 3pm daily.
Arrangements are in place with Booring City Council to transfer recycled materials to their
facility for aggregation and sale. Holberg Shire green waste is mulched and on-sold in Booring
City. The remainder of the recyclable material is transported by the Booring City waste
contractor to various markets. Holberg Shire pays for this arrangement by paying 50% of
income generated for Holberg recyclables to Booring City. Holberg Shire is responsible for
transporting all recyclables to Booring City, and it does this fortnightly. Holberg Shire uses waste
collection personnel and vehicles on days when garbage is not collected.
HOLBERG
Shire Council
OVERVIEW: SUMMARY
In summary this business case indicates that:




The Holberg community will appreciate and use an EPS recycling service.
A Holberg EPS Recycling Initiative would deliver significant environmental and amenity benefits.
These include less dumping and littering, longer landfill life, more resource efficiency and all
round better management of EPS.
The financial model indicates a loss of $2,190 in Year 1 of the initiative, which would need to be
funded by Council as a start-up cost.
If the initiative continues beyond the pilot, Council’s outgoings would be reduced and income
may be increased. A pilot approach allows the financial model to be verified during Year 1.
In the best case scenario, the program will continue and seed funding will be paid back by year five.
DESCRIPTION OF THE EPS RECYCLING INITIATIVE (PROJECT)
It is proposed that EPS recycling drop-off services be offered to residents at all three MTFs, with the
product from the two village drop-off points transported via the Holberg and ongoing transport to
Booring and sale through Booring City Council’s EPS broker.
Given that Council is working to establish two more MTFs, it is a good time to test whether EPS
recycling could be added to the list of recyclables collected at all three MTFs. This additional service
would be welcomed by the residents, who have indicated to Council that EPS is a problematic material.
EPS is used for packaging by the fruit and vegetable growers, and large quantities are found in the
packaging of electrical products, which are in high demand in this community. Currently the EPS
generated in our Shire goes straight to landfill, where each tonne occupies 18 m3 of engineered landfill
space, worth about $2,520, and generates only $150 in gate fee revenue.
In this proposal Council seeks to test whether enough EPS can be recovered to justify the recycling
effort, and how it might best be compacted and transported. It also plans to negotiate transport logistics
and costs with Booring City staff. A twelve month pilot project is proposed, including:






collecting EPS from each of the three MTFs by the use of drop off cages
strongly promoting this facility across the whole community
transporting EPS from the two outlying MTFs into the Holberg MTF
leasing of a compactor, located at Holberg MTF, to compress all EPS into 15 kg ingots
storing ingots on-site until they are in sufficient quantity to transport
transporting of the compacted EPS to Booring City for inclusion in their supply chain (at a similar
costing arrangement to that used for other recyclables).
HOLBERG
Shire Council
THE CONTEXT
Internal context issues:
Holberg Shire Council is committed to reducing waste to landfill across the Shire. It wants to achieve
this either cost neutrally or at a profit, and to provide the widest possible range of recycling services to
its residents. Introduction of EPS recycling services is in line with the core business of Council.
Council has set an internal target of reducing waste to its landfills by 30% by 2016 (based on a 2012
benchmark). While adding EPS to the list of recyclables collected will not reduce weight to any extent, it
will significantly reduce volume, thus reducing transfer and landfill costs.
In a recent community survey conducted by Council, EPS was among the top five unwanted products
suggested by residents. Results from out-of-town residents – where waste is not collected - were even
more telling, with EPS featuring in the top three unwanted products’ list. ‘It makes a mess, is unsightly
and is difficult to bury’ said one small farmer.
External issues of context:
Council is seeking to offer similar services and opportunities to those offered in larger regional/rural
shires (or cities). It sees this as a way of attracting people to live in the Shire and enhancing quality of
life for existing residents. It sees other Councils, most especially Booring City, offering some EPS
recycling services and the community wants ‘us to have this too.’
NSW EPA EPS Recycling Program provides the opportunity to learn from the experience of other
Councils. However, most Councils involved in the Program were larger than Holberg Shire. As far as
Council is aware, there are no examples of Councils offering EPS recycling in a way proposed in this
business case, hence the need to pilot the program.
The NSW EPA Program provides significant communications and education material that can be
adapted and localised for Holberg at minimal additional cost.
HOLBERG
Shire Council
EVIDENCE THAT EPS RECYCLING INITIATIVES WORK
EPS Recycling Projects delivered in your company or organisation.
Council has no previous experience in EPS recycling. However, the current eWaste recycling service
has some similar elements, including resident drop-off and intermittent supply of product. The proposed
EPS Recycling Initiative is consistent with Council’s approach to providing eWaste recycling services.
Evidence from the Holberg MTF shows that residents are increasingly using the eWaste service. The
program is widely promoted and there has been a slow, steady increase in the amount of eWaste
dropped off. Council has received positive press about this service, with letters written by residents in
the local newspaper. Over the past three months, Council has received a net income of $257 from this
service. While this return on investment is small, the positive community feedback is valuable. It has
also been noted by Council staff that less eWaste is being illegally dumped. Council has resolved to add
eWaste drop-off to the services offered in the two new MTFs.
EPS Recycling Projects delivered by others.
Some lessons learnt during the NSW EPA EPS Recycling Program include:
-
The costs of compacting EPS on-site need to be carefully calculated and compared with the
costs of transporting un-compacted EPS to a central location for compaction
EPS compaction is labour intensive, so where your marginal cost of labour is high, a high
capacity compactor (100kg/hr +) is the more cost effective option
Check whether logistics operators servicing your area collect un-compacted EPS as these
services can be better value than on-site compaction
There are a number of equipment options for compressing EPS, but the best option depends on
factors like quality of input EPS and product specifications required by the buyer
Two cubic meter bags supported by frames are the best way to collect, store and handle EPS
Focus on securing supply of EPS because it is much more difficult than finding a buyer for
compacted EPS
Because people only get EPS occasionally, 70% get it twice a year or less, EPS recycling
messages need to be clear, effective and preferably targeted at frequent generators of EPS.
STAKEHOLDERS
-
Landfill Site Manager
MTF Site Manager
Waste Management Team Leader at Booring City Council
Chamber of Commerce President
Waste Company Manager
EPS machinery supplier/buyer of compacted EPS
HOLBERG
Shire Council
FINANCIAL, SOCIAL AND ENVIRONMENTAL IMPLICATIONS
Financial Implications
The key to this business case is whether Council can offer this service either cost-neutrally or at a small
profit. While the financial modeling, undertaken below, forms an integral part of this business case, it
must be seen as preliminary, in that it is based on data available from other services and estimates of
local costs. The pilot will provide hard evidence for the initiative’s ongoing viability.
Using NSW EPA research, is estimated that EPS generation is around 5 kg/hh/yr or 15 tonnes/yr for
the Shire. For the purpose of the model and the pilot phase, estimated recovery rate of 20% is
assumed. This is consistent with the level of recovery achieved by proactive EPS recyclers with a well
promoted service.
1. The arrangements with Booring City provide savings for Holberg. Booring City has a fledgling
EPS recycling program and an arrangement with a contractor. Preliminary discussion with
Booring City staff indicates that an arrangement can be made to add our compacted EPS to
theirs at current contract costs. This is cost beneficial for both Councils and results in a total
collection of over 10 tonnes per annum.
2. Leasing of compactor. The model proposed is that Holberg leases a small compactor for a 12
month period and houses it at the town MTF.
3. Labour costs. All compacting is to be done at the town MTF. Compacting will be done on a
fortnightly basis or less often if there is not sufficient product. Labour will not be charged out as
current landfill staff can accommodate this within their current workloads – using down-time
currently available.
4. Reduction to landfill – savings will occur in this area and these are costed into the model
5. Transport costs – within Holberg. These are costed in, but will occur irregularly. (Monthly from
rural MTFs to the centre.) EPS can be transported with other materials.
6. Transport costs - Holberg to Booring. These are negligible because 15 kg ingots can be
transported as mixed loads, as needed.
Given all of these factors and assuming that within Holberg we can generate over three tonnes of
compressed EPS per annum, the following financial modeling has been undertaken.
This business case indicates a loss of $2,190 for year 1 operations. This would need to be funded by
Council as a start-up cost. If the project continues beyond the pilot, outgoings would be reduced
because cages would on-site and additional would not be needed. Accurate tonnage data would be
available etc. The pilot model will allow for all costings to be verified during Year 1. The best case
scenario is that the program will continue and seed funding will be paid back of by Year 5.
HOLBERG
Shire Council
Financial modelling
Costs
Infrastructure
 Bag and frames at MTFs [3]. Shelters
Constructed by Council [one off cost]
Bag and frames can be reused after
pilot]
 Lease of small compactor (1year only)
Promotion/comms – direct costs of signage
to bag and frames.
An alternative and more comprehensive
Communication (Marketing) and Education
plan is included an Appendix to this plan.
The estimated budget for this Plan is
$5,000.
Transport within Holberg (estimate)
Labour (will use existing underutilized
labour)
Miscellaneous
Total Expenditure Year 1
$
Income/Savings
Sale of recycled EPS at contract
price to Booring City. Three
tonnes at $500 per tonne (50%
$1,500 only as per arrangement with
$7,500 Booring City).
Savings to landfill (at
$400 $2,520/tonne)
Savings to current clean-up
$1,000 (dumping costs).
0
$500
$10,900 Total Income Year 1
$
$750
$7,560
$400
$8,710
Social Aspects
There are clear community (social) benefits in offering a drop-off EPS Recycling service at each of the
three MTFs. The community wants it and the indications are that it will use it. The opening of the two
additional MTFs provides a unique opportunity to promote the new service to residents.
The Holberg community survey indicates that, while residents find EPS a useful packaging and building
material, disposal is problematic. Council would achieve significant goodwill and credibility within the
community for establishing this service.
Although not substantial, there are some employment opportunities though this program, and if Council
proceeds into the pilot phase, liaison will occur with the local disability employment provider, concerning
possible employment opportunities.
Also, given that few, if any, other Councils of a similar size to Holberg are offering EPS recycling, this
gives us a chance to ‘be the first’ and to communicate this with our community.
HOLBERG
Shire Council
Environmental Aspects
It is clear that there will be environmental benefits in offering this service, which solidly outweigh any
environmental deficits. These benefits are:
-
-
-
-
Overall there will be a reduction in waste to landfill. If measured by weight, keeping EPS out of
landfill will have a negligible impact, because EPS is a light product. But if measured by
volume, the impact is larger, because of the space required in the landfill to accommodate noncompacted EPS. It is estimated that space saving annually will be in the order of 2% of the
material that goes to landfill currently, giving Holberg Shire a longer landfill life.
Because EPS does not breakdown easily in landfill, its presence remains for a long time to
come. Keeping it out of landfill increases space available for materials which do break down
If the service is taken up, there will be a substantial reduction in dumped EPS, because
currently EPS is often dumped. This is a current problem for Council and the environment. It is
unsightly, damaging to our stormwater systems in the urban centres and fouling our creeks
and rivers. It is a particular issue in Holberg Creek, because of dumping that occurs at the
upper end of the catchment.
When EPS is broken up to be disposed of in the garbage in the main centre, or at landfill in the
villages, it is statically charged and difficult to manage. It results in mess/litter and
environmental impacts often result from the current system, where residents are trying to do
the right thing.
Once EPS is compacted it is easy to store and to manage. It can be reused in a number of
ways and provides a positive example of a closed loop recycling system.
There are some environmental deficits in the program. These relate to the environmental cost of
transporting such a high volume product from the outlying MTFs to the centre and from Holberg to
Booring City. Trucking costs and impact on the environment need to be considered. These would be
minimised if EPS collection cages were only transported when they were close to full, and compressed
material was held in Holberg until there was sufficient quantity to send to Booring City (or it could go on
a mixed load.
In summary, there are significant environmental and amenity benefits in implementing the Holberg EPS
Recycling Initiative. These include less dumping of this invasive product, less density, more reuse and
all round better management of EPS.
HOLBERG
Shire Council
GOVERNANCE
This project will be managed by Council’s Waste Manager, working to the Director, Operations.
Because this project is in line with other recycling services offered at MTFs, it should require limited
day-to-day management. It is noted however that a significant amount of education will be required
in order to encourage people across the Shire to bring EPS to the MTF.
In the first 12 months of the project, data will need to be collected about the amount of EPS collected
and the financial viability of the service. The first of these falls into the normal data collection
undertaken by Council. The second will require the Waste Manager to set up a separate accounting
system, tracking all costs and income. Discussions have been held with the Financial Controller and
this can occur fairly easily.
The Waste Manager will handle all negotiation with Booring City, as required.
RISK MANAGEMENT
What are the risks?
There are a number of risks associated with this project that will have to be managed. These are:
Risk 1. The community will not engage in the project at the desired level.
Risk 2. There is insufficient EPS in the community and business to warrant a program.
Risk 3. Financial modeling is not matched by actual performance.
Risk 4. There is a low level risk of vandalism; the EPS in cages might be set alight.
How will each be managed?
Management of the risks will occur as follows:
Overall: This business case proposes a 12 month pilot. This approach allows for all assumptions to
be tested and for decisions to be made about the future, based on real data
Risk 1. Community engagement to occur under the tag line. Getting rid of polystyrene – you wanted
it, now you’ve got it. Signage, community service advertising and direct mail promotion of the service
will occur.
Risk 2. At this stage the amount of EPS that can be sourced is unknown. Apart from strongly
encouraging householder engagement, Council will work with retailers (especially fruit shops and
electrical suppliers in town) to strongly engage them in the program.
Risk 3. Solid actual budget data will be collected during year 1, the pilot year, which will shed light on
this risk.
Risk 4. This risk is similar to other products collected at the MTFs. It is managed by having the MTF:
staffed during business hours; locked after hours and by the use of the randomised visits by the
security service that Council engages. It is not anticipated that EPS provides a greater risk than
other recyclables.
HOLBERG
Shire Council
CONCLUSION
When taken overall, the business case indicates that the proposed Holberg Shire Council EPS
Recycling Initiative should be supported, at the outset, for a pilot of one year. At the end of this
period, a decision can be made based on real data, about whether the program will be continued. In
order to take this program forward, seed funding of $2,190 will be required for Year 1.
HOLBERG
Shire Council