The article is correct and cites the current investigations of a team of researchers investigating the Waterloo battlefield, Bernard Wilkin, Robin Schäfer, and Tony Pollard, from the Waterloo Uncovered project. A recent article by Pollard (2021, Open Access) summarizes the problem of the lack of human remains in Waterloo and uses contemporary testimonies to figure out what happened to the bodies.

What is important to note here is that the strange fate of the bones from Napoleonic battlefields - and not just Waterloo - has been part of popular knowledge since the early 19th century. As the story goes, these bones were dug up and turned either into fertilizer (as a source of phosphate) or into bone char, a valuable material used among other things as a filtering agent in beet sugar production (the bones were not "turned into sugar"). The problem, mentioned by Pollard in his article, is that hard evidence had been missing so far, even if the story is credible: there are many people writing about it when it happened, and some circumstancial evidence. Here is for instance a report in the British magazine The Imperial Magazine of January 1830 (it's also cited by Pollard in a different journal, but this one has a nice conclusion):

A ship laden with bones from Hamburg, arrived at Lossiemouth on the 25th of Oct. 1829, the property of Morayshire, and intended for manure. The master of the vessel states that the bones were collected from the plains and marshes of Leipsic, and are part of the remains of the thousands of the brave men who fell in the sanguinary battles fought betwixt France and the Allies, in October, 1813. What a commentary is this upon "military glory!" and how true is the exclamation of the poet, "To what base uses we may return, Horatio!"

Mrs Churchill, a local poet from Monmounthshire, wrote (cited by Collins, 1948):

Ye sons of glory! Do your spirits grieve

That unsepulchr'd thus your bones are spread ?

If not in monumental stone, you live

In beef, potatoes, mutton beer, and bread!

More famous authors have made reference to that story, notably Victor Hugo in Choses vues (1847-1848):

Thus, the last residue of the Emperor's victories: fattening English cows.

As Pollard notes, it remains that the "smoking gun" is elusive. There are counter-arguments to the veracity of the story, such as the lack of "reference to this exploitation in the writings of later visitors (post 1820)". Pollard nevertheless concludes that the use of the bones of Napoleonic soldiers as fertilizer "represents a credible explanation for the apparent absence of grave deposits in the archaeological record at Waterloo."

The lack of definitive evidence makes it little surprising that the story somehow entered the "legend" territory. The owner of a British charcoal factory wrote in 1953:

It is true that British Charcoals & Macdonalds, Ltd. buy bones from many different countries. As a matter of interest, just recently an article was located headed "Freak Freights", which stated that during the Peninsular War the ship "Demarara" is said to have arrived at Bristol with a cargo of bones, which were recognized as human bones. They came from the battlefields of Europe, and were shipped by the military authorities for some purpose which was never disclosed. There was, of course, no intention of using these for the manufacture of charcoal for sugar refining, but someone, the story does not relate who, is believed to have spread such a rumor in Bristol, and thus so prejudiced the population in that city that the industry soon sickened there. In Bristol there is still the " Demarara Inn " with a carved negro head above the doorway, which helps to keep the legend of the vanished trade alive. It is not thought that British Charcoals & Macdonalds have ever used human bones, though it was suggested to me (R. J. G. Macdonald) during the war that it might be a good thing to have the bones of some people rattling around the char system!

Among the sources found by the researchers and cited in the Daily Mail article are several French newspapers from the 1830s. The La Presse article mentioning bone char is here (bottom, second column). I could not find the cited issue of L'Indépendent, but here is the same story in another newspaper, La Quotidienne from 31 July 1831 (which cites a local newspaper from the French-Belgian border, L'Echo de la Frontière):

Every day we see convoys passing through the Mons gate from abroad, loaded with materials suitable for making bone char (noir animal). Bones are sold at a high price in France, especially in the department of the North; Belgium also sends us a lot of them. All these convoys are heading for the bone char factories, whose products are necessary for our beet sugar factories. The stores of bones that are transported there rise up in the open air, and the eye is not a little surprised at the sight of these high pyramids, such as we see in Marly, all built of animal remains, in the middle of which we only too often see human remains. Where do these heaps of debris come from? There is more than one battlefield on the Belgian frontier where the earth covers thousands of dead; at Waterloo especially their number was high. More than one warrior fertilized the plains of the Belgian frontier with his blood, more than one warrior found glory and a tomb; today, when nothing is more sacred to man, these same tombs, from which a dust of glory is exhaled, are not safe from the sacrilegious pickaxe; industry now traffics in everything, even in human remains!

We will have to wait for the article by Wilkin and his colleagues to see whether they found something substantial that will finally answer the question of the fate of the remains of the soldiers at Waterloo.

The story may have not ended in the 1830s though. An American author reported the following, hinting that trafficking Napoleonic bones was still going on at the end of the century, though, fittingly, this involved a ghost ship (Sprunt, 1920):

In 1894 the Austrian barque Vila, carrying a cargo of bones, which were said to have been gathered from the battle fields of Egypt, was found derelict by a Norwegian steamer and towed into New York. Not a word has ever been heard as to the fate of this vessel's crew.

Sources

• La Quotidienne. ‘Faits et nouvelles divers’, 31 July 1835. https://www.retronews.fr/journal/la-quotidienne/31-juillet-1835/737/2140133/3.

• Proceedings of the Technical Session on Bone Char, 1953. https://books.google.com/books?id=JD9f2MemKaIC.

• Collins, William John Townsend. Monmouthshire Writers: A Literary History and Anthology. R.H. Johns, 1948. https://books.google.com/books?id=h_c-AAAAIAAJ.

• Pollard, Tony. ‘These Spots of Excavation Tell: Using Early Visitor Accounts to Map the Missing Graves of Waterloo’. Journal of Conflict Archaeology 16, no. 2 (4 May 2021): 75–113. https://doi.org/10.1080/15740773.2021.2051895.

• Sprunt, James. Derelicts: An Account of Ships Lost at Sea in General Commercial Traffic and a Brief History of Blockade Runners Stranded Along the North Carolina Coast, 1861-1865. Wilmington N.C.: The Lord Baltimore Press, 1920. https://archive.org/details/derelictsanacco01sprugoog/page/n32/mode/2up?q=bones.

This is a great question, by the way, AMD thank you to User u/gerardmenfin for that splendid answer that disclosed something New for me.