Many waste management projects in the developing world are eligible for carbon credits through better waste management practices.

While Municipal Solid Waste (MSW) management is a project area that offers vast potential, it is one of the least considered methods of generating energy in terms of its potential and implementation, as well as a great opportunity to earn carbon credits.

Rapid industrialization and urbanization in India has put tremendous pressure on local governments to manage their waste disposal. This has been further aggravated by their poor financial health and lack of trained personnel as well as a lack of knowledge on efficient solid waste management techniques.

Projects that generate methane, a potent greenhouse gas with a global warming potential of 21, are considered to have the greatest potential to obtain carbon credits in developing countries like India. Notably, there are quite a few projects in India already claiming revenue through the Clean Development Mechanism (CDM) of the Kyoto Protocol.

Recent success stories of project developers in India obtaining carbon revenue for their MSW-based waste to energy projects are expected to motivate many local governments, and other project developers who are exploring new avenues for additional revenue, in addition to solving waste disposal problems.

This is also likely to encourage new entrants into the field.  On the flip side, however, many non-governmental organisations (NGOs), think-tanks, and other stakeholder groups are raising environmental concerns due to the absence of stricter environmental regulations and the suitability of existing technologies to treat different waste characteristics.

Considering the importance of a project’s contribution to the sustainable development of the host country as part of the eligibility to claim carbon credits, the CDMability of MSW projects is now under scrutiny. Issues related to the stack emissions, waste handling and disposal practices, usage of unsustainable alternative fuels (for co-firing), obtaining the No-Objection Certificate (NOC) from local government authorities, resistance from local stakeholders  and data metering and monitoring practices are a few of the major factors that could impede the CDMability of these projects.

A total of 1,190 projects worldwide were registered as on 1 November 2008 as CDM projects and a total of 204 million credits have been issued. From this total number of registered CDM projects, 297 are from the waste handling/disposal sector and can be further categorised as follows:

• 182 projects are related to biogas (mainly from animal waste and waste water treatment);
• 99 are methane recovery and utilisation; and
• the remaining 16 are methane avoidance projects.

Critical Issues

Not all submitted CDM projects in the waste sector were registered, or Certified Emissions Reductions (CERs) issued without undergoing further ‘review’ by the Executive Board (EB). Most of the waste- to-energy projects in India received adverse comments from global stakeholders on various issues during the global stakeholder comments period required under validation. Though all the waste-to-energy projects are eligible to claim carbon credits, all must address sustainability issues, show correct application of the CDM methodologies and must institute suitable metering and monitoring practices.

Based on review comments by the EB, Designated Operational Entities (DOE), and global stakeholders on Indian MSW based waste-to-energy projects, the following issues have been observed as critical for the successful registration and verification of emission reductions for these kinds of projects in India. This experience from Indian projects might prove useful for similar projects in other developing countries.

Sustainability

Sustainability issues are critical to the success of any waste-to-energy project. Any such project is expected to increase the social, environmental, economic, and technological well-being of the host country and address the treatment technology adopted, location of the project, waste handling and disposal practices, pollution control measures, and type of supporting fuels used.

Metering and Monitoring

Improper data on waste composition and the amount of non-biomass materials (like plastic and rubber) in the waste stream poses a serious threat to the emission reduction claims by the project developer. Often, the DOEs cite this as a major reason for delaying the emission reductions verification.

Project developers typically fail to provide this data due to improper and/or inadequate data monitoring practices, however adhering to the monitoring frequency of parameters specified by the CDM methodology applied would streamline the verification process.

Regulatory Requirements

Obtaining the No-Objection Certificate (NOC) and having an up-to-date ‘consent for operation’ certificate from the appropriate local government authority is essential to prove that the project is meeting all the environmental regulations in the region. It is also critical to obtain the host country approval and permits for the project. Monitoring key parameters and optimizing the plant operation with the best waste management practices will reduce the difficulty in meeting the local regulatory requirements most of the time.

Methodology Selection

Project developers tend to use small-scale and inappropriate methodologies to avoid complex monitoring procedures and the comparative ease of proving additionality of the project. Improper choice or application of a methodology (e.g. using AMS III.E instead of AM0025) not only delays the project registration, but also raises doubts on the project applicability.

Additionality

Waste-to-energy projects require higher initial investments and would be economically unsustainable without government subsidies. However, the operating costs are likely to increase beyond projected values because of selection of the wrong treatment technology, poor plant design, and variable waste characteristics.

These parameters dictate the plant operating hours and hence the revenue generation. Evaluating all of the options that could affect the project financials and providing necessary supporting documents will help the project developer to prove additionality of the project.

Essentials for a Project Developer

To improve the CDMability of waste-to-energy projects and for successful registration and verification of emission reductions, project developers need to consider the following essential points:

1. Ensure that the project meets all the sustainable development criteria of the host country. This can be achieved with proper selection and design of the treatment technology, adopting suitable pollution control measures, applying best waste handling and disposal practices, and usage of sustainable auxiliary renewable fuels ( if allowed by the local regulatory authority).
2. Adhere to the metering and monitoring practices specified by the local regulatory authorities and the applicable CDM methodology and maintain all records as per the standard QA/QC procedures. Perform monitoring of the amount of waste received, combusted, and disposed along with the quantity of non-biomass materials combusted.
3. Make sound judgements on various technical and operational barriers and valid assumptions in the financial analysis to prove the project’s additionality.
4. Ensure that the treatment plant meets local environmental regulations at all times in order to obtain up-to-date ‘consent for operation’ and no-objection certificates.
5. Establish a CDM committee with plant operational staff forming a core team to monitor all the key parameters with the frequency prescribed by the CDM methodology.

Obtaining CDM revenues for waste-to-energy projects is possible only by properly addressing the critical issues described above, particularly sustainability, metering and monitoring practices. Proper selection of the treatment technology and better waste management practices reduces the project’s operational complexities and helps obtain carbon credits more easily. Ignoring any of the critical issues puts the CDMability of a project in jeopardy and, as a result, ‘wasting’ all efforts to make the project successful.

© Sinclair Knight Merz
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