Description
In 2017, 70 percent of the global waste has been generated in cities - and a rising trend is expected in the next years. One step to efficiently and economically process this waste is the waste separation at source. It is fundamental for reusing and recycling resources because it prevents the contamination of the materials, thus increases their quality. As this system relies on the active participation of citizens, it needs to be simple and easy to understand by the users. The main aspect is that user sort waste according to the materials it is made of, but also that citizens can be identified, thus allowing differentiated pricing when people recycle more or less. In addition, this system can also facilitate composting and the recycling of other stuff like electronics or clothes.
Business Model
Implementation Facts
Average Implementation Time: less than 6 months
Market Overview
Sorting waste at the source can be done in different ways: Single or multi-stream. In the single stream version, people dispose recyclable materials in one commingled container, while, in a multi-stream system they have to sort them into two or more bins. According to Lakhan (2015), the single stream system has lower costs of collection, however, the value of the material collected is higher and processing costs are lower in multi-stream systems. As the graphic below shows, the revenue is higher implementing a multi-stream system.

(Lakhan, 2015) Based on data from 223 municipalities from Ontario (Canada) on a period of ten years.
Pricing: Example Pay As You Throw
A common regulation to reduce waste generation and increase recyclables is the called Pay As You Throw system (PAYT). In this scheme, households pay a fee which varies according to the amount of waste they generate. PAYT systems consist of a fixed fee or a tax and a variable element that can depend on "container sizes, the number of sacks, frequency of collection, or the weight collected" (Seyring et al., 2015: 15).
Example of PAYT System in the Veneto Region, Italy:

(Simon, 2014)
Example: Parma (Italy)
The city of Parma implemented a new waste management system in 2014, which included a Zero Waste strategy, door-to-door collection, and the introduction of the bio-waste collection. The table shows how the changes made by the city reduced the costs of waste management, which included a decrease of treatment costs for residual waste (due to less generation) and an increase of the income from recycling (as there were more materials and less contaminated). In addition, more jobs were created with the introduction of this system (Rosa, 2016).

(Rosa, 2016)
Driving Factors
Government initiatives
Governments are setting recycling targets to increase the amount of waste recovered. In this context, the most progressive initiative is the Zero Waste strategy, whose aim is to recover and reuse all materials avoiding incineration or landfill burying. Cities in Italy (Capannori, Priula, Treviso, Parma), Spain (Argentona, Gipuzkoa), Slovenia (Ljubljana, Vrhnika) and France (Roubaix) have already started to implement Zero Waste policies (Zero Waste Europe, 2017).
Circular Economy - European Union
In 2015, the European Commission adopted the Circular Economy Package, which aim is to reduce resource consumption through better design and to increase reuse and recycling. This package includes legislative proposals on waste with new targets, action on food waste, a finance support platform, and some other regulations (European Commission, 2017).