FUTURE of WASTE MANAGEMENT in RUSSIAN MEGACITIES

FOR TEKES INNOVATION WATCH

Finpro ry, Russia

Work Approach

• Identification of most urgent and acute waste management problems in Moscow and Saint Petersburg through desk study and expert interviews

• To examine identified problems critically in the mirror of Finnish offering

• Providing ideas for further development through analyzing the major opportunities

Project Team

Finpro ry: • PM Olga Makeeva, senior consultant• Sergey Chernega, consultant Moscow• Helenä Lähteenmäki, Head of Trade Center Moscow• Kirsi-Maarit Poljatschenko, Head of Trade Center Saint Petersburg• Inna Semak, consultant Saint Petersburg

Solved.fi: • Santtu Hulkkonen, Executive Vice President

External expert team: • Marina Himanen, ENPI project expert, University of Jyväskylä• Jukka Loikala, Cargotec Finland Oy • Mikko Kantero, GreenSound Oy

Tekes: • Virpi Herranen, Head of Tekes Russia• Kari Herlevi, program director• Reijo Munther, program director• Pavel Cheshev, Tekes Russia, advisor• Asko Vesanto, financial director

RUSSIAN MSW IN NUT SHELL

Waste generation increasing 15-16% a

year

Municipal solid waste in Russian Federation

60 mln tonsof SMW a year

/ 400 kg per capita

Average rate of MSW

utilization -7-8%

Figures and facts

Only 8% of waste disposal areas meet the requirements

Currently almost 90

billion tons of waste

accumulated in Russia

Almost all existing waste

landfills are overfilled, no opportunity to enlargement.

Russian waste management market is still in the early stage of development, thus offering strong growth opportunities

Source: Frost & Sullivan

Awareness > Growth > Maturity > Decline?

Russia

Western Europe

Deg

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MOSCOW AS EMERGING MEGACITY

Territory, km2 1100Population in 2013

11,7 (official data) millionsUp to 20 as per unofficial estimation

Population in 2020 +13%

Population density, 2013 10383 inhabitants / km2

GRP 2012 274 bln EUR

Main industries

The largest financial, international and business centre. Chemical, metallurgy, food, textile, furniture, energy production, software development and machinery. 17% of retail sales and for 13% of all construction in Russia .

Scenarios / strategy of development –2020 vision

National and International Financial Services Centre: 25-30% of Russia’s GDP will be produced in Moscow.

20% of Russian population will live in Moscow agglomeration.

The city territory will grow 2.5 times (Big Moscow + New Moscow 1600 km2)

Skolkovo – “future/ideal town”: 4E principles: ecological soundness, ergonomic efficiency, energy efficiency, and economic efficiency.

150 km of new roads and 70 new metro stations

Description Implementation schedule

Agreement on cooperation between Moscow city and Moscow region governments. 2012

Pilot MSW handling project in South-West municipal district 2013

Development of interregional waste handling system. No data

Increasing waste disposal tariffs.

Closing down 24 out of 39 landfills in Moscow region 2013

17 Eco-techno parks (waste recycling complexes) on the base of PPP model withinvestments of 4 bln EUR to increase waste recycling from 13% to 65% and minimisethe disposal of waste at the landfills

2013-2020

Construction of waste incineration plants, including the largest in Europe (0.7 Mt/a),in Moscow’s Korovino industrial area. No data

Equipping all waste trucks with Global Navigation Satellite Systems, GPS and on-board video cameras 2012-2020

Starting of 29 Moscow region landfill sites reclamation (redevelopment)2013-2016

New waste management projects and initiatives in Moscow

SAINT PETERSBURG- the second largest

Territory, sq. km 600

Population, 2013

5,03 (official data) mill. inhabitantsExpert evaluation 7,5 – 10 millions Plus 134 000 inhabitants in Yuzhny

Population in 2020 +10%

Population density 7769 inhabitants / km2

GRP, 2012 53.5 bln EUR

Main industries

Trade gateway, financial and industrial centre of Russia. Oil and gas trade, shipbuilding yards, aerospace industry, radio and electronics, software and computers; machine building, heavy machinery and transport, including tanks and other military equipment, mining, instrument manufacture, ferrous and nonferrous metallurgy (production of aluminium alloys), chemicals, pharmaceuticals, medical equipment, publishing and printing, food and catering, wholesale and retail, textile and apparel industries

Scenarios / strategy of development –2020 vision

Centre of high-tech industry: 50% of GRP –industry and related services (including R&D 6% - engineering, software development, etc.)

Increasing of environmental securityGrowth in prosperity (highly-paid working

positions (increasing of salary on 100%)Development of attractive urban environmentStrengthen the status of cultural centre of Russia

(= developing education, culture, tourism)

Description Implementation schedule

New Program on Solid Waste Management for 2012 – 2020 adopted in May 2012 2012 – 2020

Construction of two new waste recycling plants with a capacity of 350 000 t 2014 >

Modernization of two existing waste recycling plants. 2013 >

Pilot project on MWS recycling in Moscovskiy, Kolpinskiy and Krasnogvardeyskiy districts September 2013 >

Waste sorting plants to be built in Leningrad Oblast in 2013-2014 in Sosnovy Bor, Lomonosov, Gatchina, Tosno, Vsevolozhsk and Kingisepp districts; investment for one sorting plant is 1.2-1.3 MEUR. 70% of MSW to be sorted by 2018.

2013 - 2018

Reclamation of waste landfill PTO-3 2012-2014

Two new industrial complexes for waste processing and waste disposal by 2015

All retail estate management companies have to sign direct contracts with waste recycling plants by 2015

New state-owned waste transportation company being established 2013 >

Development of a regional waste register (data base) and State Information System on waste management. Waste trucks will be equipped with navigation systems 2013 >

Pilot plant on hazardous waste treatment in Krasny Bor 2014 >

New waste management projects and initiatives in St. Petersburg

MSW management trends and market drivers

Non-selective waste collectionIllegal disposal of waste, lack of control

Limited financing and low prices for waste production and collectionPoor legislation that does not stimulate recycling

Lack of environmental education among population, slow adoption of waste sorting and separation

Limited demand for recycled raw materialsIllegal disposal of waste, lack of control

Migration and social-economic stratification of societyLow quality of services, lack of professionalism and standards

Growing public and governmental awareness of environmental and waste problems

Severe undercapacity of waste treatment facilitiesIncrease in prices for waste collection and transportation servicesProspects for increasing control on waste collection and logistics Prospects for state financing of new waste management projects

Increasing competitionGrowth in waste volumes through increasing consumption

Huge volumes of generated waste in landfills that need immediate treatment

• State/local authorities face towards MSW

management

• Increase of eco-consciousness among Russian

population

• Moving from burying and incineration to recycling

• Development of

new packaging,

control, waste

management and

other technologies

• International

companies entering

the Russian market

• Exhaustion of natural resources

• Growing of environmental responsibility in both

public and private sectors

• Intensification of economic problems, global

economic recession

• Growing population

and migration

• Formation of

interregional or

federal waste

management

system

Opportunities for Finnish-Russian cooperation on MSW Russian market

MSWlogistic

MSW Eco-techno

parks

Developing new waste

landfills / re-cultivation of

old ones

Niche market: eco-

dwellings

Education and

competence development

Picture: Team Finland / Riitta Supperi

Mapping Finnish expertise and

conceptualizing Finnish offering

Monitoring on-going projects in Russia,

identifying real needs of public and

private clients in Moscow, Saint Petersburg and

other cities, identifying

interested Russian counterparties

Identification of specific districts with progressive

waste management and

clear needs for improvements in St. Petersburg, Moscow or in other regions

Increasing awareness of

Finnish offering in general (a

seminar or series of seminars)

Pilot projects

Protocol of intentions

between Russian (Moscow, Saint Petersburg) and

Finnish high-level authorities on

waste management cooperation

PROPOSALS ON FURTHER ACTIONS

THANK YOU!