CREA TING C O N DITIO N S FOR DEVELOPMENT OF W ASTE -TO- ENERGY PROJECTS IN UKRAINE Amendments to Legislation- сoncept
2 D ISPOSAL OF MUNICIPAL SOLID W ASTE - ACTUAL STATUS
Disposal of municipal solid waste - | 3 actual status 300-350 kilos Ukraine of municipal waste (MW) per 1 person generates is generated in Ukraine annually: equivalent 3,5 million GCal of heating energy 10 10 = 1 million tons billion m 3 1,2 billion of municipal waste is being OF NATURAL GAS collected and transported kWt*hour to the landfills in Ukraine of electric energy
Disposal of municipal solid waste — | 4 actual status Ukraine* 4,2% of MSW is being 93,3% 12 000 12 000 sorted hectares 5 434 MSW is taken of landfills landfills to the landfills 30 184 unauthorised landfills 2,5% Territoty exceeding that of the city of Vinnitsa** used to generate heat * As per the 2 0 1 7 annual report by the Ministry of Regional Development ** Vinnitsa city area makes 1 1 , 3 thousand hectares
Disposal of municipal solid waste — | 5 actual status As compares against Sweden 99% 1% 1% of the MSW are sorted, is taken of which: to landfills 50% 50% recycled and used 50% 50% 800000 800000 tons used for energy of waste annually imported generation to Sweden
| 6 REASONS FOR ABSENSE OF W ASTE-TO-ENERGY FACILITIES IN UKRAINE
Waste collection – actual status | 7
Why so? | 8 Cheap landfilling No efficient control Liability — minimal to absent Waste disposal is still Supervisory and law enforcement bodies the cheapest way of MSW Regulations establish are not able to hold the treatment. minimal liability persons/entities creating for waste disposal unauthorized landfills at unauthorized landfills. duly liable.
Why so? | 9 Investors are not interested No incentives and/or sufficient guarantees available to potential investors to be ready to invest into waste-to-energy (WTE) facilities. Recently adopted National housing and Municipal Services Law does not provide for: 1 2 3 No fixed amount of waste No currency rate risk decrease mechanism No means to ensure concluding supply guarantee by the available to investors — in spite of the fact long-term contracts that local authorities. Waste that the investments into waste treatment could guarantee investment treatment deals are made facilities are mainly made in foreign currencies return. Private collection/ between the waste collection/ (relevant equipment, technology and software transportation company may go transportation company are unavailable in Ukraine, hence need to bankrupt and/or stop providing and the waste treatment be procured abroad), the regulations do not its services, hence the order facility and qualify as private provide for any measures ensuring the for treatment services may be business dealing. investor’s foreign currency risks decrease. cancelled at any time.
Why so? | 10 Tariffs NO transparent mechanism to establish the waste treatment tariffs: Use of fuel No laws/regulations to — New national Housing and Municipal Services Law provides for only deal with the use of general waste disposal tariff. Unclear how the treatment fee (gate fuel produced from fee) will be calculated as a part of the disposal tariff. municipal solid waste — The actual tariff formation method (cost plus fixed profit rate (SRF/RDF) as one of the calculation) does not qualify as stable source of income since the potential energy sources components thereof (price of energy carriers, fuel and labor) are (laws/regulations increasing permanently while the automatic tariff revaluation is only deal with the use unavailable. Hence, projects aimed at the construction of waste treatment facilities get less attractive in terms of investment. of energy generation from biomass).
Why so? | 11 Ecological safety Sorting Local authorities Serious resistance by Waste sorting culture and Local authorities have no ecology-related NGO tools to ensure proper waste legal power to manage the and local communities sorting are absent. Recyclable waste treatment. They are to the construction waste typically going to limited to determining the of the waste treatment landfills instead of recycling collection/transportation facilities due to absence facilities. Meanwhile Ukraine company and establishing of regulations ensuring imports the recyclables from the relevant service fee rates. the due environmental safety other countries. Waste sorting, treatment and of the WTE facilities. disposal fall beyond their competence.
| 12 Creating preconditions for the waste to be used/disposed of with maximum energy OUR and economic efficiency and environmental safety. GOAL Each type of municipal solid waste should be treated using the most environmentally safe technology that ensures the waste’ most efficient use.
13 WHAT NEEDS TO BE CHANGED?
What needs to be changed? | 14 1 2 3 Implement the set Pass the law to establish of guarantees and incentives the clear set of ecological Turn waste disposal into necessary to involve requirements applicable least cost-efficient type private investment into to the waste treatment of waste management the WTE sector facilities 4 5 Implement the adequate waste Establish clear rules to form management system at the municipalities’ the WTE service tariff level, increase the relevant powers (gate fee) of local authorities
What needs to be changed? | 15 1 Responsibility/liability Increasing the responsibility/ liability for waste disposal at unauthorized locations. task Control Turning waste Increasing the relevant powers of the local supervisory and law disposal into least enforcement authorities. cost-efficient type of waste disposal. Tax Progressive increase of waste disposal tax rates.
Tax rate due and payable for MSW | 16 disposal in EU countries and in Ukraine 1 2 0 € /ton 100 107 80 82 70 60 65 64 49 40 20 27 26 20 0,15 France Belgium Finland Denmark Sweden Austria Ukraine The Netherlands Poland Great Britain
What needs to be changed? | 17 2 Contracts Delegating to local authorities the power to conclude long-term (up to 49 years) contracts with task the winners of the tender for waste treatment services provision. Implementing the Guarantees set of guarantees Within the effective contractual term and incentives + local authorities shall guarantee to the necessary to involve waste treatment company (i) supply private investment of fixed MSW amount and (ii) payment into the WTE sector. of the fixed waste treatment tariff.
What needs to be changed? | 18 European Sorting 3 technological Mandatory prior waste sorting with maximum requirements collection of recyclables to WTE as a part of biomechanical treatment or before In case the thermal treatment task the thermal treatment. technology is used to treat the waste the mandatory requirement for the burnout temperature shall be not less Passing the bill than 850 °С to last within not European less than 2 seconds to ensure to establish the the furanes and the dioxines requirements clear set of have disintegrated (most to emissions cancer-dangerous substances). ecological The requirements are a part of Full implementation requirements the EU legislation. of the EU Directive on industrial emissions’ applicable to the into national legislation. Gas cleaning waste treatment Providing for the mandatory facilities. 3-level gas cleaning system.
What needs to be changed? | 19 4 Cost MSW treatment cost established by National Comission Regulating task Energy Use and Municipal Services for a long-term period using the incentive-based rate formation model. Establishing clear rules to form the Price revaluation waste treatment service tariff Introducing the transparent mechanism for price revaluation (gate fee). (link to consumer price index, currency exchange rate etc.).
What needs to be changed? | 20 Property title 5 Introducing regulations to transfer to local authorities the property title to MSW. Integrated operator (IO) task Delegating to local authorities the power to either appoint the integrated MSW management operator (hereinafter the IO) from among the municipal companies or to hold a contest/ tender to otherwise determine such IO Implementing The IO shall ensure the coordination of all the waste management processes/operations within the relevant administrative/territorial unit and the adequate shall further control the quality of service rendered to customers waste treatment (population) by the companies involved. management system SO rights at the municipalities’ Vesting into the IO the right to contract: level, increasing • with relevant business entities — for waste collection/ transportation, waste cleaning, waste treatment, the relevant powers waste disposal and/or other waste management of local authorities. services; • with citizens — for waste management services (via the adherence contracts).
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