WASTE TO ENERGY NAMA IN CHILE

Viviana Huerta

Program Coordinator at the Technical Division

National Centre for Innovation and Promotion of Sustainable Energy

CCAP Climate Finance Forum 2016

Bonn, Germany

Chile's Intended Nationally Determined Contributions (INDC) for climate change mitigation set a commitment by 2030 of 30% reduction of GHG per GDP unit compared to the level reached in 2007, and up to 45% if there is international support.

Chilean Context

Pre 2020

Post 2020

Chile will take nationally appropriate mitigation actions to achieve a 20% deviation below the ‘Business as Usual’ emissions growth trajectory by 2020, as projected from year 2007. To accomplish this objective Chile will need a relevant level of international support. Energy efficiency, renewable energy, and Land Use and Land Use Change and Forestry measures will be the main focus of Chile’s nationally appropriate mitigation actions

– Energy Policy 2050: sets the goal to generate 70% of the Chilean energy mix from RE sources by 2050.

– Framework Law for Waste Management, Extended Producer Responsibility and Recycling Promotion: ensure an environmentally rational management of waste.

– National Waste Policy currently under revision to promote the value of organic waste.

Mitigation Policies

– Energy is the main GHG emitting sector, accounting for 74.7% of the country's emissions (68,410 GgCO2eq). Since 1990, they have grown 104% mainly due to the increase in mineral coal and diesel consumption for electrical generation.

– Waste represents approximately 4% of Chilean emissions (3,554.1 GgCO2eq), the fourth largest emitting sector, mainly from industrial waste, which has grown 44.2% since 1990. By category, 74.4% of GHG emission correspond to solid waste disposal, followed by wastewater treatment and discharge with 23.7%, biological treatment of solid waste with 1.9%, and waste incineration with less than 1% (IBA, 2014).

Sector Context

-60

-40

-20

0

20

40

60

80

100

MtC

O2

eq

1. Energía 2. PI 3. UDOP4. Agricultura 5. UTCUTS 6. Residuos

Total absorptions: 49,9 MtCO2eq, decreasing on 1,9%

since 1990

GHG Emissions Balance and absorptions on 2010: 41,7

MtCO2eq

Total GHG emissions: 91,6 MtCO2eq, raising 83,5% since

1990. Energy represents 74,7%

The NAMA seeks to facilitate a favorable setting for developing and implementing projects of energy usage resulting from different types of solid waste as a new source of sustainable energy and an alternative to the conventional untreated waste disposal.

Its specific objectives are to:

• Facilitate the installation of a series of projects of energy valuation of organic solid waste.

• Create a new market of technology suppliers, operators, ESCO companies, etc.

• Implement a portfolio of sample projects to facilitate its replication

• Develop and install technical capabilities, both in the public and private sector.

• Produce information that allows reducing knowledge gaps and can serve ongoing regulatory framework strengthening.

NAMA Objectives

Technical component • Capacity building:

– Implementing a training program: workshops for stakeholders and industry training (installers, operators and consultants).

• Knowledge exchange: – Elaborating a baseline per technology, describing existing projects, business models and

potential projects identified. – Identifying gaps and designing trainings for technology suppliers, consultants, operators and

installers.

• Technical assistance: – Strengthening the regulatory framework along with the ministries for the Environment and

Energy. – Designing and implementing a technical assistance plan.

• Dissemination – Dissemination and information actions to reduce information gaps. – Mechanism for searching and disseminating funds, regulations and technologies.

Elements of the Proposal

Financial component

• Creation of a national fund for leveraging resources as a domestic and international

platform, both public and private, maximizing access to support opportunities.

• Development of a bankable project pipeline (pre-investment grants); training and advisory services for the financial sector; investment grants; guarantee funds.

Elements of the Proposal

Elements of the Proposal

NAMA proposal

Grants for pre-feasibility studies

Grants for investment

Soft loans, equity and guarantee fund

Training and capacity building modules

Knowledge exchange programme

Dissemination

Technical assistance

Component Barriers

Financial

High investment costs.

Complex access to credit for smaller scale projects

(less than 1 MW).

Information Gaps between project developers and end-users.

Lack of reliable data and sample projects.

Human resources

Lack of installers, operators, consultants, evaluators and laboratories.

Underdeveloped value chain.

Cultural Difficulty to undertake projects that are not the core business of companies and industry is slow in adopting new technologies and practices.

Regulatory

Lack of specific regulations to force implementation of WtE projects.

Current final disposal does not consider the

negative externalities of untreated waste

disposal.

Institutions Involved

CIFES National Coordination Entity

Ministries for the Environment and Energy Technical advisory committee

CORFO Entity in charge of implementing

the financial component Regional committees Academia and Civil Society

Dissemination roundtables

• Creation of capacities and knowledge around appropriate technologies to adapt and implement WtE projects in Chile.

• Creation of the required financial conditions in order to overcome the existent investment barriers and mobilize private sector investments.

• Displacement of emissions from conventional energy consumption and support diversifying the energy mix.

• Reduction of methane emissions from disposal of organic waste in sanitary landfills and from transporting waste to final disposal sites.

Expected outcomes

• Extended lifespan of current final disposal sites by decreasing the volume of incoming waste.

• Generation of fertilizer will reduce emissions of other sectors, such as agriculture, change of land use and the use of water resources.

• Better access to reliable data and information on WtE project development. Only considering bovine and pig farms related projects, 10 years of project implementation, would result in a total reduction of 3,554 GgCO2eq. It is possible to set an annual reduction goal around 10% of the baseline (MAPS Chile).

Expected outcomes

Program Financing

• International support requested:

US$ 250,000 for studies at the design stage: prioritization of technologies and business models.

- NAMA Net studies currently under development

- Relevant aspects, as business model, not covered

US$ 60,000,000 for implementation: raise of a portfolio of potentially applicable projects, implementation of projects through grants/loans/guarantees, capacity building, dissemination and MRV system.

• Sustainable waste management is a pending task in Chile’s environmental policy and a relevant source of emissions due to the lack of adequate treatment of the organic fraction.

• This NAMA will create the capacities and knowledge around appropriate technologies to adapt and implement them in Chile.

• Financial instruments will reduce risks perception from financial institutions and facilitate investments, particularly for medium and small scale projects.

• This NAMA will help to change public perception around waste management by showcasing concrete examples where the energy value contained in organic waste can be utilized economically and in addition, result in GHG emission reductions and other related development benefits.

Conclusions

Thank you www.cifes.gob.cl

Viviana Huerta

vhuerta@corfo.cl