Rising tide of muck and brass

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EU directives have ensured that there is more sludge being produced across the continent, but fewer ways of disposing of it. Here Emmanuel Adler of A Consult in Lyon examines the opportunities the market presents.

When the Emperor Vespasian’s son Titus complained about the disgusting nature of the tax on urine, his father held up a gold coin and told him “Non olet!” (“It does not smell”). If Vespasian were alive today he would have no problem at all about the money to be made from European wastewater sector.

EU standards are driving investment in wastewater treatment across the continent, but the real growth is being experienced on the sludge management side. Until the mid-1990s, 30% of the investment in a
wastewater treatment plant would go into the sludge treatment line and 70% went into the water treatment line. Today that ratio is being reversed with new plants (e.g. at Valenton in Paris) seeing 70% of the cost going into the sludge treatment line. On top of the expenditure on sludge treatment outside wastewater treatment plants is increasing.

In 2006, the European sludge management market, with an estimated revenue of around €2 billion per year, is at a crossroads for regulatory, economic, political and technological reasons.

The current debate over sludge management was initiated by the 1986 EU Sewage Sludge Directive (86/278/EEC). This prohibited the use of untreated sludge on agricultural land unless it is injected or incorporated into the soil. To be considered treated the sludge must have undergone “biological, chemical or heat treatment, long-term storage or any other appropriate process so as significantly to reduce its fermentability and the health hazards resulting from its use”. The Directive also imposed restrictions on the way treated sludge can be used on the land. The legacy of the Directive has been a growing gap between the beliefs of experts and professionals in soil recycling and public opinion.

The second significant piece of regulation has been the 1991 Urban Waste Water Treatment Directive, which has been progressively implemented by all member states. This has massively increased the quantity of sewage sludge requiring disposal. From an annual production of some 5.5 million tonnes of dry matter in 1992, the community is thought to have generated nearly 9 million tonnes in 2005.

The slow but constant rise in the number of households connected to mains sewers and the increase in the level of treatment (up to tertiary treatment with removal of nutrients in some member states) has also had an impact.

According to recent evaluations, the sludge treatment equipment business (alone) should rise from $1.4 billion in 2000 to $2.1 billion by the end of the forecast period in 2007.

The costs of different sludge disposal methods varies greatly. Landspreading of solid and semi-solid sludge entails the lowest average cost (€110-160/ton of dry matter) from an overall economic point of view, i.e. accounting for both internal and external costs and benefits.

Landfilling, mono-incineration and coincineration of sludge with other wastes entail the highest costs (€260-350/ton of dry matter) from an overall economic point of view. Landspreading of composted sludge, use of sludge in land reclamation, and use of sludge in forestry record intermediate total costs (€210-250/ton of dry matter).

The best estimates of costs necessary to meet the latest regulatory limits on heavy metals, organic compounds and other more stringent treatment requirements including sludge quality insurance systems amount to €0.8 billion/year in the short term, €0.9 billion/year in the medium term (after 2015) and €1 billion/year in the long term (after 2025) for the 15 member states of the European Union.

Although at community level the reuse of sludge accounts for about 40% of overall sludge production, landfilling as well as incineration in some member states are the most widely used disposal outlets, despite their environmental drawbacks. Table 1 shows the extent to which each disposal method is used across the EU as a whole. Table 2 illustrates the extent to which each method is used in each member country. Table 3 shows the total cost and unit cost of sludge recycling in each member state. The average cost is €204/tonne of dry matter (tDM). The variation around the average cost corresponds to the variation in the quality of sludge: countries with better sludge quality pay less to recycle it.

The market for sludge treatment divides up as follows:

1) Sewage Treatment Plant operation & maintenance
This market is mainly covered by large firms with long-term contracts. In the market, total value is worth €5 billion per year and is divided up as follows: municipalities 54%; Veolia 18%; Suez 14%; Saur 7%. Sniter, the wastewater treatment turnkey contractors association (which includes Degrémont, Veolia, Stereau, and Sogea), estimates that annual revenues from sludge treatment activities are around €500 million/year including construction works and engineering studies.

2) Onsite sludge treatment (sludge reduction, thickening, dewatering, drying, oxidation, chemicals)
Among the numerous small and medium-sized companies specialised in separation and thermal process technologies, those active manufacturing centrifuges and dryers are doing well.

Andritz, an Austrian sludge treatment specialist, has been one of the main beneficiaries. During the first quarter of 2006, revenues increased 61% to €80.8 million against the same period in 2005. Andritz’s growth began with the acquisition of the centrifuge manufacturer Guinard Centrifugation in 1996 (now part of Andritz S.A.S. France), which was followed by the acquisition of Bird Machine (comprising Bird, Bird Humboldt Centrifuges and R&B Filtration) and theNetzsch Filtration Business Unit in 2004. The company’s strategy has been further enhanced by the acquisition of the Swiss 3
Sys AG with its belt drying technology and the fluid bed systems business area of VA Tech Wabag in November 2004.

Earlier this year the firm received a €10 million order from the Greek Ministry of Environment and a consortium formed by the building contractors Actor and Athena for the supply of four lines of a drum drying system (DDS) for the sewage treatment plant of the city of Athens (capacity 330,000 tons of sludge per year), located on the island of Psyttalia.

Another leader in the field is Sweden’s Alfa Laval, which has specialised in separation, heat transfer and fluid handling. It recently signed an alliance with the Dutch company Vandenbroek, a leading supplier of drying equipment for the sludge disposal market (part of the Grontmij Group, an engineering consultancy firm listed on the Amsterdam stock exchange), to become the exclusive distributor of Vandenbroek sludge driers worldwide. In the UK, Alfa Laval recently installed two Aldec G2 decanter centrifuges for Yorkshire Water at the Esholt STP(600,000 population equivalent).

Thermal drying is a growing market, driven by local, EU and government taxes and governed by EU legislation that aimed to prevent the landfill of any organic matter by 2005.

Advanced anaerobic digestion of sludge to reduce its volume and to produce biogas is expanding, with contracts in the UK and in Germany. Thus Scottish Water installed a thermal hydrolysis pretreatment process at its Nigg facility designed by sludge specialist Swiss Cambi. Also active in the same sector of enhancing digestor operational stages by optimising the hydrolysis step, is Monsal from the UK, which implemented the Enzymic Hydrolysis Digestion process at Bromborough for United Utilities and a 900kW heating technology at Roundhills for Severn Trent Water.

3) Composting
Organic matter in the excess sludge is decomposed by the activity of aerobic microorganisms, which stabilises the sludge, reduces its volume by 50%, makes it hygienic and removes offensive smells, thereby making it easier to handle. This market is covered by large and medium-sized firms involved in composting, platform engineering, equipment manufacturing and site operation, and compost sales and marketing. In the composting equipment, primary fermentation is aerobically performed by providing air and then fermentation heat generated during the composting process.

Rapidly developing in France, private composting sewage plants are now treating over 15% of the total flux of sewage sludge produced, generating an estimated market of around €80 million shared by a dozen or so medium-sized companies (Recyval, Pena Environnement, TTC Malo) along with the three majors (Agrodeveloppement for Suez, Sede for Veolia and Saur).