Carbon Market in the Middle East

green-middle-eastMiddle East is highly susceptible to climate change, on account of its water scarcity, high dependence on climate-sensitive agriculture, concentration of population and economic activity in urban coastal zones, and the presence of conflict-affected areas. Moreover, the region is one of the biggest contributors to greenhouse gas emissions on account of its thriving oil and gas industry.

The world’s dependence on Middle East energy resources has caused the region to have some of the largest carbon footprints per capita worldwide. Not surprisingly, the carbon emissions from UAE are approximately 55 tons per capita, which is more than double the US per capita footprint of 22 tons per year. The MENA region is now gearing up to meet the challenge of global warming, as with the rapid growth of the carbon market. During the last few years, many MENA countries, like UAE, Qatar, Egypt and Saudi Arabia have unveiled multi-billion dollar investment plans in the cleantech sector to portray a ‘green’ image.

There is an urgent need to foster sustainable energy systems, diversify energy sources, and implement energy efficiency measures. The clean development mechanism (CDM), under the Kyoto Protocol, is one of the most important tools to support renewable energy and energy efficiency initiatives in the MENA countries. Some MENA countries have already launched ambitious sustainable energy programs while others are beginning to recognize the need to adopt improved standards of energy efficiency.

The UAE, cognizant of its role as a major contributor to climate change, has launched several ambitious governmental initiatives aimed at reducing emissions by approximately 40 percent. Masdar, a $15 billion future energy company, will leverage the funds to produce a clean energy portfolio, which will then invest in clean energy technology across the Middle East and North African region. Egypt is the regional CDM leader with twelve projects in the UNFCCC pipeline and many more in the conceptualization phase.

Middle East is an attractive carbon market as it is rich in renewable energy resources and has a robust oil and gas industry. Surprisingly, very few CDM projects are taking place in MENA countries with only 22 CDM projects have been registered to date. The region accounts for only 1.5 percent of global CDM projects and only two percent of emission reduction credits. The two main challenges facing many of these projects are: weak capacity in most MENA countries for identifying, developing and implementing carbon finance projects and securing underlying finance. Currently, there are several CDM projects in progress in Egypt, Jordan, Bahrain, Morocco, Syria and Tunisia. Many companies and consulting firms have begun to explore this now fast-developing field.

The Al-Shaheen project is the first of its kind in the region and third CDM project in the petroleum industry worldwide. The Al-Shaheen oilfield has flared the associated gas since the oilfield began operations in 1994. Prior to the project activity, the facilities used 125 tons per day (tpd) of associated gas for power and heat generation, and the remaining 4,100 tpd was flared. Under the current project, total gas production after the completion of the project activity is 5,000 tpd with 2,800-3,400 tpd to be exported to Qatar Petroleum (QP); 680 tpd for on-site consumption, and only 900 tpd still to be flared. The project activity will reduce GHG emissions by approximately 2.5 million tCO2 per year and approximately 17 million tCO2 during the initial seven-year crediting period.

Potential CDM projects that can be implemented in the region may come from varied areas like sustainable energy, energy efficiency, waste management, landfill gas capture, industrial processes, biogas technology and carbon flaring. For example, the energy efficiency CDM projects in the oil and gas industry, can save millions of dollars and reduce tons of CO2 emissions. In addition, renewable energy, particularly solar and wind, holds great potential for the region, similar to biomass in Asia.

5 Interesting Facts About Waste-to-Energy Projects

Waste-to-energy (also known as energy-from-waste) is a complicated technology in the realm of renewable energy. There are a lot of hidden truths and myths about this technology that people need to be aware of. Renewable energy technologies, like solar and wind, have much more simple processes and gain most of the attention from media outlets.

On the converse, renewable energy sources that are highly complex like nuclear energy have a bunch of media attention as well.

So, why don’t we discuss a bit more about this relatively unknown technology and asset class? Here I’ll discuss a number of the most important facts about waste-to-energy (abbreviated as WTE).

Interesting Facts About Waste-to-Energy

Let’s get into our facts about waste-to-energy that you need to know.

  1. Waste-to-Energy Can Provide Baseload Power

The most familiar renewable energy resources such as wind and solar can only provide power if the sun is shining or the wind is blowing. WTE projects can actually provide baseload power that is used to serve consumers and the grid no matter the time of day or if the sun is shining or not.

Baseload power is essentially when intermittent resources like solar and wind become more prevalent.

  1. Not All WTE Projects are Clean and Green

While waste-to-energy projects would seem to be green and clean because they turn trash into power or gas. However, some projects require long hauling of trash to bring to the actual incineration facility. This actually ends up require much more emissions from the trash haulers than alternatives.

One solution to this would be to help promote the use of electric vehicles and electric vehicle technology to be installed in trucking, like waste hauling.

  1. WTE Projects Are Crucial to Help Reduce Landfills

Landfills have increased at an exponential pace the in last 100 years. Waste-to-energy projects are an awesome alternative to landfills as the trash is used to provide electricity or fuel.

WTE projects reduce waste volumes by approximately 90%, which results in fewer landfills that are needed to process ash. This ends up protecting our natural resources and land in a dramatic fashion.

  1. Most WTE Projects have Multiple Revenue Streams

Waste-to-energy projects are extremely complicated and expensive to build. Most of the investor economic interest is driven by financial incentives, renewable identification numbers, tax credits, etc. to help these projects get financed.

Beyond these other financial incentives, some of the waste-to-energy projects produce a byproduct, named biochar, which has multiple applications and fetches good prices. The biochar can usually end up providing the most value in the revenue stream or investability of the project itself.

In addition to other economic streams, waste-to-energy projects usually require high tipping fees. A tipping fee is what the trash hauler has to pay in order to dump the trash at the facility. With WTE projects, the tipping fee can end up being 50-60% of the overall revenue stack.

  1. WTE Facilities are Net Greenhouse Gas Reducers

Methane has more than 20 times the potency of carbon dioxide and is ranked as a very dangerous contributor to climate change and warming of our planet. WTE facilities avoid the productions of methane and end up producing up to 10 times more the electricity than landfill gas projects. If you didn’t know, landfills can actually end up producing electricity by capture the methane gas and compressing it into a consumable natural gas for power.

Sysav–WTE-plant-Sweden

Sweden is one of the best proponents of waste-to-energy in the world

WTE projects will usually have much more capacity than any landfill gas projects.

Conclusions

You can’t use waste-to-energy projects at your home similar to solar or even wind to get free electricity. However, knowing about projects in your area and the relevant suppliers will help you understand whether or not the technology is a perfect fit for your community. If you see a project coming online in your surrounding area, you should know how to ask the right questions.

At the end of the day, WTE projects are green and clean. They just need to have the right systems in place to make them more efficient and less risky to appeal new investor appetite. What fact was your favorite about waste-to-energy?

Do you know much about waste-to-energy projects? Let us know in the comments below. We’d love to hear from you.