Market News

 December 13, 2009
French Waste-to-Energy Market Report

 The French Waste-to-Energy (WTE) market is a mature, developed market, which experienced rapid growth in the early 2000s due to new construction, upgrades and refurbishing of large plants. The market, valued at approximately USD 150 million, is expected to grow at a more tempered pace over the next 5-10 years with a focus on small and medium-sized plants in less densely populated regions. The WTE industry treats over 12 million tons of municipal solid waste (MSW) and related waste annually and generates more than 10,000 GWh of energy per annum.

The Grenelle Act, France's overarching vision for environmental policy, in addition to current EU environmental legislation and directives, is expected to drive this market in the near term. While the market is highly concentrated and dominated by French industry, some niche opportunities may exist. These include energy efficiency, NOx reduction and treatment, ISO 14001 and EMAS certification and technology for small cost-effective waste-to-energy plants and heat transfer and transportation.

Market Demand

Over the past few years the market has slowed considerably due to the increased costs to build WTE plants, the strong presence of low-cost nuclear energy and an incomplete waste management policy. Currently, landfilling with pre-treatment has become a temporary solution until the WTE policy can be clarified, which has put the market at a standstill. Furthermore, government policy is driving the market towards waste reduction, waste reutilization, recycling and composting and away from incineration and landfill. The French Pollution Tax (TGAP - Taxe Générale sur les Activités Polluantes) for incineration has made incineration and landfilling at least as costly as alternative waste treatment approaches.

At the same time the TGAP has created incentives for more flexible WTE cogeneration plants (electricity and heat) via tax deductions per ton of waste treated. Consequently, according to industry officials, WTE generation from incineration could double by the year 2020 without increasing the amount of waste treated. In addition, the national renewable energy plan, which includes WTE incinerators, will provide up to 60% financing for investment for grid hookup and additional financing for thermal energy production for 5 years. This taken together should stimulate the market in the medium- to long-term.

Three major WTE incineration plant construction contracts have recently been awarded, which include the Clermont-Ferrand site for 300,000 tons of waste per year; the Saint-Thomé site for 100,000 tons per year; and the Marseille site for 150,000 tons per year. Given that contracts and construction for most of the large WTE plants have been completed, market demand is expected to come from the small to mid-sized plants (80,000-100,000 tons per year).

Market Data

The overall market for solid waste management in France, which includes WTE incineration, is valued at approximately 5 billion euros and treats over 47.5 million tons of waste per year. There are approximately 120 WTE plants that treat over 12 million tons of MSW and related waste annually and generate more than 10,000 GWh of energy per annum.

The market for WTE plant construction can vary widely from year-to-year due to the long sales cycle and high capital investment costs, but is valued at approximately 150 million euros. Future orders are expected to increase the market size in the next couple of years.

Best Prospects

Over the past several years industry has focused on supplying the large WTE incineration plant market. However, the need to treat waste in smaller cities and less densely populated communities in France has driven demand for small to medium-sized WTE incineration plants (80,000 to 100,000 tons of waste per annum).4 Government policy is also creating opportunities for the market. Policies have placed greater emphasis on waste reduction, reutilization and recycling, which should reduce the amount of waste available for incineration. In addition, the French Pollution Tax for Incineration (TGAP) and the National Renewable Energy Plan have created incentives for incineration plant operators to increase energy output. This includes thermal energy production and electricity generation.

Therefore, services, processes and technologies in energy efficiency for increased energy production and heat transportation are expected to be in big demand in the near future. Moreover, these TGAP tax incentives are also increasing demand for ISO 14001 and EMAS certification as well as cost-effective NOx reduction and treatment technologies. The emphasis on small to mid-sized plants will also create some technical challenges, given minimum economies of scale required to produce energy efficiently. One of the major problems has been the malfunctioning of the turbo alternator due to lower quantities of waste and hence, steam. Therefore, turbo alternators designed and built to operate efficiently with smaller quantities of steam will also be in big demand

Market Entry

Due to a long-standing tradition in environmental waste management, utility, engineering and centralized government planning, France has developed highly integrated total management processes. The result has been a handful of major environmental, utility and engineering firms that play a major role in design, capacity, technology choice and ultimately the future direction of this industry. This has also created a highly integrated ecosystem in which companies compete for some projects and collaborate on others.

Hence end-users, suppliers and subcontractors may compete, collaborate and form joint-ventures depending on the project. Consequently, companies interested in entering this market will have to have a flexible business model that enable them to compete with, supply to and purchase from other firms present in the market. Moreover, given that the majority of the companies are French, a strong French culture is present in business transactions and market development activities.

Therefore, US companies seeking to enter this market will need to develop a strong local presence with a strong understanding of French business practices, networks and contacts. On the service side of the market, engineering, design and MRO companies will need to be able to respond in French and in real time and be familiar with local systems, laws and regulations. This could take the form of an agent, representative, distributor, subsidiary, strategic alliance, joint-venture or acquisition.


Although no mandatory registration procedures exist, it is highly advisable that equipment sold in France be tested and approved by AFNOR, France's standards agency. U.S. exporters should, therefore, contact AFNOR to get norms and specifications. Most importers, agents or distributors should be able to provide information on certification of products.

Another important accrediting organization is the Laboratoire National d'Essais (LNE), or National Testing Laboratory, which issues certifications for various products, materials and techniques. The LNE can also provide information on recommended certifications.

ISO 14000 has become an integral part of doing business in France and the rest of Europe. In fact, many of the EU environmental regulations are related to the ISO 14000 norms. Therefore, U.S. companies that are ISO 14000 certified will generally have an easier time entering the French and European markets.

Extracts from: French Waste-to-Energy Market, US Commercial Service

Source: buyusainfo.net