Ralf Mittermayr, CEO at Saubermacher AG, the most sustainable waste disposal company in the world (GRESB rating), discussed with Jürgen Spari, Regional Manager of GrECo Steiermark their zero-waste vision and what zero waste will mean for the insurance industry.

Listen to the full interview with Ralph Mittermayr in German language.

Spari: What does Saubermacher’s zero-waste strategy mean?

Mittermayr: Zero waste has two meanings. Firstly, if we want to move towards a circular economy where only a small part remains as waste management then we have to say goodbye to the permanent concept of waste. Today, only 7% of all raw materials worldwide are recycled. Conversely, this means that 93% of raw materials are not recycled. Austria is at 11%. Pioneering countries like the Netherlands are at 27%. In concrete terms, this means that the rest is not recycled as raw materials. Our biggest goal is creating a circular economy, with Saubermacher positioned as a partner to industry to close raw material cycles.

“Globally, only 7% of all raw materials are recycled, which means 93% of raw materials are not recycled.”

Secondly, zero waste means lean thinking:  how can we prevent waste? How can we constantly improve and continually optimise? How can we continue to innovate and progress? Nature serves as our model because it typically doesn’t waste anything.

Spari: What sustainability goals is Saubermacher pursuing?
 
Mittermayr: We have two very distinct sustainability focuses.  The first is for the company to become CO2-neutral. We are making great strides in some areas – more than 30% of our car fleet is already electric and we aim to be completely electric by 2030, and for our entire vehicle fleet of almost 700 vehicles to be CO2-neutral drives by 2040.  We are also forging ahead in supplying our own electricity with photovoltaic systems and purchasing CO2-free electricity.  Plus, we’re trying out many other solutions: we have the first hydrogen waste collection truck, and have already experimented with alternative, liquid-based fuels which are produced with zero CO2.
 
Our second sustainability focus is to help our customers to reduce CO2. For example, Saubermacher is the largest producer of substitute fuels in Austria. Fuels from waste residues and a substitute fuel can – with the same calorific value – contain up to 40% less CO2.  It has the same CO2, of course, but it uses biogenic fractions from the waste and, because these are not newly extracted from the earth but are reincorporated in the biogenic cycle every year, they are not subject to CO2 tax.

Spari: You previously mentioned the end of the classic waste management industry. What adjustments will Saubermacher make in its own value chain to seize these developments as an opportunity for sustainable corporate success?

Mittermayr: In the future, waste management will not be an isolated industry. We predict that classic waste management will evolve, transforming waste products into secondary raw materials. This requires classic services such as collection, identification, sorting, separation, and treatment.

The concept of ownership becomes exciting: today it is the case that a company hands over the waste to us and pays for it. We then own this waste and can make all kinds of things out of it. But the future looks different: The waste products created during production will no longer be taken out of the producers’ hands.

“The ownership of waste will change: The waste products created during production will no longer be taken out of the producers’ hands.”

We are already seeing very clear trends to this end: increasingly in France materials are no longer being handed over to waste management, but instead they remain the property of either specific companies or are systems bundled by companies. In Austria we have the ARA, and Germany has the Green Dot. These are systems that find optimal recycling solutions on behalf of the distributors of the products.

In the past, the focus was on a quota: X-amount must be collected and recycled. That has now changed considerably: Today, beverage producers, for example, want their material back, e.g. PET bottles, and they want it qualitatively processed so that they can use it for the next life cycle.  In France, this has already gone much further. In the case of furniture or textiles, waste management never reacquires the concept of ownership. Rather, as a partner of industry, it helps to keep the cycle going. 

As specialists in logistics and in processing these material flows, this is not a huge challenge for Saubermacher, but we must learn to integrate ourselves into these networks and to think in a larger-scale industrial way.

Spari: What will Saubermacher AG look like in 5 to 10 years?

Mittermayr: That’s a good question. How long do these change processes take? My experience is that they usually take much longer than you think, but not always! There’s a huge dynamic in our industry so I think we will see both, and Saubermacher will have a strong role as an industry partner and as a partner to the big companies during this transition.

Saubermacher will grow as it continues to absorb and integrate smaller companies. Today we have 76 holdings, and this will continue to grow because smaller, often family-owned, companies will no longer be able to cope with the flood of future requirements.

We are specifically driven by legislation, very strongly by the CSRD and by the EU taxonomy. Non-financial reporting means nothing other than that large companies, which have waste streams due to their business activities, need a partner who will report back on the real, genuine CO2 content that takes place in the processing of their waste and show them ways to improve.  In Austria, probably only a handful of companies will be subject to this EU taxonomy, so how is a company with 12 employees, which is not subject to this system itself, supposed to provide a company with data suitable for auditing? Saubermacher will therefore be a network aggregator that aggregates resources that are needed in the industry.

Spari: The European circular economy package provides for digitalisation as a key measure by 2030. Digital technologies such as censoring, Internet of Things, or blockchain are seen as the essential building blocks of waste and recycling management for industry and commerce. The adaptation to new business models, for example for sustainable recyclables management, leads to a sometimes-radical change in the risk landscape.  What risk management measures is Saubermacher taking to anticipate and manage future risks arising from these changes and innovations, so you are prepared for changing risk potentials or threat scenarios?

Mittermayr: The biggest risk in all these developments is that you don’t know when and how they will occur, or in what form. We talk about this thoroughly in our strategy meetings. Once a year, the entire strategy is adapted in an iterative procedure – including the existing guard rails. Every few years we also review these guard rails. For the most part, we do this by developing theories and assessing their opportunities and risks and how likely they are to occur. We also consider counter-theories to these hypotheses and their impact. 

We have an expert panel who undertakes these deliberations consisting of top managers who have been in the business for many years, top young talent who are simply socialised differently and see the world differently and perceive trends differently, and middle management. To date this expert team combined with our risk management approach of strategy, forming thesis, and falsifications, hasn’t let us down and we’ve had most things on the radar.

Spari:  What solutions do you see for battery recycling, especially with the increasing quantities of lithium-ion batteries?

Mittermayr:  Battery recycling is probably the most sensible thing one can do. Today it is technically possible to recycle 80 to 90% of the metals in lithium-ion batteries.

A battery in an electric vehicle can easily be used for 10 to 15 years.  So, to do a simple calculation, let’s say that that battery can be used for 10 years and 80% of it can be recycled. That means that this battery can be driven four times if I can recycle 80% of the metals, which in turn means the material I initially take out of the earth can be used for 40 years.  If I use that battery for 15 years and recycle 90% of it (there are no barriers to achieving such rates), the battery can be used for over 120 years!

Battery recycling will become a normal thing, just like paper recycling or glass recycling is today. The battery recycling industry is very young, and we aren’t seeing big volumes yet, but this is just like the beginning of glass or paper recycling.

Electromobility and the electrification of our society through these products is irreversible. The solutions are there – what is often lacking is the maturity of the solutions. This is a technically challenging issue, but we have already solved many other things on a large industrial scale and can do the same again.


Spari: Let’s talk briefly about insurance. We want to take an extremely critical look at the insurance and reinsurance markets, because there is a big dichotomy: on the one hand, we have the way insurance companies deal with the recycling industry, which is burdened with losses, but on the other hand, we have the essential role of the recycling industry in the fight against climate change. Recyclers can become ESG heroes. How do you see this contradiction and how can it be resolved?

Mittermayr:  Due to the circular economy, an insurance company that finds recycling too risky will have a hard time finding customers in the future. Increasingly, very large companies will include recycling capacity and capability in their own portfolios, and the insurance companies will not be able to cherry pick which parts of the organisation will be insured, e.g. insuring the new production facilities and offices but not the part where recycling and the circular economy take place.

“Insurance companies will not be able to cherry pick which parts of an organisation will be insured.”

The hotspot risk will become more widely distributed. Today we have a few waste management companies that have many large recycling plants and thus a disproportionately high risk. However, developments in recent years show that the newer investments in treatment plants are very often made in joint ventures together with industry, as in Saubermacher’s case. This changes the risk profile for the insurer because the recycling, the waste treatment, the circular economy all take place on site at the industrial company. The risk for the insurer becomes more fragmented. What is more, I am convinced that the risk profile for recycling plants will decrease due to technological progress – as we have observed with timber companies.

As an industrial company, I would seriously consider whether I would want to work with an insurance company that simply does not want to insure a significant part of our future as humanity.  I implore the insurance industry to think about this very carefully – this is a megatrend.  I would heavily question an insurer’s strategy of not wanting to insure such risks at all, and not wanting to learn what it means to insure this industry.

About Ralf Mittermayr:
DI Ralf Mittermayr, born in 1968, has been working for Saubermacher AG in Feldkirchen near Graz as Spokesman of the Executive Board and Head of Marketing since 2014. He studied at the Technical University of Graz and after graduating held numerous positions at well-known companies such as Philips Semiconductor, GRIPS Electronic and Infonova.

About Saubermacher:
Saubermacher AG is an international waste management and recycling company based in Feldkirchen near Graz. The family-owned company was founded in 1979 by Hans and Margret Roth. and is a qualified partner for approx. 1,600 municipalities and around 42,000 companies. The company employs around 3,600 people in Austria, Germany, the Czech Republic, Hungary, Slovenia, and Croatia.

Jürgen Spari

Jürgen Spari

Regional Manager Steiermark

T +43 664 149 94 89

Jürgen Spari

Ralf Mittermayr:

CEO Saubermacher AG

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