Organic waste from eight Melbourne councils will be sent to a new composting facility, to be built by international waste management company Sacyr Group.
The Clean Energy Finance Corporation (CEFC) will commit up to $35 million towards the new composting facility.
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The $65 million South Eastern Organics Processing Facility will be the most advanced of its type in Victoria and will produce approximately 50,000 tonnes of high grade compost each year.
The compost will be made from processed household garden and food waste from council kerbside green waste collections in Melbourne’s south-east, which will then be used on local parks and gardens.
Food and green waste makes up an estimated 42 per cent of landfill for Australia’s municipal and commercial waste streams.
The Melbourne councils include Bayside, Cardinia, Casey, Frankston, Glen Eira, Greater Dandenong, Kingston and Monash.
Sacyr expects the fully-enclosed, in-vessel aerobic composting and maturation plant will be operational by mid-2019. It will aim to operate for 15 years, with a potential five-year extension.
The new facility will have an annual processing capacity of 120,000 tonnes of waste each year, the equivalent of 12,000 truckloads of waste. It is expected to abate more than 65,000 tonnes of carbon dioxide equivalent emissions annually. This would cut the greenhouse gas emissions from landfill by 85 per cent if it were to be landfilled, which is equivalent to taking 13,900 cars off the road.
Sacyr Group has built 48 plants around the world and handles more than three million tonnes of waste each year. It currently operates in Australia through its subsidiary, Sacyr Water, which has built and operates the Binningup desalination plant.
The technology used in the plant has been developed over two decades, ensures plant storage reservoirs are completely closed, and uses efficient and reliable deodorisation systems.
Federal Government Environment Minister Josh Frydenberg said converting waste to compost can play a part in Australia’s long-term waste solutions.
“This facility alone, which will be the most advanced of its type in Victoria, can process around 12,000 truckloads of waste per year,” Mr Frydenberg said.
“It means food and organic waste produced by south east Melbourne residents will not end up in landfill and will instead produce high-grade compost for our gardens and parks.”
CEFC CEO Ian Learmonth said the corporation is looking across the economy to identify finance opportunities to reduce Australia’s emissions.
“We’re pleased to be making our first project investment to help councils and communities tackle emissions from their organic waste,” he said.
“When organic waste such as food and green waste ends up in landfill it breaks down and produces methane. With this technology, councils can avoid those emissions by turning their organic waste into reusable compost, while also reducing our unsustainable reliance on landfill as a waste disposal option.
“We strongly endorse the principle of avoiding and reducing waste at the source. Our finance is about effectively manage the remaining waste, so that it doesn’t end up as landfill and we make a meaningful difference to our greenhouse gas emissions,” Mr Learmonth said.
CEFC Bioenergy Sector lead Henry Anning said the CEFC finance model for the Melbourne project was an industry first, providing councils with access to a project financing structure that has rarely been leveraged across local government.
“Australia’s waste sector is facing enormous challenges, because of the growing amount of waste we produce as well as increasing community concerns about the way we handle that waste. This new Melbourne facility provides us with a practical and proven way to turn organic waste into a reusable commodity at the same time as avoiding harmful emissions,” Mr Anning said.
“We expect to see more councils and communities consider innovative ways to manage all forms of waste. This innovative project finance model offers opportunities for other groups of councils considering investing in substantial waste management infrastructure to reduce landfill waste.”