Energy not only for the crisis

The National Environmental Protection and Water Management Authority (NFOŚiGW) is talking openly about increasing the pool of money granted by the European Investment Bank to finance the construction of waste incineration plants. There has never been so much money for thermal waste conversion. There should be enough funds for all projects. By the end of last year, NFOŚiGW had received 39 applications for investment funding.

Environmental decisions and the disenchantment of investments

The biggest challenge in preparing an investment such as the Thermal Waste Conversion Facility is still obtaining an environmental decision. Even though waste incineration plants have not only been positively verified, but also disenchanted in terms of their environmental impact. The norms and standards in these cases are so strict that efficiency must go hand in hand with ecology.

Innovation is also coming to the rescue. Fortum is working on a CO2 capture and utilisation project in Finland. At the same time, it should be emphasised that part of the energy generated by the ITPO is classified as renewable energy. We are talking about interconnected vessels. Climate care, sustainability, the closed loop economy and municipal waste management are all processes that run in parallel.

The benefits of investments in the waste management sector are convinced by examples of those already in operation. As we read in Rzeczpospolita, PGE’s Rzeszów CHP plant uses 80 per cent gas, but around 14 per cent of the heat is recovered from municipal waste through its thermal conversion. In contrast, the Kraków plant managed by Krakowski Holding Komunalny produces as much electricity as the entire Kraków tramway network would need annually. It is responsible for covering around 10 per cent of the city’s thermal energy needs.

According to data from EU countries and Poland, 30% of non-recyclable municipal waste has combustible properties and it is possible and reasonable to recover energy from it. To date, ITPOs have been operating in larger cities. Olsztyn will soon join this group. BWW worked strongly with Olsztyn’s MPEC, at the stage of preparing the investment there for construction.

Veolia, meanwhile, is preparing projects for installations in smaller cities such as Zamość, Chrzanów and Kraśnik.

‘Fit for 55’, the ETS and waste incinerators plants

As the law currently stands, municipal waste incinerators are excluded from the ETS. This state of affairs may change in a few years’ time. The ‘Fit for 55’ package includes, among other things, an amendment to the ETS Directive 2003/87/EC. Although in its original proposal of 14 July 2021. European Commission did not propose to include incinerators in the scheme, such a demand was made by the European Parliament’s Committee on the Environment, Public Health and Food Safety.

A communication is now available (April 2023) on the website of the EU Council, indicating that the Council and the European Parliament, with the participation of the European Commission (the so-called trilogue procedure), have agreed on their position as regards the amendment of Directive 2003/87/EC.

The text of the 8 February 2023 amendment to the Directive itself, incorporating the agreed changes, was also made available. According to recital 59d of the preamble and Article 30(4c) of the Directive, by 31 July2026, the Commission should submit a report to the Council and Parliament on the feasibility of including municipal waste incinerators in the ETS, including the prospect of inclusion from 2028 and assessing the possibility for Member States to make use of the opt out mechanism of postponing the deadline for inclusion of incinerators in the ETS to 31 December 2030.

Alongside the text of the amendment, the text of Annex 1 to the Directive, which indicates which installations are covered by the ETS, has been published.  According to this Annex, municipal waste incinerators are to continue to be excluded from the ETS, but from 1 January 2024, Articles 14 and 15 of the Directive, which relate to the monitoring and reporting of emissions, will apply to them. The full inclusion of ITPOs in the ETS, once the Commission has submitted the aforementioned report, will require a further amendment to the Directive. We are currently waiting for the formal adoption of the amendment by the European Parliament and the Council of the EU. After this and the publication of the text in the official languages of the Union, the amendments will become effective.

It should also be borne in mind that the disposers of municipal waste are municipalities, which are obliged to use public procurement. Investors planning to build ITPOs must expect to have to participate in public tenders for municipal waste management contracts. BWW law firm has supported several such investments. Mainly in terms of project structuring, obtaining administrative decisions and preparing transaction documentation.

Agnieszka Ferek – partner in BWW law firm. Expert recommended in Chambers Europe and Legal500 EMEA rankings. Legal counsel with many years of experience in the area of legal advisory in infrastructure projects from various economic sectors, both for public and private entities. She led the PPP practice of an international law firm for many years. She provides comprehensive advice in waste management and district heating projects, especially those implemented under the PPP formula. She provides training in PPP and PZP for private and public entities.

Bartłomiej Kielasiński – student at the Faculty of Law and Administration of the University of Warsaw, winner of the scholarship of the rector of this university. He gained professional experience in the legal department of the Helsinki Foundation for Human Rights. He is primarily interested in civil law, as well as administrative proceedings and areas of substantive administrative law, especially environmental law. At the Firm, he deals, inter alia, with matters relating to the energy market, including the gas and waste management sector, the implementation of construction projects, planning and spatial development and contract law, as well as monitoring changes in European Union legislation.