FLYBOX

 Insect Waste Management: Designing for Waste Contracts, Not Just Farming

Larry Kotch, Co-founder & CEO, Flybox®

After a decade of proving that black soldier fly (BSF) larvae can deliver high-value protein, the next challenge is less about biology and more about waste management. If the sector is to endure and present a credible story to investors, the focus has to shift toward insect waste management (IWM): systems built around waste contracts, logistics, and compliance. That orientation clears tonnes, builds trust, and secures long-term growth. The same message came through strongly from industry peers at the latest BSFCON conference in Cambridge.

At Flybox®, we have commissioned six IWM sites across multiple countries, with larger plants in development and several food businesses preparing to scale publicly with us. We have walked many facilities, studied real and hypothetical P&Ls in Africa, the EU, UK, Canada and Australia, and worked side by side with waste operators.

What follows is less a playbook than a field note: observations from the ground on how insect systems can work for waste managers, not just for insect farmers.

Start at the gate, not in the grow room

For waste operators, value begins where trucks meet the weighbridge: every load represents avoided disposal costs plus any gate fee that can be retained on site. This is why changes in waste separation policy often matter more than technical debates inside the grow room.

In England, new workplace recycling rules introduced in March 2025 require businesses to separate food waste for collection, with households following on a defined timetable. This shift is increasing the volume of clean, source-separated organics and rewards sites that are co-located with waste generators. Cutting haulage miles and reducing external gate fees should shape intake and siting strategy, not headline yield figures. [1]

“If the sector is to endure and present a credible story to investors, the focus has to shift towards insect waste management.”

 

Weigh policy incentives before you price a tonne.

Anaerobic digestion (AD) shows how subsidies tilt the playing field. Where AD is structurally supported, it will always compete hard for clean food waste. In the UK, the Green Gas Support Scheme (GGSS) pays biomethane plants a volumetric tariff for injecting to grid. That incentive is good news for renewable gas, but it squeezes the margins for new IWM facilities unless they are co-located with feedstock sources or focused on streams AD cannot use.

Anyone modelling an IWM site in the UK has to build assumptions about feedstock flows and arbitrages in the context of all competing treatment methods too. Relying on “abundant feedstock” claims in a brochure will not cut it. [2]

Other regions flip the economics. Where landfill levies are high and organics capture is mandated but AD lacks heavy subsidy, decentralised IWM close to generators makes sense. Western Australia’s FOGO rollout and South Australia’s levy framework are strong examples. Here, local treatment reduces haulage costs and captures the levy arbitrage. [3] [4] [5]

The Gulf presents another model, where landfill diversion targets and penalty structures guide behaviour more than renewable energy incentives. Dubai’s goal to eliminate landfill by 2030, backed by disposal fees and fines, is already shifting the economics. When wet organics can be handled on-site with minimal transport, IWM becomes a compelling option. [6] [7]

Serve commodity markets first

Pet food and aquaculture buyers may pay £3/kg+ for BSF protein with the right functional profile, but no one is building a credible sector at that price. Most operators will tell you: when rubber meets the road, buyers want BSF protein under £1.50/kg. If your business case doesn’t work at commodity pricing, don’t proceed.

And that target is achievable. I’ve seen companies turn a profit selling BSF protein at $1,000/tonne, not hypothetically, but in real markets like China and East Africa, with months of receipts to prove it. Quality may vary, but the margin is real.

In the EU and UK, frass tells a different story. It already has a path into compliant soil and horticulture markets, and retail sales through garden centres are beginning to show price alignment across the chain. Secure this offtake, and protein prices can come down—frass starts carrying some of the weight.

In the Global South, frass has little to no commercial value. Assume net-zero pricing per tonne. Of course, better end markets are ideal, but going forward, assumptions must stay conservative.

Turn stranded streams into value

One side-effect of Simpler Recycling in England, and similar moves in Europe, is that AD plants increasingly prefer mixed commercial and household food waste. That often strands wetter fruit-and-veg locally. These streams are awkward for direct livestock feeding and overlooked by AD, but they are a natural fit for IWM.

Packhouses, distribution centres and produce markets are examples where stranded volumes now sit. On-site IWM captures the gate fee and avoids the miles. As separation rules bite, these pockets are multiplying. They are practical nodes around which to build a pipeline and also massively reduce operational costs. [1]

Automation to fit the context

Margins in European waste operations are tight. There’s no room for high-end automation to fix what good SOPs and biology should already handle. Walk a typical site and you’ll find robust, serviceable kit, not pristine food-grade machines.

The same applies in IWM: automate dosing, tray handling and separation; instrument climate control; keep robotics light until operations stabilise. Prioritise reliability over appearance.

Some of the largest BSF plants we’ve seen in China and Africa run lean by design. They trade polish for discipline and align capex with context. Different settings, same takeaway: scale automation to local economics and judge it by uptime, not gloss. [8]

“Insect waste management gains the upper hand when it is co-sited with generators like dairies, produce distributors and breweries.” – Larry Kotch, Co-Founder & CEO @Flybox

Co-location is the margin you control

WRAP’s gate fee reports show how quickly logistics can kill value. Trucking wet organics over long distances gives anaerobic digestion or energy-from-waste the cost edge.

IWM gains the upper hand when it’s co-sited with generators like dairies, produce distributors and breweries. The goal is simple: minimise transport and design around the lowest tonne-kilometres possible. England’s new workplace recycling rules are multiplying small, steady organics streams. The plants that can internalise these flows with minimal haulage will win. [8] [1]

Where scale works, and when simplicity wins

Large centralised IWM plants typically work when four conditions align:

1. Centralised, homogeneous waste streams
2. Low logistics costs (Colocation on existing site ideally)
3. Regulatory clarity and AD without subsidy advantage on your doorstep (Or if so, unwilling to accept your desired substrate)
4. Favourable climate

Many regions meet the right conditions for large IWM facilities. Australia’s FOGO schemes and landfill levies make the economics work. Some Gulf projects, supported by clear diversion targets, are also viable. Parts of Eastern Europe, including some non-EU countries, show promise depending on policy and logistics.

In contrast, smaller builds tend to outperform in the UK and Western Europe, where they target niche streams, avoid AD competition, or secure high gate fees from green partners. In Africa, low-cost greenhouse or pit systems with tight SOPs have delivered strong margins. In China, large no-frills plants run efficiently at scale. [9] [6]

Building for today’s conditions

The shape of a viable IWM unit depends on local economics and policy. A few near-term patterns stand out:

• UK/EU: Decentralised 1–10 t/day systems work best when sited close to waste generators. Wet fruit and vegetable streams are a clear starting point. Outsourcing breeding under SLA reduces training needs and biosecurity risk. Buybacks for larvae and frass help operators lock in intake and offtake. Investment should prioritise climate control, dosing, and sanitation over advanced robotics.
• Australia: Levy structures and FOGO rollouts favour on-site builds at transfer stations and major generators. Value lies in avoided haulage and landfill fees.
• UAE: Fee systems and Dubai’s 2030 landfill-diversion target support on-premise systems. Builds must integrate with existing infrastructure and audits. Modular units that commission fast and scale with demand offer the best fit.
• Africa: Prioritise low capex, high labour availability, and strong SOPs. Success comes from co-located, specialised builds supported by practical training and advisory from proven operators.

Two cultural shifts are needed

First, the sector should present waste management as a strength. Insect systems that turn organic waste into regulated outputs like larvae and frass offer a dependable, auditable solution that reduces transport needs, stabilises gate fees, and closes the loop.

Second, investors want clarity on fundamentals. They respond to contracts, levy opportunities, acceptance protocols, uptime, and co-location. These are the levers that shape confidence and make the case for long-term viability.

We don’t have every answer. There are brilliant exceptions and local twists we haven’t covered here (most notably the work in South East Asia which is a huge admission admittedly but not our area of expertise). But across sites and countries, the pattern we keep seeing is consistent: build to the waste contract; target the stranded wet organics that policy is creating; be ruthless about co-location; keep automation honest; outsource the specialist biology; write performance the way a waste plant does.

Where policy and price align, the unit economics are already there. Where they don’t, pick niches close to waste with logistics and compliance advantages

Insect Farming is dead, long live Insect Waste Management. Now that’s something investors can get excited about again.

References:

• GOV.UK. Workplace recycling rules. https://www.gov.uk/government/news/businesses-to-separate-waste-for-recycling
• Ofgem. Green Gas Support Scheme (GGSS). https://www.ofgem.gov.uk/environmental-and-social-schemes/green-gas-support-scheme-ghgss
• Waste Authority Western Australia. FOGO rollout. https://www.wasteauthority.wa.gov.au/
• Queensland Audit Office. Organics waste management. https://www.qao.qld.gov.au/
• EPA South Australia. Waste levies and organics strategy. https://www.epa.sa.gov.au/ 
• Dubai Municipality. Waste Management Strategy. https://www.dm.gov.ae/
• WKC Group. Waste management in the UAE. https://www.wkcgroup.com/
• WRAP. Gate fees reports. https://wrap.org.uk/
• Inside State Government (Australia). Waste and recycling policy. https://insidestategovernment.com.au/

For more information about FLYBOX, please visit the website www.flybox.bio

Read the full issue of our Beta Buzz #6: From Waste To Value publication here