How Trash Makes Money In The U.S.

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In 2019, the North American waste management market reached $208 billion. Thanks to advancements in modern chemistry and support from municipal governments, landfills have seen astonishing financial success in recent years. Private companies like Waste Management and Republic Services now own a majority of landfills across the U.S., their stocks outperforming the market every year since 2014. So how exactly are landfills turning a profit out of garbage and just how much money can be made? Watch the video to find out.

A rising industry

America has long remained one of the most wasteful countries in the world, generating 239 million metric tons of garbage every year, about 1,600 to 1,700 pounds per person. While some view it as a threat to our environment and society, the solid waste management industry sees an opportunity.

“It’s a profitable industry,” according to Debra Reinhart, a member of the Board of Scientific Counselors for the EPA. “It’s a difficult industry but it is profitable if it’s done right.”

Two private companies, Waste Management and Republic Services, lead the solid waste management sector. Together they own about 480 landfills out of the 2,627 landfills across the United States. The two companies have seen staggering performance in the market, with the stock prices of both doubling in the past five years. Both Waste Management and Republic Services declined CNBC’s request for an interview.

“They’ve learned how to be best-in-class businesses,” said Michael E. Hoffman, a managing director at Stifel Financial. “Their publicly traded stocks outperformed the market handily between 2015 and 2019 and underpinning it is a meaningful improvement in their free cash flow conversion.” The stocks have continued to outperform.

Tipping fees

Since its inception, landfills have made a majority of their revenue via tipping fees. These fees are charged to trucks that are dropping off their garbage based on their weight per ton.

In 2020, municipal solid waste landfills had an average tipping fee of $53.72 per ton. That translates to roughly $1.4 million a year in approximate average gross revenue for small landfills and $43.5 million a year for large landfills just from gate fees.

Tipping fees have seen steady growth over the past four decades. In 1982, the national average tipping fee sat at $8.07 per ton or about $23.00 when adjusted for inflation. That’s nearly a 133% increase in 35 years.

While tipping fees make landfills sound like a risk-free business, they are still quite an expensive investment. It can cost about $1.1 million to $1.7 million just to construct, operate and close a landfill. For this reason, private companies have replaced municipal governments to own and operate the majority of the landfills across the U.S.

“I think it’s because the trend has been to go larger and larger so the small neighborhood dump can’t exist because of the regulations and the sophistication of the design,” Reinhart said. “So we are tending to see large landfills, which do require a lot of investment upfront.”

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How Landfills Make (A Lot Of) Money In The U.S.

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45 COMMENTS

  2. We need to drasticly cut out plastic in landfill and use what plastic there is about and recycle it even plastic in landfill sites. The plastic in landfill sites can either be refined back into an oil which can either be repumped back into empty undersea oil wells or refined again to be made into a cleaner fuel for vehicles or power generation. We also need to bring back more recyclable materials such as glass, paper, cardboard, wood and metals such as aluminium and use them to replace single use plastic. We also need to make landfill more organic and cut out metals, plastics, chemicals and other material such as textiles from entering the landfill. Keep landfills for organic or green waste to greatly reduce the impact on the environment. Any waste that cannot be recycled or put into landfill can then be incinerated and used to generate power, modern day incinerators give out less pollutants than a landfill with filters to reduce toxic emissions to a minimal amount. Landfills can now be regenerated and turned into nature reserves or woodland to help wildlife and our environment. All of this is possible with the wright investment and IF big companies are encouraged to get involved to reduce, collect and recycle plastics.

  3. Who is paying this tipping fee? I understand the trucks but don'T the trucks belong to the government? SO the government are paying for this? How is this profitable for governments?

  10. Question number 3: at the reason for those landfills to be owned by private companies but not goverments – how long will it take those private companies to pay for enviromental damages? How long will it take them in court? All laws will be fight by lawyers? Who will be able to make those private companies to pay for enviromental destructions if there is? Who will be able to make those private companies to fix ground water problems if there is? How will they going to fix those enviromental problems if there is?

  11. Question number 2: after 6 mins of the video? What kind of trees and forest are they going to create on top of those landfills? Why don't they turn those landfills into farms? Is there any enviromental problems stopped them from farming foods there?

  13. I pay about the same amount per ton for a local recycling center. Some waste will be used for landfill but most "waste" items will be recycled because that small lot would have been filled to the tip decades ago.

  14. When you look at the fiat monetary system, one must wonder if the current money system is the cause. You will witness a ton of products in a waste land that were purchased and thrown in the garbage in a very short time period. I guess the saying goes… garbage in, garbage out.

  22. What If we compress this collected waste and without more treatment put this compressed cubes into our filling material needed to form base of buildings like plinth filling or say where we put soft rocks for filling purpose if we dump that garbage I think we might save those soft rocks…….

  23. Landfill mining!? How about we just stop burring our valuable resources in the first place, and actually make an effort to sort and reuse them.

    Of course that not as profitable for these private landfills, and all they care about is profiting.

  30. Love the break down. Makes you think about these home builders and condos and apartments and all these homes bunched up all over the west! Create more money full circle

  32. I encourage everyone of us to invest in recycling and support genuine recycling initiative. I have been investing in recycling for two years now. Although the profit are not what I expected but is it worth it, contributing to sustainability is worth it, you should be part of it too. I will be willing to guide you.

  33. The business is just about to dig garbage under the ground like it was for hundreds of years.. The biggest improvement so far is they made a plastic bowl to prevent trash contacting the soil… But nothing changed – we pollute our planet. Everybody talks about regulations for landfills but nobody talks about regulations for manufacturers who produce trash. Why don't prohibit plastic bottles and plastic bags? Why don't tax Pepsi?

  37. Can you help me with this project in my community in Africa Sierra Leone cuz it will worth it I know how people are suffering in darkness I will be so happy if my request is granted

  39. the waste management in my area is so poor that govt does nothing about it. No waste management here. People burn their waste on a daily basis in their backyards. Every evening I smell bad fumes. Initially, I thought of doing a business of waste management but seems it's out of my power to do it. Im helpless but to smell these harmful gases everyday. I m worried about my health and my families and the upcoming generation.

  40. they should put this in a textbook to show what government regulation does to industry.
    the little guy can not participate in the market and the price goes up, effectively handing the market to the most wealthy,

  43. America needs to sign a law that not more than 25% of drinks can be put in plastic bottles , the rest must be aluminum because aluminum gets recycled way more as plastic just sits in our rivers and alongside the roadways….

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