2 August 2018
Ambitious plans to turn Melbourne’s organic waste into high-grade compost are a step closer, with CEFC finance supporting a state-of-the-art composting facility to be built by leading international waste management company Sacyr Group.
The new mechanical and biological treatment plant will treat organic waste produced by eight Melbourne councils, substantially reducing landfill and emissions.
The CEFC is committing up to $38 million to the $65 million South Eastern Organics Processing Facility, which will process household garden and food waste from council kerbside green waste collections.
The proposed facility will be the most advanced of its type in Victoria and will produce approximately 50,000 tonnes of high grade compost each year.
It will mean food and green waste produced by residents in the rapidly growing Dandenong region in Melbourne’s south-east will not end up as landfill, where it would produce harmful greenhouse gas emissions such as methane. Instead the waste will produce compost for local parks and gardens.
The new facility will have an annual processing capacity of 120,000 tonnes of waste per year, the equivalent of 12,000 truckloads of waste. It is expected to abate more than 65,000 tonnes of CO₂-e emissions annually – cutting 85 per cent of the emissions the waste would have generated in landfill, the same as removing about 13,900 cars from the road each year.
The project demonstrates how CEFC finance can address methane emissions, which have a global warming potential 25 times stronger than that of carbon dioxide.
CEFC CEO Ian Learmonth said: “We look right across the economy to identify finance opportunities to reduce Australia’s emissions, and we’re pleased to be making our first project investment to help councils and communities tackle emissions from their organic waste.
“When organic waste such as food and green waste ends up in landfill it breaks down and produces methane. With this technology, councils can avoid those emissions by turning their organic waste into re-usable compost, while also reducing our unsustainable reliance on landfill as a waste disposal option.
“We strongly endorse the principle of avoiding and reducing waste at the source. Our finance is about effectively manage the remaining waste, so that it doesn’t end up as landfill and we make a meaningful difference to our greenhouse gas emissions.”
Sacyr expects its fully-enclosed, in-vessel aerobic composting and maturation plant to be operational in mid-2019. It will operate for 15 years, with a potential five-year extension. The technology, developed over two decades, ensures plant storage reservoirs are completely closed, and uses efficient and reliable deodorisation systems.
Food and green waste makes up an estimated 42 per cent of landfill from Australia’s municipal and commercial and industrial waste. The new Melbourne plant will provide part of the organic waste solution for eight of the 31 councils whose waste streams are coordinated by the Victorian Metropolitan Waste and Resource Recovery Group (MWRRG).
Participating councils are charged gate fees to use the facility, with the majority of the compost produced sold back to the councils for use in community parks and gardens. The eight councils are Bayside, Cardinia, Casey, Frankston, Glen Eira, Greater Dandenong, Kingston and Monash.
The internationally-accepted Waste Hierarchy lists avoiding and reducing waste as its preferred outcomes. Its least preferred outcomes are treatment and disposal.
Resource recovery, which involves reusing, recycling, reprocessing and energy recovery, is an important middle tier where the CEFC’s finance for projects is making a difference.
CEFC Bioenergy Sector lead Henry Anning said the CEFC finance model for the Melbourne project was an industry first, providing councils with access to a project financing structure that has rarely been leveraged across local government.
The innovative approach means the large-scale investment can proceed on the basis of revenues from gate fees.
Mr Anning added: “Australia’s waste sector is facing enormous challenges, because of the growing amount of waste we produce as well as increasing community concerns about the way we handle that waste. This new Melbourne facility provides us with a practical and proven way to turn organic waste into a re-usable commodity at the same time as avoiding harmful emissions.
“It is aligned with the principles of the internationally-accepted waste hierarchy, which encourages reduction, reusing, recycling, reprocessing and energy recovery as effective waste management options.
“We need to think of waste differently, so that instead of becoming a problem it becomes a resource, whether for compost, recycling, bioenergy or biomass. We expect to see more councils and communities consider innovative ways to manage all forms of waste. This innovative project finance model offers opportunities for other groups of councils considering investing in substantial waste management infrastructure to reduce landfill waste.”
The CEFC has an increasing focus on the waste sector, recognising the significant investment requirements in new and replacement infrastructure and equipment. Key investments include:
Sacyr is a global infrastructure and services company, with expertise in turning challenges into achievements. It operates in nearly 30 countries and has a workforce of 30,000 professionals. Sacyr Industrial and Sacyr Environment boast great expertise in urban waste treatment, having built over 48 plants and handling 3 million tonnes of waste each year in 18 plants in Spain and Portugal. It also has two other waste treatment plants under development in the United States, in the states of Connecticut and Maryland. Sacyr already operates in Australia through its subsidiary, Sacyr Water, which has built and operates the Binningup desalination plant and currently is designing and building a high tech tertiary water treatment plant for agricultural purposes in the north of Adelaide.