From the beginning they have been clear that players and NPCs will not be producing waste. However, sanitation is likely still something you are going to have consider as part of town/city planning:
Yes, so we talked before about the need to have different types of buildings and there were people who were awfully upset at us previously for not pulling the ARK Survival and allowing you to poo in this game. But even if you cannot periodically hit the Z button you still have a need for sanitation. SO in order for villages to grow or towns to grow beyond a certain size to support sanitation you have to build certain types of sanitation type things.
Animal waste is much more likely to be in as they have mentioned it being used as fertilizer in the same Q&A. Though exactly how it is handled in game is still unknown.