Incinerating waste emits carbon dioxide and produces air pollutants that can harm the local environment and human health. However, collecting the energy created from incineration can replace traditional fossil fuels, especially coal for electricity generation. Incineration also reduces waste disposal into landfill, which generates methane, a potent greenhouse gas.
Global urbanisation and population trends are increasing waste, but since China curbed waste imports in 2018, exporting countries have had to review domestic processing. Now waste-to-energy has emerged as a viable alternative.
Many governments are supportive. Thailand is giving subsidies, India offers tax incentives and China is building 300 waste-to-energy plants to process a third of its waste by 2030. In Ethiopia, Africa’s first waste-to-energy plant should incinerate about 80 per cent of Addis Ababa’s waste from 2020, generating 30 per cent of local power needs.
The energy captured from incineration can displace more carbon-intensive fossil fuels. In 2016, less than 3 per cent of global power generation came from waste-to-energy but in 2017 it met half of Sweden’s demand for domestic heat.
Incinerating all plastic waste that is not sent for recycling could generate enough energy to meet the combined power requirements of Norway, Sweden and Denmark – already the most prolific waste-to-energy users.
The World Energy Council cites a 2015 study claiming incineration emissions are about 40 per cent lower than from sending waste to landfill. Incinerating waste for energy, when properly regulated, has a lower greenhouse gas profile than coal-fired power, plus reduced nitrogen oxides and much lower sulphur-oxide pollutants – both of which contribute to air pollution. It also burns some products that are harder to dispose of, such as hazardous waste and low-quality plastic.
However, there are concerns of increased local air pollution from incineration and waste-to-energy processes when they are not properly regulated, particularly in less-well-developed economies with less strict regulations and standards. Public opposition to Indonesia’s programme is strong.
Air pollution can affect human cardiovascular and respiratory health as well as the local environment and biodiversity. But modern pollution-control equipment can capture almost all of the emissions while processes such as pyrolysis heat waste without oxygen, thus reducing harmful sulphur and nitrogen oxide emissions, even if CO2 is still produced.
Incineration also produces fly ash, however, and treating this toxic residue could be key to expanding waste-to-energy use.
However, waste-to-energy plants require a steady volume of waste to run efficiently and profitably. It is often more expensive to collect and sort waste for recycling than to send it to landfill or conversion into energy. This applies particularly to low-quality plastic waste with little or no value.
Environmentalists fear this could make it harder to achieve a full ‘closed loop system’ – where waste products are restored back to their original components to make new products – leading to increased consumption of raw materials rather than recycled resources.
With rising global population, affluence and associated energy demand – and thus materials consumption – waste-to-energy can fill a gap in the chain and will grow. It will mean a trade-off between the benefits and the negative environmental impacts however. Stringent regulation alongside investment in new technologies and processes is thus important.
Disclosure and disclaimerMore, collapsed
The following analyst(s), economist(s), or strategist(s) who is(are) primarily responsible for this report, including any analyst(s) whose name(s) appear(s) as author of an individual section or sections of the report and any analyst(s) named as the covering analyst(s) of a subsidiary company in a sum-of-the-parts valuation certifies(y) that the opinion(s) on the subject security(ies) or issuer(s), any views or forecasts expressed in the section(s) of which such individual(s) is(are) named as author(s), and any other views or forecasts expressed herein, including any views expressed on the back page of the research report, accurately reflect their personal view(s) and that no part of their compensation was, is or will be directly or indirectly related to the specific recommendation(s) or views contained in this research report: Lucy Acton
Equities: Stock ratings and basis for financial analysis
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