European firms are beginning to invest heavily in waste-to-energy (WtE) markets in Southeast Asia, as the region’s electricity demands are expected to soar in the coming decades and Europe’s own demand for burning waste is drying up.
European and Japanese companies have long dominated the WtE industry, which at the simplest level sees power plants incinerate landfilled waste that cannot be recycled to produce electricity.
Energymonitor.ai, a clean energy news website, recently estimated that there are more than 100 waste-to-energy projects recently completed or underway in the Philippines, Indonesia and Thailand.
This includes a plant in Pangasinan, in the Philippines, financed by UK-based Allied Project Services, and a Danish government-backed project for a plant in Semarang, an Indonesian city. A project in Chonburi, Thailand, is backed by French firms ENGIE and Suez Environment.
The Netherlands-based Harvest Waste, previously called Amsterdam Waste Environmental Consultancy and Technology, last year began conducting initial studies for a waste-to-energy project in Vietnam’s Mekong Delta province of Soc Trang, at an estimated cost of $100 million (€93.5 million).
In 2021, Harvest Waste also obtained original proponent status for a proposal to construct a facility in Cebu in the Philippines, which is set to become the most advanced WtE plant in Asia.
It would use the same technology as the landmark facility in Amsterdam, which can generate 900 kilowatt hours (kWh) of electricity from each ton of waste, according to company documents.
Europe looking for new markets
Luuk Rietvelt, the Asia-Pacific region head at Harvest Waste, explained that the Southeast Asian market is growing because there is funding from major development banks and several of the region’s governments offer incentives, including feed-in tariffs, to spur investment.
“A lot of municipal solid and commercial waste all over Asia is still landfilled or actually openly dumped for lack of alternatives,” he told DW.
In Europe, around 500 WtE plants are currently in operation, according to the Confederation of European Waste-to-Energy Plants.
But European technology providers are now looking for new markets because of growing demand elsewhere and winnowing opportunities at home, Janek Vahk, a climate, energy and air pollution program coordinator at the nonprofit Zero Waste Europe, said.
The “business climate” for Europe’s WtE industry saw the biggest decline in a decade, according to the energy consultancy Ecoprog’s latest annual WtE Industry Barometer survey, released in October.
At the same time, most other countries and regions in the world have very few, if any, incinerators so there is a huge market potential in those regions, Vahk added.
Southeast Asia is one such region.
According to various estimates, urban populations in Southeast Asian countries are expected to increase to around 400 million by 2030, up from around 280 million in 2017, while energy demand will grow by two-thirds by 2040.
Because of this, experts reckon that the amount of landfill and unrecycled waste will soar in the coming years, further incentivizing some method of making it productive.
Policies to prevent the generation of waste will be implemented but “urgent treatment” will be necessary in the region, Masaki Takaoka, a professor and chair of the Waste to Energy Research Council at Kyoto University in Japan, told DW.
“It is expected that many cities will consider waste to energy, mainly incineration technology,” he added.
Vietnam’s largest WtE plant, capable of handling 4,000 tons of dry waste a day, started operations in June.
Southeast Asia’s waste-to-energy market is expected to grow at a compound annual growth rate of around 3.5% between 2021 and 2028, according to recent analysis by Mordor Intelligence, a research firm.
Veolia Environment SA, a France-based transnational company, was one of the five big firms active in Southeast Asia’s WtE sector, according to Mordor Intelligence. Others included Japan’s Mitsubishi Heavy Industries, and local Indonesian and Singaporean firms.
Roadblocks to development
However, there are problems. One is funding.
In Europe, the capital costs of the most high-tech WtE incinerators are typically around €1,000 per ton per year, said Vahk, which could be prohibitively expensive in some countries in Asia.
Yet some of the largest development banks, including the International Finance Corporation and Asian Development Bank, are investing heavily in the industry.
Getting cash from the European Union is unlikely. In terms of investment in waste-to-energy, the EU has excluded it from economic activities considered “sustainable finance” under the EU taxonomy for sustainable activities.
Other investors are facing heat from climate activists. Last year, a consortium of environmental groups complained to the Asian Development Bank about its funding of a new WtE incineration project in Vietnam’s Binh Duong province.
Unlike in Europe, there is not as much separation of material between recyclable and non-recyclable, nor between natural and artificial goods, in Asian landfills. As such, non-burnable waste may find its way into the incinerators, climate activists have warned.
If that requires more plastics to be burned in order to increase the necessary heat of the incinerators, that could massively increase carbon dioxide emissions.
Environmentalists also worry that a drive towards WtE incineration will disincentive local efforts to boost recycling and alternative uses for waste which are not as environmentally harmful.
“From our perspective, building incinerators is neither viable nor necessary,” said Vahk of Zero Waste Europe.
Environmental costs of burning trash
The European Union has made climate action core to its efforts to boost relations with countries in Southeast Asia.
The EU’s Waste Framework Directive states that other waste management methods are preferable to incineration.
“Our goal is to ensure that the recovery of energy from waste in the EU supports the objectives of the circular economy action plan and is firmly guided by the EU waste hierarchy,” an EU spokesperson told DW.
“It is waste prevention and recycling that deliver the highest contribution in terms of energy savings and reductions in GHG emissions,” the spokesperson added.
Advocates of WtE industries, however, say that something needs to be done about the considerable landfilling of waste in regions like Southeast Asia, as well as the soaring demand for electricity.
They point to a study last year from several Dutch academics published in Science Advances journal that argued methane emissions from landfills could be twice as high as previously thought.
There is also an argument that because Southeast Asian countries are already far along on the path to making electricity from waste, it would be better if European firms take the lead.
European companies want to help build waste-to-energy power plants in Southeast Asia like this one in Germany. (DW) 
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