There are a number of financing sources available to the country as a pre-accession fund, but principally the Public Private Partnership mechanism where RCR ensures complete transparency and equal profit sharing of the enhanced value of recyclables. In addition, however, are the following funds:

IPA (Instrument for Pre-Accession Assistance), for countries that are recent joining members of the European Union the new single EU pre-accession assistance for the period 2007 – 2013 has replaced CARDS and pre-accession programs PHARE, ISPA and SAPARD. Its objective is to assist candidate countries in the process of gradual harmonization with the EU acquis communautaire. Pursuant to the Government Regulation of the EU member company, the Central Office for Development Strategy and Coordination of EU funds is the body competent for an overall coordination and preparation for the use of the IPA program that is available to any country to which membership of the European Union has been granted until it’s accession to the EU. The IPA and the other pre-accession programs are designed to fund the mandatory upgrading of the national infrastructure in such matters as municipal solid waste collection and disposal, schools and education, health and so much more.

International financial institutions

According to plans, half of necessary resources should be provided from public resources and the remaining part from other sources.

Considering present relatively low charge levels for waste, it is necessary to plan constant gradual growth of waste charges. Waste disposal costs – the user charges pay for rendering of the utility services of waste collection, transport and disposal.

Private investment should be stimulated for recycling systems for secondary raw material separated from waste by primary selection. Private investment may be stimulated in waste management centers but in the first place as Public Private Partnerships (PPP).

Carbon Allowance Credits

The Kyoto Protocol created flexible mechanisms known as the Clean Development Mechanism (CDM) and Joint Implementation (JI), which allow industrialized (Annex 1) countries to finance emission reduction projects in developing countries (CDM projects) or other Annex 1 countries (JI), in exchange for carbon allowance ‘credits’ called Certified Emission Reductions (CERs) or Emission Reduction Units (ERUs). These credits can help project participants to meet their Greenhouse Gasses (GHG) reduction targets. For biomass project developers, these credits represent a means of acquiring additional revenue.

In the context of RCR STAG Recursive Recycling there are currently several opportunities to generate carbon finance from a number of different biomass related project types. The following project types have tangible potential to sell carbon credits:

  • use of biomass to generate electricity
  • use of biomass for cogeneration
  • use of biomass to replace fossil fuel use in boilers
  • avoidance of dumping of biomass in landfills

There are approved procedures for these kinds of project types, which make the carbon structuring relatively straightforward.

Benefits of developing a CDM/JI project

  • making use of the economic value of a waste stream
  • solution for waste disposal
  • use of local resources
  • avoidance of methane emissions
  • reduction of uncontrolled burning of the biomass and therefore reduced smoke pollution locally

The period of political uncertainty over the Kyoto Protocol and its instruments such as the Clean Development Mechanism (CDM) is over, and early risk-takers in the carbon market have gained large financial rewards from investing in emissions reduction projects.

Greenhouse gas mitigation is now in the mainstream, and makes clear business sense, with the CDM becoming a well- established international financing mechanism creating billions of dollars in future carbon revenues, and leveraging billions more in investments in renewable energy and other sectors. All administrative measures required to implement this important element of the RCR project will be managed for the municipality by RCR, thus no effort or resources from the municipality are required to capture this benefit.

Over the last few decades, there has been growing concern about global warming and climate change caused by greenhouse gases (GHG) – emissions from human activities that involve fossil fuel combustion. In 1992, the United Nations Framework Convention on Climate Change (UNFCCC) adopted the Kyoto Protocol, signed by 84 countries, under which all the major industrialized nations must limit their GHG emissions and bring them back down to 1990 levels.

One approach to mitigating global warming is emissions trading – the trading of permits to emit carbon dioxide and other greenhouse gases, calculated in tons of carbon dioxide equivalent (tCO2e). Emissions trading has emerged over the last two decades as a preferred environmental policy tool. One key advantage to emissions trading is that it gives countries and firms flexibility in meeting their emissions targets, rather than imposing predetermined technologies or standards.

The European Union (EU), under the Kyoto Protocol, has committed to reducing its GHG emissions by 8 percent from 1990 levels between 2008 and 2012. The European Union’s Emissions Trading Scheme or EU-ETS was enacted in January 2005 as one of the policy measures to enable the EU to meet its Kyoto targets. EU-ETS is a landmark environmental policy, representing the world’s first large-scale GHG trading program, covering approximately 12,000 installations in 25 countries and six major industrial sectors.

The EU-ETS offers an opportunity for critical insights into the design and implementation of a market-based environmental program of significant size and complexity. The EU-ETS grants allowances to companies for their GHG emissions in accordance with their government’s environmental objectives. The program permits a company to emit more than its allowance of GHGs as long as it has reached an agreement to buy allowances from other companies that emit less than they are permitted to.

Within the EU, the supply of allowances is initially determined by individual member states, which develop National Allocation Plans showing the allowances they plan to allocate over a given period and the methods to be used for granting allowances to various facilities. The total quantity of allowances made available by each member state must correspond to the target assigned to it under the Kyoto Protocol.

The member state must therefore ensure that the allowances it grants will enable it to reach its target. In 2005, the EU member states issued allowances for 2.2 billion tons of CO2. These amounts make the European allowance the leading CO2 unit of value in the world, with a potential market of more than 50 billion Euros. Considering that the market is young and has encountered delays in getting up to speed, this trading volume is noteworthy and encouraging. The rise in market prices for allowances reflects a growing recognition of the effect of carbon constraints on industries and of the European Commission’s authority to enforce these limits. It is the ability of public authorities to enforce compliance with emissions reductions that creates scarcity of allowances on the nascent carbon market and determines their value.

Despite the challenges and some flaws in the EU-ETS and regardless of developments in the European exchanges over the next few years, Europe is developing a real financial industry for carbon allowances that will ultimately have its own specialized professions and institutions.

Public Private Partnerships (PPP)

RCR is probably the only global company that is willing and able to provide 100% of the capital project funding cost from is own resources and credit lines. The company holds the belief that the municipality has already borne the cost of collection of the waste (and in the majority of cases has sought to recover some waste collection and disposal costs from individual waste generators in the commercial and residential sectors) and therefore title or “ownership” of the MSW is vested with the local authority

No longer is MSW an expensive collection and disposal problem. It is no longer justifiable or sustainable for it to be a municipal cost centre. To the contrary, RCR’s suite of technologies has persuaded the general public to view MSW in a completely different and much more favourable light! It is in fact a valuable resource! A renewable resource that has within it valuable recyclables that when extracted, size reduced and sanitized have considerable value.

RCR’s mission is to achieve a 98% collection rate of MSW and a similar 98% diversion rate from either incineration or landfill. Through extraction and on-site valorization of the recyclables these are sold off-site to raw material processors who can convert these products in new and similar products to which they had been previously been used. Only in the case of mixed plastics, often contaminated with volatile organic compounds (detergents, bleaches, paints, spirit cleaners, solvents) that make it impossible to recycle these for reuse as plastics. Combining mixed plastics to form plastic objects have limited application due to the problems of lamination where one type of plastic will divorce itself from another and thus degrade the integrity of the plastic product into which it has been made.

More so that using a proven depolymerization process the plastics are converted back into their original source material – oil! 1000 tonnes of mixed plastics will convert to 820 tonnes of low sulfur, premium grade diesel fuel which has an immediate use and market. Some hydrocarbon gas is also produced during the process and this is combusted in the dual fuel steam-raising boilers for the process.

These generate substantial revenues that are legitimately “shared” with the local authority or community as a “profit share” where half of the net profits are voluntarily returned to the municipality that in most cases has the effect of dwarfing or in some cases actually extinguishing the monthly cost of collection and disposal, thus converting MSW from the spiraling cost centre into a growing profit centre.

Such an arrangement attracts considerable project funding as part of green house gas reduction programs and RCR is well placed and an accepted provider of such solutions and thus 100% funding can be achieved without any need for even a small financial contribution from the local authority customer.