Over the past few years, we have become accustomed to operating in volatile markets characterised by new laws and that are almost impossible to predict. This will remain relatively unchanged in 2024 and it is precisely these factors that continue to make our markets so exciting, challenging and appealing when it comes to finding the right solutions. With our unit Recycling & Waste, we moved a considerable volume of waste of over 750,000 tonnes in 2023. Despite a declining volume of waste and ever-increasing waste prevention, we will continue to expand our trading volume with the Brüning Group in 2024.
A brief look back at the start of 2024: “30% less input” – a figure that is repeatedly communicated to the market by waste wood collectors when it comes to the quantities of waste wood received. The factors contributing to this are well known. The construction industry is weakening, less bulky waste is being disposed of and the clean pallet wood is often used in private fireplaces in times of high wood prices. What was once 8 million tonnes of waste wood in Germany is now reportedly only 5.5 – 6 million tonnes. On the other hand, new biomass power plants are being built that rely on the combustion of waste wood. Waste wood incineration plants focussing on process steam and district heating are gradually commencing operation and creating additional demand on the market. If we add the demand from the EEG1 or old EEG plants and the wood-based materials industry, it quickly becomes clear that there is not enough waste wood for everyone. As a result, two waste wood power plants have already ceased operations this year, and several plants are not operating at full load because either there is not enough wood or the price of electricity and wood are not in proportion to each other. At present, the market assumes that other power plants will cease operations sooner or later because it makes no sense to continue operating them.
The introduction of the CO2 levy has added an additional cost burden for waste and waste wood incinerators. As there is still no feedback from the DEHSt2 on the monitoring plans, some are still uncertain about the amount that will have to be paid at the end of 2024. Uncertain times remain.
The CO2 tax has also had a major impact on the market for commercial waste. In contrast to the market for waste wood, a relatively clear market picture is emerging after the first quarter. The waste incineration companies are very comfortably supplied or in some cases are full to the rafters with commercial waste. Sales opportunities are narrowing rapidly at the moment. The CO2 levy is being passed on 1:1 to the market by these companies – very smoothly. Tight sales channels in Germany confirm our internationalisation strategy. In the coming years, we will continue to focus on linking European surplus volumes with European countries with strong demand. For example, we recently expanded our international team by hiring a Polish employee in order to establish additional material flows. Logistics is playing an increasingly important role. Alternatives to the classic walking floor have long been developed and established on the market, but new routes usually require a customised logistics solution, which is why we are constantly adding new transport routes to our portfolio.
In view of the ongoing dynamics and uncertainties of the markets, the task of finding suitable solutions remains challenging. Developments in the respective markets emphasise the need for a global perspective and a flexible logistics strategy in order to meet changing needs. We are determined to consolidate our position as the Brüning Group and expand our international networks in order to be able to act flexibly and successfully meet future challenges.
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1 German Renewable Energy Sources Act (Erneuerbare-Energien-Gesetz, short EEG)
2 German Emissions Trading Authority (Deutsche Emissionshandelsstelle, short DEHSt)