Saudi Arabia: New conditions for issuing environmental industry licenses
In a crucial regulatory step aimed at restructuring the waste management sector in Saudi Arabia, the Ministry of Industry and Mineral Resources has launched a new procedural guide linking the issuance of industrial licenses for environmentally-focused facilities to mandatory approval from the National Center for Waste Management (Mawan). This decision reinforces the principle of integration among government entities and ensures effective governance of this vital sector, in line with global environmental standards and the unified industrial regulation system of the Gulf Cooperation Council (GCC) countries.
Context of the decision and its strategic dimensions
This decision cannot be viewed in isolation from the Kingdom's strategic directions, as the waste management sector is a cornerstone of the Saudi Green Initiative and the objectives of Vision 2030. Historically, this sector has suffered from overlapping jurisdictions and reliance on traditional waste disposal methods, such as sanitary landfill, which poses both an environmental and economic burden. Therefore, this procedural linkage reinforces the concept of the "circular economy," through which the Kingdom seeks to transform waste from an environmental burden into industrial resources with added economic value, thereby reducing waste and maximizing the utilization of natural resources.
Strict requirements to enhance technology
The Ministry, in its new regulations, affirmed that obtaining licenses and permits from the National Center for Waste Management is a fundamental and non-negotiable requirement for completing industrial licensing procedures. The regulations emphasized that this mandatory requirement applies to all sub-activities within environmental industries, specifically recycling facilities, treatment plants, and sorting facilities. To enhance operational efficiency, the Ministry established a stringent standard for classifying "sorting" projects as industrial activities, stipulating that the process must be fully automated and utilize advanced separation technologies. It emphasized that traditional manual sorting methods do not qualify a facility for an industrial license, thus encouraging investment in advanced technology and mechanization.
The shift from transportation to manufacturing
The guidelines require investors wishing to enter this sector to fulfill the concept of a genuine "industrial project," which necessitates physical or chemical transformations of waste to produce new finished or intermediate materials. This requirement excludes traditional collection and transportation activities from the scope of industrial licensing, focusing support and incentives on production processes that create added value. Furthermore, establishments must accurately classify their products according to the National Standards for Economic Activities (ISIC) and link them to the Harmonized System (HS) for goods, thus facilitating traceability and monitoring and opening export opportunities for Saudi recycled products.
Expected economic and environmental impact
This regulation is expected to bring about a qualitative shift in the quality of investments in the environmental sector, as it will help eliminate haphazard practices and attract foreign and domestic capital capable of localizing modern treatment technologies. The new procedures require foreign investors to present a valid investment license that includes a specific activity in environmental industries, thus enhancing the transparency of the investment environment. Ultimately, this initiative aims to achieve balanced industrial and environmental development, reduce carbon emissions, and promote the principles of "clean production" that ensure the sustainability of resources for future generations.
