Numbers Don’t Lie

The world’s leading climate scientists agree that the planet’s greenhouse situation has reached crisis levels. This is mainly due to the uncontrolled amount of waste generated by our cities and from the hazardous contaminants resulting from overusing fossil fuels.

It is scientifically proven that the earth’s average temperature increased — according to NASA, by 1.62 degrees Fahrenheit since the late 19th century, with most of the warming occurring in the last 35 years as an offshoot of carbon emissions. Global temperatures are seen to rise even further unless mitigation programs are put in place.

Exacerbating the situation is the amount of garbage we generate. In Metro Manila alone, the amount of garbage generated is an astonishing 12,500 tons per day. This puts Metro Manila among the top five most severe waste-ridden cities of the world. Quezon City is the largest generator of trash, spewing-out some 3,600 tons a day, followed by the cities of Manila and Caloocan, each generating about 1,200 and 913 tons daily, respectively.

While exiting laws mandate that non-organic waste like metals and plastics be segregated and channelled to recyclers, the reality is that the country does not have enough recycling facilities to absorb the city’s entire load of non-organic waste. What happens is that the bulk of metals and plastics are directed to junk shops who try to repurpose them. Those unsold are simply dumped in open trash pits and in our waterways.

Organic waste, on the other hand, is buried in landfills. There are three landfills that currently absorb Metro Manila’s waste, they are: the 40-hectare landfill in Navotas, the 19-hectare landfill in San Mateo, and the recently expanded 70+-hectare landfill in Rodriguez, Rizal.

The practice of dumping in landfills affects our air quality as it produces massive amounts of methane gas, a byproduct of decomposing waste. It also affects our water quality as toxic bacteria and chemicals seep into our water table. Ultimately, dumping of waste in or out of landfills affect our wildlife and the health and well-being of our people. The toxic effects of our waste will remain for generations to come.

What we need are sustainable solutions.

The world is not short of technologies that can convert waste to energy or even waste to fuel. Many have tried to set up shop in Metro Manila but only one has succeeded — a waste-to-energy facility in the Rizal landfill owned by the Montalban Methane Power Corporation. The Metro Pacific Group has also established a partnership with Quezon City to convert the city’s waste into power. However, the plant has yet to break ground.

Standing in the way of sustainable solutions to Metro Manila’s garbage problem is the financial structure and politics of the city’s waste management systems. At the heart of the conflict is what is called “tipping fees” or the amount government pays a landfill owner for the right to dump trash in its facility. The current rate is P600 per ton, and this is paid by the Metro Manila Development Authority (MMDA) to the landfill owner. It is the means by which the landfill owner recoups its investment and how it finances its maintenance costs.

The conflict lies in the fact that sustainable solutions like waste-to-energy plants also rely on trash to serve as their feedstock (the main input to generate power). With the trash channelled to the waste-to-energy plant instead of the landfill, the latter is deprived of its main source of income. Worse, waste-to-energy plants also require the collection of tipping fees as it forms a part of its business model.

The squabble over the tipping fees is the reason why waste-to-energy solutions have not prospered in the Philippines.

While it is true that government regulators can intervene and arrange a split of Metro Manila’s waste so that both the landfill owners and the waste-to-energy plants have enough tipping fees to be viable, the reality is that certain powerful politicians have a stake in the landfills and they refuse to give up a portion of their tipping fees. It is a classic case of corruption standing in the way of the greater good.

I recently came in contact with an American company that is hoping to solve Metro Manila’s garbage conundrum. The company is called Wastefuel of America and they specialize in converting municipal solid waste into aviation fuel (or diesel). Wastefuel has existing plants in various stages of development in the US, Mexico, Columbia, Panama, and Brazil, among others. The Philippines is a prime investment destination for Wastefuel.

The Philippines was singled-out for these reasons: Its abundance of waste, the local demand for aviation fuel which last year topped 628 million gallons, and our strategic position to export fuel to key aviation hubs like Hong Kong, Singapore, and Thailand. The Philippines is between one and three hours away from these hubs. Annual demand for aviation fuel across Asia is at 50 billion gallons.

As I write this, talks are ongoing between Wastefuel, the landfill owners, the MMDA, and the Department of Trade and Industry to sort out the tipping fee issue and other legal concerns.

Wastefuel’s intention is to build a bio-refinery with the capacity to process 3,500 tons of waste a day. This will yield some 22.9 million gallons of aviation fuel a year which could either be used to serve local or regional demand. This translates to P7.43 billion worth of import saving or export earnings, whichever the case may be. Wastefuel has plans to scale-up as more waste becomes available.

The investment to build Wastefuel’s bio-refinery is in the region of $700 million. Not only will an investment of this scale have an impact on the nation’s balance of payments, its financial ripple effect among Filipino contractors, equipment suppliers, and service providers will be enormous. The project is also seen to generate some 200 jobs for Filipino engineers and scientists.

As far as taxes are concerned, government stands to earn approximately P415 million in income taxes, annually, after the 8th year. This does not include business and local government taxes.

Wastefuel’s technology is fully compliant with the Clean Air Act in that its process does not involve incineration or combustion. Instead, it uses steam and pressure to convert waste into gassious form and, then using the Fischer-Tropsch process, it converts the gas to liquid. The outcome is what is called a “syncrude” and this is what is refined into aviation fuel.

What is remarkable about Wastefuel’s technology is that aviation fuel produced with its methods has a carbon content that is less than 20% of that made from fossil fuel. To put its environmental impact into context, for every minute of commercial flight using fuel made from garbage, we prevent one ton of trash from inundating our landfills and avoid the equivalent of four truckloads of CO2 from polluting our air.

Aviation fuel made from renewable sources or sustainable aviation fuel, as it is called, is seen to disrupt the petroleum industry. Not only does it leave a lighter carbon footprint, it is also cheaper. Lower carbon emission and a cheaper cost — the value proposition is too compelling to ignore. This is why analysts consider sustainable aviation fuel the wave of the future.

There’s a more compelling reason why sustainable aviation fuel makes sense.

In 2016, the international Civil Aviation Organization, or ICAO, pledged to “make all growth in international flights after 2020 ‘carbon neutral’” (according to CarbonBrief). The commitment was made before the United Nations through a climate initiative called the Carbon Offsetting and Reduction Scheme for International Aviation or CORSIA.

To date, 73 nations have volunteered to comply with the CORSIA initiative. Collectively, the airlines of these nations represent 76% of total air travel. By 2026, participation in CORSIA will be mandatory for all air carriers.

To meet their carbon emission commitment, airlines will have to use sustainable aviation fuel in whole or in part. Even today, Japan Airlines, United Airlines, and Cathay Pacific are already making purchase orders for their long term supply of sustainable aviation fuel. With this global accord in place, quantum growth in the demand for sustainable aviation fuel is expected.

The Philippines is in the position to be a major beneficiary of the CORSIA accord if Wastefuel succeeds in overcoming the tipping fee issue and politics surrounding Metro Manila’s garbage management. It will also provide a permanent solution to the city’s garbage problem. It will be a win-win situation for the country.

Lets hope greed and politics does not get in the way of this game changing project.


Andrew J. Masigan is an economist.