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An hour drive away from Delhi, past the capital’s towering landfills, a small incinerator is working to help reverse India’s chronic waste crisis.

The JBM Enviro waste-to-energy facility runs like a coal-fired power plant — it uses heat from burning feedstock to turn water into steam that powers a turbine. The electricity generated through the process, however, doesn’t employ fossil fuels and helps remove dirt from the environment, which proponents say makes it greener.

For decades the technology has been a popular solution for cleaning up streets and generating energy across rich countries such as Japan, Sweden and the US, but it’s struggled to take off in India. While India generates only a third of the daily waste produced by its European counterparts on a per capita basis, the country lacks the public infrastructure to sort and collect what it throws out. Indian cities discard about 42 million tons of solid waste per year as a whole — weighing as much as 127 Empire State buildings.

The problem has opened the door for private energy companies to step in, but collecting mounds of waste for creating energy is an ugly business that isn’t emission free or cheap. “In other countries, governments take waste as a public problem, while in India, it is left to the private player to address it like a business opportunity,” says Yogesh Mittal, chief financial officer of JBM Enviro, which runs the Sonepat waste-to-energy plant.  

The sector is now under pressure as they will likely need to meet tougher environmental criteria to generate emissions-reduction credits through a new carbon market overseen by the United Nations. These types of credits, which encourage foreign investment in climate projects, help waste-to-energy facilities offset the extra costs of doing business in India. The rules are due to be finalized at the COP28 climate talks in Dubai.

India’s government estimates the country has waste-to-energy capacity potential of as much as 5 gigawatts, almost 30 times more than the nearly 168 megawatts installed today. There are 11 operational plants across the country, and 10 are under construction.

The JBM Enviro’s 8MW plant in Sonepat, which serves just four towns, is testing its approach on a small scale. They’re handling just a drop in the ocean of rubbish mounting across a country of 1.4 billion citizens, in dense cities and areas as remote as the Himalayas. 

Every day at the crack of dawn, the company’s tipper trucks patrol the streets to collect waste door to door. Each vehicle has a separate section for dry and wet waste, but since only a small fraction of residents segregate rubbish at home, the bulk is manually sorted at collection points  before it reaches the plant. 

Once there, it’s dried and stored in a pit where a technician in the control room operates a grabbing tool to arrange the waste into tall piles, which are then progressively poured into the boiler to maintain a stable energy output.

“We directly manage the entire process from collection to incineration,” says plant manager Anurag Srivastava, “which means we can control the quality of the waste that ends up in our furnaces.”

Quality is important because not all urban waste is the same — and its composition mirrors the society that created it. While rich nations segregate a sizable share of their waste, developing countries normally do not. The rubbish is manually sorted by unlicensed workers who collect  it door to door. They sell what they can, especially hard plastics to recyclers, and the rest continues its journey, often being dumped on the ground at various points before reaching the incinerator. Frequently it’s wet with food or rain, and full of dust. This means it won’t burn as easily, and will not emit as much heat in the process – a fatal fault if you want to produce electricity from waste.

Typically, such plants require feedstock able to generate up to 4,000 kilocalories per kilogram to guarantee steady returns, but Indian waste only generates around 1,000, according to estimates shared by JBM Enviro’s Mittal.

In the past, carbon credits have helped plug this gap. One large-scale example of this is Delhi’s second biggest waste-to-energy plant owned by JSAW, part of the Jindal Group family empire. The facility churns nearly 2,000 metric tons of waste per day with a capacity of 23MW and has sold carbon credits through the first UN carbon market, the Clean Development Mechanism. The company won the tender for the plant’s construction by offering to sell electricity at tariffs well below the market rate, around 2.8 rupees per kilowatt hour, based on information from the Delhi Electricity Regulatory Commission.

For plants in India, this likely isn’t enough to break even. Mittal, who oversees the Sonepat plant, says that power-from-waste processing costs anywhere between 5 and 7 rupees per kWh.

JSAW declined to comment on how their plant may be impacted by any future changes to carbon credit eligibility.

Left in the open air, waste can release toxic chemicals into the ground, contaminating aquifers and ultimately the sea. Satellite observations discovered that methane emissions from landfills are much larger than previously reported, meaning their climate altering impact is also worse than once thought.  

Waste-to-energy comes with its own environmental problems. “Burning waste produces a lot of harmful substances,” said Diego Ezcurra, manager for methodologies with the offset registry Verra, which is currently in the process of verifying the Sonepat plant for carbon credits eligibility. 

Increased emissions and polluting ash residues are all but inevitable and particularly harmful when a plant is built next to a residential area. Analysts think environmental externalities may come under greater scrutiny for waste-to-energy projects selling offsets as the global carbon market evolves beyond the Clean Development Mechanism to a new UN-run program. Tougher standards could make some projects ineligible for credits.

Without solving issues such as segregation at source, experts agree that India’s waste problem is poised to get worse. Waste-to-energy remains an attractive idea because “it is considered a renewable energy source, and investors are increasingly interested in renewable energy projects due to the global shift toward sustainability,” said Anvesha Thakker, global co-lead for climate change and decarbonization with KPMG in India. 

But municipal solid waste is set to grow 7% to 8% year to year, she said. “This will have to be tackled.”

©2023 Bloomberg L.P.