Why waste “waste” when it can be recycled — into envelopes, newsprint, plastic components, or even biofuel? That’s the philosophy at Applied Cleantech, where CEO Refael Aharon and his staff are doing wonders with what is politely called “human effluence.”

Applied Cleantech has developed technology that takes sludge — which flows through sewers and into waste-processing systems — separating and breaking down the solids into their basic elements and reconstructing them as the raw material for industrial and consumer products. It’s a revolution, said Aharon — one that transforms waste from something useless into “a resource and base for raw materials sold to industry.”

The secret is cellulose, the building block of many of the solids that end up in the sewer system. While most sludge is liquid, the small percentage of solids can be reworked into cellulose, using Applied Cleantech’s patented methods.

Included among the materials processed by the company’s Sewage Recycling System (SRS) are food waste, clothing fibers and, of course, toilet paper. Until the SRS was developed, said Aharon, recycling these materials was time-consuming and costly. Using Cleantech’s system, the cost of recycling solid waste drops by about half, according to Aharon.

The result is an artificial form of cellulose, called Recycllose, which can be used for manufacturing plastic, paper pulp, combustible pellets to replace wood (for use in fireplaces, furnaces, etc.), and even feedstock for cellulosic ethanol fuel production.

The big question, of course, is whether or not consumers will go for recycled sludge paper and plastic products. There’s no reason not to, said the company. The material is completely disinfected when it is reclaimed, and most of it actually ends up in industrial products, so it is “merged” with material from other sources. Meanwhile, SRS can only do good for the environment, said the company. Besides enabling purification plants where SRS is installed to use 35 percent less energy (since there is less sludge to process), operating costs are lower, and there is a reduction in greenhouse gas emissions. And, purification plants, which are often owned by local governments, have an additional income stream, selling Recycllose to manufacturers.

Applied Cleantech was established in 2007 with the objective of producing biofuels from waste, but the company discovered that its methods could be useful for manufacturing as well. Today, the company is focusing on the Recycllose production possibilities of SRS, although the biofuel side of the business is also active.

SRS is not just a good idea on paper, as it were, said Aharon. The company’s systems have been installed in numerous cities in Israel and the US, and the company is planning a major expansion into Europe in the coming months. The system “is already in commercial use as it serves some 100,000 people with facilities in Israel and the United States,” he said. “Since the beginning of 2012, we have received contracts worth roughly $3.5 million. This is just scratching the surface; we calculate the addressable market to be at least $10 billion annually.”