Resources, Conservation and Recycling 46 (2006) 302–320

A model for assessing the economic viability

of construction and demolition waste
recycling—the case of Ireland
Xavier Duran a , Helena Lenihan a,∗ , Bernadette O’Regan b
aDepartment of Economics, Kemmy Business School,
University of Limerick, Limerick, Ireland
b Centre for Environmental Research, Foundation Building,
University of Limerick, Limerick, Ireland

Received 30 August 2004; accepted 4 August 2005

Available online 22 September 2005

Abstract

Construction and demolition waste (C&DW) recycling forms the prime focus of this paper. Drawing
on evidence from data collected by the authors in Ireland, the paper develops a model to assess the
economic viability of creating markets for recycled C&DW. Currently, most of the waste generated in
construction and demolition sites is composed of materials such as concrete, bricks and blocks which
are disposed of in landfill sites due to the absence of markets for their recycled forms. The model
developed in this paper is based on the potential decisions facing the waste producer and the aggregate
user. Once the model is developed and the underlying assumptions outlined and analysed, the paper
then proceeds to assess the impact of the imposition of environmental taxes and the use of subsidies
on the economics of C&DW recycling. The paper proposes the establishment of three potential Irish
recycling centres located in Dublin, Limerick and a mobile centre. Conclusions are presented which
suggest that economic viability is likely to occur when the cost of landfilling exceeds the cost of
bringing the waste to the recycling centre and the cost of using primary aggregates exceeds the cost
of using recycled aggregates. The paper also clearly demonstrates that recycling centres benefit from
economies of scale implying that an increase in the scale of a centre, in turn results in a decrease in
recycling costs. The overriding conclusion of the paper is that market based instruments are likely to
be the best option for policy makers. While the model presented is ‘tested’ on real data derived from
surveys with Irish local authorities (responsible for waste management in the Republic of Ireland

∗ Corresponding author. Tel.: +353 61 202079; fax: +353 61 338171.

E-mail address: helena.lenihan@ul.ie (H. Lenihan).

0921-3449/$ – see front matter © 2005 Elsevier B.V. All rights reserved.
doi:10.1016/j.resconrec.2005.08.003
 X. Duran et al. / Resources, Conservation and Recycling 46 (2006) 302–320 303

(ROI)) and aggregate producers, the underlying methodology of the model developed is clear and has
a wider international applicability and relevance to the study of C&DW.
© 2005 Elsevier B.V. All rights reserved.

Keywords: Construction and demolition waste recycling; Economic viability; Model; Market based instruments

1. Introduction

Concern regarding scarce landfill space and the resulting increase in landfill costs are
encouraging policy makers and waste producers to find new methods to divert waste from
landfills. Thus, construction and demolition waste (C&DW) has been identified as a potential
source of waste reduction (Environmental Protection Agency, 2001). This type of waste is
produced by the construction of new buildings or the demolition of existing structures and
is mainly composed of materials which could be reused or recycled. A survey carried out by
the authors for this research among local authorities responsible for landfills in the Republic
of Ireland showed that although a small amount of C&DW is used to reclaim land or as
cover in the operation of landfill sites, most of it is landfilled or illegally dumped.1 Only
43% of C&DW was recovered or recycled in 2000 in the ROI (personal communication,
JBA Consultants, 25th August, 2003). Markets for recycled materials such as glass and
metals are already well developed. Most of the volume of waste generated in construction
and demolition sites, however, is composed of materials such as concrete, bricks and blocks,
which are currently disposed of in landfill sites due to the non-existence of markets for their
recycled forms. There is potential for these materials to be crushed and used as secondary
(recycled) aggregates in applications such as road base and sub-base construction. Other
uses include bulk fill or concrete (Guthrie and Coventry, 1998). Along with conserving
already scarce landfill space, there are significant environmental benefits to be gained in
terms of reducing the volume of aggregate extraction as well as reducing the number of new
quarries necessary. This paper studies C&DW recycling and outlines the factors that make
it economically viable. While the framework developed in this paper is ‘tested’ in the Irish
context, the logic of the approach is clear and has much wider international applicability
regarding the study of the economics of C&DW.
This paper outlines the situation concerning C&DW management and aggregate pro-
duction in the ROI and policy implications in Section 2. Section 3 moves on to outline the
methodological approach adopted in this research. Section 4 describes the model developed
as part of this research and analyses the impact of the imposition of environmental taxes and
the use of subsidies on the economics of C&DW recycling. Section 5 uses real data obtained
in the ROI to test the model presented. Section 6 analyses the changes in the model when
potential recycling centres are not perfectly competitive. Finally, the paper then concludes
with a summary of the key findings.

1 As part of this research the authors undertook a postal survey and a telephone follow up of 29 local authorities

responsible for waste management in the ROI. This survey was conducted from January to June 2003. A telephone
survey of 15 aggregate producers was also undertaken during the period.
304 X. Duran et al. / Resources, Conservation and Recycling 46 (2006) 302–320

2. Current practice in the Republic of Ireland and implications for policy

Surveys carried out among local authorities and quarries in the ROI in 2003 which
constitutes the primary research of this paper found that landfilled waste was charged at
D 141.80/tonne on average and primary aggregates were charged at D 7.40/tonne. Currently
the low cost of disposing of C&DW in landfill sites together with the low cost of primary
aggregates makes it impossible for a sustained level of recycling to occur. C&DW producers
thus, dispose of most of their waste in landfill sites,2 and users of aggregates mainly use
primary aggregates. Society, however, incurs the environmental costs resulting from both
waste disposal and aggregate extraction. Private contractors benefit from low costs while
society incurs a high environmental cost. The policy maker must thus ensure society does
not incur the external cost. Possible approaches include:
(1) Command and control: The policy maker could impose a limit on the use of landfill
space and primary aggregates use. For further discussion on command and control refer
to Connolly and Munro, 1999.
(2) Market based instruments: The policy maker could try to internalise the externality
by ensuring that the polluters (C&DW producer or primary aggregate user) incur the
external costs. This situation summarises the ‘polluter pays principle’ and inspires most
modern environmental legislation.3 For further discussion on market based instruments
refer to Pearce and Turner (1990).
The main limitation of the command and control option is that it can be very costly
as policy makers must monitor the use of landfill and quarried stone and must punish
those breaching the rules. It can also encourage illegal dumping. The use of market based
instruments seems a more optimal solution because they are more efficient and ensure the
operation of markets to allocate resources. The use of taxes and subsidies as market based
instruments constitute an efficient way to internalise externalities.
This paper concentrates on two environmental impacts: (1) the amount of C&DW land-
filled, and (2) aggregate extraction. The authors suggest that recycling C&DW could result
in a decrease in both the amount of C&DW landfilled and the amount of primary aggregate
extracted thus reducing the environmental impacts. The purpose of this paper is to deter-
mine the economic conditions which encourage C&DW recycling and to analyse the policy
measures which contribute to this objective. The remainder of this section concentrates on
the analysis of the situation in the ROI.
The amount of C&DW recycled or recovered in the ROI was estimated to be 43% in
2000 (personal communication, JBA Consultants, 25th August, 2003). However, by 2001
this figure had increased to 65.4% (Environmental Protection Agency, 2002). Thus, there
has been significant progress concerning the government’s target of at least 85% of C&DW
recycled by 2013 as set out by the policy statement Changing Our Ways (Department of the
Environment and Local Government, 1998). Projects such as the ‘Demcon 50–50’ in the

2 Use of C&DW in the operation of the landfill site is considered as reuse of C&DW and thus is not considered

disposal at landfill site in this research.

3 One example of legislation is Council Directive 1999/31/EC of 26 April 1999 on Landfill of Waste (Internet

Reference 1).
 X. Duran et al. / Resources, Conservation and Recycling 46 (2006) 302–320 305

landfill site in Cork city where a public private partnership (PPP) resulted in the construction
of a centre to recycle C&DW and other private projects in Dublin resulting in the creation
of recycling centres for commercial use, contribute to the success in increasing recycling
rates. It is believed the increases in landfill charges and the imposition of a landfill levy of
D 15/tonne in June 2002 have contributed to this situation. There is still plenty of scope to
encourage C&DW producers to recycle.
The key issue of concern however is that of the usage of primary aggregates. This paper
argues that recycled C&DW could in the future act as a substitute for primary aggregate
extraction much more than is currently happening. The above assertion is made even when
one considers the fact that the demand for aggregates in the ROI increased from 50 million
tonnes in 1997 to 110 million tonnes in 2001 and is expected to increase further to 120 million
tonnes in 2021 (personal communication, JBA Consultants, 25th August 2003). There is
no doubting the fact that the existence of a large number of quarry sites producing primary
aggregates at a low price together with the preference for the use of primary aggregates as
opposed to recycled aggregates will make substitution difficult, nevertheless substitution is
possible.

3. Study scope and methodological approach

3.1. Scope of the study

In this research, the economic viability of recycling is examined purely from the per-
spective of the potential savings to be accrued, as it was identified during the survey as being
the prime motivation for private contractors to engage in the recycling business. Recycling,
thus, only takes place as long as C&DW producers find it cheaper than landfilling and as long
as users of construction aggregates find recycled aggregates cheaper and of similar quality
than newly quarried aggregates. Under these circumstances, recycled C&DW markets are
viable once it is ensured that illegal dumping does not occur. This paper identifies the most
relevant variables that explain the decision of a C&DW producer regarding waste disposal
(transport costs, landfill charges and recycling costs) and the decision of a construction
aggregate user regarding the type of material to use (transport costs, quarried aggregate
prices and recycling costs). The variables are modelled in terms of the decision of the waste
producer and the aggregate user in the form of mathematical inequalities which determine
whether it is economically viable or not to create markets for recycled C&DW. The model
includes an analysis of the effects of taxes and subsidies on recycling.
The study moves on to test the model for the case of the ROI. Three scenarios are
presented. The data used in the development of the scenarios was obtained from surveys
carried out to all local authorities responsible for landfill management and to producers
of primary aggregates. Data concerning the requirements for the construction of potential
recycling centres was obtained from interviews with recycling centres in other countries.
As no such C&DW recycling centres exist in Ireland, other EU countries with developed
recycling markets were used as proxies for costs. The analysis estimates the savings resulting
from the creation of the potential recycling centres and the use of taxes and subsidies in the
ROI to measure the efficiency from recycling.
306 X. Duran et al. / Resources, Conservation and Recycling 46 (2006) 302–320

3.2. Methodological approach

This research analysed the current management of C&DW in the ROI. Surveys were
carried out in the ROI to collect information and test the model. From January to June 2003,
the authors undertook a postal survey and a telephone follow up of 29 local authorities
responsible for waste management in the ROI to find the charges for C&DW, and whether the
waste is accepted. Another survey of 15 aggregate producers was also undertaken during this
period to find the charges for primary aggregates. In addition to the above, interviews were
also carried out with general recycling centres, suppliers of crushers, waste management
companies and policy makers for more information required in order to estimate the costs
of recycling. This was integrated with the data from C&DW recycling centres in other
EU countries. Some policy makers were also interviewed.4 This primary research together
with some secondary research obtained from sources such as the Symmonds Report (1999)
allowed the identification of the relevant variables and the development of the model. The
underlying assumptions of the model were subsequently identified and the model tested.

4. Model development

Under the ‘polluter pays principle’, the producer of C&DW and the user of primary
aggregates must incur the environmental costs of their actions. This encourages them to find
environmentally acceptable solutions with the objective of minimising the costs incurred.
The creation of markets for recycled C&DW is thus seen as a solution which benefits both
society and industry as follows:
• The C&DW producer if they incur lower disposal costs.
• The aggregate user if they incur lower costs when buying the secondary form.
• Society as it incurs lower environmental costs.
The current section identifies and models the factors that determine the decisions of both
C&DW producers and aggregates users to either (a) landfill or recycle C&DW and (b) use
primary or recycled aggregates. The model developed is then tested in a number of proposed
scenarios in the ROI including recycling centres in Dublin, Limerick and a mobile recycling
centre.
Irish sources on C&DW management only offer guidelines to cope with growing waste
or are reports from policy makers attempting to minimise waste production with the objec-
tive of meeting imposed targets (ENFO, 2000; Environmental Protection Agency, 1998;
Department of Environment and Local Government, 2002). The Symmonds Report (1999)
however, recognises economic viability as the underlying requirement for the adoption of
C&DW recycling. The model outlined in this section builds on a model described in the
Symmonds Report (1999). Other developments in C&DW recycling viability models are
outlined in the ‘Programa de Residus de la Construccio a Catalunya’ (1996) published by

4 Additional information was also obtained from the ‘Junta de Residus’ and ‘Gestora de Runes’ from the

Catalan Government, as a more developed C&DW recycling market exists there. Data was also gained from
personal communications with Irish local authorities.
 X. Duran et al. / Resources, Conservation and Recycling 46 (2006) 302–320 307

the Catalan Government. Presented below are the underlying assumptions and subsequent
development of a model to assess the viability of creating markets for recycled C&DW.

4.1. Assumptions underlying the model

• The waste producer and aggregate user decisions are assumed to be based on cost minimi-
sation opportunities. This is a plausible assumption to make since most private contractors
usually operate under conditions of cost minimisation or profit optimisation.5 However,
other reasons such as the quality of the aggregates may also be important regarding the
decision of the type of materials to be used. In this sense, the Aggregain programme
(Internet Reference 2), part of the ‘Waste and Resources Action Programme’ (WRAP) in
the United Kingdom has involved the development of recognized standards to guarantee
the quality of recycled waste. A forum of stakeholders involved in the production and
use of recycled aggregates agreed on the need of a guidance document for producers and
users of this type of aggregate. This resulted in the publication of the ‘Quality Protocol’
(WRAP, 2004) which (a) sets out the control process for producers so that they can ensure
their product is fully recovered and (b) provides users with common aggregate quality
standards. Cost minimisation is thus a key factor and can lead to the creation of markets
for recycled C&DW if quality requirements for the recycled aggregate are met.
• The C&DW producer can either dispose at the landfill site or in the potential recycling
centre. In practice, most landfill sites do not accept C&DW apart from the amounts
necessary for the operation of the site. Most local authorities issue permits allowing the
disposal of non-hazardous C&DW at sites where it is required for land reclamation or
cover. In such instances, C&DW is accepted free of charge. In the model presented in
this study, only the part not used in landfills for cover or reclamation is considered.
• Aggregate users can only use quarried stone or recycled C&DW.
• There is no possibility of illegal dumping. This is an inherent limitation of the model as
evidence suggests levels of illegal dumping were very high, especially in countries such
as the ROI (Symmonds Report, 1999). According to the Symmonds Report (1999), illegal
dumping is due primarily to poor legislation and monitoring systems. It should be borne
in mind however that more stringent legislation such as the Council Directive 1999/31/EC
on the Landfill of Waste is currently resulting in lower levels of illegal dumping making
this assumption more realistic.
• Recycling centres are perfectly competitive. This implies that the objective of the recy-
cling centre is not to make a profit and thus the prices charged for C&DW going into the
centre and for recycled aggregates need only cover the cost of recycling. This assumption
is realistic only if the government manages the recycling centre. Section 6 analyses the
situation whereby recycling centres make a profit.

4.2. Decision of where to dispose of the construction and demolition waste

Firstly, the decision of the building or demolition contractor must be analysed. Con-
tractors will bring the waste to a recycling centre as long as this cost is lower than that of

5 This was identified by local authorities in the authors’ 2003 survey.

308 X. Duran et al. / Resources, Conservation and Recycling 46 (2006) 302–320

bringing it to the landfill site. In cost calculations, the contractor will also consider transport
costs and the extra costs derived from bringing the waste to the recycling centre. Expression
(1) summarises the decision of the contractor to bring C&DW to the recycling centre instead
of the landfill site:

Tl + Cl > Tr + Cr + Er (1)

where Tl is the cost per tonne of transporting unsorted waste to landfill site; Cl the cost
per tonne of disposing of unsorted waste in landfill; Tr the cost per tonne of transporting
waste to recycling centre; Cr the cost per tonne of bringing waste to recycling centre and
Er the extra costs per tonne incurred by waste producer of bringing waste to recycling
centre
The left-hand side of the expression summarises the cost of landfilling C&DW, while
the right-hand side summarises the cost incurred by the generator of waste disposing of the
waste at one potential recycling centre. The term Er, which only appears in the recycling
cost side, is mainly explained by the fact that most recycling centres only accept C&DW
under the condition that it is not mixed (the stone based material must be clean of other
types of waste). This implies that the construction or demolition contractor will incur the
cost of separation. If the recycling centre accepts mixed waste, Cr is likely to be higher as
the separation will have to take place in the centre. Therefore, construction and demolition
contractors will have to make the decision of either separating the waste themselves and
incur Er or letting the recycling centre separate it and incur higher Cr.

4.3. Decision of which aggregates to use

The second condition to ensure the creation of markets for recycled C&DW requires
the aggregate user to opt for recycled aggregates. The user will use recycled aggregates
only if they are cheaper and of similar quality to primary aggregates. The user will also
consider the transport costs and the additional cost from using the material. The decision
of the aggregate user to use recycled aggregates is summarised by expression (2)

Qp + Tq > Eru + RCp + Tru (2)

where Qp is the price per tonne of newly quarried product at quarry gate; Tq the cost per
tonne of transport from quarry to site; Eru any extra costs per tonne created by using the
recycled product; RCp the price per tonne of recycled product at the recycling centre gate
and Tru the cost per tonne of transport from recycling centre to site.
The left-hand side of the expression summarises the cost incurred by the aggregate user
when primary aggregates are bought and the right-hand side summarises the cost incurred
when recycled aggregates are purchased. Eru is not relevant if recycled aggregates have the
same characteristics as primary aggregates.
The cost of recycling relates expressions (1) and (2) as it determines the values of Cr
and RCp. The cost of recycling is composed of capital costs (crushers, screeners and other
machinery used in the recycling of the material), labour costs, the site cost and operating
costs (energy, water, administration). The total cost of production must be divided by the
units produced to find the per unit cost. This must be covered by the waste producer (Cr)
 X. Duran et al. / Resources, Conservation and Recycling 46 (2006) 302–320 309

and the aggregate user (RCp). This is summarised in expression (3):

recycling costs ≤ Cr + RCp (3)

4.4. The imposition of taxes

The imposition of taxes is seen by many economists (Pearce and Turner, 1990; Lesser et
al., 1997) as a positive way to internalise negative externalities resulting from the production
of C&DW and aggregate extraction. In the case of the model presented above, the imposition
of taxes on landfilling and the use of primary aggregates result in an increase in the cost of
the use of landfill and primary aggregates. This section presents an analysis of the effects
of the imposition of taxes.
The imposition of a tax on landfilling of waste increases the cost of landfilling per tonne
before the tax (Clb ) by amount Tl thus resulting in a higher per tonne cost of landfilling
after tax (Clt ) as specified in expression (4) below:

Clt = Clb + T l (4)

The imposition of a tax on the use of primary aggregates increases the cost of using
primary aggregates. Thus, such a tax will increase the per tonne cost of primary aggregates
before the tax (Qpb ) by amount Tq resulting in a higher per tonne cost of landfilling after
tax (Qpt ) as specified in expression (5) below:

Qpt = Qpb + T q (5)

Expressions (1) and (2) can then be substituted by expressions (6) and (7) to include taxes:

Tl + Clt > Tr + Cr + Er (6)

Qpt + Tq > Eru + RCp + Tru (7)

Thus, expression (6) summarises the decision of a C&DW producer to bring waste to the
recycling centre. The C&DW producer will bring this waste to the recycling centre as long
as the cost of disposal at landfill (including the imposition of a tax) is higher. In turn,
expression (7) summarises the decision of an aggregate user to use recycled aggregates as
their cost is lower than using primary aggregates when including the imposition of a tax per
tonne of primary aggregates.

4.5. Use of subsidies

The use of taxes has been seen as a tool to encourage recycling through the increase
in the cost of either landfilling or using primary aggregates but policy makers can also
encourage recycling through the use of subsidies (Shoegren et al., 2001; Sloman, 2000).
Thus, policy makers could offer subsidies to those using recycled aggregates and those
disposing of waste in recycling centres to result in a decrease in the cost incurred by users
of recycled aggregates and producers of C&DW bringing their C&DW to the recycling
centre.
310 X. Duran et al. / Resources, Conservation and Recycling 46 (2006) 302–320

The adoption of a subsidy on the use of a recycling centre reduces the cost of bringing
one tonne of C&DW to the recycling centre (Crb ) by Sr thus resulting in a lower cost of
bringing one tonne of C&DW to the recycling centre (Crs ) as specified by expression (8)
below:

Crs = Crb − S r (8)

In turn, the use of subsidies on the use of recycled aggregate reduces the cost of one
tonne of recycled aggregate (RCpb ) by Se thus resulting in a lower cost of using one tonne
of recycled product (RCps ) as in expression (9):

RCps = RCpb − S e (9)

Expressions (1) and (2) can then be substituted by expressions (10) and (11) to include
the use of subsidies:

Tl + Cl > Tr + Crs + Er (10)

Qp + Tq > Eru + RCps + Tru (11)

Thus, expression (10) summarises the decision of a C&DW producer to bring waste to
the recycling centre as the cost of disposing C&DW in the landfill site is higher than the
cost of bringing it to the potential recycling centre when a subsidy is available. In turn,
expression (11) summarises the decision of an aggregate user to use recycled aggregates as
their cost when including a subsidy is lower than using primary aggregates.

5. Application of the model to the case of the Republic of Ireland

This section builds on the model developed in Section 4 and uses data obtained
in the ROI to assess the economic viability of creating markets for recycled C&DW.
The model assesses three potential scenarios for the location of the recycling centres
(Fig. 1).6
Scenario 1: Permanent recycling centre in Dublin.
• Output: This recycling centre is capable of recycling 1,680,000 tonnes (8 h/day, 25 days
per month) over 5 years.
• Location: It is assumed that the centre is located in the suburbs at a distance from the
source of C&DW which is the same as the distance to the landfill site. In turn, the distance
from the potential recycling centre to the site where aggregates are used is the same as
the distance from the quarry site to the site where aggregates are used. These permit the
suppression of variables Tl, Tr, Tq, Tru in the model. This assumption is realistic when
the landfill site, the potential recycling centre and the extraction site are located in the
suburbs.

6 The cost estimations and production output figures are taken from the authors’ survey, see Table 1. Data from

the ROI is used along with data from other EU countries with more developed C&DW recycling markets.
 X. Duran et al. / Resources, Conservation and Recycling 46 (2006) 302–320 311

Fig. 1. Location of proposed recycling centres.

• Machinery: The recycling centre will use two crushers, one screener and two wheeled
loaders using 30 l diesel/h. It is assumed machinery is bought and paid in full and there
is no scrap value. The maintenance cost for each one of the crushers is D 6000 per year
and for the screeners and wheeled loaders D 6000 per year.
• Labour: There are six qualified workers (D 2750 per month), six unqualified workers
(D 1800 per month) and a manager (D 5000 per month).
• Other: Other costs include a reception unit. One per cent of the input accepted at the
recycling centre would end up disposed of at the landfill site. This waste has a density
of 1.3 m3 /tonne. Operating costs increase at 3% per year. Table 1 estimates the recycling
cost per tonne at D 2.78.
Scenario 2: Permanent recycling centre in Limerick.
• Output: This recycling centre is capable of recycling 360,000 tonnes (6 h/day, 20 days a
month) over 5 years.
 312
Table 1
Recycling costs in potential permanent recycling centres in Dublin, Limerick and mobile recycling centre
Concept Dublin Limerick Mobile

Units Unit cost Total cost Units Unit cost Total cost Units Unit cost Total cost
Capital cost
D 325,000 D 650,000 D 325,000 D 325,000 D 325,000 D 325,000

X. Duran et al. / Resources, Conservation and Recycling 46 (2006) 302–320

Crushers 2 1 1
Screener 1 D 162,500 D 162,500 1 D 162,500 D 162,500 1 D 162,500 D 162,500
Loaders 2 D 169,000 D 338,000 1 D 169,000 D 169,000 1 D 169,000 D 169,000
Other D 90,000 D 90,000 D 50,000 D 50,000
Total D 1,240,500 Total D 706,500 Total D 656,500
Operating costs
Qualified workers 6 D 2,750 × 12 D 198,000 2 D 2,750 × 12 D 66,000 2 D 2,750*12 D 66,000
Unqualified workers 6 D 1,800 × 12 D 129,600 2 D 1,800 × 12 D 43,200 2 D 1,800*12 D 43,200
Recycling centre 1 D 5,000 × 12 D 60,000 1 D 5,000 × 12 D 60,000 1 D 5,000*12 D 60,000
manager
Energy 30 l/h D 0.81 × 8 D 58,320 15 l/h D 0.81 × 6 D 17,496 15 l/h D 0.81*8*20*12 D 23,328
× 25 × 12 × 20 × 12
Maintenance D 18,000 D 18,000 D 9,000 D 9,000
Transport 15 D 800 D 12,000
Other D 3,000 D 3,000 D 1,500 D 1,500
Disposal (1% of 3,360 tonnes 1.3 × 1.3079/ D 180,908 720 tonnes D 280 per skip D 86,700 1440 tonnes 113 D 167,720
incoming waste) 12 × 380 including 2 tonnes
+ D 115/tonne
Total (year 1) D 647,828 Total (year 1) D 283,896 Total (year 1) D 382,748
Total (year 2) D 667,262 Total (year 2) D 292,412 Total (year 2) D 394,230
Total (year 3) D 687,280 Total (year 3) D 301,185 Total (year 3) D 406,057
Total (year 4) D 707,899 Total (year 4) D 310,220 Total (year 4) D 418,239
Total (year 5) D 729,136 Total (year 5) D 319,527 Total (year 5) D 430,786
Total D 3,439,405 Total D 1,507,240 Total D 2,032,060
Land costs
Total 0 Total 0 Total 0
Total D 4,679,905 Total D 2,213,740 Total D 2,688,560
Tonnes 1,680,000 360,000 720,000
Unit cost D 2.78 Unit cost D 6.149 Unit cost D 3.73
Sources: The information used in this table was obtained from the authors’ surveys among local authorities and primary aggregate producers, interviews with Gestora de
Runes (Catalonia), crusher suppliers and observations from recycling centres in Kinsale Road (Cork) and Montmelo (Barcelona).
 X. Duran et al. / Resources, Conservation and Recycling 46 (2006) 302–320 313

• Location: It is assumed that the centre is built in the suburbs at a distance from the source
of C&DW which is the same as the distance to the landfill site. In turn, the distance from
the potential recycling centre to the site where aggregates are used is the same as the
distance from the quarry site to the site where the aggregates are used. These permit the
suppression of variables Tl, Tr, Tq, Tru in the model. This assumption is realistic when
the landfill site, the potential recycling centre and the extraction site are located in the
suburbs.
• Machinery: Information supplied by recycling contractors suggested that such a recycling
centre would use one crusher, one screener and one wheeled loader using 15 l diesel/h.
It is assumed machinery is bought and paid in full and there is no scrap value. The
maintenance cost for the crusher is D 6000 per year and for the screeners and wheeled
loaders D 3000 per year.
• Labour: There are two qualified workers (D 2750 per month), two unqualified workers
(D 1800 per month) and a manager (D 5000 per month).
• Other: Other costs include a reception unit. One per cent of the input accepted at the
recycling centre would end up disposed of at the landfill site. This waste has a density
of 1.3 m3 /tonne. Operating costs increase at 3% per year. Table 1 estimates the recycling
cost per tonne at D 6.149.

Scenario 3: mobile recycling centre servicing smaller urban areas in Ireland.

• Output: This mobile recycling centre services 15 smaller urban areas to recycle
144,000 tonnes (8 h/day, 15 days per month) per year for 5 years.
• Transport: The recycling centre is transported 15 times per year between the smaller
urban centres at a cost of D 800.
• Machinery: Information supplied by recycling contractors suggested that such a recycling
centre would use one crusher, one screener and one wheeled loader using 15 l diesel/h.
It is assumed machinery is bought and paid in full and there is no scrap value. The
maintenance cost for the crushers is D 6000 per year and for the screeners and wheeled
loaders D 3000 per year.
• Labour: There are two qualified workers (D 2750 per month), two unqualified workers
(D 1800 per month) and a manager (D 5000 per month).
• Other: Other costs include a reception unit. One per cent of the input accepted at the
recycling centre would end up disposed of at the landfill site. This waste has a density
of 1.3 m3 /tonne. Operating costs increase at 3% per year. Table 1 estimates the recycling
cost per tonne to be D 3.73.

5.1. Estimation of savings resulting from each scenario

The savings resulting from each of the scenarios are estimated by expression (12). These
savings are an estimation of the efficiency gains resulting from the use of the recycling
centre to dispose of C&DW and the use of secondary aggregates. It is assumed that only
99% of the incoming waste is recycled. Er and Eru are not considered.

savings = [(Cl − Cr) + 0.99(Qp − RCp)]tonnes (12)

314 X. Duran et al. / Resources, Conservation and Recycling 46 (2006) 302–320

Table 2
Savings resulting from recycling centres
Dublin Limerick Mobile
Tonnes 1,680,000 360,000 720,000
Cost D 4,679,905 D 2,213,740 D 2,688,560
Cost/tonne D 2.78 D 6.149 D 3.73
Cl D 165 D 145 D 141.80
Cr 0 D 0.149 0
Qp D 10 D6 D 7.43
RCp D 2.78 D6 D 3.73
Savings D 289,208,305 D 52,146,360 D 104,733,360

Table 2 thus summarises the savings accrued from recycling as specified in the proposed
scenarios.
In the Dublin centre, the amount charged to C&DW producers and users of aggregate
must cover the recycling cost, thus RCp + Cr ≥ D 2.78. In order to encourage producers to
bring their C&DW into the centre, the waste is assumed to be accepted free of charge,
Cr = 0. In perfect competition RCp must then be D 2.78. The cost of landfilling a tonne of
waste (D 165) was taken as the price charged at Dublin landfill sites in 2003.7 The cost of
primary aggregates (D 10) is the price charged per tonne by supplier of primary aggregates
in Dublin in 2003.8
In the Limerick centre, because the charges to producers of C&DW and the users of
recycled material must cover the recycling costs, RCp + Cr ≥ D 6.149. In order to encourage
waste to be brought to the centre, Cr must be as close to 0 as possible but because the cost of
primary aggregates is only D 6/tonne,7 the manager must ensure that the cost of the primary
aggregates is not cheaper than the recycled aggregates. Thus, RCp must be D 6 and the cost
of bringing C&DW to the recycling centre is D 0.149. The cost of landfilling a tonne of
waste (D 145) was taken as the price charged at Limerick landfill sites in 2003.8 The cost of
primary aggregates (D 6) is the price charged per tonne by supplier of primary aggregates
in Limerick in 2003.
In the mobile recycling centre, the amount charged to producers of C&DW and users
of aggregates must cover the recycling cost, thus RCp + Cr ≥ D 3.73. Cr is 0 to encourage
producers to bring C&DW to a depot to be recycled. Therefore, RCp must be D 3.73 in
perfect competition. The cost of landfilling a tonne of C&DW (D 141.8) was taken as the
average price charged in landfill sites in the ROI in 2003.7 The cost of primary aggregates
(D 7.43) is the average price charged per tonne by supplier of primary aggregates in the ROI
in 2003 taken from the survey of primary aggregate producers.
The significant savings clearly demonstrate that it is economically viable to create the
three proposed recycling centres. It should be considered however, that the real impact of
the estimated savings depends on the underlying assumptions of the model.

7 Authors’ survey of local authorities in the ROI.

8 Authors’ survey of primary aggregate producers in the ROI.
 X. Duran et al. / Resources, Conservation and Recycling 46 (2006) 302–320 315

Fig. 2. Long run per tonne costs of processing C&DW.

5.2. Economies of scale

The study of the recycling cost as related to the scale of the recycling centre reveals that
recycling would benefit from economies of scale. This implies that the more the recycling
centre processes, the less the long run recycling cost per tonne. This phenomenon can
be observed in the case of the three scenarios (Dublin, Limerick and the mobile centre)
presented for the ROI. Fig. 2 summarises the relationship between cost per tonne and the
tonnes of waste recycled in these scenarios.
The conclusion that economies of scale appear in recycling centres suggest that recyclers
should increase the scale of the centre to the point of maximum production of C&DW or
the minimum demand for recycled material.

5.3. Imposition of environmental taxes on C&DW in the Republic of Ireland

The imposition of taxes makes the creation of markets for recycled C&DW more viable
as it increases the cost of landfilling and the cost of use of primary aggregates. In turn, these
result in an increase in savings. Expression (13) measures the savings that can be accrued.
savings = [(Clt − Cr) + (Qpt − RCp)0.99]tonnes (13)
The ROI imposed a landfill levy in June 2002. This levy increased charges by D 15/tonne
landfilled and has resulted in an incentive to decrease production of C&DW as the higher
costs are passed on to final customers.
The ROI does not have a tax on the use of primary aggregates. The imposition of such a
tax would increase the cost of primary aggregates. A primary aggregates levy of £1.60/tonne
(D 2.40 exchange rate as of July 2004) is imposed in the United Kingdom since April 2002
(Internet Reference 3). Table 3 summarises the effect on the savings of a potential tax
of D 2.40 on the use of one tonne of primary aggregates on the savings estimated for the
scenarios presented in the ROI.
As can be seen from Table 3, the imposition of a per tonne tax on the use of primary
aggregates results in an increase in the savings accrued from recycling thus encouraging
316 X. Duran et al. / Resources, Conservation and Recycling 46 (2006) 302–320

Table 3
Saving resulting from recycling centres and implementation of taxes
Dublin Limerick Mobile
Tonnes 1,680,000 360,000 720,000
Cost D 4,679,905 D 2,213,740 D 2,688,560
Cost/tonne D 2.78 D 6.149 D 3.73
Cl D 165 D 145 D 141.80
Cr 0 D 0.149 0
Qpt D 12.40 D 8.40 D 9.83
RCp D 2.78 D6 D 3.73
Savings after tax D 293,199,984 D 53,001,720 D 106,444,080
Savings before tax D 289,208,305 D 52,146,360 D 104,733,360
Increase in savings D 3,991,679 D 855,360 D 1,710,720

recycling, reducing the use of landfill and primary aggregates and the environmental exter-
nalities. This increase in savings is measured by expression (14):
increase in savings = T q × tonnes × 0.99 (14)

5.4. Use of subsidies in the Republic of Ireland

The use of subsidies makes the creation of markets for recycled C&DW more economi-
cally viable as it reduces the cost of using the recycling centre and the cost of use of recycled
aggregates. In turn, these result in an increase in savings.
The savings accrued from the subsidies are summarised by expression (15):
savings = [(Cl − Crs ) + (Qp − RCps )0.99]tonnes (15)
However, subsidies impose a cost on the public sector. Expression (16) summarises the
cost. This cost, however is not a deadweight loss as the cost to the public sector is the
increase in savings of C&DW producers bringing the waste to the recycling centre and
users of secondary aggregates. Society does not incur an external cost.
Cost = (S r + S e )tonnes (16)
Table 4 illustrates the effect of D 2.40 subsidy offered to users of primary aggregates.
Table 4 demonstrates that the increase in savings is equal to the public sector cost.

5.5. Combined use of taxes and subsidies in the Republic of Ireland

A combination of taxes and subsidies could minimise the cost incurred by the public
sector as the taxes could finance the subsidies. This encourages recycling and increases
savings. Expression (17) summarises the savings:
savings = [(Clt − Crs ) + (Qpt − RCps )0.99]tonnes (17)
The results of the implementation of a D 2.40 tax on the use of primary aggregates and
a D 2.40 subsidy on the use of secondary aggregates are summarised in Table 5.
 X. Duran et al. / Resources, Conservation and Recycling 46 (2006) 302–320 317

Table 4
savings resulting from recycling centres and use of subsidies
Dublin Limerick Mobile
Tonnes 1,680,000 360,000 720,000
Cost D 4,679,905 D 2,213,740 D 2,688,560
Cost/tonne D 2.78 D 6.149 D 3.73
Cl D 165 D 145 D 141.8
Cr 0 D 0.149 0
Qp D 10 D6 D 7.43
RCps D 0.38 D 3.6 D 1.33
Savings after subsidy D 293,199,984 D 53,001,720 D 106,444,080
Savings before subsidy D 289,208,305 D 52,146,360 D 104,733,360
Increase in savings D 3,991,679 D 855,360 D 1,710,720
Public sector cost D 3,991,679 D 855,360 D 1,710,720

Table 5
savings resulting from recycling centres, implementation of taxes and use of subsidies
Dublin Limerick Mobile
Tonnes 1,680,000 360,000 720,000
Cost D 4,679,905 D 2,213,740 D 2,688,560
Cost/tonne D 2.78 D 6.149 D 3.73
Cl D 165 D 145 D 141.8
Cr 0 D 0.149 0
Qpt D 12.4 D 8.4 D 9.83
RCps D 0.38 D 3.6 D 1.33
Savings after tax and subsidies D 297,191,663 D 53,857,080 D 108,154,800
Savings before tax and savings D 289,208,305 D 52,146,360 D 104,733,360
Increase in savings D 7,983,358 D 1,710,720 D 3,421,440
Public sector cost D 3,991,679 D 855,360 D 1,710,720
Public sector revenue increase D 3,991,679 D 855,360 D 1,710,720
Net public sector increase in cost 0 0 0

From Table 5 it is clear that the combination of taxes and subsidies optimises the savings
accrued and reduces landfilling and use of primary aggregates. The cost of subsidies is paid
by the revenues resulting from taxes and thus the public sector does not incur cost.

6. The recycling centre makes a profit

In the model presented in Section 4 and its subsequent application to the ROI, it is
assumed that the recycler is perfectly competitive and is not making any profit. In practice
however, recycling centres are not likely to be perfectly competitive due to reasons such as
the location of the recycling centre or the quality of the aggregates produced. Both of these
distinguishing factors could enable the recycling centre to possess some degree of market
power. This market power may in turn imply the possibility of making a profit by means of
charging a price to producers of C&DW and to users of aggregates in excess of the cost of
318 X. Duran et al. / Resources, Conservation and Recycling 46 (2006) 302–320

recycling. If the profit is calculated as markup of the addition of the prices charged to waste
producers when no profits are made by the recycler (Crc ) and to aggregate users (RCpc )
which ensures that the cost of recycling is covered (recycling cost = Crc + RCpc ) then the
profit made by the recycler is a percentage over the recycling cost as specified in expression
(18) below:
profit = recycling cost × m × tonnes (18)
where m is the percentage of profit over the recycling cost.
Thus, the savings estimated in Table 2 decrease as m increases. Expression (19) relates
the savings to m
savings = {[(Cl − Crc ) + (Qp − RCpc )0.99]tonnes} − [(Crc + RCpc )m × tonnes]
(19)
But m does not tell us how the profit will be made. In fact, the recycler can either increase
the price charged for accepting C&DW or for selling recycled aggregates, m can be bro-
ken down into the percentage over the price charged for C&DW in the recycling centre
(r) and the percentage over the price charged for recycled aggregates in the recycling
centre (u).
Thus, expression (20) substitutes expression (1) as outlined in Section 4 in the model
presented with perfect competition:
Tl + Cl > Tr + Crc (1 + r) + Er (20)
expression (21) substitutes expression (2) as outlined in Section 2:
Qp + Tq > Eru + RCpc (1 + u) + Tru (21)
and expression (22) substitutes expression (3) as outlined in Section 4
recycling cost ≤ Crc (1 + r) + RCpc (1 + u) (22)
The savings that accrue can thus in turn be expressed as follows:
savings = [(Cl − Crc (1 + r)] + [Qp − RCpc (1 + u)0.99]tonnes (23)
Savings will be lower than in the case of perfect competition as the prices charged for
bringing C&DW to the recycling centre and for recycled aggregates are higher.

7. Conclusion

The purpose of this paper was to develop a model to assess the economic viabil-
ity of creating markets for recycled C&DW. This study suggested that C&DW could be
crushed and used as recycled aggregates thus reducing the use of landfills and the devel-
opment of new or expansion of existing quarries to meet growing demand. This in turn
would result in a decrease in the negative environmental impacts. The introduction out-
lined the policy options to reduce the problems resulting from C&DW and aggregate
 X. Duran et al. / Resources, Conservation and Recycling 46 (2006) 302–320 319

use and focused on the use of subsidies and taxes to encourage recycling in the ROI.
This section identified the large number of quarry sites supplying primary aggregates
at a low cost as the main problem thus suggesting that policy makers should impose
taxes on the use of primary aggregates or use subsidies to reduce the cost of recycled
aggregates.
The model presented in Section 4 described the conditions that make a market for
recycled C&DW economically viable. Viability is likely to occur when the cost of
landfilling exceeds the cost of bringing the waste to the recycling centre and the cost
of using primary aggregates exceeds the cost of using recycled aggregates assuming the
recycled aggregate meets quality requirements. Once these conditions are met, recycling
will be economically viable and likely to occur, as it then becomes a cheaper option than
the use of landfill and/or primary aggregates.
Having developed a suitable framework to highlight the conditions necessary to encour-
age the recycling of C&DW, the model was then applied to the case of the ROI.
Three potential recycling centres were proposed: Dublin, Limerick and a mobile cen-
tre. Real data was collected in the ROI for the variables used in the model in 2003
and the recycling costs were estimated based on a number of underlying assumptions.
The results clearly demonstrate that it is economically viable to create the three poten-
tial centres proposed. One important conclusion is that the recycling centres benefit
from economies of scale. Thus, an increase in the scale of the centre would result in
a decrease in recycling costs. Recycling centres located close to areas with larger pop-
ulations and higher demand for aggregates would incur lower costs per tonne and thus
charge lower prices. The high price of land associated with densely populated areas
where future demand for aggregates is likely to be greatest means that primary aggre-
gates extracted close to cities will be more expensive. Thus, the effects of economies
of scale in recycling C&DW resulting from higher demand for aggregates and higher
supply of waste, in addition to the high cost of extracting aggregates close to cities
make markets for recycled C&DW in locations such as Dublin more economically
viable.
The economic viability of the recycling model presented in this paper is dependent
on the underlying assumptions and the values of certain variables. In order to encourage
recycling, the prices charged to users of landfills and primary aggregates should be high.
The ‘polluter pays principle’ solves this problem as it states that polluters should pay for the
total environmental cost (private plus social) produced by their actions. Thus, the cost of
landfilling waste and the cost of using primary aggregates should include the environmental
cost. The implementation of this principle in the European Union and national legislations
has resulted in a progressive increase in the landfill charges. The case of Ireland is an
example, with the implementation of the landfill levy in 2002. Although the process is not
as advanced concerning the implementation of the ‘polluter pays principle’ in the quarrying
industry, some steps have been taken in some European countries (such as the UK) with the
use of aggregate taxes that increase the cost of using primary aggregates to reflect the true
cost. This paper analysed the use of taxes and subsidies as tools to encourage recycling.
Both of these instruments were tested in the model to study the effects on recycling in the
ROI. The conclusion for policy makers from this research is that market based instruments
are the best option.
320 X. Duran et al. / Resources, Conservation and Recycling 46 (2006) 302–320

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