Promotion of Waste Exchange Systems:
Five Models from Bandung, Indonesia

Hari Srinivas
Case Study Series E-194. May 2023.

A waste exchange system enables companies and the society at large, to conserve energy, finite resources and landfill space, and to create better understanding about alternatives for materials use and reuse.

This document provides a quick introduction to the features of waste exchange systems and how they function, within the contexts of overall solid waste management and recycling initiatives. It illustrates five models drawn from initiatives undertaken by companies in Bandung, Indonesia.

waste exchange, industrial waste, circular economy,

Part 1: Waste Exchange Systems

1. Introduction
2. Waste scenarios in the Private Sector
3. What is waste exchange?
4. Features of a typical waste exchange system

Part 2: Waste exchange initiatives in Bandung, Indonesia

5. Bandung's Economy
6. Survey of Industry in Bandung
7. Waste Exchange Example 1: Pt. Kimia Farma
8. Waste Exchange Example 2: Pt. Pindad
9. Five Models of waste exchange

Part 3: Annexures

1. Sample (1) of an online waste exchange system
2. Sample (2) of an online waste exchange system
3. Typical web-based Search for Wastes
4. Sample Search Results
5. Sample Waste Exchange Guidelines

Part 1: Waste Exchange Systems

1. Introduction

Sustainability in all the dimensions of its definition - eoconomic, social and environmental - needs to be at the core of all the decisions we take on a daily basis. Promotion of more sustainable patterns of consumption and production, particularly aimed at private sector companies, is an approach that enables them to develop and adopt policies and practices that are cleaner and safer; make efficient use of natural resources; ensure adequate management of chemicals; incorporate environmental costs; and reduce pollution and risks for humans and the environment.

But aspirations for a high quality of life, and high rates of resource use have had a unintended and negative impact on the urban environment: generation of wastes far beyond the handling capacities of urban governments and public utilities. Companies are therefore grappling with the problems of high volumes of waste, the costs involved, the disposal technologies and methodologies, and the impact of wastes on the local and global environment.

Most companies have, time and again, identified waste management as a major problem. We can observe three key trends with respect to industrial waste - increase in volume of waste generated by companies; change in the quality of waste generated; and the disposal method of waste collected. But these problems have also provided a window of opportunity for companies to find solutions - involving the community and the private sector; involving innovative technologies and disposal methods; and involving behaviour changes and awareness raising.

A waste exchange system enables companies and the society at large, to conserve energy, finite resources and landfill space, and to create better understanding about alternatives for materials use and reuse.
Waste exchange systems constitute a key part of activities in industrial areas or 'eco-towns'. Eco-towns are urban planning and environmental management efforts where industries located in the designated 'eco-town' area practice resource recycling within their manufacturing process and in between the industries. They are developed in pursuit of synergies derived from combined efforts in waste treatment, environmental preservation, and promotion of industrial development.

2. Waste scenarios in the Private Sector

Waste is any surplus material generated from a process that does not form part of the final product. Industrial wastes has two issues we have to contend with - (a) the amount of waste produced is a consequence of the quantity and quantity of materials consumed and efficiency with which it is produced, and (b) once waste has been produced, dealing with it has an impact on the environment that should be minimized.

The characteristics of industrial wastes are different from that of household or other wastes. Industrial wastes are predominantly homogeneous (and not mixed as with household wastes) allowing for easier reuse and recycling. Depending on the waste type and manufacturing process, industrial wastes are produced either regularly or are one-time wastes. Some wastes could also contain hazardous components that require special and separate handling.

Most industrial wastes are landfilled - however this is not only harmful to the environment but due to waste disposal and landfill costs, it is becoming increasingly expensive.

As a first step, through resource efficiency, waste prevention, and emissions reduction at source, organizations can maximize output and increase profits. Waste minimization calls for the systematic reduction of all forms of waste and may include energy, water, materials, effort and process and production waste in order to conserve resources. This can be achieved through different approaches such as better product design and material efficiency ("Design for Environment"). Companies have also implemented strategies to design their products to be easily dissembled and recycled ("Design for Disassembly"). Others have attempted better and more efficient manufacturing processes, better packaging that use less materials, and product buy-back systems that facilitate higher rates of recycling.

Rubbish and waste can account for over four percent or more of a business' turnover. Due to these disposal costs, (including storage costs in some cases) and of any additional costs arising from potential pollution, degradation or accidents, companies are increasingly looking for comprehensive waste management approaches that can overcome these shortcomings.

Of particular interest are approaches that enable reuse and recycle of wastes and by products. Waste exchange systems fall in this category. By providing a business reuse network, waste exchange systems help prevent usable materials from becoming waste.

3. What is waste exchange?

A Waste Exchange is an operation that enables materials discarded by one company to be re-used by another company. These can be scrap, production by-products, obsolete or unused raw materials, hazardous waste and recyclable products.

The potential cost savings that can be made are immense as on average businesses spend 4.5 percent of their total turnover on waste disposal and a significant percentage on raw materials. Many of these costs can be eliminated through exchanging materials, turning what was once a significant drain on financial resources into profit.

In general, a waste exchange system (also called a 'materials exchange' system) is an alternative to disposal of waste to landfill. Such systems enable the efficient reuse and recycle of materials, reduction in waste that has to be disposed, cost savings in raw materials and waste disposal, and enables compliance with waste laws and regulations where relevant. For large companies (such as JFE Steel in Japan, illustrated in Figure 1), wastes also provides business opportunities to set up subsidiaries that utilize by-products from one process of the company to be used to create further new products.

Figure 1: Examples of waste exchange practiced by companies in the JFE group of Kawasaki city, Japan
(Source: Kawasaki City Government, Kawasaki, Japan)

Through a waste exchange system, companies can find alternatives to landfilling of unwanted materials, save on disposal costs and support community groups by registering re-usable materials. Through waste exchange, users can access re-usable materials, access information about local recyclers and regional recycling services or reduce rubbish going to landfill.

A quick survey of waste exchange systems established worldwide reveals four key functions:

  1. DATABASE FUNCTION: This is the most important and core function of a waste exchange system. Usually made available online as a web-based database, offers and requests for wastes are included in the database and are searchable. In some cases, advisory services and 'waste matching' services may also be included.

  2. INFORMATION FUNCTION: Most waste exchange systems have a vast array of general waste management information, functioning as a repository both online and offline.

  3. INTERACTION FUNCTION: Typically, this function includes the organization of seminars, workshops, training and other activities for members or users of the waste exchange system.

  4. COMMUNICATION FUNCTION: Registered members of the waste exchange as well as the public at large, are provided services such as newsletters, email reminder services, information sharing etc.

The main function of a waste exchange system, of course is its Database function. In populating a database, the following points are usually collected. (See Annex 1 for another simple form):

  • Material offer or request
  • Material classifications: acids, alkalis, other inorganic chemicals, solvents, other organic chemicals, oils and waxes, plastics and rubber, textiles and leather, wood and paper, metals and metal sludges, etc.
  • Generic name of material and description
  • Potential or intended use
  • Packaging: bulk, drums, pallets, bales, etc.
  • Present amount: in kgs, tons, lts etc.
  • Frequency: continuous supplies, variable supplies, one time supply, etc.
  • Restrictions, if any (including hazardous characteristics)
  • Available to interested parties: sample lab analysis, independent analysis, consultation, etc.

4. Features of a typical waste exchange system

Most established waste exchange systems have a combination of of the following features -

  • Waste exchanges behave as a business-to-business "stock exchange" for wastes.

  • The common goals of a waste exchange system are to achieve a resource efficient and sustainable society. They achieve these aims through a number of ways - promotion and facilitation sector collaboration and partnerships across industry, government and the community, implement innovative actions and projects, actively contribute to and support relevant government policy, strategies and actions, and foster knowledge and skills through communications, and information and educational resources.

  • Some of the most common reasons business cite to use a waste exchange system include (a) receiving low or no-cost materials, (b) reducing of disposal and purchase costs, (c) freeing up storage space, (d) finding markets for surplus materials/scrap

  • Materials exchanged through the system usually consist of business-related items in good, usable condition (e.g., business overruns, seconds, outdated inventory, empty containers and office furniture).

  • Examples of wastes exchanged fall under a number of categories, including for example, boxes and packaging, chemicals, computer/electrical, construction materials, containers and pallets, metals, organic waste, paints and stains, paper/cardboard, plastic materials, textiles, wood waste etc.

  • Besides their characteristics, materials are also listed as available or required along a timeline - continuously, ongoing, one-off, daily, weekly, or monthly.

  • Costs of the exchange service itself is in many cases free (run by a non-profit or subsidized by local governments and business associations), though a fee may be incurred in transportation and/or payment for the wastes purchased.

  • Waste exchange services mostly cater only to companies and other organizations, and not residential or household entities. However, many non-profit organizations sometimes take advantage in using waste exchanges.

  • User-members of waste management systems include elected officials, managers, engineers, planners, policy makers, operators, and the organizations they represent - including central, regional and local government agencies, private waste management companies, equipment suppliers and service providers, engineering and consulting companies, non-profit organizations etc.

  • Waste exchange systems do not deal only with wastes. Many organizations also host conferences, conduct workshops and seminars, publish newsletters, share information with its members, or provide networking opportunities for its members.

  • Due to copyright, patents and IPR issues, many waste management systems have a robust confidentiality policy in place, enabling companies to exchange wastes without infringing on these rights.

  • Some waste exchange systems also deal with waste management resources and waste trading tools to improve recycling and/or buy and sell scraps, recycled materials and products made from recycled materials.

  • Some combine waste information exchange services (as a clearinghouse and repository for industry) providing information on, for example:
    • Market development
    • Recycled products
    • Solid and hazardous waste management
    • Current regulations/legislation
    • Alternative and emerging waste management technologies
    • Trade journals and associations
    • Technical reports
    • Waste management services and products

Part 2: Waste exchange initiatives in Bandung, Indonesia.

5. Bandung's Economy

Bandung has undergone an intensive and impressive process of industrial and technological transformation in the past 20 years, with a more technology, skill and capital-intensive production processes.

Bandung like most major cities in the Asia-Pacific region has seen considerable growth in its urban population and industrial growth. It has attempted to implement a number of sustainability initiatives, such as a 3R Programme (Reduce, Reuse, and Recycle), targeting different stakeholders. But the growth patterns of its urban population and industrial clusters have resulted in unintended and unforeseen environmental impacts that will have to be addressed in the short and long terms.

As a result, Baundung city has strengthened its competitiveness by developing industry clusters that promote dynamic partnership between the government and the industry, and interlinkages between industries themselves. These policy directions provide an excellent opportunity to guide the industrial growth in an environmentally sound manner, using various sustainability concepts, such as waste exchange among factories.

The city of Bandung has adopted a policy approach to put environmental concerns in the forefront of the development of the city, and to create the necessary conditions to enable concerted action to be taken. An integrated approach that incorporates different sustainability ideas and concepts, enabling broader stakeholder collaboration, and reduce resource dependency, is to be put in place. This is being done within the scope provided by concepts such as 3Rs, and sustainable consumption and production patterns.

6. Survey of Industry in Bandung

In order to explore and expand on the above ideas, a survey of small, medium and large industries in Bandung City was carried out by Bandung's BAPEDA office, covering questions related to the products produced, raw materials used, and scraps/wastes generated by the factory/company. The potential uses of the scrap/waste, packaging for disposal, and other details of current practice was also asked.

Figure 2: Survey Questionnaire format
(Source: BAPEDA, Bandung Office)

An initial total of 17 industries were surveyed for the purpose. A brief summary of some of the responses is shown in the following table.

Table 1:
Data Result Of Industrial Scrap/Waste Survey Bandung City Ecotown Programme



Type Of Industry

Type Of Waste




Pt. Bio Farma

Immunization Plant

Ash Of Animal Body





Pt. Kimia Farma

Pharmaceutical Plant

Skin Of Kina Seed



Non Hazardous


Pt. Pindad

Army Factory

Wet Sludge







Furan Sand












Mixing Sludge




Pt. Paratex Mekar














Pt. Aneka Produksi

Metal Works

Fly Ash & Bottom Ash From Coal





Pt. Indosco Utama

Metal Works

Fly Ash & Bottom Ash From Coal





Pt. Grandtex


Fly Ash & Bottom Ash From Coal





Pt. Indosinga Lestari


Wet Sludge





Pt. Beteen Textile


Fly Ash & Bottom Ash From Coal





Pt. Perintex


Wet Sludge





Pt. Ewindo







Pt. Cimuntex


Fly Ash & Bottom Ash From Coal

No Data

No Data



Pt. Nagamas


Wet Sludge

No Data

No Data



Cv. Banyumas


Sludge From Coal





Pt. Omedata














Sentosa Makmur


Gypsum Sludge



Non Hazardous



(Building Material)






Tegep Boots

Leather Boots




Non Hazardous

In order to demonstrate the viability of waste exchange and explore a more concerted approach to broader industrial waste management, a workshop meeting was organized in Bandung on 4 - 5 November 2007. The workshop included participants from a range of local stakeholders, including the local government, BAPEDA offices, research institutions and private sector entities.

A total of 23 persons participated in the meeting. The meeting saw presentations being made from four local companies (both large and small). As a part of the meeting, waste exchange case studies of two factories were presented to illustrate the viability of waste exchange among factories.

7. Waste Exchange Example 1: . Kimia Farma

Pt. Kimia Farma is a pharmaceutical company that produces the medicine quinine from Kina (or 'quina') seeds. It is one of the largest producers of quinine in the region, and supplies most of the needs for Indonesia and for other countries in the region. Quinine is the main medicine for the treatment of malaria, and has several other medical uses including digestive, fever and other health condition.

The quinine medicine itself is produced under very strict sanitary conditions from the bark and wood of the kina seed. The bark of the kina seed is first boiled and crushed in order to extract the base raw material from which quinine itself is synthesized and produced. The base raw material is produced in the form of crystalline blocks that is removed and further purified (in a second Kimia Farma factory). The remaining/resulting molasses is then allowed to drain in large brick and concrete tanks, before the pulp is dried and then disposed.

Initially, Pt. Kimia Farma disposed the residual kina seed pulp in the municipal landfill of Bandung, without any processing. But as production volumes increased, reaching the current levels of 8 tons per day, the company decided to explore alternative ways to reuse and sell the waste pulp.

Much of the residual pulp is wood-based and homogenous with little, if any, contamination or intermixing with other wastes types. The calorific value of the waste pulp was analyzed by an independent third party, and a value of about 2912 calories/gram was obtained (this is about one third that of ordinary coal). The sample analyzed also had 23.76% ash. Other constituents of the sample studied were as follows:

  • SiO2 = 15.68%
  • Al2O3 = 4.27
  • Fe2O3 = 1.97%
  • CaO = 69.14%
  • MgO = 1.49%
  • K2O = 0.59%
  • Na2O = 3.28%
  • TiO2 = 0.4%
  • SO3 = 0.76%
  • P2O5 = 0.58%
  • MnO2 = 0.08%

Pt. Kimia Farma participated in the waste exchange demonstration project with the help of local experts and Bandung city. As a result, it created compressed brickets from the pulp in order for them to be sold as fuel as an alternative to coal. The process consists of first drying the molasses in large tanks. The resultant dried pulp is then further dried in sunlight to reduce the moisture content. The dried pulp is then ground into a powder, mixed with clay that acts as a binder and then shaped into small balls using a 'ball shaping machine' It is further dried before it is packed and sold to factories in the area as a alternative fuel.

The kina seed bark is crushed, boiled and allowed to cool, which produces the crystalline base material (shown floating in the vat in the photo), from which the quinine is extracted.
The waste molasses is then pumped into drying beds such as these, and water is allowed to drain for a few weeks
and the waste pulp dries up as shown into solids.
After the pulp is thoroughly dried, it is ground with clay in large grinders. The clay functions as a binder for the pulp, for the next stage.
Water is added to the ground pulp before it is compressed into small golf-ball sized brickets using this 'ball-shaping machine'
The brickets are further dried in flat-bed panels to reduce their moisture content to less than 8%.
The resultant brickets, with a high calorific value of almost half of that of coal, can be used in an ordinary stove, or for other purposes, as an alternative fuel.

Most of these brickets are sold at Rp.100/kg to nearby factories that require fuel for furnaces etc.

The key lessons learnt from this demonstration exercise is the need for looking at the wastes/outputs resulting from manufacturing processes as a valuable resource. With a little value adding (drying, crushing and shaping the pulp into brickets), the 'waste' pulp was converted into a saleable product, which also reduced the dependence of the factories on traditional fuels such as coal, petroleum and electricity.

The factory did face barriers in the form of finding appropriate technologies to process the waste, in producing the right product from the waste (low moisture content + high calorific content of the brickets).

8. Waste Exchange Example 2: Pt. Pindad

Pt. Pindad is a metal processing factory in Bandung, producing a number of die cast manufacturing machines for other factories and industries.

Examples of die-cast machinery parts produced by the company.

The company is part of the Pt. Pindad Group, which is the largest and oldest arms manufacturing company in Indonesia. The factory initially used raw/pig iron for its production process.

But after consultation with a number of experts and collaborating in research with foreign companies and technology suppliers, it adopted a system that utilized a higher percentage of recycled and waste scrap metal in the casting process.

As result of this, and by instituting an enhanced waste exchange system in the city, the company now collects scrap iron from factories in the city and the neighbouring region, and has become a major user of scrap iron. The factory currently uses about 10-14% of its metal source from the reused/recycled scrap (amounting to about 8-10 tons per day) collected as a part of its waste exchange system.

Scrap metal from various sources in the city and from neighbouring towns and cities, is collected by the factory as a part of an enhanced waste exchange system.
The waste is then sorted by the factory into different categories based on the quality and use of the scrap.
The collected scrap is smelted in a furnace for further purification, processing and casting.

9. Five Models of waste exchange

Some of the key lessons learnt from the initiatives undertaken by the surveyed companies are listed below (shared during stakeholder meetings with local government officials, business leaders and academics in Bandung):

  • Waste exchange initiatives will, to a certain extent, be hampered by companies not willing to fully disclose the materials and components of the products they produce, due to copyright and company secrecy concerns. Other problems include a lack of understanding and initiative from the part of the factories to be involved in waste exchange systems (resorting to, for example, only selling of scrap to dealers).

  • While a number of factories have already taken measures to, where feasible, process, add-value and sell their waste to other companies, a need to make waste exchange more systematic and market-based, was expressed by participants. This would require more awareness-raising and capacity building sessions on the potential of waste exchange systems and related aspects.

  • Participants, especially the local governments, expressed a desire to expand and broaden the waste exchange initiative to cover more factories and companies in the two cities.

  • Waste exchange systems clearly need to be integrated into on-going urban and industrial growth strategies of (for example, Bandung City Government's Integrated Waste Management Plan, and eco-town initiatives)

  • Participants expressed a clear need to develop online waste exchange databases that would enable factories to buy and/or sell wastes and scraps in a more systematic and environmentally sound manner, while saving waste processing costs at the same time.

  • From a longer-term and strategic perspective, participating companies and private sector entities expressed the need to integrate waste exchange initiatives with efforts to facilitate transfer of technologies and techniques in waste management to encourage value-adding to wastes and by-products.

Typical components of a waste exchange system

The case studies of industries surveyed in Bandung identified five models of waste exchange that could potentially be used for replication in other cities in Indonesia and elsewhere in the Asia Pacific region.

MODEL 1: Internal Reuse/recycle

In this model, wastes generated from the factory's manufacturing processes are reused/recycled as-is within the same factory. This is most common in factories that generate single waste streams containing only one waste type.

Examples observed in the field surveys and visits included metals, glass or plastics reused once again in the factory.

MODEL 2: Direct Disposal

In this model, wastes generated from the factory's manufacturing processes are disposed as-is in a municipal landfill or dumpsite.

This is common for wastes that are mixed, or cannot be recycled. Most of such wastes are non-hazardous wastes in nature.

Examples observed in the field survey and visits included office wastes, garden wastes, and wastes from kitchens/canteens. Sometimes, wastes from gardens and kitchens were also composted and used in factory gardens.

MODEL 3: Controlled Disposal

In this model, wastes generated from the factory's manufacturing processes are disposed in a controlled manner for processing. This is particularly the case for toxic or hazardous materials, where the waste was shipped to a hazardous waste processing plant for incineration.

Examples observed in the field surveys and visits included disposing of animal carcasses after testing, or certain kinds of ash/residues etc.

MODEL 4: Sale of Wastes

In this model, wastes generated from the factory's manufacturing processes are sold as-is to a third party essentially due to the fact that the wastes cannot be reused/recycled within the same factory. These third parties are usually other factories or designated / contracted scrap dealers.

Depending on the waste type, some wastes are also sold to informal sector dealers (for example, paper).

Examples observed in the field survey and visits included metal scraps, plastic and paper.

MODEL 5: Waste Value Adding

In this model, wastes generated from the factory's manufacturing processes are value-added to create a new product for sale, by the same factory or another factory/subsidiary.

Value adding is done with new technology and new materials, providing the maximum benefit of the wastes being generated.

Examples observed in the field survey and visits included the creating of burnable briquettes out of residual vegetative matter (after extraction of the quinine medicine) using clay as a binder, or creating art objects using cast away bottles and other glass items.

PART 3: Annexures

Annex 1: Sample (1) of an online waste exchange system

Sample form of a web-based online database to be filled in by companies that have waste materials to be disposed:

Annex 2: Sample (2) of an online waste exchange system

Sample form of a web-based online database to be filled in by companies in need of waste materials that is being disposed:

Annex 3: Typical web-based Search for Wastes

Web-based or computer-based databases of waste available or needed, can be searched. A typical database search window for waste exchange:

Annex 4: Sample Search Results

Sample search results page of a 'materials-wanted' listing:

Sample search results page of a 'materials-available' listing:

Annex 5 Sample Waste Exchange Guidelines
Source: Minnesota Materials Exchange program

The goal of the Materials Exchange program is to reduce the amount of reusable business items going to landfills while assisting Minnesota businesses and organizations in obtaining free or low cost items and saving money. The Materials Exchange program is designed for materials that would otherwise be discarded. Below are examples of acceptable listings. All acceptable listings will appear on the Web site. Acceptable Listings

  • Business-related items in good, usable condition (e.g., business overruns, seconds, outdated inventory, empty containers and office furniture).
  • Large and/or recurring quantities of materials that can no longer be used by the lister but may be able to be used by others (e.g., chemicals, machinery and industrial by-products).
  • Large and/or recurring quantities of recyclable scrap materials for which recycling markets are not yet established (e.g., some types of paper and plastics). These materials may be useable as feedstock for manufacturers, recyclers or brokers. To find recyclers, contact your local city/county recycling coordinator, or check the yellow pages under Recycling Services.
  • Wish list items or "wanted" listings submitted by businesses, organizations or schools. Fees: Items may be sold for a nominal fee. Fees must be specified and be 20 percent or less than the value of an item. An item's value must be based on its current condition.

Top 10 Most Frequent Materials Exchanged

  1. Wood pallets
  2. Plastic drums
  3. Office furniture
  4. Packing peanuts
  5. Plastic buckets
  6. 3-ring binders
  7. Cardboard boxes
  8. Office supplies
  9. Bubble wrap
  10. Photocopiers/printers

Unacceptable Listings

For unacceptable listings, the Materials Exchange program will try to redirect listers to more appropriate venues.

  • Selling used or new items at market value (e.g., appliances, equipment and furniture). Those items with established resale markets are better publicized with local advertising options.
  • An item being sold for more than 20 percent of its value.
  • Household items, motor vehicles, live animals, firearms, plants, real estate.
  • Recyclable, scrap materials with established recycling markets (e.g., cardboard and white office paper). Outlets for materials can be found by your local city/county recycling coordinator, or checking the yellow pages under Recycling Services. Exceptions include materials suitable in form and quantity for reuse in arts and education applications.
  • Businesses interested in listing their service.
  • Individuals may not submit "wanted" listings. Lister Responsibilities Please respond to all inquiries, even if only to say that you are not interested or that an item is no longer available. Materials Exchange will only work if listers are responsive. If complaints are received that you are not returning phone calls or e-mails and the problem is not resolved in a timely manner, your listing(s) will be removed. Listers should notify Materials Exchange if their listing is no longer valid. Materials Exchange will contact listers periodically to verify that listings are still current. Failure to respond will result in the listing being removed.

Right to Reject

Materials Exchange reserves the right to reject any listing deemed inappropriate. The lister may be contacted by Materials Exchange if clarification is needed prior to approving a posting.

Acknowledgement: The survey and stakeholder meetings were carried out by the Global Environment Center and local partners in Bandung, and coordinated by the author.

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