Environmental Technologies Industries
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Spain Environmental Export Market Plan
Chapter 4

General Overview

The European Union (EU) has been developing and implementing broad directives regarding waste management for the past two decades. The current thinking centers on preventing the generation of waste to minimize the volume requiring final treatment, recycling and re-use, and repackaging.

The strategy of minimizing packaging waste, and recovering and recycling packaging materials, may result in a trade barrier for foreign manufacturers of a wide range of products that are imported into Europe in the future. If imported products are not packaged according to the regulations that will eventually go into effect, they may no longer be allowed into the market. However, the requirements could also be viewed as a trade opportunity for American companies in the packaging industry. By developing new packaging materials and technology that addresses EU concerns, they may be able to capture a
significant share of the market.

In 1996, the EU took legal action against Spain for not complying with EU waste management directives. As a result of the ruling of the Court of Justice against Spain, the Spanish Council of Ministers created and approved new legislation in August 1997 to bring the country into compliance with EU directives. Among other things, this legislation forces Spanish manufacturers to introduce recyclable packaging material by April 2002. By then, at least 50 percent of all packaging should be recyclable.

As in other environmental areas, the EU Cohesion Fund has been the prime source of funding for infrastructure projects designed to improve waste management in Spain. Funding will continue to flow into this important environmental area. However, future projects that receive grants will be directly related to compliance with EU directives.

As previously mentioned, the Organization for Economic Cooperation and Development (OECD)
estimates that there are about 430 enterprises in Spain in the eco-industry. Together, they employ about 19,000 people and have annual sales of $1.6 billion. There are approximately 79,000 companies that produce, handle, use, and store toxic and/or hazardous substances that eventually have to be treated and disposed of without damaging the environment. At least 18,000 of these companies cause pollution of the air, water, and soil.

Solid Waste Disposal Technologies

Reduction, Collection, Recycling, and Re-use
A priority in Spain is to establish new mechanisms to manage the collection, recycling, and disposal of municipal solid waste. EU directives require gradual elimination of sanitary landfills. Because incineration is not the preferred method for disposal of inorganic and organic wastes, sludge, rubber tires, plastics, etc., and landfills will be eliminated, there is a need to introduce cost-efficient new disposal methods, including waste-to-energy technologies.

Spain uses advanced collection technologies, but it lags behind other EU countries in most recycling methods. Handling of solid waste collection is generally well run, but little progress has been made on waste prevention or reduction. Solid waste collection rests with municipal and regional governments. In most cities and towns in Spain, high-tech equipment operated by workers clean city

However, many traditional small family-run operations collect recyclable waste, usually newspapers, cardboard, and used glass. Although they are not as efficient as larger modern recycling operations, the government feels obligated to protect the livelihoods of families at the lower end of the economic scale.

With the exception of recycling of paper and cardboard, Spain is behind other EU countries in recycling. According to Tecno Ambiente, a leading Spanish environmental publication, over 50 percent of the Spaniards separate their household solid waste to recycle paper products and cardboard. An estimated 74 percent of these paper products are recycled.

A new program to separate municipal waste at households for composting and recycling commenced January 1, 1998 in Madrid. The program involves 176 municipalities. A broad media campaign is being used to promote separating refuse into biodegradable and nonbiodegradable components. The government has given away 600,000 special garbage containers for biodegradable wastes and 78 million yellow plastic bags for inorganic waste. Detailed information on this project can be found in the Madrid Region Official Gazette.

Sanitary Landfills
About 80 percent of the wastes in Spain is delivered to landfills or dumps as compared with about 60 percent of the wastes in other OECD countries. About 25 percent of solid wastes is placed in uncontrolled landfills and the remaining 75 percent goes into sites with varying controls.

Certain regions in Spain require upgrades to landfills. To illustrate, in the historical region of Aragón, despite millions of dollars invested in the past decade, there are more than 100 uncontrolled dumps. About 96 percent of them do not meet the requirements of a controlled sanitary landfill site. They lack perimeter fences to limit site geography and control access to people who want to dispose of hazardous substances. Wastes are often burned without control, posing fire risks and generating considerable air pollution from plastics, used tires, and other toxic substances. These dumps also lack liners or other drainage systems to prevent contamination of the soil and underground water with biological and toxic substances.

Numerous types of wastes are dumped at these sites, from construction to municipal solid waste, animal carcasses, and industrial waste in violation of regulations. A large portion of the approximately 440 tons of waste per day generated by about 550,000 people in Aragón is improperly treated.

As in other areas of waste disposal, the EU is developing directives to govern the design and operation, as well as closure and post-closure management of all types of sanitary landfills. The EU wants to require landfill operators to provide financial guarantees to cover the cost of closure and post-closure management of the facilities. The EU also wants to force government authorities to set prices for waste disposal that reflect actual costs of disposal, including the operation and long-term monitoring of landfills post-closure.

The EU Environmental Ministers Council approved a draft directive in March 1998 for uncontrolled landfills in Europe. Ninety percent of the Spanish landfills do not meet the environmental standards imposed in this draft directive. If approved by the European Parliament, the directive will force the Spanish municipalities to adopt the new standards by the year 2006. Landfills that do not meet the directive's requirements will be forced to close. The directive also requests a gradual reduction of organic
waste dumped in the landfills. The European countries will have to reduce 25 percent of this type of waste by the year 2005, based on the 1995 levels. By the year 2009, 50 percent should be reduced, and by the year 2016, percent. Technical staff from the Ministry of Environment estimated that a $667 billion investment would be needed for implementing this directive.

Spain is one of the EU members that have taken steps to apply stricter standards for new waste landfills in advance of any EU directives. Among other things, Spain will enforce new regulations that will require households to separate wastes at home to divert different items to recycling, re-use, or disposal at a sanitary landfill or to an incineration plant. New landfill sites using modern technology are being designed. User fees will probably pay for the construction of these sites. As in other environmental areas, the needs outstrip the availability of funding to correct past mistakes.

U.S. firms could benefit from the opportunities in waste management, such as supplying liners for modern sanitary landfills. American petroleum and petrochemical companies are among the world's principal suppliers of this item. They are very competitive in price and quality, and are already well-represented in the market.

Incineration is one of the oldest methods of municipal solid waste treatment. Modern incinerators incorporate energy recovery to produce electricity. In Spain, only a few of the existing facilities have installed emission control equipment, such as electric filters and multicyclones.

The EU disfavors incineration. Nevertheless, in August 1997, the Spanish Council of Ministers approved legislation to bring Spain into compliance with the EU directives on waste management using incinerators. Growing public and EU opposition should continue to make it difficult for the installation of new incinerators in Spain.

Therefore, future market opportunities for imported incineration equipment may be limited. However, American companies manufacturing incinerators in Spain and elsewhere in Europe enjoy market advantages.

In 1991, Consell Insular de Mallorca, the regional government for the Balearic Islands in the Mediterranean, issued a public tender for building a plant on the island of Majorca that combined incineration of municipal solid wastes and energy recovery. The consortium formed by Gas y Electricidad, S.A. (GESA); Empresa Nacional de Energia, S.A. (ENDESA); Dragados y Construcciones; Fomento de Construcciones y Contratas (FCC); and Iberdrola successfully bid on the project. Each of the Spanish companies owns 20 percent of the plant, which they operate on contract with the municipal authority.
The project has been affected by substantial cost overruns. Nevertheless, this group of companies is
without a doubt one of the most active and successful in the environmental services area.

Foster Wheeler, an American company with European headquarters in Madrid, is active in the market but mostly through its Italian subsidiary. This company has been more successful in the Portuguese market, where it has obtained important contracts in the environmental area, including an incineration project near Lisbon, which received assistance from the EU Cohesion Fund.

An important player in Spain in incineration is the firm Babcock Wilcox Española, well known as a manufacturer of coal-fired power plants. Despite its name, the company is not a part of the American company Babcock Wilcox. The American firm's local subsidiary went bankrupt years ago, and the Spanish Government took over the subsidiary's assets and continued to operate its factory to sustain employment.

Large French companies, including Compagnie General des Eaux (CGE), are also active in the incineration market in Spain. CGE operates several important incineration plants in the United States.

Anaerobic Digestion and Composting of Municipal Solid Waste
Among the preferred technologies for the treatment of municipal solid waste are anaerobic digestion and composting or organic fraction of waste. These technologies are normally implemented with a system to recover biogas to produce electricity. (One of the few current projects using this source of energy was contracted in May 1997 by the Consorcio de Municipios de la Bahía de Cádiz in the Andalucian region. Although American companies produce these types of technology, there are many strong competitors in the European Community. Plants with a biogas system are already successfully operating in other European countries, such as Finland, Germany, Netherlands, Belgium, and France.

The Cohesion Fund was recently used to make improvements to a large composting plant located in Valdemingómez (Madrid). The improvements included reducing offensive odors that affected the nearby towns of Vallecas and Rivas through the use of large air extractors and filters. The EU grant covered 80 percent of the total cost of the project, which amounts to pesetas 2,600 million ($173 million).

The municipality of Madrid contracted the Spanish firm Dragados for $86 million to build the facility, install the equipment, and manage the project. The firm will receive about 600 tons of biodegradable waste per day. It will produce compost using a process that takes about 8 months. The composting site will be covered, and air extractors will be installed to absorb the odors by forcing them through special underground biological filters. Other equipment will automatically rotate the waste to expedite decomposition.

Madrid produces about 3,600 tons of waste daily, and an estimated 1,800 tons are sent to processing sites. About 550 tons end up in an incinerator. Another 650 tons are recovered for recycling.

The autonomous regions of Valencia and Murcia have the most active composting programs, treating more than 50 percent of the waste generated. The use of compost as a fertilizer has received mixed results in Spain and elsewhere. Some of the first shipments of compost produced in Spain were not well received by farmers. Pieces of glass mixed with the compost have hurt agricultural workers. Another problem is the possible contamination of the compost with heavy metals and other hazardous substances. In spite of these problems, the recent projects funded by the EU in Madrid illustrate that composting has a market in Spain and elsewhere in Europe.

Industrial Solid Waste
There are approximately 79,000 companies in Spain that produce, handle, use, and store toxic and/or hazardous substances that eventually have to be treated and disposed of without damaging the environment. Many of these companies produce industrial solid waste that could either be recycled, re-used, or treated for final disposal. There are no reliable statistics on how many of these companies produce solid wastes and other forms of industrial waste.

Spanish industry uses equipment for treating industrial waste on-site which recycles the waste into the production line. For example, the Ford Motor Company plant in Valencia uses a modern system to recycle water and lubricants that are used in the process of assembling automobiles and a system to recover solid waste, including heavy metals, metal scrap, etc. Cooling liquids used by heavy industrial machinery are recovered, piped into treatment equipment, and recycled back to the production line where solids are separated for disposal.

In many cases, large companies which need recycling technologies, such as vehicle manufacturers, design and develop their own equipment in-house and contract out the manufacturing. Off-the-shelf equipment is generally not used for factory recycling in large industrial plants. It often has to be custom-made to the needs of the end user. Large industrial plants, such as vehicle manufacturers and large fuel burning installations, subcontract environmental technology design and consulting engineers dedicated to industrial waste recycling. Multinational companies are prime customers for this operation. A royal decree of October 1997, which allows companies to receive tax credits for investments in environmental technology, should stimulate the market.

Another industrial-wide practice in Spain, especially by small factories, is to send the waste off-site for treatment or recycling. This process involves transporting potentially dangerous wastes to treatment plants. Although there are treatment facilities throughout Spain, their capacity does not meet the country's needs and some do not meet new EU standards. The cost of treatment and recycling is enormous. Therefore, the demand for treatment and recycling services is not as high as the need.
However, due to anticipated changes in legislation, noncompliance may prove to be more costly.

There are multiple local manufacturers of recycling equipment and service providers in Spain. These firms may be targeted by American companies as possible buyers, joint-venture partners, or manufacturers of U.S. technology under license. Service providers are also prime candidates to purchase American technology.

Although recycling of industrial waste is now carried out throughout Spain, it is a very young industry. As recent as 1989, recycling of industrial waste was not considered a viable business, and very few companies, if any, provided this service. EGMASA, the public sector corporation fully owned by the regional government, created a successful joint venture with private investors to recycle and treat industrial wastes. Other new private and public companies have started to enter this new lucrative trade created by environmental legislation.

Nevertheless, industrial wastes generated by unscrupulous entrepreneurs still find their way to unprotected landfill sites, illegal dumps, and bodies of water. The Spanish Government has started to apply fines to enforce environmental legislation to protect the environment. As enforcement of environmental legislation increases, business opportunities for industrial waste recycling and
treatment will undoubtedly increase as well.

Hazardous Waste Disposal Technologies

General Overview
In October 1993, the Spanish State Secretariat for Environment and Housing released the results of the first inventory of contaminated sites in the country. The investigation revealed that 4,532 sites were possibly contaminated by toxic industrial waste and the estimated cost of the cleanup was estimated at $600 million. In September 1996, the Spanish news media reported that 22 percent of the contaminated sites in Spain were located in the Basque Country (in the northern part of Spain) where heavy industry such as cement plants, steel mills, etc. has traditionally been located.

There are an estimated 18,000 soil and subsoil polluted sites in Spain. The cost of cleaning only 250 of the worst contaminated sites is estimated at $2.3 billion. The Spanish Plan for Recovery of Contaminated Sites (1995-2005) was signed into law in 1995. The main source of financing for these soil remediation projects will be the EU Cohesion Fund. Its share will be approximately $554 million.

The Ministry of Environment stated in its 1996 annual report that investment in the National Plan for Contaminated Soil Recovery in 1995 totaled only pesetas 238.7 million (approximately $1.6 million). It did not even reach half of the total approved budget, which was pesetas 710 million (approximately $4.7 million). Of the total approved budget, pesetas 546 million (approximately $3.6 million) was transferred to the autonomous communities. The Catalunya region was allotted the highest amount (pesetas 180 million or about $1.2 million). Despite the fairly low amount of funds available for the plan, Catalunya was the only region that spent all the money allocated to it. Opportunities for the sale of equipment and services will arise as law enforcement increases and regional and local level authorities implement the plan. Due to the insufficient action taken in the past, several projects should be developed to meet the plan's 2005

Assessment of the degree of pollution has been carried out for 395 sites. Of these, 27 percent are in or close to urban areas; 60 percent pose a risk of groundwater pollution; and 50 percent pose a risk of surface water pollution. The pollutants involved are mainly heavy metals. The sites are classified into three categories: 113 sites are considered high priority for remediation, posing serious risk; 122 sites are classified for medium-term remediation; and the rest are scheduled for no immediate action but will be continually monitored and controlled. The amount of actual cleanup carried out has been fairly
limited so far.

There is no reliable data related to the size of the Spanish market for equipment used in cleaning contaminated sites. Since some of the equipment has dual purposes, it is difficult to ascertain if a centrifuge or any other item is being imported for this or some other purpose. There are many Spanish engineering firms that have capable personnel for technical studies, and some of the equipment used in remediation projects can be purchased locally from Spanish manufacturers. However, imported technology, both technical know-how and equipment, is usually necessary for such a massive and
complicated work. Some American companies, like Dames and Moore, are already working in Spain in the
recovery of contaminated sites.

European Union Definition of Hazardous Waste
The European Union has been engaged in a long-term effort to define hazardous waste. The critical component of this exercise is to distinguish hazardous waste from solid waste. The EU drafted the “European Waste Catalog (EWC),” and published it in its official journal in 1994. The EWC will be periodically discussed, reviewed, and expanded, if necessary. However, there is no basic disagreement on the broad category of hazardous waste. Spain basically follows the 1978 EC directive on toxic and dangerous waste for defining hazardous and toxic waste. It's list of such substances is divided into 30 categories.

Recovery of Sites Contaminated by Hazardous Industrial Waste
The prime contractors for cleaning contaminated sites in Spain are the national government and the regional governments. The large investment needed for remedial action forces the governments to design long-term plans. These historically have been be carried out through the financial assistance of the EU. One of the problems associated with cleaning contaminated sites is that the caloric value of waste is lost over time as biogases escape and biodegradable components degrade. The production or recovery of energy as part of the cleanup process is normally costly.

For successful bidding on government contracts, particularly for cleaning contaminated sites, U.S. companies need to have a physical presence in Spain. Joint ventures with either Spanish or other European firms may also enhance the competitive position of any American company interested in bidding on this work. This strategy applies to both engineering and design work, as well as to the sale of specialty equipment.

Who's Who in Waste Management in Spain
This section lists the companies involved in Spain's waste management by subcategory.

Solid Waste Collection Services
Browning Ferris Industries Ibérica (Grupo). This U.S. company operates the Can Mata landfill, which is used for treatment and long-term deposit of industrial waste and urban solid waste. It also operates a plant for the treatment and recycling of urban solid waste at Mollet del Valles, Sant Joan Despi, and Tarragona. Active in Spain since 1974, the company provides waste collection and treatment to over 100 municipal governments throughout Spain, particularly in the northeast, and operates over 450 specialty trucks.
Cadagua. The company constructs, develops, and manages infrastructure projects, including large
environmental projects. It is part of Grupo Ferrovial.

Empresa de Gestión Medioambiental (EGMASA). EGMASA is an environmental services company in the
Andalucian region. It also undertakes environmental projects internationally. The company reported sales of more than $73 million in 1996.
Browning Ferris Industries Iberica. Part of Browning Ferris Industries Iberica (Grupo), the company
collects, transports, handles, and manages urban solid waste and street cleaning.
Servisa Tarjetas. The company is part of Red Espanola de Servicios S.A., which is also part of Cepsa
Estaciones de Servicios S.A., one of the most important Spanish petrochemical companies. Servisa Tarjetas provides credit card services to the road transport sector in Spain.
Agricultores de la Vega de Valencia. The company collects and manages solid waste for Valencia City and other small towns in Valencia region. It also manages Valencia City's street cleaning.
Gestión y Técnicas del Agua. The company is involved in water supply and urban solid waste collection.
It is part of the French environmental company Saur.
Cooperativa de Usuarios de Servicios de Limpieza Púbica y Domiciliaria de Barcelona. The company
collects and handles urban solid waste in Barcelona.
Dragados. This is the second largest Spanish construction company. Since its diversification into the
environmental services area, the company has obtained contracts for collection and treatment of solid municipal waste in several large Spanish cities. Its 1996 sales exceeded $2.8 billion (based on an exchange rate of one U.S. dollar equals 150 Spanish pesetas).
FCC Medio Ambiente, S. A. This is a subsidiary of the largest Spanish construction company, Fomento de Construcciones y Contratas (FCC). It handles municipal solid waste collection and recycling programs, as well as industrial waste, for several municipalities in Spain and other countries.
Ferrovial + Agromán. This company's annual sales exceed $2.4 billion. In the environmental sector, the
company provides solid waste and management services of sanitary landfills in several cities. It is an important potential customer for American technology.
Vertresa. The company received a contract to handle solid waste collection and the operation of a landfill near Valdemingómez to service the Madrid metropolitan area.
Argon, S. A. This company is a subsidiary of Praxair, Inc., of the United States. It employs about 470 workers in Spain and manufactures industrial gases and welding equipment, among other things.
Calor y Caldería, S. A. This Barcelona-based company manufactures boilers and other metallic equipment.
Danima Marrel, S. A. The company manufactures incinerators, waste collection trucks, and compacting equipment.
Sociedad de Ingenieria y Transportes Auxiliares, S. A. The company manufactures trucks with dedicated
specialty equipment for waste collection, compactors, small trucks for street sweepers, large trucks for sweeping highways, tanker trucks, trucks equipped with vacuum cleaners, and specialty trucks for cleaning containers with hot water treatment.
Masias, S. A. The company manufactures machinery for sorting and recycling urban solid waste from the demolition of old buildings.
Amedeo Farell, S. A. The company manufactures equipment for sorting and recycling urban solid waste, compacting and bailing, and handling metal waste for recycling.
Sanitary Landfill Operators
Browning - Ferris Industries Iberica, S. A., Dragados, FCC Medio Ambiente, S. A., Ferrovial +
Agromán, and Vertresa.
Equipment for Sanitary Landfills
Argon, S. A., Calor y Caldería, S. A., Danima Marrel, S. A., Sociedad de Ingenieria y Transportes
Auxiliares, S. A., Masias, S. A., and Amedeo Farell, S. A.
Iberdrola. This private electric utility, with over 12,000 employees, has expanded into the environmental
technology business.
Babcock Wilcox Española. This company, formerly owned by the U.S. firm Babcock Wilcox, manufactures
desalinization plants, incinerators for urban solid waste, many different types of boilers, turbines, and other heavy industrial products. Its principal plant is in Bilbao. In December 1997, a consortium formed by Tecmed and Babcock Wilcox was awarded a contract to build a new solid urban waste treatment center in La Coruña, designed to treat all type of urban solid waste. Materials collected are received in the treatment center, which has three independent areas that complement each other; they are the recycling and classification plant, organic waste treatment plant, and packaging plant.
Danima Marrel, S. A. The company manufactures incinerators, tanker-trucks, and other equipment.
AEG Iberica de Electricidad, S. A. The company manufactures water treatment equipment and incinerators for solid waste. It also produces electricity by cogeneration.
CGE. This company manufactures and operates incineration plants throughout the world.
Grupo Ferrovial. The company is a key construction company in Spain. It has branched into the environmental services field and has obtained important concessions to handle municipal solid waste and the management of landfill sites and incinerators. The company is a potential client for incineration plants and similar technologies.
Industrial Waste Recycling and Treatment
ASER, S. A. This is a construction and real estate company. It invests in and promotes other companies’
products and services. It was established 24 years ago in Barcelona.
Derivados de Pintura S.A. (DERPINSA). This company recuperates and recycles industrial liquid
chemical waste and paints. It also sells chemical products.
Distiller. This company distills and recycles chemical liquid products in general.
ECOCAT. Part of the French environmental firm Teris, this company treats industrial waste.
EGMASA. Empresa para la Gestion de los Residuos Industriales S.A. (EMGRISA). This company manages and assesses services for companies in the industrial waste treatment sector.
Empresa Nacional de Residuos Radioactivos S.A. (ENRESA). This company is active in radioactive waste
treatment and storage.
Entitat Metropolitana (Emshtr). This company provides urban solid waste management and water
services to the Barcelona city hall.
Hidroonor, S. A. The company manages and treats industrial waste, working mainly in northern Spain
(Basque Country).
Sader, S. A. de Descontaminaron y Eliminación de Residuos. The company provides waste management
treatment services and manufactures fertilizers.
Tratamientos y Recuperaciones Industriales S.A. (TRISA). The company provides industrial waste
management and treatment. It owns a physical-chemical treatment plant.
Valles Hermanos, S. A. (VANOSSA). The company provides industrial disolvents and recycles fluid waste. It sells industrial cleaning products.
Valls Química, S. A. The company recycles industrial disolvents recycling. It is part of the French company Tredi S.A.

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