The recycling sector has been facing increased fire risks for quite some time. As early as 2015, explicit attention was drawn to this development within the waste industry under the heading of increasing fire risks in the recycling sector. During that period, the sector was still widely insurable and, in general, relatively favourable insurance conditions applied.

This picture changed dramatically in 2017 and 2018. During this period, the sector was hit by a large number of fires, often with a substantial volume of damage. Claims payouts structurally exceeded the premiums received, causing a significant part of the insurance market to withdraw – whether temporarily or otherwise – from the recycling sector. From 2018 onwards, initiatives emerged again to make recycling companies insurable, but exclusively under clearly tightened conditions. Higher premiums, increased deductibles and far-reaching prevention requirements became the new norm.

Developments since 2018

In the period from 2018 up to and including 2025, the number of fire incidents within the recycling sector has remained relatively stable. However, this does not mean that the fire risk can now be considered manageable. Several large fires still take place annually, heavily damaging buildings and installations. On a positive note, fire prevention has come more prominently onto the agenda in recent years. At the same time, it must be acknowledged that prevention is not yet sufficiently structurally embedded in business operations at a portion of the companies. The sector has made clear steps forward, but is not yet where it needs to be.

Practical experience and approach

Recent practical experiences, based on visits to nearly a hundred recycling companies, show that not every situation is insurable. In a limited number of cases, the risk profile proved so unfavourable that it was not possible to issue an insurance proposal. The starting point here is always that pre-established minimum requirements in the area of risk management and fire prevention must first be met. Insurance solutions have indeed been achieved for the majority of companies, often in combination with additional preventive improvements. Sustainability plays an important role in this. After all, recycling companies perform an essential societal function within the circular economy. However, that role can only be fulfilled in a future-proof manner when risks are demonstrably and structurally managed.

Technology as the starting point

An effective approach to fire risks starts with technology. The first step is always a detailed risk analysis, in which processes, material flows and structural aspects are comprehensively assessed. Only at a later stage does the question of insurability arise: under what conditions, and which parts are or are not insurable. This sequence is essential. Insuring must never be the starting point, but rather forms the final piece of demonstrable risk management. In recent years, this approach has led to a growing number of recycling companies becoming insurable again, and under better and clearer conditions.

Differentiation in risk profiles

An important principle in risk assessment is differentiation. Recycling companies differ greatly in activities and therefore in risk profile. Companies where hardly any flammable materials are stored indoors have a significantly lower fire risk and can generally be insured under relatively favourable conditions. For other types of companies, the risk is significantly higher, particularly for:

• construction and demolition waste processors;

• commercial waste processors;

• household waste processors.

Within these categories, lithium batteries form an increasingly dominant source of risk. Every day in practice, large quantities of batteries are removed from waste streams, often originating from regular waste in which they do not belong. In addition, vapes, nitrous oxide cylinders and aerosol cans with highly flammable contents pose a substantial risk. These products regularly lead to fire incidents during storage, transport or processing.

Prevention begins at the source

Effective fire prevention does not begin solely at the recycling company itself, but already at the source: the citizen and the producer. Education, awareness and clear collection structures are crucial. Campaigns that point consumers to the correct disposal channel for batteries and other high-risk products demonstrably contribute to risk reduction. There are also opportunities at the policy level. Products such as nitrous oxide cylinders are now banned, but remain relatively easy to obtain and do not have a closed-loop collection structure. Without a deposit system or mandatory take-back, it is inevitable that these products end up in household waste, with all the risks that entail. In addition to external ignition sources, self-heating remains a structural risk, particularly for waste streams with an organic component. If the turnover rate is insufficient, heat generation can lead to self-combustion. This requires active flow management, combined with detection systems that signal temperature rises at an early stage.

Effective measures make the difference

Prevention measures must align with the specific risk profile of the company. For waste streams where sources of risk cannot be fully ruled out, the emphasis lies on:

• early separation of high-risk materials;

• smaller and well-designed fire compartments;

• reliable detection systems;

• automatic and effective suppression systems.

In practice, however, it appears that not all measures are actually effective. Detection systems sometimes signal too late, suppression installations are insufficiently tailored to the fire scenario, or compartmentation falls short. Effectiveness is more important in this respect than formally ticking off measures.

Complying with regulations is not enough

It is often argued that the Decreet on Construction Works in the Living Environment (BBL, formerly the Dutch Building Decree) is complied with and that the situation is therefore acceptable. From the perspective of the competent authority, this is understandable, given that the BBL is primarily aimed at preventing casualties. However, for business continuity and insurability, this is insufficient. Fire incidents within the sector demonstrate that additional preventive measures are necessary. At the same time, it is undesirable to impose generic, highly stringent requirements that do not do justice to the great diversity within the recycling sector.

Appeal to the sector

The advice to recycling companies is clear: have an independent risk analysis carried out periodically, invest in demonstrably effective prevention measures and limit the long-term storage of fire-prone waste streams. Complying with statutory minimum requirements is no guarantee of a manageable risk profile. Prevention remains better than cure. This is not only in the interest of individual companies, but of the entire recycling sector. Developments are positive and insurance solutions are improving, but structural attention to fire prevention remains essential for a sustainable and insurable future.

This article appeared on 9 April on www.bewerken-online.