‘Trashing’ it out: Waste management across Asia

Seth Tan and Lim Joo Hong

Generating garbage is easy, but managing it is all-together more problematic, say experts

The world is generating more waste than ever. Rubbish created in Asia-Pacific is projected to increase from about 802 million tonnes in 2016 to 1.1 trillion tonnes in 2030. In Southeast Asia alone, waste volume has been increasing rapidly since 2000, reaching about 150 million tonnes in 2016. By 2030, the amount is estimated to more than double.

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We observe and feel this happening around us. Take online delivery as an example. The advent of e-commerce has made it much easier to have items delivered to our doorsteps with just a few taps on our devices. We dispose of the packaging and the leftovers with little appreciation as to what happens to them after they end up in the bin. While some of our waste can be recycled, a large portion will end up in landfills.

If only it could be swept under the carpet. Some waste unfortunately lingers for decades and makes waste management a critical issue that deserves no less attention than the likes of poverty elimination and climate action. Poorly managed waste will result in consequences that are too severe to bear. Solid waste clogs drains, exacerbates flooding and promotes breeding of vectors. Waste is building up in nature, washing out to and polluting rivers and eventually ending up in the oceans. Open burning releases toxic pollutants and allergens linked to respiratory issues. Landfills take up significant land space and may not be sustainable in the long run for many countries.

Small wonder that various countries have stepped up efforts to reduce waste volume through recycling and better managing solid waste. Many are considering waste-to-energy (WTE) technologies, such as incineration, which takes municipal solid waste through an environmentally friendly combustion process and recovers the heat value of the combusted waste to generate steam and electricity. Allard Nooy, chief executive officer, InfraCo Asia, pointed out that WTE helps to reduce carbon footprint on two levels. First, less waste disposal to landfills means less methane and other greenhouse gases (methane is at least 20 times more harmful to the environment than carbon dioxide). Second, energy is now produced from waste instead of burning fossil fuels which further reduces emission of greenhouse gases.

But developing a waste management facility is not without its challenges, observes Seth Tan, executive director, Infrastructure Asia, who has experience in leading numerous transactions related to waste management. Appropriate technology, waste amount, regulatory frameworks, commercial arrangements and structuring and social perception are but some of the most important considerations when developing a waste management facility.

There is no one size fits all. Technology selection will depend on factors such as waste type, waste moisture content and calorific value, regulatory framework and location of waste facility. Carsten Schneider, head of business development (Southeast Asia), Ramboll, said that he would recommend identifying the technology early, for example at the pre-feasibility study stage of a waste treatment project, because technology selection can affect the viability and bankability of the project.

A general rule of thumb is that if the waste has a calorific value of around 6 megajoules (MJ) per kilogramme (kg), WTE using grate-based combustion can be considered. The issue with municipal solid waste in Southeast Asia is that it is often relatively wet and therefore has a calorific value of below 6 MJ per kg. There are a few options to address this. One can consider pre-treating the waste to remove moisture thereby improving its calorific value, or simply by designing the bunker for pre-storage of the waste to remove free water. In many cases, this will be sufficient to remove enough water that the waste can be combusted.

For very wet waste and waste that mainly comprises organic fractions, biological treatment such as anaerobic digestion or aerobic composting can be considered, based on Ramboll’s experience. The residue from these processes can sometimes be used as fertiliser, but it can be very challenging to achieve the cleanliness required to be used for agricultural use, especially because of micro-plastic and other impurities. The more segregated and cleaner the incoming waste fractions are, the better output can be expected.

Another alternative is mechanical treatment of the waste to sort out high calorific waste fractions to be used as a fuel, typically in cement kilns, called refuse derived fuel (RDF). The challenges for these projects include getting long term agreements for the offtake of RDF, thereby making the projects bankable, and meeting the technically high demands for the quality of RDF to be produced. For power-producing treatment methods, it is easier to estimate the future revenue streams covered by the Power Purchase Agreement (PPA).

In Southeast Asia where the waste fractions are typically co-mingled, one may consider an incineration plant, a combination of incineration and anaerobic digestion, an RDF plant or combination with the other technologies. Projects may always be seen in a circular economy approach, where waste is recycled to the extent that it is technically and economically feasible. Technical advisers will consider all factors, including the waste collection system and economics, when determining the technology, because all these factors are intertwined. At the end, the client should end up with the right technology for the long term and a cost-effective and secure operation that is tailored for local conditions and regulations.

Waste amount is important from two perspectives.

First, if one is considering an incineration-based WTE plant, then it needs a minimum amount of waste to make economic sense. A rule of thumb is to have at least 500 tonnes per day of waste – the more the better, especially if low calorific value is expected. This is not to say that plants below 500 tonnes per day would be unfeasible. There are plants with capacities as low as 50 tonnes per day, for example airport waste management plants, and WTE can therefore be adapted to local conditions, but they may be more difficult to be made bankable.

Second, in the case of a public-private partnership (PPP) project, the private sector developer would need to be assured that it will receive enough waste daily so that it can collect sufficient tipping fees and have enough waste to produce electricity for sale. Developers will unlikely bear risk if the waste provision is uncertain, after considering the high capital outlay. This was why only one bid was received by Singapore’s National Environment Agency (NEA) when it first called for proposal for Singapore’s fifth WTE plant in 2001. The NEA wanted the developer to undertake finance, design, operational and demand risk.

A study was then commissioned and the project was re-tendered in 2005 with material changes in the terms. One of the key changes was the adoption of the “take-or-pay” approach, where the government either buys 100 percent of the incineration capacity from the developer or pays the developer a penalty. This means that the government will bear “demand” risks by giving the developer full capacity payment, regardless of the actual utilisation rate of the WTE plant.

The tender attracted good responses from the market and Keppel Seghers was awarded it in 2005. The plant started operations in 2009, treating 800 tonnes of solid waste daily to generate about 22 megawatts (mW) of green energy. It is equipped with two incinerator-boiler units with one condensing turbine-generator. It incorporates Keppel Seghers’ in-house technologies such as the air-cooled grate and flue gas cleaning system.

Not all governments would be prepared to adopt the “take-or-pay” approach and absorb full demand risk. In such situations, the WTE plant developer and/or the structuring adviser would need to be creative and identify guaranteed sources of waste and revenues. This can be done by, for example, signing waste supply agreements with factories, farms around the WTE plant, or waste collector companies – and signing offtake agreements for refuse derived fuel (RDF) and electricity with nearby industries.

Clear enabling legislations are critical to allow waste management projects to get off the ground. First, clear legislations give clarity as to whether the technology used and plant discharges comply with the relevant regulations and emission standards, which is important to developers and financiers. Second, legislations that allow higher tariffs to be charged for electricity generated by a waste management facility would enhance its financial viability and reduce reliance on tipping fees.

Infrastructure Asia notes that the Philippines has filed Senate Bill No 363, also known as the Waste-to-Energy (WTE) Act and is of the view that it is a good move to clarify the relevant WTE legislations. First, it mandates the inclusion of a WTE strategy in the national, provincial and local government solid waste management plans. Second, it provides the clarity that WTE plants will be considered as solid waste management facilities and exempted from the ban on incineration so long as it complies with the emission standards under the Clean Air Act. Third and more important, local government units (LGUs) will be allowed to cluster and enter into long term contracts, joint ventures, PPPs and cooperative undertakings to develop WTE projects. Not only does this address the issue of one LGU not having enough waste supply for a WTE facility, but it also brings together the LGUs to reap economies of scale.

Vietnam has also moved in a similar direction. The government has implemented numerous policies in favour of firms involved in WTE projects. The major regulations are mentioned in Decision 31, which stipulates the supporting mechanism for development of WTE projects; Circular 32, which deals with the development of grid-tied WTE projects and provides a model electricity sale contract for WTE plants in Vietnam; Decree 118, which deals with investment incentives and schemes in various sectors including construction of concentrated solid waste treatment zones and collection, treatment, recycling and reuse of waste.

Vietnam has also stipulated the relevant tariffs for WTE plants, eg 10.05 US cents per kilowatt (kW) for WTE plants using incineration, and 7.28 US cents per kW for WTE plants that burn gases from landfills.

Unlike a water treatment plant where one can fairly estimate the investment cost based on the MLD  produced, a solid waste management facility is a different ball game altogether, noted Kunal Shah, managing director and regional business development head, Anaergia Singapore.

It depends on a myriad of factors, such as the characteristics of the waste, which varies from country to country and seasonally, regulations related to air, soil, water quality, quantity of waste to be processed, space constraints and overall regulations for solid waste management and government support, just to name a few. Waste management is currently heavily focused on the models of PPP and Build-Operate-Transfer (BOT), which makes revenue sources, such as tipping fees, feed-in tariffs and prices of RDF, recyclables and compost, critical factors for successful implementation.

The advancement of technology combined with innovation, creativity and good technical skills has allowed many aesthetically pleasing and odourless waste management facilities to be built with near-zero harmful substances emitted.

It took years for the Western countries, China and Singapore to iterate and arrive at their current waste management models. But they did not stop there. Singapore, for example, is constantly finding innovative ways that can optimise land use, maximise energy and resource recovery and minimise environmental impact.

It is now developing the Integrated Waste Management Facility (IWMF) which will have the capacity to process incinerable waste, household recyclables, source-segregated food waste and dewatered sludge.

Seth Tan. Executive Director. Infrastructure Asia, and Joo Hong Lim – Lead – Infrastructure Asia


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