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A. Vaccani & Partner AG | 2020 | Page 1
A.Vaccani&Partner AGZollikerstrasse 141P.O. Box 1682CH-8032 Zurich, SwitzerlandT +41 44 392 99 [email protected]
A. Vaccani & Partners AG
9 July 2020
COVID-19 Impact Analysis on the EfW and Waste Management Industry
A. Vaccani & Partner AG | 2020 | Page 2
Business Intelligence
▪ Strategic market analysis
▪ Industry, competitor and customer analysis
▪ In depth business analysis based on market interviews and
data base research
Proprietary databases
▪ Award/market tracker WTE, Biomass, Multifuel (market
shares, segmentation, trends)
▪ Global structural market data (220 countries) environment,
energy, incl. long-term forecast
References
100 M&A Transactions, mostly cross border, about 50% in
Cleantech space, many involving Asian, European and US parties
Over 50 Tech Transfer/Partnering transactions in Cleantech space
between Europe/US and Asia
60 Market Entry mandates in Cleantech space, mostly into Europe,
Asia, North America
AVP is an independent international
management consulting company
located in Switzerland, founded 25
years ago
Amedeo C. Vaccani
MBA Harvard
MS Federal Institute of
Technology (ETH)
Zeinegul Salimova
MSc. Univ. of Strathclyde
BSc Al-Farabi Kazakh
National University
Suejean Asato
BA USC / Lynchburg
College
A. Vaccani & Partner AG | 2020 | Page 3
Agenda
1. Survey Overview
▪ Market confidence
▪ Research uncertainties (factors)
2. Critical Uncertainties & COVID-19 Assumptions
3. Scenarios
4. AVP Market Forecasts
1
2
3
4
A. Vaccani & Partner AG | 2020 | Page 4
9'75111'261
14'174
12'03313'226
14'551 15'053
9'0688'009
10'013
12'371
10'4469'415
5'139 5'591
7'6518'402
6'7478'289
0
2'000
4'000
6'000
8'000
10'000
12'000
14'000
16'000
2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
tpd
Annual Award Volume 2001 - 2019
Global Financial
Crisis (2009)
“Russian”
Financial Crisis
(2014/15)
COVID-19 Crisis – an Unprecedented Event
COVID–19 Crisis
(2020)
Annual Award Volume EMEA (2001 – 2019)
A. Vaccani & Partner AG | 2020 | Page 5
1. Help take control over the uncertainty by
getting alternative views on future development
2. Highlight drivers of change to manage
complexity of the environment
3. Assess impact of the crisis on budgets under
different scenarios
4. Make well informed decisions
5. Develop a course of action that will be
sustainable in any scenario
6. Develop a winning strategy for the new real
Scenarios are possible
views of the world told in a
story that gives a context to
companies and individuals
to make well informed
decisions.
Scenario Planning
A. Vaccani & Partner AG | 2020 | Page 6
Profile of the Responses
Industry Segment Job Function
A. Vaccani & Partner AG | 2020 | Page 7
Much Better Better Same Worse Much Worse
How respondents see their business’s prospects
2021
2022
28% 50%
50% 36%
A. Vaccani & Partner AG | 2020 | Page 8
Much Better Better Same Worse Much Worse
How respondents assess the regional market for EfW
2021
2022
47% 31%
36% 53%
A. Vaccani & Partner AG | 2020 | Page 9
Much Better Better Same Worse Much Worse
How respondents assess the global market for EfW
2021
2022
60% 20%
26% 60%
A. Vaccani & Partner AG | 2020 | Page 10
Much Better Better Same Worse Much Worse
How respondents assess the regional market for recycling
2021
2022
22% 44% 28%
31% 44%
A. Vaccani & Partner AG | 2020 | Page 11
Much Better Better Same Worse Much Worse
How respondents assess the global market for recycling
2021
2022
17% 53% 19%
28% 44%
A. Vaccani & Partner AG | 2020 | Page 12
Research Uncertainties
~600 PESTEL
factors
submitted
Grouped into
~200 common
themes
>50 Critical
uncertainties
Economic growth
Technology
Political decision
Recycling
Change of lifestyle (work-life balance,
WFH)
Quality of waste classification/ sorting
Plastic waste reduction/ ban
Disposable income
Technology incentives
Recycling rates
Level of technological
awareness
Copyright and patent laws
Better fluff filters
O&G prices
Carbon capture technology
Technology availability
Biomass sustainability
Coal conversion
Waste to fuel and waste X technology
Fossil Fuel exploration
High technology performance
Number of single-person
households
Power generation diversity
Public perception of landfill
Gas/LNG trade policy
Waste Quality/Amount
Exchange rate risk
Trade restrictions
Brexit impactAvailability of
financingSubsidies
EFW technology price
Equity requirement for project development
Number of planned facility in the region
Supply Chain/ Project Delivery
TechnologyAdvancement
Automation
Income distribution
Political (in)stability
Employment law
Tax policy
Regulatory changes
Shift to circular economy (plastic, etc)
Age distribution
Antitrust lawsIBA
regulation
Labour force availability
CO2 tax
E-waste fee
Incinerationtax
Sea pollutionWater
availability
Civil unrest
Claims culture
Combustion laws
Concentration on other issues
Extended producer responsibility law
Incineration ban
Less waste implementation of zero
waste implemented
Lack of waste experience in
government officials
Political awareness
Influence of NGOs
A. Vaccani & Partner AG | 2020 | Page 13
Post-COVID-19 Assumptions
Assumptions
Economic Recession
• Reduced “industrial production”
• Reduced energy need
• High debt repayment
Circular Economy• Re-use
• Recycle
Climate Change Agenda• CO2 reduction
• Renewable alternatives
Changes in lifestyle
• Increased working from home
• Air traffic sustainable reduction
• Focus on Health and Safety
• Sanitation
Waste Volumes
• Reduced commercial waste
• Less source separation and recycling
• Increased residual waste / reduced waste quality
A. Vaccani & Partner AG | 2020 | Page 14
✓ Enabling financial and regulatory incentives
✓ Dependent on
✓ Sustainability agenda
✓ Renewable energy agenda
✓ Pro-EFW political decision
✓ Affect
✓ Regulatory framework
✓ FIT, subsidies, other incentives
✓ Laws in action: recycling, law
✓ Waste management planLack of government support
Government stimuli
Key Critical Uncertainties
Government Stimulus1
Supply Chain2
✓ Enabling waste collection and project implementation
✓ Dependent on
✓ Waste management system
✓ Viable project economics
✓ Suitable/ acceptable technology
✓ Affect
✓ Project bankability
✓ Acceptable risk (EPC, Dev. company)
✓ Private sector (dev. company) investment appetite
✓ Infrastructure effectiveness
High Supply Chain Risks
Adequate Supply Chain
A. Vaccani & Partner AG | 2020 | Page 15
Post-COVID-19 Scenarios: EFW & Waste Management
Lack of
Government
Support
Government
Stimuli
High Supply Chain Risks
Adequate Supply Chain
• Government does not provide
support to waste industry
• No issue with supply chain
• Strong market drivers
• No issues with supply chain
• Government does not provide
support to waste industry
• Major issues with supply chain
• Strong market drivers
• Major issues with supply chain
Scenario: Private Sector Initiative Scenario: Green Growth
Scenario: Bottom Line Disruption Scenario: Public Sector Responsibility
A. Vaccani & Partner AG | 2020 | Page 16
Post-COVID-19 Scenarios: EFW & Waste Management
Government
Stimuli
Adequate
Supply
Chain
Key Characteristics:
• Policy decision pro EfW
• Strong sustainability agenda
• Working laws, regulations, incentives, etc
• Economically viable projects due to gate fees, availability of financing, etc
• Strong and reliable developers, EPC, OEM, etc.
Risks:
• “Normal course of business”
Opportunities:
• For developers, investors, EPC, technology, etc.
Scenario: Green Growth
A. Vaccani & Partner AG | 2020 | Page 17
Post-COVID-19 Scenarios: EFW & Waste Management
Government
Stimuli
High
Supply
Chain
Risks
Key Characteristics:
• Strong government incentives
• Government stimuli to make up for supply chain links
• Missing links in supply chain
• Public ownership/financing
Risks:
• Developer risk (including country risk)
Opportunities:
• PPP / EPC
• Localize supply chain
Scenario: Public Sector Responsibility
A. Vaccani & Partner AG | 2020 | Page 18
Post-COVID-19 Scenarios: EFW & Waste Management
Lack of
Government
Support
Adequate
Supply
Chain
Key Characteristics:
• Missing links in market drivers
• Insufficient incentives from the government
• Inadequate procurement process
• Smaller projects
• Preferred alternatives or the market is saturated
Risks:
• Project development
• Permitting
• Penalties (e.g. incineration /CO2 tax)
Opportunities:
• Merchant facilities
• Decentralized solutions
• Innovation, alternative technologies (waste to X)
Scenario: Private Sector Initiative
A. Vaccani & Partner AG | 2020 | Page 19
Post-COVID-19 Scenarios: EFW & Waste Management
Lack of
Government
Support
High Supply
Chain Risks
Key Characteristics:
• Lack of support and/or inadequate waste management system
• Bottom line optimisation
• Supply chain weak or inexistent
• Generally low market attractiveness
• Support toward alternative technology/segments (as opposed to EfW)
Risks:
• Lack of business opportunities
• Country risk
• Unfavourable project economics
Opportunities:
• Scientific landfill, recycling
• Education, market maker strategy
• Innovation and market disruptors
Scenario: Bottom Line Disruption
A. Vaccani & Partner AG | 2020 | Page 20
0
2'000
4'000
6'000
8'000
10'000
12'000
14'000
16'000
18'000
China EMEA Asia & Oceania (excl. JP& CN)
Japan Americas
ktpy
Total
Order ktpy 15’374 3’218 2’860 887 512 22’851
# of plants 59.4 18.0 13.3 9.0 2.7 102.3
M€ 4’485 2’362 1’133 900 303 9’183
Worldwide Annual Market Forecast by Region (2020 – 2024), ktpy
* Forecast pre COVID-19 impact
Annual Worldwide Market Potential for New Build is about € 9.2 Billion*, Highest Market Potential in China,
EMEA, strongest growth SEA
A. Vaccani & Partner AG | 2020 | Page 21
Developed markets with high EfW capacity
Markets with low EfW penetration and less developed waste management systems
Covid-19 Impact on the EfW Industry
Pressure on market drivers Waste volume, private and public operator
investment appetite and cost optimization
programs
Pressure on project economics, e.g. gate
fee
Implementation pressure uncertainty, equity
requirements, circular economy agenda
Strengthening of market drivers Increased need for sanitation in urban
environment, sustainability agenda of public and
private sector
Implementation stimulation Economic support (green recovery), increased
private sector involvement, PPP
A. Vaccani & Partner AG | 2020 | Page 22
Pre-COVID-19
Lack of
Government
Support
Government
Stimuli
High Supply Chain Risks
Adequate Supply Chain
Sweden
Netherlands
Switzerland
Germany
China
Japan
UK
ThailandMalaysia
USA India
UAE/ Gulf Region
Scenario: Private Sector Initiative Scenario: Green Growth
Scenario: Bottom Line Disruption Scenario: Public Sector Responsibility
Pakistan
Disclaimer: Positions of the countries
are for illustration purposes only and
should not used for business analysis
or forecasts.
A. Vaccani & Partner AG | 2020 | Page 23
A. Vaccani & Partner AG | 2020 | Page 24
Final thoughts…
• Need for safe and sustainable waste management remains unchanged
• EfW has huge and sustainable long-term global market potential
• Individual market developments need to be watched carefully
➢ AVP will present a scoring mechanism and a cockpit to better
understand and track market developments… follow us on
to stay updated
A. Vaccani & Partner AG | 2020 | Page 25
Thank you for your attention
− 2020 Edition Worldwide Market Share Analysis of Thermal Waste Treatment Plants
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