Reliance supports local carbon market while composting Cape Town’s green waste

Not everybody knows this, but under South Africa’s National Environmental Management: Waste Act (59 of 2008) all solid waste that leaves private property or is placed in a wheely-bin provided by the local municipality, belongs to the State. This is largely a matter of convenience as it allows local governments to plan and provide definitive waste management services. However, as rising commodity prices have pushed the value of the waste stream up and awareness has developed around the greenhouse gas emissions produced by landfill sites, the ownership issue has developed a number of interesting implications.

The City of Cape Town outsources most of its solid waste handling to five large companies. These companies provide a high level of service to rate paying communities and deploy large logistics fleets in moving waste around the peninsula before it ends up either in a landfill site (over 2 million tons of waste per annum) or it is recycled (roughly 500,000 tons per annum). One particular company, Reliance Compost, has developed highly specialized machinery and processes for converting the City’s green waste into compost.

Reliance’s central business model is simple. Based on a three year rolling negotiation the City of Cape Town pays the company (as they do other waste handlers) to manage several green waste drop-off sites in what constitute large contracts. At these sites, Reliance collects the green waste, breaks it into fine chips, and transports it to its processing plant. Turning waste to compost takes 3-6 weeks depending on the weather. During this time the waste rows are turned every day to ensure aerobic decomposition. The finished product is either trucked to bulk clients (which include the City of Cape Town department responsible for parks and flowerbeds) or bagged and sold to nurseries. Reliance manages over 300,000 cubic metres of green waste per annum.

Reliance’s ingenuity does not end there. From the outset they have been aware that by diverting green waste from landfill they are preventing the emission of methane, a noxious greenhouse gas with a global warming potential 23 times that of carbon dioxide. This qualifies Reliance for carbon credits and true to form the company has been pursuing these credits since they began their operations inception. Unfortunately, the flagship carbon market instrument – the Clean Development Mechanism – with its high transaction costs and opaque processes proved hopelessly inadequate for Reliance (and most other African projects). By my own estimates, if the CDM were to continue with the level of mitigation it achieved in 2011 and 2012, it would remove only 1.45% of the total greenhouse gases required to keep atmospheric concentrations below 500ppm by 2050. Not deterred Reliance looked for voluntary market opportunities and with the help of an NGO called Promoting Access to Carbon Equity began trading their credits through South Africa’s Credible Carbon registry. In 2013 Reliance supplemented their not-insignificant revenue from handling green waste with a further R2.4 million worth of carbon revenue, generated from the sale of 71,000 tons of CO2 as measured by the independent carbon auditing firm, Carbon Calculated Pty Ltd. It is a condition of the Credible Carbon registry that carbon revenue is spent on poverty alleviation in southern African and in compliance Reliance has so far spent R1.1 million on local community projects.

Reliance’s is a Cape Town green economy story of innovation, entrepreneurship, opportunity (if not opportunism) and closed-loop thinking. It also speaks of the manner in which local carbon markets are emerging in the absence of a global market co-ordinated by the United Nations Framework Convention on Climate Change. These markets pay even less attention to actual mitigation than the CDM, instead taking their raison d’état from local priorities.  To do this they have developed their own accountability procedures. They are unlikely to prove much help in reducing greenhouse gas emission in the short-term but do have a role to play in financing the transition toward a green economy.

The final chapter in the Reliance story will involve the City of Cape Town – the legal owners of the waste that Reliance puts to such good use. It is important that City waste managers are aware of how Reliance has benefitted from the carbon market for two reasons: they need to encourage their other waste handlers to pursue similar opportunities and they need to factor this revenue into their future contract negotiations with their commercial waste handling partners so as to save the City money.

Anton Cartwright is a Mistra Urban Futures Researcher at the African Centre for Cities in Cape Town, South Africa, where his focus is on the green economy. He is an economist with degrees in agriculture, environmental change, and management and economics respectively. He is an associate researcher at the Stockholm Environment Institute and an associate of the Cambridge Programme for Sustainability Leadership. This article is supported by Mistra Urban Futures, a global research and knowledge center in sustainable urban development, funded by the Swedish International Development Agency (SIDA) and the Mistra Foundation for Strategic Development.


Read older posts from this section

Leave a Reply