Peru looks to reduce methane from waste, move toward circular economy

A coalition of countries – including Peru – made headlines this week for pledging to reduce methane emissions. Much of that reduction will come from cuts to oil and gas development, but another key component of methane reductions will need to come from improved waste management. Waste is one of the fastest-growing sources of methane emissions in the world.

With help from the Center for Clean Air Policy (CCAP), Peru’s Ministry of Environment (MINAM) is looking to transform the country’s waste management sector, decreasing methane emissions and adding economic value.

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The NAMA Support Project (NSP), developed by CCAP with the United Nations Environment Program (UNEP) and MINAM), would help Peru transition its waste sector from a linear process focused on disposal to a circular waste management system that finds productive uses for waste products.

The NAMA Facility has shortlisted the NSP, which is about to enter the fund’s Detailed Preparation Phase (DPP). If successful, the NSP will provide myriad benefits to the country and could be replicated in other countries throughout the region.

The NSP envisions the implementation of 22 waste recovery projects, focused on the technologies of landfill gas recovery, composting, and anaerobic digestion. The NSP will open a market for these technologies in Peru and align the country’s waste sector with its enhanced NDC.

The project would prevent the release of potent methane emissions, a super pollutant, whose impact is 34 times greater than CO2 over a 100-year period, and avoids CO2 and other harmful emissions that would otherwise result from the production of fertilizer, fuels, and power.

The NSP is expected to result in a number of co-benefits

Starting situation: Take-Make-Dispose

Peru has a population of 32 million people. Every day, on average, more than 20,500 tons of waste is generated in the country. This is increasing exponentially year on year, as the population grows and per capita income rises, amplifying the purchasing power and waste generation of the average Peruvian. By 2025, the World Bank forecasts that Peru will be generating 36,000 tons of waste per day, or over 13 million tons per year. Over 50 percent of this waste is organic, which decomposes to produce methane gas. According to the UNEP, organic waste is the source of over 36 percent of the country’s methane emissions and is projected to increase .

The Peruvian government is aware of this challenge this increased waste presents, and over the last decade it has prioritized improving waste management. MINAM has identified the waste sector as a key opportunity through which to contribute to the achievement of Peru’s NDC, a commitment to reduce national emissions to at least 20 percent below business-as-usual by 2030, and by as much as 30 percent, conditional on international support.

The Peruvian waste sector currently follows a traditional take-make-dispose model that is focused on final disposal as a waste solution, with disposal being either in dumps, or more recently, in engineered landfills. The country is currently working with Japan International Cooperation Agency (JICA) and the Inter-American Development Bank (IDB) to invest millions of dollars to build new, engineered landfills around the country. These will be helpful in curbing illegal dumping and preventing toxic leachate from entering drinking water sources (an ongoing issue in certain parts of the country, including the capital), as well as keeping waste concentrated and contained. However, all of these new landfills will accept organic waste, which will continue to decompose and release significant amounts of methane, in essence locking in methane-emitting infrastructure over the life of the landfills. The NSP seeks to complement the JICA/IDB projects by collocating gas capture and electricity generation projects with the new planned landfills, mitigating the potential climate impacts.

Proposed solution: Overcome barriers to a Circular Economy

CCAP and UNEP’s NSP seeks to transform Peru’s waste sector by changing the focus from a linear model based on final disposal, to a circular model, focused on treating the large, organic fraction of Peru’s waste to create new uses. It would help Peru accelerate emissions reductions and capture methane, while generating new inputs to the economy, including clean electricity and organic compost, and creating new green jobs. The project is focused on using market and financial mechanisms to reduce risk perception and promote effective technological solutions already being deployed successfully around the world, including organic waste treatment technologies such as composting, anaerobic digestion, and landfill gas capture.

One of the key barriers to this transition happening organically is that in Peru, waste management is a service provided directly by the municipality, and municipalities do not have the capacity or the knowledge to invest in, construct, and operate these technologies. This knowledge and expertise exists internationally in the private sector, including in neighboring countries such as Chile, but Peruvian municipalities lack experience in engaging with the private sector, such as through Public Private Partnerships, and international companies are reluctant to invest in a landscape where the technology has yet to be proven.

The NSP seeks to overcome this barrier by piloting and financing landfill gas capture and electricity generation projects in new and old landfill sites where waste inputs are significant enough for it to be financially feasible. It will work with municipalities on source separation of organics and provide incentives for banks and private sector developers to invest in composting and anaerobic digestion technologies to promote greater diversion from landfills. Focus will be placed on getting these transformative, emission-reducing projects off the ground, opening up the market to these technologies, and promoting replication across the country.

Expected Impacts

Initial modeling suggests that the project, if implemented, could lead to the direct reduction of 12.34 million tCO2e over 20 years, and indirect emissions reductions of over 24 million tCO2e. It would allow the processing of 7,600 tons per day of organic waste, the equivalent of the total capacity of 4 large landfills in Peru, or 69 percent of the organic fraction of municipal waste produced in 2018.

Beyond its significant emissions benefits, the NSP is expected to have a direct impact on the quality of life of the population and translate into additional environmental, social, and economic co-benefits. In addition to its impact on climate change, reducing methane emissions will improve local air quality, since methane is a key precursor gas of tropospheric ozone, which is responsible annually for about 1 million premature respiratory deaths worldwide. The byproducts of organic waste treatment can be used as a soil amendment, reducing the need for harmful chemical fertilizers, improving plant growth, reducing soil erosion and nutrient run-off, alleviating soil compaction, and helping soil retain water. The biogas from anaerobic digestion plants and landfill gas capture will be used to create clean energy and electricity, offsetting fossil fuels.  Finally, the NSP is expected to generate new green jobs (skilled and unskilled) with stable salaries in a sector with significant growth potential.

Conclusion

Peru’s waste sector has a vast potential for mitigation, a fact that has been highlighted over the last 15 year by various studies funded by international institutions and conducted by international consultancies. This potential remains largely untapped, as the barriers have been significant. CCAP and UNEP’s NSP has been designed from the outset to overcome those barriers, reducing transaction costs and risk perception for transformative technologies, and ushering in private sector financing to transform the sector and accelerate it toward the ultimate goal of carbon neutrality.