In 2009 and 2010, the U.S. Environmental Protection
Agency (EPA) finalized a Mandatory Greenhouse Gas (GHG) Reporting Rule (40 CFR
98.2) and the “Tailoring Rule” (officially PSD [Prevention of Significant
Deterioration] and Title V Greenhouse Gas Tailoring Rule, 40 CFR 51, 52,
70, and 71), respectively, to collect, report, and permit GHG emissions. These
rules do not impose limits or tariffs on GHG emissions; however, information
developed through these tracking and reporting requirements will provide background
for future GHG policy decisions.
Several countries have taken the next step of
controlling GHG emission through taxes or tariffs. In 2012, Australia
implemented a carbon tax to encourage GHG emission reductions. While water
resource recovery facilities (WRRFs) generate a fairly small percentage of
total U.S. GHG emissions — approximately 0.3% in 2011, according to EPA’s 2013 Inventory
of U.S. Greenhouse Gas Emissions and Sinks — energy and resource recovery
programs at WRRFs can result in important reductions to GHGs. Consequently, it
is important to have carbon tax or incentive programs accurately identify
potential GHG reduction benefits associated with wastewater treatment and
Biosolids and the carbon pricing mechanism in Australia
In July 2012, Australia enforced a price on carbon
emissions as part of a series of initiatives to reduce its global carbon
impact, which on a per-capita basis is among the highest in the world. The
carbon price, known as the Carbon Pricing Mechanism (CPM), initially was to tax
Scope 1 (see sidebar, p. 59) carbon emissions at AUD $23 (U.S. $21) per
tonne of carbon dioxide equivalent ($/t CO2e) emissions (U.S. $21/t
CO2e) for 3 years followed by incremental increases prior to
entering an emissions trading scheme.
Its introduction was, and remains, highly controversial
and often is discussed on the Australian political agenda. In fact, following a
change in prime minister in mid-2013, the carbon price subsequently was
discarded and will be replaced with an emissions trading scheme (ETS) as soon
as July 2014.
At press time, the value of 1 tonne CO2e
under the new proposal had dropped to AUD $6/t CO2e (U.S. $5/t CO2e).
It is expected that moving to an ETS-based system will save the average
Australian family $1 per day. While the carbon price primarily was aimed at
heavy industry, it also applies to the water industry under a general waste
category. Currently, under the National Greenhouse and Energy Reporting (NGER)
guidelines (Australian Government Department of Climate Change and Energy
Efficiency), water companies must report on their energy use and GHG emissions
if, at a facility level, they do any of the following on an annual basis:
- emit more than 25,000 tonnes of CO2e,
- produce more than 100 terajoules (28
million kWh) of energy, or
- consume more than 100 terajoules of
energy (28 million kWh).
It is well understood that the responsible management of
biosolids generated from the water industry can reduce the carbon footprint.
Methods for carbon footprint reduction include
- production of renewable energy from
biogas generated from anaerobic digestion,
- displacement of fossil fuels attributed
to fertilizer manufacture by land applying the biosolids to provide nutrients
(as well as carbon retention) to agricultural land,
- displacement of fossil fuel by direct
burning of biosolids (which have similar calorific value to lignite) in
purpose-built or third-party facilities, and
- increased carbon sequestration of land
by applying biosolids as a soil amendment.
The reductions in carbon footprint listed above will be
offset somewhat by fugitive methane emissions that can occur during solids
processing and the energy associated with biosolids treatment.
with calculation methodology
A recent study commissioned by the Australian and New
Zealand Biosolids Partnership (ANZBP) — a member-based group consisting of
utilities, consultants, academics, and government bodies committed to the
sustainable management of biosolids — investigated the potential impact of the
CPM on the biosolids industry. This study was, in part, aimed to inform the
industry of current practice, while also reviewing the methodology proposed and
highlighting opportunities going forward.
One finding of the study was immediately clear: The
methods used to calculate emissions arising from biosolids treatment and
management in the CPM have the potential to significantly over- or
underestimate the emissions generated, resulting in unjustified carbon price
liabilities. These errors arise partly from the emission factors used for
certain treatment or management processes. For example, only five multiplier
“options” are available:
- managed aerobic treatment,
- unmanaged aerobic treatment,
- anaerobic digester/reactor,
- shallow anaerobic lagoon (less than 2 m
[6.56 ft] depth), and
- deep anaerobic lagoon (greater than 2 m
[6.56 ft] depth).
No methodology is available to calculate emissions for
numerous commonly practiced processes in the biosolids industry, such as
advanced anaerobic digestion, thermal and pasteurization systems, systems
involving use of admixtures, or energy recovery through combustion processes.
Since the existing calculation methodology fails to
include processes that increase digestion performance — advanced digestion, for
example — there is no incentive from the CPM to move toward systems that
produce more biogas and are more carbon efficient.
In addition, as the CPM only applies to Scope 1
emissions, the study found that the methodology does not penalize processes that
may have higher total carbon emissions. Based on current methodology, aerobic
digestion, which has zero Scope 1 emissions — as a process which falls under a
definition of “managed aerobic treatment” — will have a lower carbon price
liability than anaerobic digestion despite the higher energy demand and overall
Another concern is the principal calculation of Scope 1
methane emissions. These are based on the difference between a theoretical
production and a measured quantity (that is based on methane used for
cogeneration, flared, or exported). While the methodology is correct in
principle, the factor used to calculate the theoretical figure is inappropriate
as it is based on the production of biogas from glucose, which has a lower
biogas yield and methane content than biogas from wastewater solids digestion.
Consequently, the theoretical figure is too low and can lead to small or even
negative results for methane emissions.
The effects of these anomalies are profound. Along with
inaccurately determined tax liabilities, wastewater operators also are exposed
to real financial and criminal risks, as well as reputational risks, if
emission estimates are incorrect. If an audit indicates underestimated carbon
emission, the operator may be subject to sizeable fines and criminal penalties
attached to the carbon pricing legislation. Conversely, overestimation of
emissions may lead to an excessive carbon price liability. Recommendations have
been made calling for additional research to develop more accurate
methodologies for carbon emissions estimates for biosolids processing.
While significant opportunities for reducing carbon
emissions and recovering energy from biosolids exist, the current methodology
fails to account for the emissions reduction directly from biosolids energy
recovery. However, the potential value of this missed opportuntiy can be
As an example, the table on p. 60 shows the carbon
emissions generated from the production of 1 MWh of electricity from coal,
natural gas, and biogas. A coal-fired power station generating 100 MW of power
would produce about 279,000 tCO2e Scope 1 emissions. This amount
would be taxed at $6.42 million (U.S. $5.87 million) based on $23/t (U.S. $21/t)
If biosolids combustion generates 5% of the total power,
the Scope 1 emissions would fall and save the generator $315,300 (U.S.
$288,000). If biosolids are used in place of a portion of the coal, carbon
emissions are reduced by 312 kg CO2e for each MWh resulting from biosolids
combustion. Based on a biosolids energy content of 12 MJ/kg (7.3 kWh/lb),
combustion of 5 MW equivalent of biosolids would be worth approximately $24/t
(U.S. $21.90) dry solids in tax reductions alone.
Using biogas in place of natural gas for 5% of total
power would result in a Scope 1 reduction of about 7700 tCO2e/yr, or
$176, 200 (U.S. $160,913) annually. Examples of how biogas and biosolids can be
used to decrease carbon effects in areas other than commercial power generation
are shown in the figure on p. 58 (determined based on NGER methodology).
The Carbon Farming Initiative (CFI)enables farmers and
land managers to earn carbon credits by storing carbon or reducing greenhouse
gas emissions on the land. These credits then can be sold to people and
businesses wishing to offset their emissions. Potentially, use of biosolids in
lieu of inorganic fertilizers would be considered emission free and enable
farmers using biosolids to claim carbon credits. However, biosolids use is not
considered within the CFI.
Although the CPM has subsequently been replaced with an
emissions trading scheme, solids processing and biosolids use will have an
effect on carbon footprint and ultimately cost to water companies. While the
ANZBP study has identified carbon benefits using the existing methodology,
several concerns remain with the current calculation methods. If energy
recovery and carbon emissions minimization are to be realized fully, it will be
critical to accuately identify derived carbon benefits, especially those
associated with final use of biosolids.
Scope 1 emissions refer to the release of greenhouse gases as a
direct result of process activities — for example, loss of methane from
anaerobic digestion infrastructure and stationary combustion.
In contrast, Scope 2 emissions are those generated
by power companies in the production of electricity that is used by the
facility. Examples of Scope 2 emissions during solids treatment include power
consumed by biosolids dewatering equipment and natural gas required for
Scope 3 emissions are indirect emissions other than those
covered by in Scope 2. Examples include emissions associated with the
extraction, manufacture, and production of products that a company purchases;
waste-related emissions; and any business travel or employee commuting.
Solids-related examples include use of polymer for thickening or dewatering and
use of lime for pathogen deactivation.
1 MWh (kg CO2e)
Emissions for 100 MW facility
Emissions for 100 MW facility (tonne CO2e/yr)
(5% biogas or biosolids replacment)
Carbon tax savings ($/yr)*
* Based on AUD
$23 (U.S. $21) per tonne CO2e.