COP21 made history by having all countries agree to work together on limiting global warming in the form of the Paris Agreement. By contrast, one of the greatest achievements of COP26 was when more than 100 countries signed a pledge to cut methane emissions by 30 percent by 2030 from 2020 levels. There is a reason why the president of the European Commission, Ursula von der Leyen, described methane as the “lowest-hanging fruit in our battle to slow down climate change”.

Methane is the second most abundant greenhouse gas after CO2. Although it accounts for 20 percent of global emissions, its global warming potential – its ability to trap heat in the atmosphere – is 86 times stronger than CO2 over a 20-year horizon. Because of this potential, the IPCC believes that 30 to 50 percent of human-induced global warming is due to methane. More than half of global methane emissions stem from human activities in three sectors: waste, fossil fuels and agriculture.

Accordingly, waste-to-energy facilities will be one of the leading infrastructure solutions in the removal of methane for a circular economy. Investors should take note on this investment opportunity as demand for these facilities grows across the world.

Space missions from the European Space Agency and GHGSat have started to monitor the odourless and colourless methane emissions. Their findings are remarkable: intentional methane releases (through venting) or unintentional ones (through leaks in pipes) during gas transportation from Russia to Europe amounted to as much as 450 tonnes per hour. They also found that a methane hotspot from a landfill near the Indonesian capital Jakarta was leaking 16 tonnes of methane per hour, equivalent to running 750,000 conventional cars for a year.

Reducing methane emissions

On a more positive note, there are cost-effective mitigation technologies and practices available to reduce methane emissions.

The Global Methane Initiative assessed the mitigation opportunities by sector. It found that although the oil and gas sector can reduce a large part of its methane emissions at little to no cost, the waste sector has the greatest total reduction potential of all, at 61 percent of the baseline emissions.

The mitigation potential summarised by the GMI varies between countries and regions. The UN’s Global Methane Assessment indicates that the Middle East, North America and the former Soviet Union show the largest abatement potential in the oil and gas sector.

Taking into account continued urbanisation, growing income and increasing populations, the UN concludes that in many low- and middle-income countries – including India and  countries in Asia-Pacific – the waste sector has the greatest potential.

“More than half of global methane emissions stem from human activities in three sectors: waste, fossil fuels and agriculture”

History has proven that diverting waste from landfill – or worse, open dumps – has a major impact on methane emissions. In the Netherlands, where a ban on landfill was announced in the early 1990s, the industry developed other ways to process waste. One of the main drivers in the country was the shift to WtE combined with gas recovery from existing landfills. This shift did not stand in the way of waste processing initiatives that are placed higher in the waste hierarchy: in 2019, 54 percent of household waste was recycled, 0.2 percent went to landfill and 45.8 percent was used for energy recovery. Overall, recycling rates from all waste streams in the Netherlands are at 80 percent.

The World Bank estimates that 93 percent of the waste in low-income countries is disposed of in open dumps. Given the bank’s projection of rising amounts of solid waste (from 2.6 billion tonnes to 3.4 billion tonnes annually by 2050), sustainable treatment of waste becomes increasingly pressing for reaching the global emission targets set at the Paris and Glasgow conferences. Even in parts of Europe and North America there is significant room for improvement.

WtE promotes circular economy

To avoid the adverse effects of landfills and open dumps, governments are moving towards more circular economies. The Asian Development Bank has stated that WtE plants are one way to promote a thriving circular economy, as they serve as the cornerstone of wider eco-industrial parks. Waste-to-energy uses mixed and end-of-life waste streams as feedstock to produce baseload power or heat with a variety of technologies, of which thermal treatment through incineration is the most established in Europe. Despite emitting CO2, a WtE plant significantly reduces the footprint of waste and replaces fossil fuels for electricity generation.

In the meantime, a WtE plant enables other initiatives to be established on the back of its business case, waste logistics infrastructure and energy generation. To attract investment and improve the bankability of WtE projects, policymakers in low- and middle-income countries have chosen to give these projects long-term waste concessions and electricity offtake contracts.

WtE infrastructure will play an important role as the world moves to remove methane and create circular economies. Investors should seriously assess this growing sector for its investment opportunity as well as its environmental and societal benefits.

Evert Lichtenbelt is chief executive and co-founder, and Bas Hamers is investment manager at Harvest Waste, a waste management company based in Amsterdam

Case study: WtE in the Middle East

For years, a country in the Middle East has been struggling with the negative impacts of its underdeveloped waste management system.

When one of its landfills was close to reaching capacity, it was a natural moment for the authorities to improve the situation. A feasibility study was carried out to explore what solution would be able to process large amounts of waste at the lowest price for society.

The authorities decided to float a tender for a WtE facility, where the private sector would enter into a 25-year design, build, finance, maintain and operate contract and power-purchase agreement. The consortium of Harvest Waste participated in the tender, in which we acted as co-developer and technology provider, and the bid benefited from the proprietary High Efficiency Waste to Energy technology developed and proven in Amsterdam.

Because the technology produces 25 to 50 percent more electricity from the same amount of waste, the electricity price put forward by the Harvest Waste consortium was at least 25 percent lower than the competing bids while no gate fee was required. The offered electricity price was close to the price currently paid for baseload power. Once the $150 million plant, which will process more than 1,200 tonnes of solid waste daily, is built, it will be a blueprint for other countries on how to significantly reduce methane emissions from residual waste (the equivalent of more than 400,000 tonnes of CO2 annually), improve the quality of air and land and benefit from a stable, clean amount of baseload energy.