MUNICIPAL SOLID WASTE MANAGEMENT AND CARBON FINANCE Carbon Finance Unit Training Session Charles Peterson and Ahmed Mostafa March 29, 2007

Methane avoidance projects: Composting Maximum amount of credits per ton of waste (100% compared to max. 50% for landfills) No additional investment needed

Composting process Composting is decomposition of waste under aerobic conditions (waste stabilized/digested in 2-3 months, compared to several yrs in sanitary landfills - anaerobic) The baseline is waste that would have been left to decay in the landfill and release methane to the atmosphere Composting is prevention of methane generation and not methane recovery Methane avoidance in composting process is nearly 100% compared to 30-50% in capturing and flaring By-product is CO2, moisture, high temperature and valuable soil conditioner (compost) that can be used for horticulture / agriculture.

Composting projects Challenges Technical Biological process that needs technical expertise/know how Well designed composting plants suitable for local conditions, waste characteristics and climate Siting of composting plants (should be on same premises of final disposal site) – affects costs More expensive compared to waste dumping/landfilling (but lower investment, useful product, no environmental/health issues, etc.) Creating market for compost Consistent product quality is key to success (compost from MSW could be contaminated with heavy metals – depends on collection/transportation methods) Market demand may not be adequate to cover costs (gradually establishing market – quality control)

Composting projects Challenges (Cont.) Financial Compost market & price (recent EC standards restricts use of compost from MSW for edible plants) Tipping fees Sale of recyclables & market / price

Composting projects Challenges (cont.) Institutional Ownership of facility (operator, municipality?) BOO, DBO, etc types of contracts or construction by Municipalities, and operated by private sector through concession contracts with following: - PS paid tipping fees with minimum tons/day, - Specifying minimum treatment percentage (as high as 60%) in contract, thus increasing lifetime of final disposal facilities (instead of yrs, could be doubled and minimal precautions for leachate, LFG, resources pollution, i.e. significantly lower investment costs)

Eligibility of Composting operations Technical: a- Municipal solid waste: Require upstream sorting facility (represents at least 70% of capital and O&M costs) At least 60% organic content in mixed MSW Type of technology / process (windrow, aerated static pile, In-vessel) Process (capital and O&M cost) vs land requirement Windrow technology most cost effective, but requires space, high monitoring/quality control. b- Sludge / Market / Food waste: No sorting process required (low capital and O&M costs) Windrow technology among the best (space area, operator skills, etc) Beware of chemical contaminants (source of sludge – industrial pollution) Financial Selected Technology Existence of compost market Tipping fees paid for treatment Recyclables (in case of MSW)

Technology I: windrow

Technology II: Aerated Static Pile

Technology III: In-Vessel

MSW: sorting process is essential

Sorting line

Composting process for MSW

Monitoring

Plastic processing

Cans compactor

Important issues to be discussed with project developer Technical Type of technology / process (affects capital, O&M costs) Type of waste (MSW, sludge, manure, agri / organic residuals) Capacity (depends primarily on type of waste - no less than 500 t/d MSW, 400 t/d market/food waste for acceptable ER levels) Process monitoring (ensuring aerobic conditions) Quality control measures on final product (need to ensure consistent quality for final product) Financial Existence of compost market (if not, what's the sponsor’s strategy?) – MSW compost ranges ($5 – $35), agri / organic compost ($50 upwards) Tipping fees paid for treatment or not? Recyclables (in case of MSW)

Landfilling verses Composting of different types of wastes (500 t/d) a: 65% organic content (requires sorting, composting and screening processes) b: 100% organic content (market / food waste) Sanitary Landfill MSW a Market/food b Total ERs upto 2015 (tCO2e) 220,000440,000700,000 Methane avoided (tons CO2e/ton MSW) Capital Cost $1 M + cost of landfill $4-5 M$1-1.5 M O&M cost$70,000 – 100,000 / yr $100,000 – 200,000 / yr $ 50, ,000 / yr

Successful Case Studies Option 1: DBO, BOOT, etc types of contracts –PS designs, constructs and operates for yrs treatment/disposal facilities –PS paid tipping fees (per tonnage) with minimum tonnage per day on monthly basis + compost revenues + portion of CF revenues –Municipality responsible for monitoring and supervision of PS operation –Facilities handed to municipality after concession period Option 2: Design and construction by Municipality –Concession contract to PS for operation (10-15 yrs) –Same cost recovery as above –Municipality responsible for monitoring and supervision of PS operation

Overview of CFU Portfolio Composting projects Santiago, Chile Kabul, Afghanistan Porto Novo, Benin Karnataka, India Tashkent, Samarkand, Bukhara, Uzbekistan Kampala, Uganda Cairo, Egypt Jeddah, Saudi Arabia Kota Kinabalu, Malaysia

THANK YOU VERY MUCH FOR MORE INFORMATION CONTACT Charles Peterson Ahmed Mostafa,