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Thursday, April 19, 2012

Panelists

Sumanto Basu, Chair of the Projects Practice and Partner, J. Sagar Associates, Gurgaon Jacquelin Gutierrez Gonzalez, Senior Attorney for Latin America, The Nature Conservancy, Mexico City

Bryan W. Jardine, Managing Partner Bucharest, Wolf Theiss, Bucharest Alex McLean, Head of Projects and Energy, Arthur Cox, Dublin

Moderator

Sylvia Chin, Partner, Energy, Infrastructure, Projects & Asset Finance Group, White & Case, New York

Program Chairs

Caryl Ben Basat, BenBasat Law Group, P.A., Weston, Florida

Renee Dopplick, Inside Justice, Washington, D.C.

Waste to Energy A 21

st Century Solution or a Costly Detour that Will

Derail Recycling?

Program Panel at the ABA Section of International Law's Spring Meeting

Sponsored by the International Energy and Natural Resources Committee

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Index

I. Introduction and Useful Terms……………......2

II. India……………………………………………6

III. Ireland…………………………………………15

IV. Mexico…………………………………………26

V. United States…………………………………...33

VI. Central, Eastern & Southeastern Europe………40

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Waste-to-Energy

A 21st Century Solution or a Costly Detour that Will Derail Recycling?

Thursday, April 19, 2012

Panelists

Sylvia Chin, Moderator, Partner, Energy, Infrastructure, Projects & Asset Finance Group,

White & Case, New York

Alex McLean, Head of Projects and Energy, Arthur Cox, Dublin

Sumanto Basu, Chair of the Projects Practice and Partner, J. Sagar Associates, Gurgaon

Bryan W. Jardine, Managing Partner Bucharest, Wolf Theiss, Bucharest

Jacquelin Gutierrez Gonzalez, Senior Attorney for Latin America, The Nature

Conservancy, Mexico City

Let’s talk trash and the piles of garbage and commercial waste intended for mega-landfills. Can

waste provide a path to a sustainable energy future? Can modern waste-to-energy facilities kill

two birds with one stone, yielding clean energy safely at affordable prices? Or is the process too

expensive, financially and environmentally, and will these projects, that are often public-private

partnerships, undercut recycling efforts?

As rural populations increasingly move into large urban areas, especially in emerging countries

such as China and India, the demand for electricity and other forms of energy has increased as

well. In addition, as these urban populations increase, the amount of municipal solid waste

(MSW) that these urban centers produce increases accordingly. In an environment where

landfills are becoming less practicable due to the negative environmental effects of placing

MSW in landfills including the creation and release of methane gas into the atmosphere, what are

viable alternatives? Why can’t we curb the rising municipal waste problem and sate the ever-

growing demand for energy in emerging and developed nations across the globe?

Waste-to-Energy (WtE) projects appear to provide a win-win solution. Why aren’t they more

prevalent? In its purest form, WtE facilities can utilize municipal waste, including about 50-70%

biomass to create electricity. WtE projects can realize energy from municipal waste in a variety

of different processes, thermal and organic. The U.S. Environmental Protection Agency (EPA)

estimates that if anaerobic digestion is used to treat just 50% of the food waste created in the

U.S. each year, the process would generate enough electricity to power 2.5 million homes for an

entire year.1 The projects could also garner revenue from tipping fees, recycling scrap metal and

utilizing bottom ash in concrete.

Unfortunately certain problems plague the widespread development of MSW WtE facilities.

These challenges include regulatory, environmental, economic and other practical hurdles.

1 Turning Food Waste into Energy at the East Bay Municipal Utility District (EBMUD), ENVIRONMENTAL

PROTECTION AGENCY, http://www.epa.gov/region9/waste/features/foodtoenergy/ (last visited Feb. 27, 2012).

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At the forefront of the regulatory issues is how different governments classify MSW, which in

term affects feed in tariffs and other governmental incentives and subsidies. If MSW is

classified as a renewable energy source, regulatory bodies in many jurisdictions provide for

generous incentives, in the form of feed-in-tariffs, premiums and grid access, among others, to

aid in the development, construction, and operation of WtE facilities. However, other

jurisdictions may only classify a portion of the MSW as renewable biomass. In those

jurisdictions it may be necessary for WtE facilities to develop additional sorting mechanisms to

ensure that the WtE projects can benefit from renewable energy government incentives.

In addition to and in conjunction with the regulatory hurdles, WtE projects also must address

various challenges before becoming economically viable. These include locating sources for

funding, identifying adequate areas to site the facility, overcoming any local opposition to WtE

development, securing a steady MSW stream of supply through implementing competitive

tipping fees or other means, attaining long term utility contracts and grid access, as well as

identifying efficient and environmentally sensitive means to dispose of any waste residue.

Is it possible to overcome these issues? If so, can WtE facilities be a viable global solution to

dispose of MSW in an environmentally sensitive manner while also creating much needed clean

energy?

Using information gathered from a wide spectrum of jurisdictions, the panel presentation will

explore some answers to these questions. Before proceeding to the jurisdictional survey, let’s

start with a few useful terms.

USEFUL TERMS:

Anaerobic Digestion: Also known as methane recovery, the process by which bacteria digests

organic material in an oxygen-free environment, resulting in a release of methane and other

gases, which are then released are collected and used to produce electricity and heat.

Biomass: Biomass is plant and plant-derived material including those from the agricultural

sector (planted crops and crop residues) and the non-agricultural sector (planted trees, residue,

and animal waste and byproducts). Municipal solid waste typically contains around 50-70%

renewable biomass.

Cogeneration Facility: A generating facility that sequentially produces electricity and another

form of useful thermal energy (such as head or steam) in a way that is more efficient than the

separate production of both forms of energy.

Dispatch: The distributed allotment or order of access for the transmission of electricity to an

electric utility. Government regulators often construct dispatch procedures to optimize the mix

of energy resources available to a given region in order to improve efficiency, reduce costs and

promote policy goals, such as increased access for renewable energy producers.

Environmental Impact Statement (EIS): Required by the National Environmental Policy Act

(NEPA) and certain state statutes, an EIS is used to relate private and public information

detailing the environmental consequences stemming from a specific site or project. This

information is then presented as a report to related government agencies, including the

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Environmental Protection Agency. An EIS typically covers possible impacts to air and water

quality, traffic, noise, population, natural habitats and other environmental concerns.

Feed-in-Tariff (FIT): Similar in structure to power purchase agreements, feed-in-tariffs are

government issued incentives focused on the development and support of renewable power

generation. In some jurisdictions, regulations may impose FIT’s that require utility companies to

purchase the electricity generated by certain renewable energy operators. An FIT may provide a

fixed payment in terms of dollars per kWh for either the full output (gross) or surplus (net)

generated by an energy supply facility for a guaranteed period of time. An FIT may also be

coupled with a grid access guaranty. The calculated amount of FIT payment is based upon the

cost of the energy supply coupled with an amount reflecting any societal or policy gains

associated with that energy supply.

Feed-in-Premium: An FIT payment option where the payment takes the form of a bonus paid to

the producer above spot electricity market prices.

Flow Contract: In the WtE context, an agreement or system where a municipality contracts to

direct its MSW stream to a particular facility; in some situations these systems require the

municipality to compel haulers to act in a manner consistent with the flow contract. Some flow

contracts have been successfully challenged in the U.S. as unconstitutionally restricting interstate

commerce.

Greenhouse Gas Emissions: Gases that trap heat in the atmosphere including carbon dioxide,

methane, and nitrous oxide as well as fluorinated gases typically emitted as a result of industrial

processes.

kWh: kilowatt hour. The measurement of actual energy generated or consumed by a site.

Municipal Solid Waste (MSW): Waste derived from commercial and residential sources.

Power Purchase Agreement (PPA): Legal agreement where a utility agrees to purchase the

power, in the form of electricity, heat or steam, generated by a project company for a set period

of time at a set rate. PPA’s are highly negotiated in some jurisdictions and determine the

revenue stream that a project will realize over time. PPA’s are not present in jurisdictions that

mandate utilities pay a set statutory rate for energy originating from renewable sources.

Public-Private Partnership (P3 or PPP) Financing: Generally a long-term contract between a

government entity or a government owned entity and a private sector party or private

consortium. While the terms of PPP’s may vary, under a PPP the public and private entities will

share some degree of risk associated with the project. The private entity will perform

substantially all of the aspects of the project, including financing, design and construction while

the public entity will retain some control either through direct ownership or contractual restraints

on the private entity. As government entities pay the private entity over time instead of at once,

a PPP assists in cost savings and reducing government debt while utilizing the operational

expertise of the private partner.

Renewable Energy Technologies: Generally include biomass and biofuels, solar power, wind

power, geothermal, hydropower, tidal power and, in some jurisdictions, waste-to-energy.

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Syngas: Gasification of the organic components of MSW leads to the production of synthetic

gas, or syngas. Syngas can then be treated chemically to create ethanol, methanol, synthetic

natural gas and other useful substances.

Tipping Fee: The fee charged to MSW haulers upon arrival at a waste disposal facility,

including WtE projects, typically on a per-ton basis. The tipping fee is a major source of

revenue for many waste disposal facilities.

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J. SAGAR ASSOCIATES

advocates & solicitors

Waste to Energy in India

Waste-to-Energy Program Panel at the ABA Section of International Law's Spring Meeting

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I. GENERAL

1. What is the nature and importance of waste to energy projects in your country?

Until now there has been limited waste to energy ("WtE") projects in India. But, now the Government (through the relevant ministries) is promoting WtE projects. The increasing industrialization, urbanization and changes in the pattern of life, is leading to increase waste generation in India. From the Government’s perspective, WtE projects serve a dual purpose (which is all the more relevant in a country such as India), i.e., they not only help in generating energy, but also in reducing the quantity of waste for its safe disposal.

2. What is the definition and coverage of waste to energy projects under the relevant legislation in your country? WtE projects have not been specifically defined in terms of any Indian legislation.

2 However,

the Central Electricity Regulatory Commission (Terms and Conditions for Tariff determination from Renewable Energy Sources) Regulations, 2012 ("Tariff Regulations")

3, defines

"Renewable Energy Sources" as the sources used for generating electricity from non-conventional sources. And, municipal solid waste ("MSW") is one such "Renewable Energy Source".

3. Is there a preferred structure for waste to energy projects in your country?

As the fuel for a WtE project is MSW and the responsibility of managing, disposing and

treating MSW is that of the relevant government authorities (acting through the concerned

municipalities in the various states), typically any WtE project developer needs to get a

concession from the relevant government authorities (which concession, in addition to

assuring an agreed quantity of MSW, typically also grants the rights to the land for

constructing the waste management facility).

The concession is typically granted based on a 2 stage bidding process. The concessionaire

is selected based on its technical bid which provides for the technical capability to treat the

MSW and its financial bid which provides for the tipping fee quoted by the bidder.

The successful bidder, is then granted a concession in terms of a concession agreement,

with regard to the development, implementation, construction, operation and maintenance of

the waste management facility (including the WtE facility). In relation to the supply of MSW,

the concerned municipality executes an agreement with the concessionaire, in terms of which

the said municipality agrees to supply a specified quantity and quality of MSW to a particular

receipt point specified in the supply agreement (which typically is on the site/close to the site).

If such receipt point is not located on the site, the obligation to transport the MSW from such

receipt point to the site is that of the concessionaire.

Further, with regard to the framework for the implementation of the project, as a whole, it is

useful for the concerned municipality, the State Government and the concessionaire to

execute an overall project implementation agreement.

2 The draft agreement for supply of MSW, available at the website of the Ministry of Urban Development, Government of India

(http://urbanindia.nic.in/programme/uwss/mswm/MSW_Supply_Agmnt_Mnclity.pdf), defines "Waste to Energy" as "means the processing option to produce energy from the MSW." 3 Such Tariff Regulations were notified by the CERC on 6 February, 2012.

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For the purpose of the sale and purchase of electricity generated from the project, the project

developer (generator of power) executes a power purchase agreement with the concerned

distribution licensee/consumer.

II. REGULATION

1. What are the principal laws and regulations regulating waste to energy projects (include regulations applicable to municipal solid waste disposal, conveyance of waste, tipping fees, energy generation and environmental issues)?

In terms of the Constitution of India, the legislative powers of the Centre and the States have

been demarcated into three subject matter specific lists: (i) List I of Schedule VII of the

Constitution of India, with regard to which the Parliament (the Central Government) has the

power to make laws (Union List)4; (ii) List II of Schedule VII of the Constitution of India, with

regard to which the States have the power to make laws (State List)5; and (iii) List III of

Schedule VII of the Constitution of India, with regard to which both, the Centre and the States

have the power to make laws (Concurrent List)6. In case of any conflict or inconsistency

between central legislation and the provisions of a state legislation, the former shall prevail.7

The Constitution of India places "Electricity" in the Concurrent List (Entry 38, List III of

Schedule VII of the Constitution of India), whereby both, the Parliament (the Central

Government) and the State Legislatures are empowered to make laws/policies with regard to

the electricity industry.

The Electricity Act, 2003 ("Electricity Act") is the enabling statute in India covering matters

such as generation, distribution, transmission and trading of power. Further, the Central

Government of India, in consultation with State Governments and Central Electricity

Authority, has notified the:

(i) National Electricity Policy, on 12 February, 20058 ("National Electricity Policy");

and

(ii) Tariff Policy, on 6 January, 20069 ("Tariff Policy").

The National Electricity Policy, inter-alia, addresses the issue of the need to promote

generation of electricity from non-conventional sources (which includes MSW). And, the Tariff

Policy has elaborated the role of regulatory commissions and the mechanism for promoting

renewable energy and timeframe for implementation, etc. With regard to the determination of

tariff, the Tariff Regulations provide for the tariff determination aspects for various renewable

energy sources (including MSW).

Environmental Compliances:

The environmental compliances which need to be borne in mind with regard to the execution

of WtE projects are two-fold, i.e., compliances under the Municipal Solid Wastes

4 Article 246 (1) of the Constitution of India.

5 Article 246 (3) of the Constitution of India.

6 Article 246 (2) of the Constitution of India.

7 Article 254(1) of the Constitution of India.

8 pursuant to Resolution No. 23/40/2004-R&R (Vol.II).

9 pursuant to vide Resolution No.23/2/2005-R&R (Vol. III).

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(Management and Handling) Rules, 2000 ("MSW Rules") and those under the Environment

(Protection) Act, 1986. There is some judicial history on how we got to the MSW Rules.

(i) Disposal and conveyance of MSW: By way of background, there was a landmark Supreme

Court judgement on the issue. With regard to the management of MSW, the Supreme Court

of India, in the case of Almitra H. Patel vs. Union of India10

stated:

"We consider appropriate at this stage to constitute a Committee and to specify the specific aspects which the Committee is required to examine... The terms of Reference for the Committee shall be as under:

To look into all aspects of urban solid waste management, particularly

1. Examine the existing practices and to suggest hygienic processing and waste disposal practices and proven technologies on the basis of economic feasibility and safety which the Corporations/Government may directly or indirectly adopt or sponsor

2. Examine and suggest ways to improve conditions in the formal and informal sector for promoting eco-friendly sorting, collection, transportation, disposal, recycling and reuse

3. To review municipal bye-laws and the powers of local bodies and regional planning authorities and suggest necessary modifications to ensure effective budgeting, financing, administration, monitoring and compliance

4. Examine and formulate standards and regulations for management of urban solid waste, and set time-frames within which the authorities shall be bound to implement the same." (emphasis supplied)

Pursuant to this order of the Supreme Court of India, the Committee so formed submitted its recommendations and based on discussions of the relevant parties, the Central Government, on September 25, 2000, notified the MSW Rules.

11 The MSW Rules provide that the

municipality is responsible for the implementation of the said Rules, and for any infrastructure development for collection, storage, segregation, transportation, processing and disposal of MSW.

12

(ii) Permits and Clearances: The Ministry of Environment and Forest, on September 14,

2006, issued a notification which prescribes for the procedure for the grant of an

environmental clearance for projects or activities listed in the schedule to the said

notification.13

However, power plants up to 15 MW, based on non-hazardous municipal waste

are exempt from obtaining prior environment clearance.14

Tipping Fees: Presently, there are no laws/regulations which address the concept of tipping

fees in India. However, currently this concept exists and the draft agreement issued by the

Central Government (through the Ministry of Urban Development) for supply of MSW15

and

10

(1998) 2 SCC 416 11

Issued by the Ministry of Environment and Forest, pursuant to notification dated September 25, 2000. 12

Section 4 of the MSW Rules, 2000. 13

The Notification was issued, by the Ministry of Environment and Forest, pursuant to Rule 5(3) of the Environment Protection Rules, 1986, which Rules were issued pursuant to sections 6 and 25 of the Environment (Protection) Act, 1986. 14

In terms of the notification dated December 1, 2009, issued by the Ministry of Environment and Forest. 15

Available at the website of the Ministry of Urban Development, Government of India at: http://urbanindia.nic.in/programme/uwss/mswm/MSW_Supply_Agmnt_Mnclity.pdf

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the draft of the project implementation agreement16

provides for the payment of a monthly

tipping fees, by the concerned municipality to the concessionaire, for the total quantity of

MSW supplied by the concerned municipality. Further, as discussed above, the financial

evaluation of the bids for the development of WtE projects, is done based on the tipping fee

quoted by the bidders (preference being given to the bidder quoting the lowest).

2. What are the principal regulatory bodies regulating waste to energy projects? The Ministry of New and Renewable Energy ("MNRE") is the nodal ministry of the Government of India for all matters relating to new and renewable energy. The MNRE is the administrative ministry for policies and programmes in the field of renewable energy.

17 In

addition, the Ministry of Urban Development is the ministry responsible for formulating policies, supporting and monitoring programmes and co-ordinating the activities of various central ministries, State Governments and other nodal authorities, in so far as they relate to urban development issues in the country (such as the management of MSW).

18

The main regulatory authorities which regulate the tariff of generating companies are the Central Electricity Regulatory Commission

19 ("CERC") and the State Electricity Regulatory

Commissions20

("SERC"), both, constituted under the Electricity Act.

3. Are flow contracts permitted in your country?

We assume that these contracts refer to the agreement or system where a municipality

contracts to direct its MSW stream to a particular facility. In this regard, with a view of fulfilling

its obligations under Section 4 of the MSW Rules, if the concessionaire is setting up a waste

management facility, the concerned municipality contracts to supply the MSW to the

concessionaire at a particular receipt point specified in the supply agreement. And, if such

receipt point is not at the site the responsibility of transportation from such receipt point to the

site is that of the concessionaire.

4. Are there limitations on foreign investment in waste to energy projects? No, there are no limitations in India on foreign investment in WtE projects. Foreign investment in the generation of electricity and waste management is permitted up to 100%, under the automatic route.

21 While foreign bidders are permitted to bid for the development of WtE

projects, typically the bidding documents and the concession agreement for such projects contemplate the incorporation of a special purpose company (under the provisions of the Companies Act, 1956) prior to the execution of the agreements in connection with the development of the WtE project.

16

Available at the website of the Ministry of Urban Development, Government of India at: http://www.urbanindia.nic.in/programme/uwss/mswm/Project_Implementation_Agmnt-Mnclity.pdf 17

http://www.mnre.gov.in/mission-and-vision-2/mission-and-vision/. 18

http://www.urbanindia.nic.in/ 19

The CERC is, inter-alia, responsible for determining and regulating tariff for generating companies owned or controlled by the Central Government and for generating companies other than those owned or controlled by Central Government, if such companies have entered into a composite scheme for generation and sale of electricity in more than one state. 20

The SERC, inter-alia, determines and regulates tariff for intra-state generation, supply, transmission and wheeling of electricity in the relevant states. 21

In terms of the Consolidated Foreign Direct Investment Policy issued by Department of Industrial Policy & Promotion, Ministry of

Commerce & Industry, Government of India, effective from October 1, 2011.

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III. INCENTIVES

1. Are tax advantages available to waste to energy projects? Specific tax advantages vis-à-vis the development of WtE projects include:

(i) all items of machinery, including prime movers, instruments, apparatus and appliances, control gear etc., required for initial setting up of a project for generation of power using municipal and urban waste:

(a) are required to pay a maximum of 5% customs duty, ad valorem, irrespective of the duty specified in the First Schedule of the Customs Tariff Act, 1975, subject to certain conditions (such as the existence of a valid power purchase agreement between the importer and the purchaser etc.);

22 and

(b) are exempted from the payment of excise duty specified in the First

Schedule of the Central Excise Tariff Act, 1985, subject to certain conditions (such as the existence of a valid power purchase agreement between the importer and the purchaser etc.).

23

And, other tax advantages available to developers include:

(i) a 10 year tax holiday under the provisions of the Income Tax Act, 1961

24 with

regard to the development of infrastructure projects; and

(ii) accelerated depreciation on certain specified assets employed for renewable projects.

2. Is there a purchase guarantee given by the relevant legislation/regulations for electricity generated by waste to energy projects? With a view to promote generation of electricity from renewable energy sources, the SERCs are required to fix a minimum percentage for purchase of power from renewable energy sources in the area of the distribution licensee.

25 Pursuant to this, the SERCs in various

States in India have issued orders/regulations specifying the percentage for procurement of energy generated from renewable energy sources out of the total consumption of electricity within the area of a distribution licensee (for e.g., for the year 2012-2013, the State of Maharashtra has provided that the minimum quantum of purchase from renewable energy sources will be 8%, the State of Gujarat has provided that the minimum quantum of purchase from renewable energy sources will be 7%, etc.).

3. Is there a minimum price guarantee given by the relevant legislation/regulations for the electricity generated by waste to energy projects? The Tariff Policy requires the fixation by SERCs of preferential tariff for procurement by distribution companies of power generated from renewable energy sources. The CERC and the SERCs have determined generic levellised tariff with respect to some renewable energy projects (such as wind, solar etc.). The approach being followed by the CERC/SERCs is to

22

vide Notification No. 81/2005-Cus. 23

vide Notification No. 33/2005-C.E. 24

Section 80-1A of the Income Tax Act, 1961. 25

Section 86(1)(e) of the Electricity Act, Clause 5.12.2 of the National Electricity Policy 2005 and Clause 6.4 of the Tariff Policy.

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move away from the determination of tariff on a case to case basis. However, with regard to electricity generated from WtE projects, project specific tariff in accordance the relevant state tariff regulations, on a case to case basis, is determined by the relevant SERCs (as most renewable energy projects fall within the domain of the SERC, i.e., envisage sale of electricity within the state) and no levellised tariff has yet been determined. Thus, tariff is determined on a case to case basis.

4. Are waste to energy projects given preferential dispatch treatment in your country? An additional incentive provided by the Tariff Regulations (i.e., issued by the CERC) and several tariff regulations of the SERCs, for renewable energy projects (with the exception in certain instances, for biomass plants and non-fossil fuel based cogeneration plants, with installed capacity of 10 MW and above), is a 'MUST RUN' status (such projects will not be asked to back down for commercial tariff purposes) and that such projects are not subjected to ‘merit order despatch’ principles (priority of despatch being given to cheaper electricity).

5. What are the other incentives available to waste to energy projects? Are these incentives available to foreign investors? Are there incentives available to foreign investors that may not be available to domestic investors? Generally, there are no other incentives available to the development of WtE Projects. However, with regard to the development of certain pilot projects (selected though a bidding process), specific incentives are specified in The 'Programme on Energy Recovery from Municipal Solid Waste for the year 2011-12 - Sanction regarding',

26 which has been notified

with the main objectives of: (i) setting up 5 pilot projects for recovery of energy from MSW; and (ii) providing a fiscal and financial regime, to develop, demonstrate and disseminate utilization of MSW for recovery of energy. Incentives available to the concessionaire under the said programme include: (i) financial assistance at a flat rate of Rs. 2 crore (approximately 400,000 USD) per MW, subject to a ceiling of 20% of the project cost or Rs. 10 crore (approximately 2,000,000 USD), whichever is lesser; (ii) financial assistance that is 20% higher than that specified for other projects, for projects located in certain geographical (underdeveloped) areas; and (iii) financial assistance with regard to the cost of preparation of the detailed project report subject to a cap of Rs. 10 lakh per project (approximately 20,000 USD).

IV. STATISTICS

1. Approximately how many waste to energy projects are in your country? What percentage of electricity in your country is generated by waste to energy projects?

A total of 11 WtE projects have been completed in India up to January 31, 2011.27

In the year

2010, electricity generated from WtE projects contributed around 0.01% of the total power

generation of the country.28

2. Do you foresee any near term developments favoring or adversely impacting waste to energy projects in your country?

26

Notified by the MNRE on May 2, 2011. 27

Annual Report (2010 – 2011) of the MNRE, available at: http://mnre.gov.in/file-manager/annual-report/2010-2011/EN/Chapter% 204/ chapter%204.htm 28

As inferred from the DIRECT Report 2010 (http://www.direc2010.gov.in/pdf/India's-RE-Sector-Potential-and-Investment-opportunites-SSM.pdf) and Report Potential of RE in India (at: http://siteresources.worldbank.org/EXTENERGY2/Resources/Unleashing potential of_ renewables_in_India.pdf).

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As per the XIth five year plan (2007 – 2012), the MNRE is targeting to achieve 200 MW from generation of electricity from urban WtE and estimates that potential for power generation from MSW would be around 5200 MWe by the year 2017.

29 The MNRE is also envisaging a

long term plan (to be achieved by 2031) for energy recovery from municipal waste in 423 class-I cities.

30

29

http://planningcommission.gov.in/aboutus/committee/wrkgrp11/wg11_renewable.pdf

30

http://www.mnre.gov.in/schemes/r-d/solar-pv-3/development-focus/

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Waste to Energy Projects in Ireland

ABA International Law Section Meeting April 19, 2012

By Alex McLean, Brendan Slattery, Deirdre O’Mahony and Jenny Burke

Arthur Cox

I. General

1. What is the nature and importance of waste to energy projects in your country?

There is just one waste to energy facility in operation in Ireland, Indaver Ireland’s

facility in Carranstown, Duleek, County Meath (the “Carranstown Facility”). The

Carranstown Facility has an annual capacity of 200,000 for the incineration of non-

hazardous waste and a rated generation capacity of approx. 18 MW. It began

accepting waste in September 2011.

There are three other projects at various stages of development:

- Poolbeg Peninsula, Dublin 4, Dublin (the “Poolbeg Facility”). The Poolbeg

Facility, promoted by Dublin City Council (representing the four Dublin region

local authoritites) and Dublin Waste to Energy Limited (a consortium between

Covanta Energy, USA, and DONG Energy Generation, Denmark), has all

necessary consents for the incineration of up to 600,000 tonnes per annum of

residual non-hazardous waste, with a rated generation capacity of approx. 72MW.

It is hoped that construction of the Poolbeg Facility will recommence in late 2012.

- Ringaskiddy, County Cork (the “Ringaskiddy Facility”). The Ringaskiddy

Facility, promoted by Indaver Ireland, has a waste licence for the incineration of

hazardous and non-hazardous waste of up to 200,000 tonnes per annum, with a

rated generation capacity of 25MW, but does not yet have planning permission.31

- Nobber, County Meath (the “Nobber Facility”). This is a proposal, promoted by

College Proteins Limited, for the construction of a combined heat and power plant

to process up to 105,000 tonnes of biomass per annum, with a predicted electricity

output of approx. 8MW. The Nobber Facility is the subject of an application for

planning permission to An Bord Pleanála.

A number of regional waste management plans identify a need for waste to energy

infrastructure for residual waste. This is relevant to whether or not a facility will

secure planning permission and/or a waste licence in those regions and may result in

the relevant local authority taking steps itself to progress the development of waste to

energy infrastructure in the region.

31

The decision made in June 2011 by the relevant planning authority, An Bord Pleanála, to refuse permission is the

subject of legal challenge in the Irish High Court.

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In addition, Ireland has a number of landfill gas facilities, with a generating capacity

of approx. 35MW, while also incinerating waste in a number fo cement kilns.

2. What is the definition and coverage of waste to energy projects under the

relevant legislation in your country?

The Irish Waste Management Acts 1996 to 2011 (the “WMA”) have recently been

amended, to give effect to the revised European waste framework Directive

(2008/98/EC) (the “Waste Framework Directive”), to define waste to energy as

‘recovery’, where certain energy efficiency criteria described at R1 of Annex II of the

Directive and the Fourth Schedule to the WMA32

are met, and as ‘disposal’, where

they are not. Category R1 relates to the “use [of waste] principally as a fuel or other

means to generate energy”.

This characterisation is important, because the Waste Framework Directive also

requires the application of the ‘waste hierarchy’ as a ‘priority order’ in domestic

waste legislation and policy. The proper application of the waste hierarchy demands

that recovery options must be given priority to disposal options and there must be no

discrimination between recovery options to which the same priority is given under the

waste hierarchy.

There is no specific statutory definition of ‘waste to energy’ or ‘incineration’ under

the WMA. ‘Incineration plant’33

and ‘co-incineration plant’34

are defined under the

European Directive on the incineration of waste (2000/76/EC).

32

Incineration facilities dedicated to the processing of municipal solid waste are included only where their energy

efficiency is equal to or above:

— 0,60 for installations in operation and permitted in accordance with applicable Community legislation before 1

January 2009,

— 0,65 for installations permitted after 31 December 2008,

using the following formula:

Energy efficiency = (Ep - (Ef + Ei))/(0,97 × (Ew + Ef))

In which:

Ep means annual energy produced as heat or electricity. It is calculated with energy in the form of electricity being

multiplied by

2,6 and heat produced for commercial use multiplied by 1,1 (GJ/year)

Ef means annual energy input to the system from fuels contributing to the production of steam (GJ/year)

Ew means annual energy contained in the treated waste calculated using the net calorific value of the waste

(GJ/year)

Ei means annual energy imported excluding Ew and Ef (GJ/year)

0,97 is a factor accounting for energy losses due to bottom ash and radiation.

This formula shall be applied in accordance with the reference document on Best Available Techniques for waste

incineration 33

Article 3(4) of the Incineration Directive defines ‘incineration plant’ to mean “any stationary or mobile technical

unit and equipment dedicated to the thermal treatment of wastes with or without recovery of the combustion heat

generated. This includes the incineration by oxidation of waste as well as other thermal treatment processes such as

pyrolysis, gasification or plasma processes in so far as the substances resulting from the treatment are subsequently

incinerated. 34

Article 3(5) of the Incineration Directive defines ‘co-incineration plant’ to mean “any stationary or mobile plant

whose main purpose is the generation of energy or production of material products and: — which uses wastes as a

regular or additional fuel; or — in which waste is thermally treated for the purpose of disposal.”

NEWYORK 8418227 v4 (2K) 16

Equally, ‘waste to energy’ is not defined in electricity regulation, and is for the most

part regulated as ‘biomass’. The Electricity Regulation Act 1999, as amended (the

“ERA”), defines “renewable, sustainable or alternative forms of energy” as energy

used in the production of electricity which uses as its primary source one or a

combination of more than one of a number of fuels, including biomass and waste.

Neither of ‘biomass’ or ‘waste’ is defined in the ERA.

This somewhat passing acknowledgement of waste as a form of energy does not feed

through into more recent legislative provisions. The European Communities

(Renewable Energy) Regulations 2011 (Statutory Instrument 147 of 2011, (the “RED

Regulations”)), which transpose Directive 2009/28/EC (the “Renewable Energy

Directive”) into Irish law introduce a further definition of “energy from renewable

sources” as follows:

“‘energy from renewable sources’ means energy from renewable non-fossil sources, namely

wind, solar, aerothermal, geothermal, hydrothermal and ocean energy, hydropower, biomass,

landfill gas, sewage treatment plant gas and biogases”.

The RED Regulations rely on the same definition of biomass as that contained in the

National Oil Reserves Act 2007, namely:

“‘biomass’ means the biodegradable fraction of products, waste and residues from biological

origin from agriculture (including vegetal and animal substances), forestry and related

industries including fisheries and aquaculture, as well as the biodegradable fraction of

industrial and municipal waste.”

3. Is there a preferred structure for waste to energy projects in your country?

The majority of projects at some stage of development in Ireland (Carranstown,

Ringaskiddy and Nobber) are merchant projects. The Poolbeg Facility is a public

private partnership project involving a concession agreement between Dublin City

Council (representing the four local authorities in the Dublin region) and Dublin

Waste to Energy Limited (a consortium between Covanta Energy, USA, and DONG

Energy Generation, Denmark).

II. Regulation

1. What are the principal laws and regulations regulating waste to energy projects

(include regulations applicable to municipal solid waste disposal, conveyance of

waste, tipping fees, energy generation and environmental issues)?

Waste Sector Regulation

Waste to energy projects in Ireland are regulated under European and Irish waste law.

The principal domestic legislation regulating waste in Ireland, including the

collection, transport, management and treatment (including disposal and recovery) of

waste, is the WMA. The WMA gives effect inter alia to the European Waste

Framework Directive, Landfill Directive (99/31/EC) and Waste Shipment Regulation

(1013/2006). In particular, all recovery and disposal activities require a waste licence

NEWYORK 8418227 v4 (2K) 17

issued by the Environmental Protection Agency (“EPA”), except activities falling

under a class of activity for which waste permit regulations have been provided.35

The WMA imposes certain obligations on landfill operators to give effect to the

Landfill Directive. Section 53A relates to tipping (or gate) fees and requires that the

price charged for disposal of waste in a landfill must not be less than the total of the

costs incurred by the operator in the acquisition or development, or both, of the

facility, the costs of operating the facility during the relevant period and the estimated

costs, during a period of not less than 30 years or such greater period as may be

prescribed, of the closure, restoration, remediation or aftercare of the facility. Section

73 relates to the imposition of landfill levies on lanfill operators, the level of which is

prescribed under the Waste Management (Landfill Levy) Regulations 2011 (SI No.

434 of 2011). The rate prescribed, as of 1 September 2011, is €50 per tonne for each

tonne of waste disposed. The Regulations provide an exemption from the levy for

residual waste arisings from a waste to energy facility which meets the energy

efficiency criteria described in the Fourth Schedule to the WMA.

Finally, waste to energy projects, like all development in Ireland, are also subject to

the general controls prescribed under planning and environmental legislation, in

particular the requirements for planning permission and environmental impact

assessment (“EIA”).36

Electricity Sector Regulation

The principal legislation governing waste to energy projects from an electricity

perspective in Ireland is the ERA. The ERA provides for the establishment of a

regulatory framework for the introduction of competition in the generation and supply

of electricity in Ireland. It also established the Commission for Energy Regulation

(“CER”) as the national regulatory authority responsible for overseeing the

liberalisation of the energy sector and granting licences for the generation,

transmission, distribution and supply of electricity. The duties and functions of the

CER are prescribed principally by Section 9 of the ERA37

. The CER’s

responsibilities in respect of the electricity market include:

(a) licensing and oversight of participants;

(b) authorising construction of new generation capacity;

35

The classes of activity for which a waste permit may be obtained include the recovery of waste, other than

hazardous waste or an activity specified in Category 5 of Annex I of Council Directive 96/61/EC, where:- (a) the

annual intake does not exceed 50,000 tonnes, and (b) the maximum quantity of residual waste consigned from the

facility for onward transport and submission to disposal at an authorised facility shall not exceed 15% of the annual

intake. Category 5 of Directive 96/61/EC includes “Installations for the incineration of municipal waste…with a

capacity exceeding 3 tonnes per hour.” 36

The requirement for EIA is prescribed under the EIA Directive (85/337/EC) and the Planning and Development

Acts 2000 to 2011. 37

Some additional electricity- related functions are provided for by the European Communities (Internal Market in

Electricity) Regulations, 2005, SI No. 60 of 2005. Most recently, in the context of the electricity sector, the duties

and functions of the CER have been expanded by the 2011 IME Regulations to reflect the requirements of Article 37

of Directive 2009/72/EC and Article 41 of Directive 2009/73/EC.

NEWYORK 8418227 v4 (2K) 18

(c) monitoring final tariffs charged to domestic customers;

(d) setting tariffs for access to networks;

(e) promotion of renewable, sustainable and alternative energy;

(f) monitoring of interconnector arrangements;

(g) monitoring of security of supply of electricity; and

(h) ensuring there are adequate provisions in place to protect vulnerable

customers.

Government policy in the electricity sector is driven principally by the relevant EC

directives. The European Communities (Internal Market in Electricity) Regulations

2000 (the “2000 Regulations”) completed the transposition of Directive 96/92/EC of

the European Parliament and of the Council of 19 December 1996 concerning

common rules for the internal market in electricity (Directive 96/92/EC). The

European Communities (Internal Market in Electricity) Regulations 2005 and the

European Communities (Internal Market In Electricity) (Electricity Supply Board)

Regulations 2008 (the “2008 Regulations”) were promulgated to transpose the

requirements of Directive 2003/54/EC of the European Parliament and of the Council

of 26 June 2003 concerning common rules for the internal market in electricity and

repealing Directive 96/92/EC (Directive 2003/54/EC).

Most recently, the European Communities (Internal Market in Electricity)

Regulations 2010, the European Communities (Internal Market in Electricity and

Gas) (Consumer Protection) Regulations 201, the European Communities (Internal

Market in Electricity) (Certification and Designation of the Transmission System

Operator) Regulations 2011 and the European Communities (Internal Market in

Natural Gas and Electricity) Regulations 2011 provided for transposition of Directive

2009/72/EC.

Also of note are the European Communities (Renewable Energy) Regulations 2011

(supplemented by the Sustainable Energy Act 2002 (Section 8(2)) (Conferral of

Additional Functions – renewable Energy) Order 2011), which transposed Directive

2009/28/EC on the promotion of use of energy from renewable sources.

The electricity sector underwent fundamental reform with the establishment on 1

November 2007 of a Single Electricity Market (“SEM”) encompassing Ireland and

Northern Ireland. The Energy (Miscellaneous Provisions) Act 2006 and the

Electricity Regulation (Amendment) (Single Electricity Market) Act 2007 provide the

legal basis for the SEM, including establishment of a SEM Committee of the CER.

The key administrative authorisation required to construct a generation facility is an

authorisation to construct or reconstruct a generating station issued by the CER

pursuant to Section 16 of the ERA. It is an offence (Punishable on conviction on

indictment by a fine not exceeding €126,973) to carry out construction or

NEWYORK 8418227 v4 (2K) 19

reconstruction without the appropriate authorisation. Furthermore, by virtue of

Section 34(3) of the ERA, the making by the ESBNL of a connection offer is subject

to the offeree holding an authorisation to construct.

The key administrative authorisation required to operate a generation facility is a

licence to generate electricity issued by the CER pursuant to Section 14(1)(a) of the

ERA. Under Regulation 4(1)(a) of the 2000 Regulations as amended by Regulation

23(a) of the 2008 Regulations, a person who generates electricity without being duly

authorised to do so is guilty of an offence and liable on summary conviction to a fine

not exceeding €5,000 or to imprisonment for a term not exceeding 12 months, or to

both. The making of a connection offer by the relevant system operator is subject to

the offeree holding a licence to generate (Section 34(3) of the ERA).

The CER has the authority to grant to any person a licence to generate electricity on

such terms as may be specified in the licence. The CER may modify licences or

authorisations with or without the consent of the holder (albeit subject to a statutory

consultation process).

In addition to the requirement to have in place a Licence to Generate, a generator will

be required to accede to and comply with a series of industry codes. These codes set

out the detailed obligations on the generator in respect of market participation (SEM

Trading and Settlement Code), use of electricity systems (the Grid Code and

Distribution Code), metering (the Metering Code) and obtaining access to the

Transmission and Distribution Systems (Transmission Use of System Agreements

and Distribution Use of System Agreements). In all cases, these codes are subject to

regulatory oversight and may only be modified following a consultative process and

regulator approval.

2. What are the principal regulatory bodies regulating waste to energy projects?

The principal regulatory authorities are:

- EPA, for waste licence/environmental matters.

- An Bord Pleanála (the planning appeals board), for planning permission/planning

matters, where the development is deemed to be “strategic infrastructure

development”38

; or the relevant local authority, for planning permission/planning

38

“Strategic infrastructure development” (“SID”) means development falling under a category prescribed under the

Planning and Development Acts, which meets one or more of the following criteria: (a) the development would be

of strategic economic or social importance to the State or the region in which it would be situate; (b) the

development would contribute substantially to the fulfilment of any of the objectives in the National Spatial Strategy

or in any regional planning guidelines in force in respect of the area or areas in which it would be situate; (c) the

development would have a significant effect on the area of more than one planning authority. The categories of SID

development include “[w]aste disposal installations for the incineration, chemical treatment as defined in Annex IIA

to Directive 75/442/EEC under heading D9, of non-hazardous waste with a capacity exceeding 100 tonnes per

day.” The expression “waste disposal installations” under this category has been interpreted by An Bord Pleanála,

the authority with responsibility for SID applications, to mean disposal or recovery, including waste to energy

installations.

NEWYORK 8418227 v4 (2K) 20

matters, where the permission is for ordinary development and not “strategic

infrastructure development”.

For projects involving EIA, there is a requirement under the European EIA

Directive (85/337/EEC) for co-ordinated and consistent decision-making between

the various regulatory authorities. This requirement has not been given express

effect in domestic law and Ireland was recently (in March 2011) criticised by the

European Court for its failure to properly implement that requirement.

- CER for electricity regulatory matters.

3. Are flow contracts permitted in your country?

We assume this is to mean contracts for the direction of waste to a particular facility.

Subject to compliance with conditions contained in waste collection permits, which

waste collectors must hold and comply with, there is no express prohibition against

agreements between private operators with the purpose of regulating the flow or

direction of waste to a particular facility. Of course, the general controls around anti-

competitive behaviour and activity under European and Irish competition law may

operate to prohibit this type of agreement.

The Irish High Court made a decision that cast doubt on the statutory powers afforded

to local authorities under the WMA and the ability of local authorities to adopt policy

regulating the flow or direction of waste.39

This decision, made in December 2009, is

under appeal to the Supreme Court. One of the main issues in that case, the control of

waste flows in the collection market, is currently the subject of review by the

Government and new legislation is expected. Franchise bidding for collection

services within specific geographical regions is one option being considered. It is

expected that direction of collected waste to a tier within the waste hierarchy, rather

than to a specific facility, will remain permissible. Subject to this, private operators

will be free to commit tonnage to facilities.

4. Are there limitations on foreign investment in waste to energy projects?

No.

III. Incentives

1. Are tax advantages available to waste to energy projects?

Save for avoidance of certain levies on other forms of disposal such as landfill levies,

there are no tax advantages specifically to waste to energy facilities.

2. Is there a purchase guarantee given by the relevant legislation/regulations for

electricity generated by waste to energy projects?

39

Nurendale Ltd t/a Panda Waste Services v. Dublin City Council & Ors. [2009] IEHC 588.

NEWYORK 8418227 v4 (2K) 21

A Single Electricity Market exists on an all-island based on the island of Ireland. This is a

single wholesale electricity market for the island which, from it's effective date on 1

November 2007, has functioned through a day ahead, dual currency, gross mandatory pool.

Trade of physical electricity must be conducted through the pool by generators who reach the

10MW minimum threshold, while those below 10MW can choose whether or not to

participate. As such, there is not a purchase guarantee, but subject to their being dispatched,

all of their output is guaranteed to receive the system marginal price. The issue for waste to

energy projects is to ensure that they will receive priority dispatch. (see question 4, below).

3. Is there a minimum price guarantee given by the relevant legislation/regulations

for the electricity generated by waste to energy projects?

There is no minimum price guarantee for electricity in Ireland. Rather, a Renewable Energy

Feed in Tariff Scheme (“REFIT”) is used as a support scheme for electricity generation,

including for waste to energy plants. REFIT is the name given to a series of schemes

administered by the Department of Communications, Energy and Natural Resources

(“DCENR”) to support the construction of certain new renewable electricity generation plant.

To participate in REFIT, renewable generators must be accepted by DCENR in accordance

with the REFIT Terms and Conditions40

. Successful generators who received a “letter of

offer” are required to enter into a power purchase agreement (“PPA”) with a supplier

licensed by the CER.

With the benefit of a formal REFIT letter of offer (the generator is the addressee although

details of the supplier are subsequently notified to the DCENR), the supplier counterparty to a

REFIT PPA is entitled to be reimbursed its “additional costs” in performing its public service

obligation (“PSO”) to purchase the output from the new electricity generation plant. This

PSO is imposed on licensed suppliers by way of statutory instrument.

In times where the additional costs to suppliers of purchases under REFIT PPAs are over and

above market incomes in the SEM, the fund used to finance the REFIT payments is collected

by suppliers from final customers of electricity through a PSO Levy that is set by the CER.

Ultimate responsibility for the onward payment to licensed suppliers of levy amounts

collected lies with EirGrid, the TSO. The levies are collected by suppliers and passed to the

TSO, who then distributes them back to the persons who are entitled to receive such

payments.

The European Commission provided state aid clearance for the first REFIT scheme

by letter dated 25 September 2007. REFIT support cannot extend beyond (a) a period

in excess of 15 years; (b) 31 December 2025; or (c) the termination of the REFIT

PPA concerned. We note that for new projects entering the ROI market, that the

REFIT competition was subject to a quantitative limit, which has now been reached.

Accordingly, the DCENR is no longer issuing REFIT letters of offer for the first

REFIT scheme. State aid clearance has now been received for a successor “REFIT 2”

and “REFIT 3” scheme, which will apply from 1 January 2010 to 31 December 2015,

40

Renewable Energy Feed In Tariff (REFIT2006) – A Competition for Electricity Generation from Biomass, Hydro

and Wind, published by the DCENR (see http://www.dcenr.gov.ie/NR/rdonlyres/E260E316-B65A-4FDC-92F0-

9F623BA18B55/0/REFIT 2006termsandconditionsV2.doc

NEWYORK 8418227 v4 (2K) 22

with the principal difference between REFIT 2 and REFIT 3 being that they cover

different technologies.

4. Are waste to energy projects given preferential dispatch treatment in your

country?

Article 16(2)(c) of Renewable Energy Directive41

provides for priority dispatch for

generating installations using renewable energy sources in so far as the secure

operation of the national electricity system permits and based on transparent and non-

discriminatory criteria. Article 2(a) of the Renewable Energy Directive defines

‘energy from renewable sources’ to include biomass, which is, in turn, defined in

Article 2(e) to include the 'biodegradable fraction of industrial and municipal solid

waste.'

Ireland has transposed this requirement into Irish law by means of the RED

Regulations which provide, at Article 4(1), that:

“[i]n order to achieve the target addressed to the state in Annex 1 to the Directive and based

on transparent and non discriminatory criteria defined and published by CER—

(b) when dispatching generating units, the transmission system operator shall give priority to

generating units using energy from renewable sources42

in so far as the secure operation of the

electricity system permits”

Article 4(2) of the RED Regulations makes the implementation of paragraph (1) “at

all times subject to the maintenance of the reliability and safety of the grid”.

On 26 August 2011, the CER, acting through its SEM Committee published a

decision paper setting out the manner in which priority dispatch would be

implemented in Ireland.43

The effect of this Decision was that waste to energy,

notwithstanding its use of renewable energy sources within the meaning of the

Renewable Energy Directive, would be provided with priority dispatch only where it

could be classified as a qualifying hybrid plant. Subject to a minimum requirement

that its input fuel be at least 10% renewable, qualification would be based on the

estimated impact of a given plant on emissions from power generation over a given

period. Where a hybrid plant was shown to emit fewer carbon emissions than an

"appropriate reference thermal plant deemed to be displaced by the qualifying hybrid

plant", it would be afforded priority dispatch.44

Since the publication of its Decision, neither of the CER nor its SEM Committee has

provided any further detail of the practical implementation of the qualification

process for hybrid plant. As such it is as yet unclear as to whether waste to energy

plant will fall within this, apparently narrow, classification. In any case, the

41

Transposed in Ireland by to S.I. 147 of 2011. 42

See definition at Part I Question 2 above. 43

Principles of Dispatch and the Design of the Market Schedule in the Trading and Settlement Code -SEM

Committee Decision Paper, 26th August 2011 (SEM-11-062) 44

The Decision further proposes that the reference plant would be a mid merit plant, that carbon emissions from

renewable fuel inputs will be deemed to be zero.

NEWYORK 8418227 v4 (2K) 23

equivocal nature of priority for waste to energy plant and the apparently ongoing

requirement to “qualify" over the lifetime of a project is considered to be a

disappointing transposition of the Renewable Energy Directive.

5. What are the other incentives available to waste to energy projects? Are these

incentives available to foreign investors? Are there incentives available to

foreign investors that may not be available to domestic investors?

The incentives applicable to waste to energy under waste law are indirect i.e., waste

to energy facilities are not subject to a levy (like the landfill levy) and residual waste

arisings from a waste to energy facility which meets the energy efficiency criteria

described in the Fourth Schedule to the WMA are exempt from the landfill levy.

There are no incentives available to foreign investors that are not available to local

investors.

IV. Statistics

1. Approximately how many waste to energy projects are in your country? What

percentage of electricity in your country is generated by waste to energy

projects?

See I.1 above. No figures are available for the percentage of electricity generated by

waste to energy projects, however the total installed capacity of waste to energy

projects (including landfill gas) is only approx. 53MW. This accounts for well under

1% of the total installed capacity in Ireland which indicates that the percentage of

electricity generated is likely to be similarly small.45

2. Do you foresee any near term developments favoring or adversely impacting

waste to energy projects in your country?

A number of policy developments favour the development of waste to energy projects in

Ireland.

The Landfill Directive, amongst other things, prescribes targets for Member States for the

gradual reduction of biodegradable municipal waste (“BMW”) going to landfill. Ireland’s

next landfill diversion targets arise in 2013 and 2016, as follows:

(i) By 2013, BMW to landfills must be reduced to 50% of the total amount (by weight)

of BMW produced in 1995;

(ii) By 2016, BMW to landfills must be reduced to 75% of the total amount (by weight)

of BMW produced in 1995.

45 See the All-island Generation Capacity Statement 2011 – 2020 published by EirGrid and SONI (the Transmission

System Operators for Ireland and Northern Ireland respectively) which gives the total generation capacity of fully

dispatchable plants in Ireland in 2011 as 6,743MW: http://www.eirgrid.com/media/GCS%202011-

2020%20as%20published%2022%20Dec.pdf

NEWYORK 8418227 v4 (2K) 24

Ireland must take measures to meet those targets and may be subject to fines imposed by the

European Commission for its failure to do so.

The EPA has published recent data regarding the level of non-compliance of landfills in

Ireland that suggests that, without significant additional waste infrastructure, Ireland will not

meet its Landfill Directive targets.

There was a proposal by the former Government to introduce a ‘waste facility levy’

applicable to incineration facilities.46

This proposal, which conflicts with the waste hierarchy

imposed under European waste law, was not given effect and is not expected to be given

effect by the existing Government, given the exemption created under the Landfill Levy

Regulations for residual waste arisings from waste to energy facilities.

The Renewable Energy Directive promotes the use of renewable sources for electricity

generation and sets a target for energy from renewables of 20% of total energy consumption

across the EU by 2020. Ireland’s mandatory national target for its overall share of gross

energy consumption from renewables is 16% by 2020.

Under the Renewable Energy Directive, member states are free to decide their

preferred mix of renewable sources but to ensure that the mandatory national targets

are achieved, member states are required to follow an indicative trajectory towards

the achievement of their target and each will produce a National Renewable Energy

Action Plan (“NREAP”). Ireland’s NREAP projects that primary energy production

of biodegradable fraction of municipal solid waste including biowaste and landfill gas

will rise from 220ktoe to 410ktoe between 2015 and 2020.

The biodegradable fraction of waste is treated as “biomass” and so qualifies as

“renewable” for the purposes of the Renewable Energy Directive. This, however,

means that energy from waste facilities use only partially renewable fuel sources. For

the purposes of renewable energy targets, that volume of electricity attributable to the

renewable portion of the fuel may only be counted.

46

Environment (Miscellaneous Provisions) Bill 2011

NEWYORK 8418227 v4 (2K) 25

Waste to Energy Projects in Mexico

ABA International Law Section Spring Meeting April 19, 2012

By Jacquelin Gutierrez

I. General.

1. What is the nature and importance of waste to energy projects in your country?

Due to the operational issues as well as to controversy surrounding incineration, waste-to-energy

(“WtE”) projects in Mexico are mainly understood as greenhouse gas recovery from landfills

which are channeled and used to generate electricity, and filed under the “biomass” energy

category. According to government data, an average of 88.4% of waste generated in Mexico is

collected of which, only between 3.3 and 10% is recycled. Of the total waste generated in the

country, it is estimated that 67% is landfilled, while the rest disposed of irregularly.47

Data

accounts for incineration are negligible. WtE projects are not typically associated to incineration

or to syngas/ethanol production.

2. What is the definition and coverage of waste to energy projects under the

relevant legislation in your country?

There is no definition of WtE as such under Mexican law, but Mexican law does define the

various elements that make up the different alternatives for WtE, such as Municipal Solid Waste

Handling and Disposal, Landfills, Incineration and the Generation of Electricity from Biogas and

Biomass.

In principle, the generation of electricity in Mexico is a public service that must be carried out

exclusively by the state. However the federal government, through the Energy Regulation

Commission, may grant permits to individuals for the generation of energy under special

circumstances, such as generation of electricity for self-supply, cogeneration or small production

(i.e., less than 30MW).

The principal vehicles to generate electricity based on biogas has been cogeneration and/or self-

supply permits. A self-supply company is generally a consortium of private parties that invests in

an energy project that will supply electricity to at least one of the consortium members of-site.

As to cogeneration, private power cogeneration facilities supply power to the establishments

associated with the cogeneration process and the shareholders of the cogeneration company.

The location of the generation facility is not necessarily adjacent to the location of the member(s)

of the consortium that consume the electricity generated.

47

Informe de la Situación del Medio Ambiente en México, Edición 2008. Sistema Nacional de Información Ambiental y

Recursos Naturales.

NEWYORK 8418227 v4 (2K) 26

3. Is there a preferred structure for waste to energy projects in your country?

Since the collection and disposal of municipal waste is a public service that has been

constitutionally assigned to the municipalities, WtE projects in Mexico are structured as

concession titles involving the right to collect MSW from a certain locality and/or to operate the

a landfill. The concessions include the rights to capture greenhouse emission gases. Further, the

concessionaire must secure a self-supply permit for the generation of electricity.

II. Regulation

1. What are the principal laws and regulations regulating waste to energy projects

a) Waste handling (collection, disposal and incineration).

According to the Mexican Constitution, the collection and disposal of non-hazardous waste is a

responsibility of the municipalities. Notwithstanding, municipalities carry these activities out as

provided in the law issued by state legislatures and subject to certain environmental provisions

issued by the federal legislative body.

State constitutions and secondary legislation in this regard vary from state to state, but generally

provide for obligations held by the municipalities, as well as the feasibility of granting

concessions to private individuals for these services. In many cases, tipping fees are determined

and justified by the private individual in the proposal filed to the local government in a tender

process, which is then agreed upon by the parties after the award has been granted.

Overarching environmental provisions applicable to waste handling are foreseen in the General

Law for the Prevention and Integral Management of Waste, and its regulations, which establish

various restrictions relating to the protection of the environment for the handling of municipal

waste, including confinement and incineration.

By the same token, Mexican Official Standard NOM-083-SEMARNAT-2003, issued by the

federal ministry of environment, regulates the specifications for the design, construction and

operation of municipal and special management waste landfills. Further, Mexican Official

Standard NOM-098-SEMARNAT-2002, also issued by the federal government, sets forth certain

specifications for the design, construction operation and emission levels of incinerators as well as

the type of waste that may be incinerated.

b) Generation of electricity.

Mexico has a vertically-integrated energy utility monopoly that includes the generation,

transmission, distribution and marketing of electric power, the Federal Electricity Commission

(Comisión Federal de Electricidad “CFE”). Nevertheless, private entities may participate in the

generation of electricity under specific conditions.

Although a monopoly, CFE is also subject to a significant number of legal constraints imposed

by several Federal agencies, including the Energy Regulatory Commmission (Comisión

Reguladora de Energía “CRE”), the Ministry of Energy (Secretaría de Energía, “SENER”),

NEWYORK 8418227 v4 (2K) 27

the Federal Comptroller Bureau (Secretaría de la Función Pública) and the Ministry of Finance

and Public Credit (Secretaría de Hacienda y Crédito Público) (“SHCP”).

The activities of CFE are regulated by the Electric Power Public Utility Service Law (Ley del

Servicio Público de Energía Eléctrica) (the “Power Law”) and the Regulations of the Electric

Power Public Utility Law (Reglamento de la Ley del Servicio Público de Energía Eléctrica) (the

“Power Regulations”).

Under the Power Law, private entities may participate in power generation, either through self-

supply for particular entities or individuals, through generation from Independent Power

Producers (IPP), or for export to other countries. Under the self-supply scheme, private

developers may produce electricity for their own use. In this case, energy generated by one of the

partners of a “self-supply partnership” may be delivered to the CFE grid at a given

interconnection point and then be transported to the point of consumption by another partner.

Under the IPP scheme, private producers with plants over 30 MW must sell their power to the

CFE through long-term power purchase agreements (PPA).

In 2008, the Mexican government adopted an Energy Reform package, which included the Law

for the Development of Renewable Energy and the Financing of the Energy Transition (Ley para

el Aprovechamiento de Energías Renovables y el Financiamiento de la Transición Energética

“LAERFTE”) to reduce the country’s dependence on fossil fuels by fostering renewable energy

development, but excludes energy derived from waste incineration as well as from landfills that

do not meet regulations.

This bill called for the drafting a renewable energy program by the SENER, as well as for the

development of a national strategy for the sustainable use of energy. Various bodies were created

to design a renewable energy strategy, which also involves the private sector. SENER was also

made responsible for the preparation of a “Special Program for the Use of Renewable Energy”,

setting the objective of increasing the share of non-hydro renewable energy in the total national

installed generating capacity from 3.3% (1,900 MW) to reach 7.6% (4,500 MW) by 2012 and the

share of non-hydro renewable power generation from 3.9% to 6.6%.

The bill also created a Renewable Energy Fund to promote the use of renewable sources and

energy efficiency, including providing financing guarantees and direct support. Although

approximately USD 200 million designated to this fund on an annual basis from 2009 to 2011,

these funds have been used more for energy efficiency programs than for renewable energy

technologies.

During 2010, a series of new regulations were issued by SENER to strengthen the regulatory

framework for renewable energy, including reductions in the transmission charges for private

renewable energy developers. Also new models of interconnection contracts and agreements for

renewable energy small scale projects have created new opportunities for larger investments.

2. What are the principal regulatory bodies regulating waste to energy projects?

NEWYORK 8418227 v4 (2K) 28

On waste collection/disposal, the municipality (or State in case various municipalities are

involved), play a crucial role in the granting of concessions and, most importantly in the

execution of any contractual obligations and collection of tipping fees.

Depending on the infrastructure required, an environmental impact authorization may be

required from local and/or federal environmental authorities, as well as the verification of

compliance with the official Mexican Standards mentioned;

Also, depending on the design of the project, land use and construction permits may be

required from the municipality which should not be taken for granted;48

The CRE will be involved in the issuance of permits for the generation of electricity;

CFE will be involved in transmission and power purchase issues.

SENER and SHCP are involved in the issuance of general rules for tariffs charged to

users of the transmission network.

3. Are flow contracts permitted in your country?

Yes.

4. Are there limitations on foreign investment in waste to energy projects?

None besides the fulfillment of certain registration/permitting obligations.

III. Incentives

1. Are tax advantages available to waste to energy projects?

Tax advantages in Mexico are limited in this area. The Federal Income Tax Law provides for an

“accelerated depreciation” option for investments made in connection with renewable resources,

which should consist on equipment that will be in use for at least 5 years following the

deduction. Also, the Mexican government offers to charges a 0% import tax on “anti-pollution”

equipment or equipment to be used on “research and development”, the latter so long as the

importer adopts guidelines established by the Ministry of Economy and the National Science

Council.

2. Is there a purchase guarantee given by the relevant legislation/regulations for

electricity generated by waste to energy projects?

Article 36-BIS of the Power Law requires CFE to purchase power for public supply at the lowest

possible cost, generally interpreted as the least cost per kWh delivered. Some interpret this to

mean that diversification and environmental benefits of renewable energy are not in cost

determinations.

48

The famous (or rather infamous) Metalclad case involving a hazardous waste confinement originated from the

lack of a construction permit that the Municipality originally dismissed as unnecessary.

NEWYORK 8418227 v4 (2K) 29

Tariffs for the electric power public utility services provided by the CFE are set by the SHCP,

with the participation of the SENER and the Ministry of Economy, based on the proposals

presented by the CFE. The terms and conditions under which such a service shall be provided are

regulated in the Power Law and its Regulations.

Since power generated by the holders of cogeneration and self-supply permits is not sold to third

parties, the terms, conditions and price is determined by the shareholders/partners of the holder

of the permit.

Self-supply projects do have to take into account the wheeling fee levied by CFE on “off-site”

self-supply projects (where the location of the generation is different from the site at which the

self-supply power is consumed) for access to its high-tension transmission lines. In recent years,

CRE developed a Wheeling Service Agreement for Electricity from Renewable Energy Sources

(Convenio para el Servicio de Transmisión de Energía Eléctrica para Fuente de Energía

Renovable), which sets a wheeling fee is based upon the variable costs of the transmission line,

and varies based on the tension level used. The cost only changes with inflation, thereby

providing cost certainty to project developers.

3. Is there a minimum price guarantee given by the relevant legislation/regulations

for the electricity generated by waste to energy projects?

As mentioned, prices of power generated by holders of self-supply and cogeneration permits are

determined by the holder and its partners/shareholedrs. On the other hand, the rates for the sale

of excess power generated by permit holders to the CFE are determined based on the

methodology approved by the CRE and are based on a percentage (between 85 and 95) of the

CFE’s short-term cost of power. Power sales between the CFE and foreign entities for imported

or exported power, on the other hand, are not regulated, but this type of transaction is subject to

approval by the Ministry of Energy.

4. Are waste to energy projects given preferential dispatch treatment in your

country?

In spite of CFE’s initial reluctance, in 2006 it held the first “open season” bidding process for the

allocation and reservation of transmission capacity in the CFE’s transmission grid. This open-

season process helped in the generalized request for transparency and efficiency in the allocation

of limited transmission capacity. Unfortunately, the bidding process was restricted to areas of the

country where some sorts of renewable energy projects (i.e. wind) are more likely –Oaxaca, for

example.

The holders of a power generation, export or import permit are allowed to either interconnect to

the national electric system and use the CFE’s wheeling services, which then acts as a contract

carrier, or to build and operate their own transmission facilities. The CFE’s wheeling services are

provided pursuant to model contracts approved by the CRE, which also approve the

methodology to calculate the applicable charges.

NEWYORK 8418227 v4 (2K) 30

In 2010, the CRE has issued new model interconnection, wheeling and back-up power

agreements (Contrato de Interconexión para Fuentes de Energía Renovable o Cogeneración

Eficiente “CIFER”), especially crafted for permit-holders developing projects under a

‘renewable energy’ scheme, which entail more favorable conditions to access the transmission

grid of the national electric system (a ‘postage stamp’ scheme). Subsequently, the CRE

published specific rules regulating the manner in which renewable energy and efficient

cogeneration shall be given access to the CFE’s national electric system on a ‘first come, first

served’ basis and include the right to request the intervention of the CRE in case the CFE denies

access or the cost of the grid enhancements required by the CFE is excessive.

5. What are the other incentives available to waste to energy projects? Are these

incentives available to foreign investors? Are there incentives available to

foreign investors that may not be available to domestic investors?

The Mexican Government has established a fund to finance initiatives related to the Sustainable

Use of Energy. As of 2011, it had allocated close to US $1million be spent on the promotion of

renewable energy and energy efficiency projects. The grants made by this fund are determined

by a committee made up of various representatives of the Mexican Government. Unfortunately,

these funds have mostly been granted to energy efficiency projects and, as we mentioned,

projects involving waste incineration are excluded.

IV. Statistics

1. Approximately how many waste to energy projects are in your country?

As of the end of February, 2012, the Mexican Energy Regulation Commission had published that

it has issued 66 permits for the generation of electricity based on biomass/biogas. Of those, all of

the permits related to biomass (56) were actually sugar-cane related. The other 10 permits listed

are “biogas”, as follows:

State

WWTP Self-supply 1997 1997 1.600 14.02 Operation Nuevo Leon

WWTP Self-supply 1997 1997 9.200 40.20 Operation Nuevo Leon

Landfill Cogen 2002 2003 16.960 100.29 Operation Nuevo Leon

Food factory Cogen 2004 2004 0.971 8.11 Operation Estado de Mexico

DairyFarm Self-supply 2009 2009 0.800 5.06 Operation Chihuahua

Landfill Self-supply 2009 2011 6.400 39.24 Operation Chihuahua

WWTP Cogen 2010 2010 1.049 7.35 Operation Queretaro

Landfill Self-supply 2010 2011 3.200 21.52 Operation Aguascalientes

NEWYORK 8418227 v4 (2K) 31

WWTP Self-supply 2011 2011 1.734 12.14 Constructio

n Guanajuato

WWTP Self-supply 2011 2012 2.852 21.20 Constructio

n Jalisco

Total 44.7 269.13

The Institute of Investigation on Electricity has mentioned that WtE projects in Mexico have a

generation potential that ranges between 160 and 180MW, which corresponds to some 40-50

WtE plants across the country. 49

The estimated capacity includes a 30MW WtE project for the

clean-up of Mexico City's Bordo Poniente landfill, which is one of the largest landfills in the

world, holding approximately 72 metric tons of Municipal Solid Waste (“MSW”). The

Government of Mexico City has recently published a call for proposals to build this plant and

expects to award the project by the end of July of 2012.

2. Do you foresee any near term developments favoring or adversely impacting

waste to energy projects in your country?

CRE has approved a net-metering scheme for self-supply installations with a capacity less than 0.5 MW.

This allows small installations to benefit from all the renewable power generated through sales of excess

generation to the grid, not just that which is used at the self-supply location at the time of generation.

However, this payment is just for the generation supplied, not the capacity. As a next step, CRE is

working to design a system in which CFE would incorporate a capacity payment to small producers (less

than 30 MW with all power supplied to grid) and efficient co-generators that will be included in the tariff

paid by CFE for each kWh delivered to the grid.

49 Instituto de Investigaciones Eléctricas.

NEWYORK 8418227 v4 (2K) 32

Waste to Energy Projects in the United States

ABA International Law Section Spring Meeting April 19, 2012

By Sylvia Fung Chin and Matthew Walker

White & Case LLP

I. General

1. What is the nature and importance of waste to energy projects in your country?

Waste to Energy (WtE) projects have seen a resurgence in recent years. The process of

disposing of municipal solid waste (MSW) in landfills has been critiqued as impractical in states

where land is at a premium as well as in states where the water table is near the surface. As an

ideal alternative method to landfills for MSW disposal, the federal government and several states

have classified WtE as a renewable energy resource. This is an important classification at the

state level in that only those technologies classified as a renewable energy resource fall within

the states’ renewable portfolio standard (RPS) (discussed below). As a renewable energy

resource, WtE facilities assist states and their public utilities in meeting their future renewable

energy standards while also decreasing the widespread use of landfills.

2. What is the definition and coverage of waste to energy projects under the relevant

legislation in your country?

Federal:

As of October 1, 2010, the following federal statutes and policies define waste to energy as

renewable energy:50

American Recovery and Reinvestment Act of 2009

Energy Policy Act of 2005

Federal Power Act

Public Utility Regulatory Policy Act (PURPA) of 1978

Biomass Research and Development Act of 2000

Pacific Northwest Power Planning and Conservation Act

Internal Revenue Code (Section 45)

Executive Orders 13123 and 13423

50

Michaels, Ted “The 2010 ERC Directory of Waste-to-Energy Plants,” Energy Recovery Council, p. 4 (November

2010)

NEWYORK 8418227 v4 (2K) 33

Federal Energy Regulatory Commissions Regulations (18 C.F.R.Ch.I, 4/96 Edition, Sec.

292.204)

However, the Energy Information Administration (a division within the U.S. Department of

Energy) has classified MSW as a renewable energy source only to the extent that the source-

stream can be identified as biogenic. Additionally, beginning in 2001, the EIA has classified

MSW and landfill gas as separate fuels in its survey forms.51

State:

Whether waste to energy is defined as a renewable energy resource varies widely from state to

state. In the United States, 24 states and the District of Columbia define waste to energy as a

renewable source, with some exceptions.52

However, some states, such as New York, do not

include waste to energy as a renewable energy resource for purposes of their Renewable

Portfolio Standard (RPS, discussed below). In addition to New York, California generally

excludes from the definition of renewable sources those facilities that “combust” MSW.

However, the California RPS explicitly includes and grandfathers in particular MSW combustion

facilities into the definition of renewable energy. Namely, MSW combustion waste to energy

facilities that are located in a specific county and were in operation prior to September 26, 1996.

Others, such as Massachusetts and Connecticut, include WtE facilities as renewable, but only as

“Class II” renewable energy sources. By contrast, Maryland considers WtE facilities to be a

“Class I” renewable energy resource. This is an important distinction in these states with two-

tiered systems as preference is given to Class I defined sources. In Massachusetts, Class I

renewable energy obligations increase annually while Class II obligations remain static.

3. Is there a preferred structure for waste to energy projects in your country?

As a relatively expensive technology, WtE projects need to secure ample amounts of funding in

order to become economically viable enterprises. Projects in the past have either been funded

through municipal bond financing or through a form of public-private partnerships. Projects that

are owned by municipalities take advantage of the lower cost of funding by engaging in tax-

exempt financing, the United States being the only major jurisdiction that utilizes its tax code to

create a capital market to subsidize the efforts of state and local governments to invest in

infrastucture. Projects that are owned and operated privately can also take advantage of a form of

private activity taxable bond financing. By doing so, such projects will frequently realize

benefits with respect to reductions in other taxes, for example, real estate taxes.

51

“Methodology for Allocating Municipal Solid Waste to Biogenic and Non-Biogenic Energy,” Energy Information

Administration, p. 8 (May 2007). 52

For example, while California recognizes waste to energy as a renewable source for purposes of its RPS,

California specifically excludes combustion-based thermal facilities from the RPS-eligible “municipal solid waste

conversion” facilities.

NEWYORK 8418227 v4 (2K) 34

II. Regulation

1. What are the principal laws and regulations regulating waste to energy projects?

Federal

Principally, waste to energy projects are regulated at the federal level by:

The Clean Air Act (CAA);

The Resource Conservation and Recovery Act (RCRA);

The Public Utility Regulatory Policies Act (PURPA); and

The EPA’s Maximum Achievable Control Technology (MACT) regulation and

other related environmental regulations.

State

In addition to federal regulations, waste to energy facilities must comply with various regulations

at the state level. Every state employs various rules and regulations for electricity generating

facilities, as well as rules and regulations governing the transportation and disposal of MSW.

However, some states have specific regulations related to MSW-based WtE facilities. For

example, in Massachusetts, WtE facilities must also comply with 310 CMR 7.08(2) and 310

CMR 19.000. Section 7.08(2), in conjunction with sections 111(d) and 129 of the CAA,

regulates the emissions and other pollutants from MSW WtE facilities that utilize combustion

technology. Section 19.000 regulates the collection, transportation, diversion, energy

reclamation and disposal of MSW, among other related activities.

2. What are the principal regulatory bodies regulating waste to energy projects?

Federal

There are two principal agencies that regulate waste to energy projects: the Environmental

Protection Agency (EPA) and the Federal Energy Regulatory Commission (FERC). The EPA

regulates the project during its initial planning and operation phases through a number of

enabling statutes including the RCRA and the CAA. The FERC, by contrast, regulates covered

waste to energy facilities’ electricity production and transmission.

State

In addition to federal regulatory oversight, state agencies also regulate waste to energy projects.

For example, in Massachusetts the Massachusetts Department of Environmental Protection

(DEP) regulates the collection, transfer and disposal (through composting or energy generation

means) of MSW. In conjunction with the FERC, the Massachusetts Department of Public

Utilities (DPU) regulates the transmission of electricity to investor-owned electric power

utilities. Similar regulatory bodies exist in every state.

NEWYORK 8418227 v4 (2K) 35

3. Are flow contracts permitted in your country?

The use of flow control contracts to direct MSW to favored facilities has encountered a number

of difficulties in the United States. Following the Supreme Court’s landmark ruling in C&A

Carbone, Inc. v. Town of Clarkstown, 511 U.S. 383 (1994) (ruling that flow control contracts to

a favored private facility violates the dormant commerce clause as an impermissible burden on

interstate commerce), flow contracts were largely considered unconstitutional. However, in

United Haulers Association Inc. v. Oneida Herkimer Solid Waste Management Authority, 550

U.S. 330 (2007), the Supreme Court reviewed its Carbone decision and held that flow control

ordinances that direct waste to government owned and operated facilities do not discriminate

against interstate commerce for purposes of the dormant Commerce Clause. While essential

tools for guaranteeing the necessary flow of MSW and the resulting income from tipping fees,

flow control contracts continue to operate within an uncertain area as litigation continues to work

its way through U.S. courts.

4. Are there limitations on foreign investment in waste to energy projects?

Under the Exon-Florio Amendment to the Defense Production Act of 1950, as amended by the

Foreign Investment and National Security Act of 2007, the executive branch has the authority to

investigate and block any foreign investment made into the United States that threatens national

security. This usually involves a foreign person or entity acquiring control in a transaction that

results in an impairment to national security interests. While the Exon-Florio Amendment has

not been used to block foreign investments in any WtE project to date, it remains a possibility

that certain investors may be blocked from investing in electricity-generating projects.

III Incentives

1. Are tax advantages available to waste to energy projects?

Federal

A Production Tax Credit (PTC) of 1.1 cents/kWh is available for MSW waste to energy

facilities, pursuant to the Energy Improvement and Extension Act of 2008 and the American

Recovery and Reinvestment Act of 2009 (ARRA), which expires in 2013 unless extended. In

addition, the ARRA allows those eligible for a PTC to instead elect to take the investment tax

credit or a grant from the U.S. Department of the Treasury towards new facilities. If an entity

elects to receive other government grants in addition to the PTC, they will receive a PTC at a

discounted rate.

State

The availability of state tax advantages for WtE projects varies state by state. However, the key

aspect of availability of such advantages largely depends on whether the state in question

considers MSW to be a “renewable resource”. For example, New York does not consider MSW

to be a renewable resource under its RPS; therefore WtE facilities in the state are not eligible for

inclusion in the state’s RPS or coinciding tax incentives and advantages available to RPS-eligible

NEWYORK 8418227 v4 (2K) 36

facilities. However, Pennsylvania does consider MSW to be an RPS eligible resource. As such,

Pennsylvania allows for WtE facilities to procure a number of tax incentives. These include the

Clean Energy Reinvestment Fund, the PA Energy Development Authority Grant and the

availability of Alternative Energy Production Tax Credits.

2. Is there a purchase guarantee given by any legislation or regulations for electricity

generated by waste to energy projects?

State:

Under many states’ RPS programs, WtE is identified as a renewable energy source. As such,

utilities are encouraged to utilize such sources in order to meet their renewable energy targets.

Although there are no statutory purchase guarantees for new projects, purchase guarantees do

occur at the contractual level.

3. Is there a minimum price guarantee given by any legislation or regulations for

electricity generated by waste to energy projects?

Federal:

Under PURPA, in accordance with guidance issued from the FERC, utility companies are

required to purchase energy from qualifying facilities (QFs) at a price up to that utility’s

“avoided cost.” Qualifying facilities are a class of generating facilities which are entitled to

receive special rate and regulatory treatment. They fall into the category of either small power

production facilities or cogeneration facilities. Avoided cost is the cost that a utility avoids by

purchasing energy from another source rather than independently generating the energy itself, in

terms of capacity and energy generation.

State:

In conjunction with PURPA, some states also require that prices for renewable energy sources,

such as MSW, be considered competitive in the marketplace. For example, in California if the

state determines that the price negotiated for a renewable energy resource is not a competitive

price, the state may require the electrical company to renegotiate the terms of the contract.

While these laws do not set a strict minimum price guarantee, they do provide an advantage for

waste to energy projects during the price negotiation period.

4. Are waste to energy projects given preferential dispatch treatment in your country?

Priority or preferential dispatch guarantees are barred for generators covered by the Federal

Power Act.53

However, some commentators have suggested that state RPS policies may be a

means to implement European-style feed-in-tariffs without running afoul of federal law.54

For

example, Maine and California both have policies that do not outright mandate a dispatch

53

16 U.S.C. § 824E(a) 54

Fink, Porter and Rodgers, “The Relevance of Generation Interconnection Procedures to Feed-in Tariffs in the

United States,” National Renewable Energy Laboratory, p. 18 (October 2010).

NEWYORK 8418227 v4 (2K) 37

preference for renewable energy sources, such as MSW. However, these policies could

incentivize dispatch for renewable energy sources.

Maine: Under the auspices of the state RPS, the state may direct investor owned

utilities to enter into long term contracts to fulfill state RPS goals. Maine

subsequently amended the provisions to eliminate preferential dispatch treatment for

renewable energy resources.

California: According to the state RPS, each electrical company must give preference

to renewable energy resources that provide economic and environmental benefits to

impoverished communities or communities that suffer from high level of pollutants.

5. What are the other incentives available to waste to energy projects?

A major source for state incentives for WtE MSW projects to receive rebates, grants, guaranteed

price controls and grid access comes from the state Renewable Portfolio Standard (RPS). RPS

criteria and benefits vary widely from state-to-state; however all have the goal of encouraging

the use of renewable energy technologies and decreasing the amount of greenhouse emissions

from current power generation facilities. For example, the Massachusetts Renewable Trust Fund

provides various grants, investments and other financial incentives to assist RPS-eligible

facilities.

Connecticut’s RPS is an additional example of a two-tiered system. Under the Connecticut RPS,

renewable energy resources are separated into two tiers:

o Tier I: Tier I facilities include solar, wind, tidal power, sustainable biomass, and

methane gas recovery from landfills, among others.

o Tier II: Tier II facilities include some hydroelectric, biomass not included in Tier

I, and MSW-based waste-to-energy facilities.

In accordance with the two-tiered system, electric providers must meet the standard with 9.0%

from Class I sources and an additional 3.0% from either Class I or II sources in 2012. Every

year the obligation to provide energy from Class I sources increases by around 1-1.5%, up to

20.0% in 2020. However, the obligation to provide energy from Class I or II sources remains

static at 3.0%.

In addition to RPS, some states utilize various other methods to incentivize the development of

waste to energy projects. For example, some states such as Florida, also credit waste-to-energy

energy production towards recycling goals. Under Florida’s statute, section 403.706, the state

sets a goal for increasing the recycling of recyclable waste to 75% of such waste by 2020. In

order to facilitate this, section 4(a) provides that each kWh produced by a renewable energy

project that uses MSW as fuel shall count as 1 ton of recyclable waste towards that

municipality’s overall recycling goal. In addition, the statute also allows for any county that has

a debt service payment owed to that facility to receive 1 ton of recyclable credit for each ton of

MSW utilized by the facility.

NEWYORK 8418227 v4 (2K) 38

IV. Statistics:

1. Approximately how many waste to energy projects are in your country? What

percentage of electricity in your country is generated by waste to energy

projects?

According to the EPA, there were about 87 WtE facilities located in 25 states with the capacity

to produce 2,500 megawatt hours of electricity a year, amounting to roughly 0.3% of all

electricity generated in the United States in 2008.55

2. Do you foresee any near term developments favoring or adversely impacting

waste to energy projects in your country?

Waste to energy projects still encounter a number of obstacles hindering the wide spread

development of operations in the United States. The primary obstacle comes from public

pressure from environmental groups who argue that MSW should not be considered a renewable

energy source. This debate came to the fore recently in New York. Covanta, a large owner and

operator of many waste to energy projects throughout the U.S., unsuccessfully petitioned for

WtE facilities to be included within the New York RPS. Outside environmental groups decried

the petition and argued that adding WtE to the RPS would harm existing solar and wind energy

facilities by reducing the financial benefits allotted to those technologies. Additionally, the

groups argued that WtE facilities incinerate paper, plastic and other materials that otherwise

would be recycled. Several months after the initial request, Covanta agreed to drop its petition.

Waste to energy projects in the United States also suffer from a NIMBY (not in my backyard)

mentality and until there is better education and communication regarding the clean and

environmentally favorable benefits of the improved technology available for waste to energy

facilities they are likely to continue to encounter public opposition.

55

Environmental Protection Agency, http://www.epa.gov/cleanenergy/energy-and-you/affect/municipal-sw.html,

accessed April 03, 2012. The Energy resource Council estimates that there were 86 WtE facilities in the United

States in 2010, with an estimated generating capacity of 2,790 megawatt hours of electricity.

NEWYORK 8418227 v4 (2K) 39

Waste to Energy in Central, Eastern & Southeastern Europe

WOLF THEISS ŞI ASOCIAŢII

Waste-to-Energy Program Panel at the ABA Section of International Law's Spring

Meeting

NEWYORK 8418227 v4 (2K) 40

TABLE OF CONTENTS

COUNTRY CHAPTERS 42

BOSNIA AND HERZEGOVINA 42

BULGARIA 49

CROATIA 54

CZECH REPUBLIC 59

HUNGARY 65

ROMANIA 74

SERBIA 79

SLOVAK REPUBLIC 88

UKRAINE 93

NEWYORK 8418227 v4 (2K) 42

COUNTRY CHAPTERS

BOSNIA AND HERZEGOVINA

1. GENERAL 43 1.1 What is the nature and importance of waste to energy projects in your country? 43 1.2 What is the definition and coverage of waste to energy projects under the relevant

legislation in your country? 43 1.3 Is there a preferred structure for waste to energy projects in your country? 44

2. REGULATION 44 2.1 What are the principal laws and regulations regulating waste to energy projects

(include regulations applicable to municipal solid waste disposal, conveyance of waste, tipping fees, energy generation and environmental issues)? 44

2.2 What are the principal regulatory bodies regulating waste to energy projects? 44 2.3 Are flow contracts permitted in your country? 45 2.4 Are there limitations on foreign investment in waste to energy projects? 45

3. INCENTIVES 45 3.1 Are tax advantages available to waste to energy projects? 45 3.2 Is there a purchase guarantee given by the relevant legislation/regulations for

electricity generated by waste to energy projects? 45 3.3 Is there a minimum price guarantee given by the relevant legislation/regulations for

the electricity generated by waste to energy projects? 46 3.4 Are waste to energy projects given preferential dispatch treatment in your country? 47 3.5 What are the other incentives available to waste to energy projects? Are these

incentives available to foreign investors? Are there incentives available to foreign investors that may not be available to domestic investors? 47

4. STATISTICS 48 4.1 Approximately how many waste to energy projects are in your country? What

percentage of electricity in your country is generated by waste to energy projects? 48 4.2 Do you foresee any near term developments favoring waste to energy projects in

your country? 48

NEWYORK 8418227 v4 (2K) 43

Bosnia and Herzegovina ("BiH") consists of two separate entities i.e. the Federation of BiH ("FBiH") (FBiH is

divided in ten separate cantons) and the Republic of Srpska (“RS”), and one special autonomous district

under direct sovereignty of the state, the Brčko District ("BD") where different legal regimes apply. On the

other side, some legal matters are regulated by the national laws applicable in both entities and the Brčko

District.

Furthermore, waste management, Renewable Energy Sources ("RES") production

and all regulatory aspects related to the RES are regulated at the entity level.

1. GENERAL

1.1 What is the nature and importance of waste to energy projects in your country?

Waste Management in BiH is regulated by Laws on Waste Management adopted at

the entities level (i.e., FBiH and RS), as well as partially on the cantonal level in

FBiH. In general, all laws regulating waste management provide that waste

management should be conducted in a manner that ensures and incentivizes usage of

waste for production of energy.

However, according to available information, currently there is only one completed

waste to energy project in BiH, involving usage of landfill gas for production of

energy.

1.2 What is the definition and coverage of waste to energy projects under the relevant legislation in your country?

Both FBiH and RS Regulation on RES and Efficient Cogeneration define, in

principle, methods of RES generating electricity and incentives for production of

such electricity. Although the mentioned regulations do not explicitly define waste to

energy projects, they do recognize biomass as one of the RES that can be used for

production of electricity. In that respect, biomass is defined as bio-decomposable

parts of products, wastes and agricultural remains out of which one can produce

biogas or liquid bio fuel. Biomass power plant is defined as power plant using

biomass for production of electricity.

In line with the above, it can be concluded that waste to energy projects in BiH

encompass all projects concerning usage of biomass for production of electricity.

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1.3 Is there a preferred structure for waste to energy projects in your country?

Given the fact (as stated above) that there is almost no waste to energy projects in

BiH, it is difficult to define the preferred structure.

2. REGULATION

2.1 What are the principal laws and regulations regulating waste to energy projects (include regulations applicable to municipal solid waste disposal, conveyance of waste, tipping fees, energy generation and environmental issues)?

The principal laws and regulations regulating RES generating electricity projects,

including waste management projects, in FBiH and RS are as follows:

FBiH Law on Waste Management (Official Gazette of FBiH, no. 33/03 and 72/09)

RS Law on Waste Management (Official Gazette of RS, no. 53/02, 113/05 and 65/08)

Regulation on Renewable Energy Sources and Efficient Cogeneration (Official Gazette of FBiH No. 36/10, 11/11 and 88/11) (“RES and Cogeneration Regulation”).

Regulation on Renewable Energy and Cogeneration (RS Official Gazette, no 28/11 and 39/11) (the “RS RES Regulation”)

Rulebook on Incentives for Electricity Production Using Renewable Energy Sources and Efficient Cogeneration (RS Official Gazette, no 128/11) (the "RS Rulebook on Incentives"); and

Decision on the Amount of Feed-in tariff and Premium for Renewable Energy Sources and Efficient Cogeneration Facility Generating Electricity (RS Official Gazette, no 128/11) (the "RS Decision").

2.2 What are the principal regulatory bodies regulating waste to energy projects?

Principal regulatory bodies regulating RES generating electricity projects (including

waste to energy projects) are Federal Ministry of Energy, Mining and Industry and

Federal Regulatory Commission for Electricity ("FERK") which, as the main

regulatory body in electricity market, plays a significant role in this matter as well.

According to the RES and Cogeneration Regulation, an Operator for RES and

Cogeneration shall be established, which shall inter alia, be authorized to issue a

certificate of origin. However, the respective operator has not been established yet.

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In RS, the competent regulating authority for RES generating electricity project is

Ministry of Industry, Energy and Mining. The main regulatory body for electricity

market is RS is the RS Regulatory Electricity Commission ("RERS"). It is also

important to note that the relevant legislation in this matter stipulates establishment

of Operator of Incentive System as authority competent for administrative and

financial as well as other operational activities of the incentive system.

2.3 Are flow contracts permitted in your country?

Given the general lack of Waste to Energy projects in BiH, it is very difficult to

predict the models of implementation of these projects. In general, it is possible that

these projects are conducted on the basis of public private partnership. However,

until now the legal framework for public private partnership has only been adopted in

RS, BD and in Sarajevo Canton in FBiH.

Therefore, at this moment it is still not clear whether the Waste to Energy projects

will be implemented on the basis of Flow Contracts.

2.4 Are there limitations on foreign investment in waste to energy projects?

Relevant laws on foreign investments do not stipulate any limitations as to foreign

investment in RES generating electricity projects, including waste to energy projects.

3. INCENTIVES

3.1 Are tax advantages available to waste to energy projects?

There are no particular financial incentives for energy producers using RES in FBiH.

However, there are general tax exemptions applicable to entrepreneurs in FBiH set

forth by the FBiH Corporate Income Tax Law. RS Corporate Income Tax Law does

not provide tax exemptions similar to the FBiH Corporate Income Tax Law.

3.2 Is there a purchase guarantee given by the relevant legislation/regulations for electricity generated by waste to energy projects?

In FBiH an RES producer, that has obtained energy consent issued by Ministry of

Energy, Mining and Industry, is entitled to conclude a contract on compulsory

purchase of the electricity produced from RES with the RES Operator at the

guaranteed price. Such contract, inter alia, defines duration, quantity of electricity

which is the subject of purchase and tolerance of registered plan, etc. The contract is

concluded for a period of twelve (12) years from the day when the RES power plant

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becomes operational. The guaranteed purchase price is fixed for the entire duration

of the contract. The guaranteed price is calculated in accordance with the provisions

of the Regulation on RES and Cogeneration. After the expiry of the contractual

period, the eligible producer loses the right to the guaranteed price specified in the

Regulation on RES and Cogeneration.

In general, a producer of electricity in RS can benefit from the promotion system if it

produces electricity by using renewable energy sources in an economically

appropriate manner and respecting environmental protection requirements. In terms

of waste to energy projects, the previously statement applies to: (i) power plants

using solid biomass of installed power up to 10MW; and (ii) power plants using

agricultural biogas of installed power up to 1MW.

3.3 Is there a minimum price guarantee given by the relevant legislation/regulations for the electricity generated by waste to energy projects?

In FBiH, the guaranteed price depends on the reference price and the tariff

coefficient. In that respect the guaranteed price is calculated in accordance with the

provisions of the FBiH Regulation on RES and Cogeneration. The Reference Price

(“RP”) for the year 2012 is 12,26 pf/kWh. Under the Regulation on RES and

Cogeneration, the tariff coefficient is determined for each type of the renewable

resource. Depending on the type of biomass origin, the tariff coefficient varies from

1,17 to 1,37.

In RS, pursuant to recent legislative changes, the feed-in tariff promotion system is

determined by the RS Decision. Furthermore, the Regulatory Commission for

Electricity in RS verifies once a year the amount of the feed-in tariff and premium. If

necessary, it can also make corrections in a form of special decision. In any case,

such decision needs approval of the RS Government in order for it to be

implemented.

The feed-in tariff in RS consists of a referential price and premium, where the feed-in

tariff is either the same or higher than the referential price for mandatory repurchase

of electricity. The Regulatory Commission for Electricity in RS reviews the amount

of premium at least once a year or more frequently, if it is considered necessary.

Pursuant to the RS Decision, the current feed-in tariffs for solid biomass of 1 MW

installed power is 0,1730 Km/kWh.

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3.4 Are waste to energy projects given preferential dispatch treatment in your country?

As stated above, there are almost no waste to energy projects in BiH, therefore these

projects are not treated with preferential dispatch treatment in BiH.

3.5 What are the other incentives available to waste to energy projects? Are these incentives available to foreign investors? Are there incentives available to foreign investors that may not be available to domestic investors?

Aside from a guaranteed repurchase price, according to the Regulation on RES and

Cogeneration, the promotion system for the production of RES-Electricity for

eligible producers in FBiH is based on the following:

priority of delivery and/or off-taking of the electricity produced from RES to the grid;

obligation to purchase the electricity produced from RES; and

the guaranteed price / feed-in tariffs.

As for the RS, the RS RES Regulation sets up a general framework for a promotion

system for the production of RES, while the new set of documents recently adopted

(i.e. the RS Rulebook on Incentives and the RS Decision) provides for detailed rules

and regulations in this matter.

It should be noted that the promotion system includes the following measures: (i)

benefits for grid connection; (ii) priority for grid access (dispecarenje); (iii)

mandatory repurchase of electricity; (iv) feed-in tariff; and (v) premium on the use of

electricity for personal needs or market sale.

Specifically, the feed-in tariff and corrective coefficients depend upon both the type

of the renewable source and on the amount of installed power of a given facility.

Please note that all incentive measures, outlined above, are applicable to both foreign

and domestic investment projects. Foreign investors, in this respect, do not have any

special or favorable treatment.

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4. STATISTICS

4.1 Approximately how many waste to energy projects are in your country? What percentage of electricity in your country is generated by waste to energy projects?

There are no statistic data as to the percentage of RES generating electricity projects,

including waste to energy projects. Nonetheless, we can say that at this point, there

are, inter alia, two ongoing projects related to use of biomass for production of

energy.

One is conducted by Municipality Maglaj, which decided to invest in construction of

boiler room on biomass. It is intended that this project should be realized as a CDM

project, and is intended to solve the problem of central heating system in this

municipality.

A second project is Agricultural Biomass Cross-border Development of Energy in

Posavina. The aim of the project is focused on using agricultural biomass for

production of, inter alia, biogas, which can be used for production of electricity.

According to available information this project is still in the development phase.

4.2 Do you foresee any near term developments favoring waste to energy projects in your country?

Bearing in mind that BiH is rich with renewable energy sources, and that there is an

increasing trend of investments in this sector, it can be expected that there will be an

increased implementation of waste to energy projects as well.

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BULGARIA

1. GENERAL 50 1.1 What is the nature and importance of waste to energy projects in your country? 50 1.2 What is the definition and coverage of waste to energy projects under the relevant

legislation in your country? 50 1.3 Is there a preferred structure for waste to energy projects in your country? 51

2. REGULATION 51 2.1 What are the principal laws and regulations regulating waste to energy projects

(include regulations applicable to municipal solid waste disposal, conveyance of waste, tipping fees, energy generation and environmental issues)? 51

2.2 What are the principal regulatory bodies regulating waste to energy projects? 51 2.3 Are flow contracts permitted in your country? (Flow Contract: In the WtE context, an

agreement or system where a municipality contracts to direct its MSW stream to a particular facility; in some situations these systems require the municipality to compel haulers to act in a manner consistent with the flow contract. Some flow contracts have been successfully challenged in the U.S. as unconstitutionally restricting interstate commerce.) 51

2.4 Are there limitations on foreign investment in waste to energy projects? 51

3. INCENTIVES 51 3.1 Are tax advantages available to waste to energy projects? 51 3.2 Is there a purchase guarantee given by the relevant legislation/regulations for

electricity generated by waste to energy projects? 52 3.3 Is there a minimum price guarantee given by the relevant legislation/regulations for

the electricity generated by waste to energy projects? 52 3.4 Are waste to energy projects given preferential dispatch treatment in your country? 52 3.5 What are the other incentives available to waste to energy projects? Are these

incentives available to foreign investors? Are there incentives available to foreign investors that may not be available to domestic investors? 52

4. STATISTICS 53 4.1 Approximately how many waste to energy projects are in your country? What

percentage of electricity in your country is generated by waste to energy projects? 53 4.2 Do you foresee any near term developments favoring waste to energy projects in

your country? 53

NEWYORK 8418227 v4 (2K) 50

1. Whether there is separate (landfill) municipal solid waste legislation.

In Bulgaria there is no specific municipal solid waste legislation. The Waste

Management Act regulates household waste, industrial waste, construction,

demolition waste and hazardous waste.

2. Whether Waste-to-Energy initiatives are considered as "renewable energy" for purposes of governments in our region offering incentives or subsidies for such initiatives.

Waste-to-Energy projects may be considered as renewable energy projects only in

certain cases. In order for a Waste-to-Energy project to be considered as a

"renewable" project, it should utilize as energy source biomass from biologically

degradable fractions of industrial and/or municipal waste. Only energy produced

from this type of biomass may benefit from the incentives for energy from renewable

sources (Please see below).

1. GENERAL

1.1 What is the nature and importance of waste to energy projects in your country?

In Bulgaria Waste-to-Energy projects are not widely developed yet. There are only a

few operational Waste-to-Energy projects with very limited installed capacity

(unofficial sources indicate no more than five projects). The operational projects

utilize as an energy source industrial waste or agriculture waste.

1.2 What is the definition and coverage of waste to energy projects under the relevant legislation in your country?

Waste-to-Energy projects are covered under the Waste Management Act (WMA).

Under this law the production of energy from waste is considered as waste treatment

activity, and as should comply with the requirements of the WMA.

Production of energy from waste is also partially regulated by the Act on Energy

from Renewable Sources (AERS). According to AERS Generation of energy from

certain types of waste is considered as generation from renewable sources and as

such may benefit from some incentives. Further, generation of energy from waste

should comply with the Energy Act.

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The incineration of waste is addressed also by the Ordinance on the conditions and

requirements for construction and operation of waste incineration plants. This

Ordinance transposes into the Bulgarian legislation the Directive 2000/76/EC and

provides the definition of 'Co-incineration' plant.

1.3 Is there a preferred structure for waste to energy projects in your country?

The usual corporate structure of a limited liability company or a joint stock company

is the usual vehicle to be considered.

2. REGULATION

2.1 What are the principal laws and regulations regulating waste to energy projects (include regulations applicable to municipal solid waste disposal, conveyance of waste, tipping fees, energy generation and environmental issues)?

Please see above, 1.2. Main applicable Acts are: the Energy Act, AERS, WMA, the

Environment Protection Act, the Waters Act, the Spatial Development Act.

2.2 What are the principal regulatory bodies regulating waste to energy projects?

The main regulatory bodies are: the State Energy and Water Regulatory Commission

(SEWRC), the Regional Inspectorates on Environment and Waters and the Agency

for Sustainable Energy Development.

2.3 Are flow contracts permitted in your country?

There is no practice in this regard in Bulgaria.

2.4 Are there limitations on foreign investment in waste to energy projects?

There are no limitations in this respect.

3. INCENTIVES

3.1 Are tax advantages available to waste to energy projects?

There are no tax advantages in this respect.

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3.2 Is there a purchase guarantee given by the relevant legislation/regulations for electricity generated by waste to energy projects?

Under the AERS there is a provision for mandatory off-take of energy generated

from biomass, which may include municipal waste. However, not all the municipal

waste may be qualified as biomass – only the biologically degradable waste qualifies

as such source. The mandatory off-take is provided only for 'renewable' projects.

3.3 Is there a minimum price guarantee given by the relevant legislation/regulations for the electricity generated by waste to energy projects?

For energy recognized to be from renewable sources, a mandatory preferential feed-

in-tariff under the AERS is determined by the SEWRC. Depending on the installed

capacity of the power plant, either the licensed public provider or the licensed end-

supply companies are obliged to buy all energy certified as renewable energy (by

way of a guarantee for energy origin) at the preferential price. Power plants with

installed capacity above 5 MW should be connected to the transmission electricity

network and their generated electricity is to be purchased by the public provider,

while the power plants with installed capacity below 5 MW shall be connected to the

electricity distribution grids and their generated electricity shall be purchased by the

end-supply companies.

3.4 Are waste to energy projects given preferential dispatch treatment in your country?

If such projects are under the scope of the AERS, they will benefit from a

preferential dispatch treatment.

3.5 What are the other incentives available to waste to energy projects? Are these incentives available to foreign investors? Are there incentives available to foreign investors that may not be available to domestic investors?

According to our information, it is possible for Waste-to-energy to obtain financing

from European Union programs, such as Operating Program Competitiveness,

Energy efficiency programs, etc. However, we do not have information on projects

implemented based on such programs.

Such incentives are available to foreign investors, as well as to local investors.

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4. STATISTICS

4.1 Approximately how many waste to energy projects are in your country? What percentage of electricity in your country is generated by waste to energy projects?

There is publicly available information only for 5 waste-to-energy projects. The

quantity produced electricity by such projects is not available.

4.2 Do you foresee any near term developments favoring waste to energy projects in your country?

Currently some of the larger municipalities are developing waste treatment plant

projects, which include generation of energy from waste. Such projects are supposed

to be implemented with the support of EU funds and to become operational in the

following 4-5 years.

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CROATIA

1. GENERAL 55 1.1 What is the nature and importance of waste to energy projects in your country? 55 1.2 What is the definition and coverage of waste to energy projects under the relevant

legislation in your country? 55 1.3 Is there a preferred structure for waste to energy projects in your country? 55

2. REGULATION 55 2.1 What are the principal laws and regulations regulating waste to energy projects

(include regulations applicable to municipal solid waste disposal, conveyance of waste, tipping fees, energy generation and environmental issues)? 55

2.2 What are the principal regulatory bodies regulating waste to energy projects? 56 2.3 Are flow contracts permitted in your country? (Flow Contract: In the WtE context, an

agreement or system where a municipality contracts to direct its MSW stream to a particular facility; in some situations these systems require the municipality to compel haulers to act in a manner consistent with the flow contract.) 56

2.4 Are there limitations on foreign investment in waste to energy projects? 56

3. INCENTIVES 56 3.1 Are tax advantages available to waste to energy projects? 56 3.2 Is there a purchase guarantee given by the relevant legislation/regulations for

electricity generated by waste to energy projects? 57 3.3 Is there a minimum price guarantee given by the relevant legislation/regulations for

the electricity generated by waste to energy projects? 57 3.4 Are waste to energy projects given preferential dispatch treatment in your country? 58 3.5 What are the other incentives available to waste to energy projects? Are these

incentives available to foreign investors? Are there incentives available to foreign investors that may not be available to domestic investors? 58

4. STATISTICS 58 4.1 Approximately how many waste to energy projects are in your country? What

percentage of electricity in your country is generated by waste to energy projects ? 58 4.2 Do you foresee any near term developments favoring waste to energy projects in

your country? 58

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1. GENERAL

1.1 What is the nature and importance of waste to energy projects in your country?

There is no law or regulation requiring source separation of municipal solid waste,

which causes difficulties in establishing waste to energy facilities in Croatia.

However, specific industries (e.g. agricultural and food-processing industry) are

required to separate the waste they produce and certain power plants use such waste

for generating electricity.

1.2 What is the definition and coverage of waste to energy projects under the relevant legislation in your country?

There is no law specifically regulating waste to energy projects. This matter is

encompassed by the regulation on renewable energy sources in general. Two types of

power plants connected to the distribution grid which use RES for electricity

generation are covered under the relevant regulation, namely (i) biogas power plants

from organic remnants and waste from agricultural and food-processing industry, and

(ii) landfill gas power plants and waste water treatment gas power plants.

1.3 Is there a preferred structure for waste to energy projects in your country?

There is no preferred structure for waste to energy projects in Croatia.

2. REGULATION

2.1 What are the principal laws and regulations regulating waste to energy projects (include regulations applicable to municipal solid waste disposal, conveyance of waste, tipping fees, energy generation and environmental issues)?

The Energy Act (Official Gazette of Croatia Nos. 68/01, 177/04, 76/07, 152/08 and 127/10) regulates licensing and general regulatory issues relating to the energy sector.

The Waste Act (Official Gazette of Croatia Nos. 178/04, 153/05, 111/06, 110/07, 60/08 and 87/09) regulates waste management.

The Ministerial Ordinance on Granting the Status of an Eligible Electricity Producer (Official Gazette of Croatia No. 67/07) regulates the requirements for qualifying as an eligible electricity producer generating both heat and power and using waste or

NEWYORK 8418227 v4 (2K) 56

renewable energy sources to generate electricity in a profitable and environmentally friendly way.

The Governmental Regulation on Fees for Promotion of Production of Electricity from Renewable Energy Sources and Cogeneration (Official Gazette of Croatia Nos. 33/07, 133/07, 155/08, 155/09, 8/2011 and 144/2011) sets incentive fees.

The Ministerial Ordinance on Use of Renewable Energy Sources and Cogeneration (Official Gazette of Croatia Nos. 68/01 and 177/04) regulates projects involving the construction of renewable energy sources and cogeneration facilities.

The Governmental Tariff System for Electricity Generation from Renewable Energy Sources and Cogeneration (Official Gazette of Croatia No. 33/07) regulates the right of eligible producers to an incentivized electricity price paid by the Croatian market operator.

2.2 What are the principal regulatory bodies regulating waste to energy projects?

Ministry of Economy, Ministry of Environmental and Nature Protection, Croatian

Energy Market Operator and Croatian Energy Regulatory Agency.

2.3 Are flow contracts permitted in your country?

Yes. Collection, transport and disposal of waste are considered to be communal

services. These services are provided by the companies owned by one or more

municipalities. It is common for a municipality to direct its MSW stream to a

particular regional waste management center.

2.4 Are there limitations on foreign investment in waste to energy projects?

A local company should run the project, but there are no limitations regarding the

shareholders of such local company.

3. INCENTIVES

3.1 Are tax advantages available to waste to energy projects?

There are tax incentives for investment projects available if certain conditions are

met (investment located in special state care area, investment amounting to at least

10 million HRK/1,5 million EUR, at least 10 new jobs linked to the investment).

However, there is no tax advantage specifically designed for waste to energy

projects.

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3.2 Is there a purchase guarantee given by the relevant legislation/regulations for electricity generated by waste to energy projects?

Yes, there is a purchase guarantee for electricity generated by all the RES power

plants, thus including the facilities listed under Item 1.2. above. Additionally, an

incentive fee is paid for the delivered electricity to the eligible producers generating

electricity from RES in the amount of 0,005 HRK/kWh (0,000066 EUR/kWh).

3.3 Is there a minimum price guarantee given by the relevant legislation/regulations for the electricity generated by waste to energy projects?

Yes, there is a minimum price guarantee, but it applies to all the RES power plants,

not only to the power plants generating energy from waste. The feed-in tariff unit

prices are determined according to the type of power plants and sources used for

electricity generation. Below is the overview of these prices for the relevant power

plants:

Type of RES power plant up to 1 MW Price

(HRK/kWh)

Price

(EUR/kWh

)

Biogas power plants from organic remnants and

waste from agricultural and food-processing

industry

1,3837 0,1844

Landfill gas power plants and waste water

treatment gas power plants 0,4150 0.0553

Type of RES power plant over 1 MW Price

(HRK/kWh)

Price

(EUR/kWh)

Biogas power plants from organic remnants and

waste from agricultural and food-processing

industry

1,1992 0,15984

Landfill gas power plants and waste water

treatment gas power plants 0,4150 0.0553

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3.4 Are waste to energy projects given preferential dispatch treatment in your country?

No.

3.5 What are the other incentives available to waste to energy projects? Are these incentives available to foreign investors? Are there incentives available to foreign investors that may not be available to domestic investors?

There are no particular financial incentives for renewable energy producers other

than those mentioned above.

4. STATISTICS

4.1 Approximately how many waste to energy projects are in your country? What percentage of electricity in your country is generated by waste to energy projects?

Locating landfills and public opposition to siting new facilities, especially

incinerators, remains a challenge in Croatia. The plan to establish a Zagreb waste to

energy facility based on incineration several years ago has been met with strong

opposition. No waste to energy facility has been established in Croatia to date.

4.2 Do you foresee any near term developments favoring waste to energy projects in your country?

Croatia is set to become a member state of the European Union and is therefore

working to meet its obligations for implementing the EU environmental acquis. In

particular, it is planning to go ahead with the above mentioned waste to energy

project in Zagreb in a few years’ time, possibly using EU funding.

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CZECH REPUBLIC

1. GENERAL 60 1.1 What is the nature and importance of waste to energy projects in your country? 60 1.2 What is the definition and coverage of waste to energy projects under the relevant

legislation in your country? 60 1.3 Is there a preferred structure for waste to energy projects in your country? 61

2. REGULATION 62 2.1 What are the principal laws and regulations regulating waste to energy projects

(include regulations applicable to municipal solid waste disposal, conveyance of waste, tipping fees, energy generation and environmental issues)? 62

2.2 What are the principal regulatory bodies regulating waste to energy projects? 62 2.3 Are flow contracts permitted in your country? (Flow Contract: In the WtE context, an

agreement or system where a municipality contracts to direct its MSW stream to a particular facility; in some situations these systems require the municipality to compel haulers to act in a manner consistent with the flow contract.) 63

2.4 Are there limitations on foreign investment in waste to energy projects? 63

3. INCENTIVES 63 3.1 Are tax advantages available to waste to energy projects? 63 3.2 Is there a purchase guarantee given by the relevant legislation/regulations for

electricity generated by waste to energy projects? 63 3.3 Is there a minimum price guarantee given by the relevant legislation/regulations for

the electricity generated by waste to energy projects? 63 3.4 Are waste to energy projects given preferential dispatch treatment in your country? 63 3.5 What are the other incentives available to waste to energy projects? Are these

incentives available to foreign investors? Are there incentives available to foreign investors that may not be available to domestic investors? 64

4. STATISTICS 64 4.1 Approximately how many waste to energy projects are in your country? What

percentage of electricity in your country is generated by waste to energy projects? 64 4.2 Do you foresee any near term developments favoring waste to energy projects in

your country? 64

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1. GENERAL

1.1 What is the nature and importance of waste to energy projects in your country?

We did not find any hard data about electricity or heat production from MSW,

although all official sources suggest that such production is very low (in the range of

several percentage points, if not lower).

1.2 What is the definition and coverage of waste to energy projects under the relevant legislation in your country?

There is no law specifically regulating WtE projects.

Currently:

(a) Under Act No. 180/2005 Coll., on promotion of renewable sources of energy ("Promotion Act"):

renewable sources ("RES") include energy from biomass;

"biomass" includes biologically decomposable part of sorted out municipal waste;

however, incineration of waste encompassing biomass is not considered as use of biomass that is subject to promotion;

of course, the concept of "biomass" is NOT identical with MSW and we are mentioning biomass because it may be wholly or partly produced from certain parts of MSW;

otherwise, there is no support for production of the heat or electricity.

(b) Under Act No. 458/2000 Coll., on energy ("Energy Act"):

cogeneration of heat and electricity is promoted by way of a bonus paid on top of the price of the generated electricity;

the bonus can be combined with promotion schemes for the generation of RES electricity.

Possible future legislation (replacing (a) and (b) above) – under Bill on promoted

sources of energy ("Bill") that, if adopted into law, should replace the Promotion Act

and provisions of the Energy Act described under (b) above:

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"RES" include energy from biomass;

"biomass" includes biologically decomposable part of municipal waste;

generation of electricity from municipal waste is eligible for promotion in the form of an annual green bonus;

under the promotion scheme for green bonuses, the operators of the generating facilities have either to sell the electricity at market price to end customers/traders, or consume the electricity themselves;

for electricity that is sold/consumed, the operators of the generating facilities receive a green bonus;

the ERO annually determines green bonuses for the following year;

cogeneration of heat and electricity is subject to a promotion.

On 14 March 2012, the President vetoed the Bill. The Bill currently foresees the new

law to come into effect partly on the day the new law is published in the Collection

of Laws and partly on 1 January 2013. The scope of the Bill is wider than that of the

Promotion Act. The Bill covers the promotion of electricity and heat production from

RES and secondary sources of energy as well as the cogeneration of heat and energy.

In addition, the Energy Act provides for two types of licences/authorizations

necessary for the construction and operation of electricity generating facilities (these

provisions are not affected by the Bill):

authorization - for any construction of an electricity generating facility if the total installed capacity exceeds or equals 100 kW, to be issued by the Ministry of Industry; and

licence - for the generation of electricity, to be issued by the Energy Regulatory Office.

1.3 Is there a preferred structure for waste to energy projects in your country?

No.

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2. REGULATION

2.1 What are the principal laws and regulations regulating waste to energy projects (include regulations applicable to municipal solid waste disposal, conveyance of waste, tipping fees, energy generation and environmental issues)?

In particular:

Act No. 185/2001 Coll., on waste - regulates municipal solid waste disposal, conveyance of waste, tipping fees;

the Promotion Act;

the Bill;

the Energy Act;

Act No. 17/1992 Coll., on the protection of the environment;

Act No. 406/2000 Coll., on administering of energy;

Czech Governmental Regulation No. 482/2005 Coll. on types, methods and parameters of biomass in the promotion of generation of electricity from biomass;

Czech Governmental Regulation No. 383/2001 Coll. on details regarding handling waste;

Governmental Decree No. 354/2002 Coll. on emission limits and conditions for operation of waste incineration plants and cogeneration plants; and

Governmental Decree No. 197/2003 Coll., on plan for the waste economy of the Czech Republic.

2.2 What are the principal regulatory bodies regulating waste to energy projects?

In particular: Ministry of Industry and Trade, Ministry of Environment, Energy

Regulatory Office ("ERO"), State Energy Inspection.

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2.3 Are flow contracts permitted in your country? (Flow Contract: In the WtE context, an agreement or system where a municipality contracts to direct its MSW stream to a particular facility; in some situations these systems require the municipality to compel haulers to act in a manner consistent with the flow contract. Some flow contracts have been successfully challenged in the U.S. as unconstitutionally restricting interstate commerce.)

Yes.

2.4 Are there limitations on foreign investment in waste to energy projects?

No.

3. INCENTIVES

3.1 Are tax advantages available to waste to energy projects?

No.

3.2 Is there a purchase guarantee given by the relevant legislation/regulations for electricity generated by waste to energy projects?

Currently: no.

Under the Bill: no.

3.3 Is there a minimum price guarantee given by the relevant legislation/regulations for the electricity generated by waste to energy projects?

Currently: no.

Under the Bill: no.

3.4 Are waste to energy projects given preferential dispatch treatment in your country?

Currently and under the Bill: operators of the transmission/distribution grid are

obliged to prefer RES electricity generating facilities and cogenerating plants in

connection to the transmission/distribution grid, if they comply with the prescribed

conditions and such connection is technically possible.

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3.5 What are the other incentives available to waste to energy projects? Are these incentives available to foreign investors? Are there incentives available to foreign investors that may not be available to domestic investors?

Czech law does not differentiate between foreign and domestic investors.

4. STATISTICS

4.1 Approximately how many waste to energy projects are in your country? What percentage of electricity in your country is generated by waste to energy projects?

There are three incinerator plants in the Czech Republic.

4.2 Do you foresee any near term developments favoring waste to energy projects in your country?

Council Directive 1999/31/EC (EU Landfill Waste Directive) has been implemented

into Czech law.

It is difficult to determine at this point; however, in order to fulfill the requirements

set down by EU law, there may be developments favoring WtE projects in the near

future.

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HUNGARY

1. GENERAL 66 1.1 What is the nature and importance of waste to energy projects in your country? 66 1.2 What is the definition and coverage of waste to energy projects under the relevant

legislation in your country? 66 1.3 Is there a preferred structure for waste to energy projects in your country? 67

2. REGULATION 68 2.1 What are the principal laws and regulations regulating waste to energy projects

(include regulations applicable to municipal solid waste disposal, conveyance of waste, tipping fees, energy generation and environmental issues)? 68

2.2 What are the principal regulatory bodies regulating waste to energy projects? 68 2.3 Are flow contracts permitted in your country? (Flow Contract: In the WtE context, an

agreement or system where a municipality contracts to direct its MSW stream to a particular facility; in some situations these systems require the municipality to compel haulers to act in a manner consistent with the flow contract.) 68

2.4 Are there limitations on foreign investment in waste to energy projects? 69

3. INCENTIVES 69 3.1 Are tax advantages available to waste to energy projects? 69 3.2 Is there a purchase guarantee given by the relevant legislation/regulations for

electricity generated by waste to energy projects? 70 3.3 Is there a minimum price guarantee given by the relevant legislation/regulations for

the electricity generated by waste to energy projects? 71 3.4 Are waste to energy projects given preferential dispatch treatment in your country? 71 3.5 What are the other incentives available to waste to energy projects? Are these

incentives available to foreign investors? Are there incentives available to foreign investors that may not be available to domestic investors? 71

4. STATISTICS 73 4.1 Approximately how many waste to energy projects are in your country? What

percentage of electricity in your country is generated by waste to energy projects? 73 4.2 Do you foresee any near term developments favoring waste to energy projects in

your country? 73

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1. GENERAL

1.1 What is the nature and importance of waste to energy projects in your country?

Hungary has fully incorporated the EU directive No. 2008/98/EC on waste

("Directive") into its domestic law meaning that the principles and terms of the

Directive also became an integral part of the Hungarian regulation. Based on this, the

greatest possible efforts should be made to support the utilization of the material as

well as the energy potentially present in waste in line with the Directive in order to

achieve the re-use of waste, replacement of raw materials by waste, or, should these

not be feasible, the use of waste as a source of energy. Hence, according to these

principles, waste to energy projects are prioritized as a method of waste management

and have to be supported by various incentives, but only secondary to the re-use and

replacement.

According to the Act LXXXVI of 2007 on electric energy (the "Electricity Act"),

with a view to the protection of the natural environment, to supply energy to users, to

save primary energy, and to expand the range of available energy sources, the use of

renewable energy sources and waste as an energy source shall be endorsed. To

promote the use of renewable energy sources and waste as an energy source, the

Electricity Act and decrees issued under authorization by the Electricity Act establish

the system of a differentiated purchasing obligation regime in consideration of

energy sources, generation procedures, nominal generating capacity, the efficiency

and cost-effectiveness of energy conversion processes, and the time of construction

of power plants.

1.2 What is the definition and coverage of waste to energy projects under the relevant legislation in your country?

According to the Electricity Act, energy from waste is energy generated by using

waste as fuel in compliance with the relevant environmental protection and waste

management regulations.

The Electricity Act also defines biomass, a term that is also relevant for waste to

energy projects, as follows: biomass is degradable fraction of products, waste and

residues from agriculture (including vegetal and animal substances), forestry and

related industries, as well as biodegradable fraction of industrial and municipal

waste. This is important as energy sources produced directly or indirectly from

biomass shall be deemed as renewable energy sources ("RES").

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1.3 Is there a preferred structure for waste to energy projects in your country?

Waste to energy projects might be preferred first of all by the so-called mandatory

off-take system of electricity in Hungary that is a feed-in tariff system for promoting

RES-Electricity. Electricity generated from RES (such as biomass) is subject to

mandatory off-take including electricity produced by using non-biodegradable

municipal solid waste though with different off-take prices applicable. Also with

different off-take prices, but electricity generated from waste is also subject to this

mandatory off-take system. Thus, through the mandatory off-take system all types of

waste to energy investment projects (either falling under the definition of biomass or

just under the general definition of energy from waste) fulfilling certain eligibility

criteria not discussed here may have a fixed return on their investments.1

Furthermore, network operators should give priority to generating installations using

technologies free of emissions of carbon dioxide or using renewable energy sources

or waste in connection with the operation of and access to networks.

Generators of electricity from RES (such as biomass) or waste may request from the

Hungarian Energy Office the issuance of a certificate guaranteeing of origin

regarding such electricity generated in the previous year.

The transmission system operator may limit, reduce or suspend services for the

protection of the generation of electricity from RES (biomass) or waste.

In addition, for electricity produced from biomass there is also a preferential grid

connection.

Preferential nature of waste-generated electricity can also be seen in the treatment of

co-generation technologies in Hungary: from 1 July 2011 all co-generation power

plants have been excluded from mandatory off-take, except for those generating

electricity from renewable sources or waste.

1 The Government elaborated a new regulation conception of a brand new system called “MeTáR”

(“Megújuló Támogatási Rendszer” – renewable subsidy system) to replace the existing mandatory off-

take system of heat and electricity generated from renewable and alternative energy sources.

According to the plans, the new system will likely come into force in 2013. Details are not yet known

concerning the new system.

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2. REGULATION

2.1 What are the principal laws and regulations regulating waste to energy projects (include regulations applicable to municipal solid waste disposal, conveyance of waste, tipping fees, energy generation and environmental issues)?

The principal laws and bylaws are:

Act XLIII. of 2000 on waste management

electricity Act (Act LXXXVI of 2007 on electric energy)

Government decree No. 213/2001 on conditions of activities in connection with municipal waste

Government decree No. 98/2001conditions of activities in connection with dangerous waste

Act LIII of 1995 on environment protection

Government decree No. 389/2007 on mandatory off-take system of electric energy generated from renewable energy sources or waste

Decree No. 3/2000 of the ministry of environmental protection on technical requirements of waste burning power plants.

2.2 What are the principal regulatory bodies regulating waste to energy projects?

General provisions are defined by acts adopted by the Parliament, but provisions on

detailed rules governing waste to energy projects are adopted by the Government or

the Minister of environment protection, in both cases in a form of decrees.

2.3 Are flow contracts permitted in your country?

The Hungarian regulations do not mention and regulate flow contracts with this

meaning, but given our limited experiences in this field we cannot exclude the

possibility that it exists in practice. However, it should also be noted that under

domestic orders the waste operation activities are the subject of concessions. The

service provider has to be selected as a result of a concession tender strictly regulated

by law, and often as a result of public procurement procedure (in case concession law

overlaps with public procurement law, then both are applicable with certain

limitations).

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2.4 Are there limitations on foreign investment in waste to energy projects?

There are no limitations on foreign investment (using waste as fuel in energy

generation requires permission of the environment protection authority and has to be

done in compliance with the relevant environmental protection and waste

management regulations, but these are applicable both to foreign and domestic

investors).

However, it is worth noting that electricity production is subject to the license of the

Hungarian Energy Office and licenses are issued to Hungarian companies. Under

Hungarian law, a complex small power plant license may only be obtained by an

economic organization having its seat in Hungary. Furthermore, the holder of the

generation license of a power plant with a capacity of 50 MW or more may only be a

limited liability company or a company limited by shares with a registered seat in

Hungary.

3. INCENTIVES

3.1 Are tax advantages available to waste to energy projects?

Please note that no specific corporate income tax incentives would be available for

'waste to energy' projects. However, companies engaged in such businesses could be

entitled to certain general corporate income tax incentives. Especially, tax easement

might apply to several qualifying investment development projects, to research and

development and to small- and medium sized enterprises.

In Hungary, certain “extraordinary” taxes have recently been imposed on energy

market players. Though there are no special tax exemptions from general tax paying

obligations available to waste-generated or RES-electricity (.e.g. biomass) producers,

there are certain tax exemptions and allowances granted from the new extraordinary

taxes.

The so-called Robin Hood tax is 8% of the positive tax base that is the profit before

tax with certain deductions and increases defined by law. Producers selling in the

mandatory off-take (either generating electricity from waste or RES) with an inbuilt

capacity of or below 50 MW are not subject to this tax (but all others are).

The so-called crisis tax was introduced by Act XCIV of 2010 on “special taxes for

certain business sectors” passed on 18 October 2010 by the Hungarian Parliament.

The rate of this tax is 1.05% of the net revenue gained from energy supply activities

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(including production). There are two exemptions: (i) entities whose annual net

revenue gained from energy supply activities (including production) does not reach

5% of the total net revenue (thus, applicable to waste- and RES-electricity producers

respectively); and (ii) producers selling in the mandatory off-take system (either

generating electricity from waste or RES) with an inbuilt capacity of or below 50

MW are not subject to this tax.

The so-called energy tax is HUF 295/MWh (this tax is payable by producers of

electricity produced for their own consumption), but RES-electricity is fully

exempted.

3.2 Is there a purchase guarantee given by the relevant legislation/regulations for electricity generated by waste to energy projects?

As mentioned above, electricity generated from waste falls under the mandatory off-

take regime such as RES-electricity (biomass). The detailed regulations for the

purchasing obligation under the mandatory off-take system are provided in decrees

The producer who wishes to sell electricity generated from RES or waste or some

part of it in the mandatory off-take system must submit an application to the

Hungarian Energy Office for determining the duration and the amount of electricity

falling under the mandatory off-take system. The earliest time at which the producer

may submit the application is concurrently with the application for the relevant

Hungarian Energy Office license.

In addition to the general annexes to the application set out in the applicable laws,

the waste or RES-electricity producer must attach to its application all the relevant

documents evidencing any other support (e.g., investment support, tax exemption or

tax allowance or any other direct price subsidy of preferential connection fee) has

already received, is currently using or intends to use in the future.

The Hungarian Energy Office shall determine the duration of the mandatory off-take

on the basis of the return of investment period. The Hungarian Energy Office

calculates the return time by energy source and generation procedure, taking into

account the (domestic and international) data of investment implemented and

operated in accordance with the rational choice of seat, the principle of lowest cost,

the best available technology and the prices defined in the relevand decree.

Furthermore, if the producer also receives other support of the sort referred to above,

the Hungarian Energy Office shall modify the return time on the basis of the current

value of the ratio of such support to the total costs of investment.

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MAVIR, as the primary off-taker of the electricity falling under mandatory off-take,

has the obligation to off-take all such electricity. The eligibility for mandatory off-

take shall terminate with expiry of the duration defined for mandatory off-take or

when the installation has sold all the quantity of electricity benefiting from the

mandatory off-take.

The only waste that can be used as energy source is that which complies with the

conditions of waste collection and selection and excludes from group 05-15 of the

European Waste Catalogue (EWC).

3.3 Is there a minimum price guarantee given by the relevant legislation/regulations for the electricity generated by waste to energy projects?

The base prices of the purchasing obligation are determined by government decree

No. 389/2007 on the mandatory off-take system of electricity generated from RES or

waste.

The Electricity Act defines the maximum initial purchase price of waste- and RES-

electricity that is subject to the mandatory off-take as k*24,71 HUF/ kWh (excluding

VAT), where k is the annual indexation factor and 24.71 HUF is the initial purchase

price defined for 2007.

In the framework of the Electricity Act, the government decree No. 389/2007 applies

differentiated off-take prices based on, e.g., the installed capacity, energy source and

date of the HEO resolution regarding the quantity and the duration of the mandatory

off-take. These prices are indexed each year by the HEO.

3.4 Are waste to energy projects given preferential dispatch treatment in your country?

As explained above, waste to energy projects are not the most preferred projects in

environment protection strategy of Hungary. Further, the public acceptance of waste-

related power facilities (incinerators, power plants) is rather limited.

3.5 What are the other incentives available to waste to energy projects? Are these incentives available to foreign investors? Are there incentives available to foreign investors that may not be available to domestic investors?

There are some episodic tenders published by the ministry of environment protection

and by the government, which support environment protection programs and

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investments. Some of them aim at subsidizing national investors rather than

foreigners, such as Project Széchenyi.

In connection with electricity produced from RES and waste, the most important

subsidy programs currently applicable are as follows: (i) development assistance

from the EU; (ii) environmental and Energy Operative Program (Környezeti és

Energia Operatív Program – “KEOP”) together with a regional program called

KMOP; (iii) preferential loans from the so-called Energy Efficiency Loan Fund; and

(iv) preferential grid connection.

In the period from 2007 to 2013, Hungary will be entitled – on account of its

European Union membership – to EU subsidies which may be used for development

purposes. From the total allowance of 4916 million EUR (approx. 1290 billion HUF)

of KEOP, there are two subsidy schemes with energy-related objectives: 5.15 percent

of the allowance is available for the purposes of the priority program named

“Increasing use of renewable energy sources” and 3.14 percent is available for the

purposes of the priority program named “Efficient energy use” aimed at encouraging

energy conservation.

The primary goal of the program “Increasing use of renewable energy sources” is to

influence the resource structure of domestic energy sources in a favorable direction,

i.e., facilitate the departure from fossil energy sources to renewable variants.

Apart from KEOP, the measures of the New Hungary Rural Development Strategic

Plan (Új Magyarország Vidékfejlesztési Stratégiai Terv) also support the propagation

of renewable energy use in Hungary. The objective of this plan is to ensure that rural

areas intensively participate in the development of the bio energy segment apart from

producing the necessary raw materials. This plan supports the production of RES

along three strategic directions: liquid biomass (bioethanol and biodiesel), solid

biomass (wooden and soft stemmed energy plantation) and biogas. The subsidy

resources are provided by the European Agricultural Fund for Rural Development,

which provides assistance to competitive production of biomass and its processing to

primary semi-finished products and producer’s own energy supply.

There is also a special fund called the Energy Efficiency Loan Fund established to

make preferential loans available to RES-Electricity producers. The Energy

Efficiency Loan Fund managed by the Energia Központ Nonprofit Kft. grants loans

with preferential interest rates in cooperation with K&H Bank. The construction of

the fund is scheduled to be revised.

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4. STATISTICS

4.1 Approximately how many waste to energy projects are in your country? What percentage of electricity in your country is generated by waste to energy projects?

There are only 2 power plants in Hungary which produce electricity from waste.

Thus the percentage of electricity generated by waste to energy projects is rather low,

only 0.5%.

The quantity of waste has decreased significantly since 2000 (e.g. the volume of

industrial production waste decreased with 40%). The biologically degradable part of

communal solid waste was 1,827,868 ton in 2006, amount of waste (methane) gas

was 140,821 ton.

Communal solid waste is utilized energetically by the Fővárosi Hulladékhasznosító

Mű: in 2007 energy produced by incineration of waste was 3,310,385 GJ, energy

efficiency rate was 0.63.

However, we do expect a significant increase in the future, see next response.

4.2 Do you foresee any near term developments favoring waste to energy projects in your country?

Hungary’s parliament has approved the country's National Energy Strategy up to

2030. Under the Strategy, Hungary will aim at ensuring the long-term security of

energy supplies in Hungary and increasing the share of RES and waste in its

electricity generation mix, particularly biomass. The envisaged increase of the share

of RES in the energy mix is up to 15 % until 2030 and up to 20 % by 2050.

For the compliance of the environment protection strategy of the European Union

especially in the field of waste management, the near term strategy of the

government is to raise the role of waste recycling in any form.

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ROMANIA

1. GENERAL 75 1.1 What is the nature and importance of waste to energy projects in your country? 75 1.2 What is the definition and coverage of waste to energy projects under the relevant

legislation in your country? 75 1.3 Is there a preferred structure for waste to energy projects in your country? 75

2. REGULATION 75 2.1 What are the principal laws and regulations regulating waste to energy projects

(include regulations applicable to municipal solid waste disposal, conveyance of waste, tipping fees, energy generation and environmental issues)? 75

2.2 What are the principal regulatory bodies regulating waste to energy projects? 76 2.3 Are flow contracts permitted in your country? (Flow Contract: In the WtE context, an

agreement or system where a municipality contracts to direct its MSW stream to a particular facility; in some situations these systems require the municipality to compel haulers to act in a manner consistent with the flow contract. Some flow contracts have been successfully challenged in the U.S. as unconstitutionally restricting interstate commerce.) 76

2.4 Are there limitations on foreign investment in waste to energy projects? 76

3. INCENTIVES 76 3.1 Are tax advantages available to waste to energy projects? 76 3.2 Is there a purchase guarantee given by the relevant legislation/regulations for

electricity generated by waste to energy projects? 76 3.3 Is there a minimum price guarantee given by the relevant legislation/regulations for

the electricity generated by waste to energy projects? 76 3.4 Are waste to energy projects given preferential dispatch treatment in your country? 77 3.5 What are the other incentives available to waste to energy projects? Are these

incentives available to foreign investors? Are there incentives available to foreign investors that may not be available to domestic investors? 77

4. STATISTICS 78 4.1 Approximately how many waste to energy projects are in your country? What

percentage of electricity in your country is generated by waste to energy projects? 78 4.2 Do you foresee any near term developments favoring waste to energy projects in

your country? 78

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1. GENERAL

1.1 What is the nature and importance of waste to energy projects in your country?

According to official data and information gathered from the press, Romania is one

of the leas preoccupied countries in the EU in regard to waste management and

recycling. Thus, without the required infrastructure in place and given the low

development rate of supporting this type of technology, for the moment waste to

energy projects have not generated a high interest from the Romanian authorities and

investors.

1.2 What is the definition and coverage of waste to energy projects under the relevant legislation in your country?

Under the relevant legislation in Romania, WtE projects are not separately defined

and regulated.

1.3 Is there a preferred structure for waste to energy projects in your country?

No, there is no preferred structure for waste to energy projects in Romania.

2. REGULATION

2.1 What are the principal laws and regulations regulating waste to energy projects (include regulations applicable to municipal solid waste disposal, conveyance of waste, tipping fees, energy generation and environmental issues)?

Please find below the list of significant regulations in Romania:

Law no. 211/2011 on the regime of waste;

Government decision no. 128/2002 regarding incineration of waste;

Order no.756/2004 issued by the Romanian Ministry of Environment, regarding the approval of technical norms for the incineration of waste; and

Law no. 220/2008 regarding the establishment of a system to promote electricity generated from renewable energy sources.

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2.2 What are the principal regulatory bodies regulating waste to energy projects?

According to Law no. 220/2008, the Romanian Ministry of Environment and Forest

is the main regulatory body for WtE projects. In order for WtE to be considered

RES-E and to benefit from the green certificate support system which is in place in

Romania, the developer of the project has to obtain an origin certificate from the

Romanian Ministry of Environment and Forests.

Another regulatory body is the National Agency for the Protection of the

Environment which is an entity within the Ministry of Environment and Forests that

has the competence to harmonize the Romanian legislation on waste management

with the EU legislation.

2.3 Are flow contracts permitted in your country?

Such contracts are not present for the moment in the Romanian legislation.

2.4 Are there limitations on foreign investment in waste to energy projects?

There are no such limitations.

3. INCENTIVES

3.1 Are tax advantages available to waste to energy projects?

Presently there are no tax incentives for WtE projects other than the general

advantages offered for any type of investments.

3.2 Is there a purchase guarantee given by the relevant legislation/regulations for electricity generated by waste to energy projects?

The Romanian legislation ensures guaranteed access to the grid system for electricity

produced from renewable energy sources.

3.3 Is there a minimum price guarantee given by the relevant legislation/regulations for the electricity generated by waste to energy projects?

There is no direct minimum price guarantee for electricity produced from WtE, but a

bare minimum could be calculated, given that the biodegradable parts obtained from

WtE are qualified by law as biomass, which benefits from the current support

scheme through green certificates. A green certificate is an instrument which assures

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that part of the energy used by the consumers is obtained from renewable sources

and assures the producer a certain financial revenue, between EUR 27 and EUR 55

per green certificate. For the exact number of green certificates and duration of the

supported technology please check the table below:

3.4 Are waste to energy projects given preferential dispatch treatment in your country?

In Romania the transmission system operator and distribution operators ensure that

the electricity produced from renewable sources is dispatched on a priority basis.

3.5 What are the other incentives available to waste to energy projects? Are these incentives available to foreign investors? Are there incentives available to foreign investors that may not be available to domestic investors?

For the moment there are no special incentives available for WtE in particular, as

opposed to standard incentives for RES-E.

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4. STATISTICS

4.1 Approximately how many waste to energy projects are in your country? What percentage of electricity in your country is generated by waste to energy projects?

At this moment there is no official statistical data which quantifies how much

electricity is generated from WtE.

4.2 Do you foresee any near term developments favoring waste to energy projects in your country?

Until new legislation will be passed to promote this specific type of energy projects,

it seems very unlikely that these types of developments will gather investors and be

profitable.

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SERBIA

1. GENERAL 80 1.1 What is the nature and importance of waste to energy projects in your country? 80 1.2 What is the definition and coverage of waste to energy projects under the relevant

legislation in your country? 80 1.3 Is there a preferred structure for waste to energy projects in your country? 80

2. REGULATION 80 2.1 What are the principal laws and regulations regulating waste to energy projects

(include regulations applicable to municipal solid waste disposal, conveyance of waste, tipping fees, energy generation and environmental issues)? 80

2.2 What are the principal regulatory bodies regulating waste to energy projects? 82 2.3 Are flow contracts permitted in your country? (Flow Contract: In the WtE context, an

agreement or system where a municipality contracts to direct its MSW stream to a particular facility; in some situations these systems require the municipality to compel haulers to act in a manner consistent with the flow contract. Some flow contracts have been successfully challenged in the U.S. as unconstitutionally restricting interstate commerce.) 82

2.4 Are there limitations on foreign investment in waste to energy projects? 82

3. INCENTIVES 82 3.1 Are tax advantages available to waste to energy projects? 82 3.2 Is there a purchase guarantee given by the relevant legislation/regulations for

electricity generated by waste to energy projects? 86 3.3 Is there a minimum price guarantee given by the relevant legislation/regulations for

the electricity generated by waste to energy projects? 87 3.4 Are waste to energy projects given preferential dispatch treatment in your country? 87 3.5 What are the other incentives available to waste to energy projects? Are these

incentives available to foreign investors? Are there incentives available to foreign investors that may not be available to domestic investors? 87

4. STATISTICS 87 4.1 Approximately how many waste to energy projects are in your country? What

percentage of electricity in your country is generated by waste to energy projects? 87 4.2 Do you foresee any near term developments favoring waste to energy projects in

your country? 87

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1. GENERAL

1.1 What is the nature and importance of waste to energy projects in your country?

Even though that the relevant authorities are aware of the importance of WtE

projects, according to the latest press releases, there are no active projects in Serbia

yet.

Namely, Serbia's potential to generate electricity from biomass and waste is about 3

million tons of oil equivalents, and also there is 700,000 tons of combustible waste,

which is equal to the annual consumption of liquid fuels in 2009, but this potential is

not realized in Serbia.

1.2 What is the definition and coverage of waste to energy projects under the relevant legislation in your country?

Under the relevant legislation in Serbia, WtE projects are not separately defined and

regulated.

1.3 Is there a preferred structure for waste to energy projects in your country?

No, there is no specific preferred structure for waste to energy projects in Serbia.

Such projects can be conducted as the public enterprises, private companies, public-

private partnerships, concessions, etc.

2. REGULATION

2.1 What are the principal laws and regulations regulating waste to energy projects (include regulations applicable to municipal solid waste disposal, conveyance of waste, tipping fees, energy generation and environmental issues)?

Please find below the list of the most significant regulations in Serbia:

Law on Environmental Protection (Official Gazette of the Republic of Serbia, No. 135/04);

Law on Waste Management (Official Gazette of the Republic of Serbia, Nos. 36/09 and 88/2010);

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Law on Packaging and Packaging Waste (Official Gazette of the Republic of Serbia, No. 36/09);

Law on Strategic Assesment of Impacts on Environment (Official Gazette of the Republic of Serbia, No.135/04);

Law on Environmental Impact Assessment (Official Gazette of the Republic of Serbia, No. 135/04);

Law on Integrated Prevention and Control of Polution of the Environment (Official Gazette of the Republic of Serbia, No. 135/04);

Energy Law (Official Gazette of the Republic of Serbia, Nos. 57/2011 and 80/2011);

Decree on Incentives for the Production of Electricity from Renewable Energy Sources and Combined Production of Electricity and Heat (Official Gazette of the Republic of Serbia, No. 99/2009);

Rulebook on Categories, Examination and Clasification of Waste (Official Gazette of the Republic of Serbia, No. 56/2010);

Law on Hazardous Waste Transport (Official Gazette of the Republic of Serbia, No. 88/2010);

Rulebook on Manners for Storage, Packaging and Marking of Hazardous Waste (Official Gazette of the Republic of Serbia, No. 92/2010);

Decree on Amount and Conditions for Acquiring Incentive Funds (Official Gazette of the Republic of Serbia, Nos. 88/2009, 67/2010, 101/2010 and 86/2011);

Rulebook on Conditions and Manner Of Collection, Transport, Storage and Treatment of Waste Used as Secondary Raw Material or For Energy Production (Offic ial Gazette of the Republic of Serbia, No. 98/2010);

Decree on Categories of Waste for Which Technical Treatement is Conducted; Conditions and Criteria for Determining Location; on Technical and Technology Conditions for Designing, Building, Equiping and Work of Facilities for Thermal Treatment of Waste, and Management of Waste After Incineration (Official Gazette of the Republic of Serbia, No. 102/2010);

Strategy for Waste Management for 2010 - 2019 (Official Gazette of the Republic of Serbia, No. 29/2010).

The current Serbian waste management regulations were passed so as to be in line

with the respective EU regulations.

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However pursuant to the Serbian Waste Management Startegy for period 2010 -

2019, EU Landfill Waste Directive (99/31/EC) is yet to be implemented in the

Serbian legal system.

2.2 What are the principal regulatory bodies regulating waste to energy projects?

According to the relevant regulations, in general, the following governmental bodies

are in charge for WtE projects: the Government, the Ministry of Environmental

Protection, Mining and Spatial Planning, the Agency for Environmental Protection,

the Fund for Environmental Protection, as well as the municipalities.

2.3 Are flow contracts permitted in your country?

Yes, according to the relevant Serbian regulations, a municipality may assign its

MSW stream to a private entity.

2.4 Are there limitations on foreign investment in waste to energy projects?

No.

3. INCENTIVES

3.1 Are tax advantages available to waste to energy projects?

There are no specific tax advantages provided by regulations for WtE projects.

However, in general, the Foreign Investment Law provides certain privileges to the

foreign investors, inter alia, the exemption from customs duty and other import

charges for the import of equipment on the basis of a foreign investor’s investment

(though excluding the motor vehicles and entertainment and games of chance

automatic machines).

In addition, the Foreign Investment Law provides for certain safeguards for foreign

investors, including equal treatment, free repatriation of profit and investment,

protection of acquired rights of a foreign investor against subsequent negative

changes in the laws and protection from expropriation or similar measures, except in

cases when public interest requires such measures and only against fair

consideration.

Investment incentives are available to any investor in Serbia under the conditions set

out in the Decree on Conditions and Manner of Attracting Investment. The authority

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that grants such investment subsidies is the Ministry for Economy and Regional

Development.

A new investment package has been prepared for investors in Serbia. State grants are

offered for Greenfield and Brownfield projects in all industries, except for primary

agriculture, the hospitality industry, retail, and the production of synthetic fibers and

coal.

For standard-scale Greenfield and Brownfield projects in the manufacturing, export-

related services sector and tourism, non-refundable state funds are offered in the

range between EUR 2,000 and 10,000 per new job created within three years.

However, a special financial package is available for the large investments, under the

terms and conditions presented below:

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In addition, Serbia in general offers other incentives for the investors, such as (i)

customs-free import of machinery and equipment (the foreign investors are exempt

from paying customs duty on imported equipment and machinery which represents

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the share of a foreign investor in a capital of a company in Serbia); (ii) local

Incentives (a wide array of incentives is also available at the local level, varying in

scope and size from one city to another; the major ones comprise the following: city

construction land lease fee exemptions or deductions, including the option of paying

in installments, with the prior consent of the Government; city construction land

development fee relief such as fee exemptions or discounts for one-off payments;

other local fees exemptions or deductions (e.g. the fee for displaying the company's

name), etc.

Tax holiday or tax exemption from corporate profits tax is governed by the Corporate

Income Tax Law, and may be granted under the conditions set out in this law. This

means that this tax holiday can be granted by the competent tax authorities, provided

that the conditions from the law are met. In a nutshell, these conditions are that the

investment in fixed assets (property, plant, equipment) of the company reaches RSD

800 million, and that at least 100 new jobs are created. The tax holiday may be used

(following the conditions are fully met) from the first year in which taxable profit is

determined, and for the next nine years (10 years in total). Tax holiday means pro-

rata reduction of tax liability, proportionate to the share of investment in fixed assets

with the value of at least RSD 800 million to the total permanent assets. This means

that the amount of reduction of tax liability is subject to change, e.g. in a first year is

can be 100%, and in the subsequent years it may change due to additional investment

in fixed assets and increase in value of the total fixed assets (therefore the proportion

between total fixed assets and fixed assets on the basis of which tax holiday is obtain

changes).

Another relevant tax incentive is a tax credit for investment in taxpayer's own fixed

assets. An annual corporate income tax liability of the company will be reduced by

the amount of 20% of investment made in fixed assets (property, plant, equipment)

that are used for Serbian subsidiary's business, made in that year. However, the

reduction of tax liability may not exceed 50% of a tax liability in any given tax year.

For companies that qualify as small companies under accounting rules, the tax credit

amounts to 40% of investment made in fixed assets, and the reduction of tax liability

is 70%. Investment in fixed assets means purchase, and not financial leasing.

If not used entirely in the course of one year, this tax credit can be carried forward

for a maximum period of 10 years.

The tax loss stated in the tax return can be carried forward and offset against future

profits over a period up to 5 years.

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Income generated through commercial activities in the Free Zones in Serbia is

exempted from Value Added Tax.

3.2 Is there a purchase guarantee given by the relevant legislation/regulations for electricity generated by waste to energy projects?

Under the Energy Law, there is a proscribed purchase guarantee only for energy

producers who have acquired status of a privileged producer.

According to the currently applicable Government Decree on Incentive Measures for

Electricity Production from Renewable Energy Sources and CHP (Official Gazette of

the Republic, No. 99/09) (which decree was adopted on 20 November 2009 and shall

remain effective until 31 December 2012), the feed-in tariff which applies to the

privileged producers who use biomass and waste and sell their electricity to the state-

owned electricity monopoly company Elektroprivreda Srbije ("EPS") is set as

follows:

Type of Plant/Energy

Source

Installed Power

(MW)

Feed-in Tariff (Eurocents/kWh)

Biomass Up to 0.5 MW

0.5 MW to 5 MW 5 MW to 10 MW

13.6 13.845

11.4

Waste up to 1 MW

1 MW to 10 MW 9.2 8.5

If the criteria for privileged status and feed-in tariffs are met, EPS is obliged to

conclude a contract with the privileged producer, if the privileged producer so

requests. Such a contract is concluded for a period of 12 years starting from the date

of the contract coming into force. During the duration of the contract, the feed-in

tariffs are guaranteed. However, the regulations do not contain any provision

regarding revision or indexation of the feed-in tariffs.

Also, pursuant to another Government decree, the Fund for Environmental Protection

provide (i) RSD 3,000 (approx. EUR 27) for every ton of waste tires, and (ii) RSD

4,5 per kg for waste oils that will be treated and used for production of energy.

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3.3 Is there a minimum price guarantee given by the relevant legislation/regulations for the electricity generated by waste to energy projects?

Please see above.

3.4 Are waste to energy projects given preferential dispatch treatment in your country?

3.5 What are the other incentives available to waste to energy projects? Are these incentives available to foreign investors? Are there incentives available to foreign investors that may not be available to domestic investors?

Except as stated above in answer to question 3.1, there are no specific incentives

available to WtE projects for foreign investors.

4. STATISTICS

4.1 Approximately how many waste to energy projects are in your country? What percentage of electricity in your country is generated by waste to energy projects?

There is no statistical data available. However, according to the latest press releases,

there are no active WtE projects in Serbia.

4.2 Do you foresee any near term developments favoring waste to energy projects in your country?

We do not foresee coming developments favoring waste to energy projects in Serbia.

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SLOVAK REPUBLIC

1. GENERAL 89 1.1 What is the nature and importance of waste to energy projects in your country? 89 1.2 What is the definition and coverage of waste to energy projects under the relevant

legislation in your country? 89 1.3 Is there a preferred structure for waste to energy projects in your country? 89

2. REGULATION 89 2.1 What are the principal laws and regulations regulating waste to energy projects

(include regulations applicable to municipal solid waste disposal, conveyance of waste, tipping fees, energy generation and environmental issues)? 89

2.2 What are the principal regulatory bodies regulating waste to energy projects? 90 2.3 Are flow contracts permitted in your country? (Flow Contract: In the WtE context, an

agreement or system where a municipality contracts to direct its MSW stream to a particular facility; in some situations these systems require the municipali ty to compel haulers to act in a manner consistent with the flow contract. Some flow contracts have been successfully challenged in the U.S. as unconstitutionally restricting interstate commerce.) 90

2.4 Are there limitations on foreign investment in waste to energy projects? 90

3. INCENTIVES 90 3.1 Are tax advantages available to waste to energy projects? 90 3.2 Is there a purchase guarantee given by the relevant legislation/regulations for

electricity generated by waste to energy projects? 90 3.3 Is there a minimum price guarantee given by the relevant legislation/regulations for

the electricity generated by waste to energy projects? 91 3.4 Are waste to energy projects given preferential dispatch treatment in your country? 91 3.5 What are the other incentives available to waste to energy projects? Are these

incentives available to foreign investors? Are there incentives available to foreign investors that may not be available to domestic investors? 91

4. STATISTICS 91 4.1 Approximately how many waste to energy projects are in your country? What

percentage of electricity in your country is generated by waste to energy projects? 91 4.2 Do you foresee any near term developments favoring waste to energy projects in

your country? 91

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1. GENERAL

1.1 What is the nature and importance of waste to energy projects in your country?

Due to membership of Slovakia in the EU its environmental policy gives high

importance to the separation of the waste. There are several directives focused on

separation and recycling of the waste implemented in Slovak legislation. However

Slovakia has not implemented the EU Directive No. 2008/98/EC yet.

1.2 What is the definition and coverage of waste to energy projects under the relevant legislation in your country?

There is no specific definition for energy of waste in Slovak legislation, however the

purpose of using waste as source of energy is mentioned in the Waste Act and the

term biomass is defined as a the biodegradable fraction of a product, residue from

vegetal and animal substances from agriculture, forestry, the biodegradable fraction

of municipal and industrial waste, including black liquor from wood processing.

1.3 Is there a preferred structure for waste to energy projects in your country?

There is no preferred structure for waste to energy projects in Slovakia.

2. REGULATION

2.1 What are the principal laws and regulations regulating waste to energy projects (include regulations applicable to municipal solid waste disposal, conveyance of waste, tipping fees, energy generation and environmental issues)?

The Act No.309/2009 Coll. on the promotion of renewable energy resources and high -efficiency cooperation

The Waste Act No. 283/2001Coll.

The Act No.656/2004Coll.on Energetics

The Act No. 17/2004 Coll. on Fees for storage of the waste

The Government regulation No. 220/2005 Coll. constituting binding limits for declining of waste and its recycling in relation to its weight

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The Ordinance of Ministry of Environment No. 283/2001 Coll. on executing several provisions of The Waste Act 283/2001 Coll.

The Ordinance of Ministry of Environment No. 284/2001 Coll. constituting the Catalogue of waste

2.2 What are the principal regulatory bodies regulating waste to energy projects?

Ministry of Environment

Ministry of Economics

Regulatory Office for Network Industries

State Energy Inspection

Slovak Agency for Innovation and Energy

2.3 Are flow contracts permitted in your country? (Flow Contract: In the WtE context, an agreement or system where a municipality contracts to direct its MSW stream to a particular facility; in some situations these systems require the municipality to compel haulers to act in a manner consistent with the flow contract. Some flow contracts have been successfully challenged in the U.S. as unconstitutionally restricting interstate commerce.)

There is no legal term of "flow contract" with this meaning however the collection of

MSW in municipality and its flow to a particular facility – commercial entity would

be subject of concessions and public procurement laws.

2.4 Are there limitations on foreign investment in waste to energy projects?

Generally there are no limitations on foreign investment.

3. INCENTIVES

3.1 Are tax advantages available to waste to energy projects?

There is no available income tax incentive to waste to energy projects at this time.

3.2 Is there a purchase guarantee given by the relevant legislation/regulations for electricity generated by waste to energy projects?

Generally the support for producers is granted under the act The Act No.309/2009 Coll. on the promotion of renewable energy resources and high-efficiency cooperation. Thus waste to energy projects fall under the promotion scheme only if they qualify for such

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promotion incentives. Waste biomass falls under the category of renewable energy sources.

3.3 Is there a minimum price guarantee given by the relevant legislation/regulations for the electricity generated by waste to energy projects?

The electricity generated only by waste which belongs to a category of RES electricity sources (waste biomass) has a special regime and minimum prices are granted provided that the conditions of the RES act and the Decree of Regulatory Office of Network Industries No. 225/2011 Col are met.

3.4 Are waste to energy projects given preferential dispatch treatment in your country?

No. There is no such preferential treatment scheme valid in Slovakia for waste to energy projects. For the RES promotion schemes see above.

3.5 What are the other incentives available to waste to energy projects? Are these incentives available to foreign investors? Are there incentives available to foreign investors that may not be available to domestic investors?

There are no such incentives, neither to domestic nor to foreign investors in the area of waste management. The projects may apply to the EU funding – priority programs – environment.

4. STATISTICS

4.1 Approximately how many waste to energy projects are in your country? What percentage of electricity in your country is generated by waste to energy projects?

There are no such statistics available to us.

4.2 Do you foresee any near term developments favoring waste to energy projects in your country?

We do not see any significant change in the renewable energy legislation nor introduction of any new waste to energy laws. This is also partly due to the recent parliamentary elections in March 2012, the new government has not yet announced its political agenda for the upcoming period.

We are not aware of any significant rise of specific waste to energy projects in the near future, although it is rather probable that this kind of projects will become part of the agenda in the upcoming years, not only because the agreed share of RES but also

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because of steadily declining capacities of landfill sites and preference given to combustion of waste.

Guide to: RES-Electricity

93

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UKRAINE

1. GENERAL 94 1.1 What is the nature and importance of waste to energy projects in your country? 94 1.2 What is the definition and coverage of waste to energy projects under the relevant legislation in your

country? 94 1.3 Is there a preferred structure for waste to energy projects in your country? 94

2. REGULATION 94 2.1 What are the principal laws and regulations regulating waste to energy projects (include regulations

applicable to municipal solid waste disposal, conveyance of waste, tipping fees, energy generation and environmental issues)? 94

2.2 What are the principal regulatory bodies regulating waste to energy projects? 94 2.3 Are flow contracts permitted in your country? (Flow Contract: In the WtE context, an agreement or

system where a municipality contracts to direct its MSW stream to a particular facility; in some situations these systems require the municipality to compel haulers to act in a manner cons istent with the flow contract. Some flow contracts have been successfully challenged in the U.S. as unconstitutionally restricting interstate commerce.) 94

2.4 Are there limitations on foreign investment in waste to energy projects? 94

3. INCENTIVES 95 3.1 Are tax advantages available to waste to energy projects? 95 3.2 Is there a purchase guarantee given by the relevant legislation/regulations for electricity generated

by waste to energy projects? 95 3.3 Is there a minimum price guarantee given by the relevant legislation/regulations for the electricity

generated by waste to energy projects? 95 3.4 Are waste to energy projects given preferential dispatch treatment in your country? 95 3.5 What are the other incentives available to waste to energy projects? Are these incentives available

to foreign investors? Are there incentives available to foreign investors that may not be available to domestic investors? 95

4. STATISTICS 95 4.1 Approximately how many waste to energy projects are in your country? What percentage of

electricity in your country is generated by waste to energy projects? 95 4.2 Do you foresee any near term developments favoring waste to energy projects in your country? 95

NEWYORK 8418227 v4 (2K) 94

1. GENERAL

1.1 What is the nature and importance of waste to energy projects in your country?

At the moment, Ukraine is seeking to diversify its energy and fuel sources. Therefore, waste to

energy projects are rather prospective and may become of high importance in Ukraine.

1.2 What is the definition and coverage of waste to energy projects under the relevant legislation in your country?

There is no definition for waste to energy projects under Ukrainian legislation. At the same time,

the Ukrainian legislation defines some sources of waste to energy projects as alternative sources

of energy, namely, energy from biomass including biogas, landfill gas and sewage treatment

plant gas.

1.3 Is there a preferred structure for waste to energy projects in your country?

There is no preferred structure for waste to energy projects in Ukraine. However, RES projects

are usually structured as an Ukrainian subsidiary, fully or partially owned by foreign investors.

Therefore, the same structure may be used for waste to energy projects.

2. REGULATION

2.1 What are the principal laws and regulations regulating waste to energy projects (include regulations applicable to municipal solid waste disposal, conveyance of waste, tipping fees, energy generation and environmental issues)?

The Law of Ukraine “On Alternative Types of Fuels” No. 1391-XIV of 14 January 2000;

The Law of Ukraine “On Alternative Sources of Energy” No. 555-IV of 20 February 2003;

The Tax Code of Ukraine No. 2755-VI of 2 December 2010

2.2 What are the principal regulatory bodies regulating waste to energy projects?

The principal regulatory body regulating waste to energy projects is the National Commission

that Performs State Regulation in Sphere of Energy.

2.3 Are flow contracts permitted in your country?

Flow contracts are not regulated by Ukrainian law.

2.4 Are there limitations on foreign investment in waste to energy projects?

No. The general foreign investment regime is applied.

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3. INCENTIVES

3.1 Are tax advantages available to waste to energy projects?

As long as waste to energy projects use the gases qualified as renewable energy sources under

Ukrainian law, several tax (including VAT, profit and land taxes) and duties privileges may be

applicable to such projects.

3.2 Is there a purchase guarantee given by the relevant legislation/regulations for electricity generated by waste to energy projects?

Electricity produced from certain type of sources used by the waste to energy projects are

granted purchase guarantees in the form of off-take at the price of respective green tariff, as

provided by the Law of Ukraine on the Electric Power Industry.

3.3 Is there a minimum price guarantee given by the relevant legislation/regulations for the electricity generated by waste to energy projects?

There is a kind of feed-in tariff applicable until 1 January 2030 to legal entities or individual

entrepreneurs generating electricity from renewable energy sources, including from certain type

of the sources used by the waste to energy projects.

3.4 Are waste to energy projects given preferential dispatch treatment in your country?

Waste to energy projects do not have any preferential dispatch treatment in Ukraine.

3.5 What are the other incentives available to waste to energy projects? Are these incentives available to foreign investors? Are there incentives available to foreign investors that may not be available to domestic investors?

There are no additional incentives, except for the above-mentioned feed-in tariff combined with

mandatory off-take and tax privileges. The incentives are generally available for foreign

investors, they have no special privileges compared to domestic investors.

4. STATISTICS

4.1 Approximately how many waste to energy projects are in your country? What percentage of electricity in your country is generated by waste to energy projects?

There is no official statistical information regarding waste to energy projects in Ukraine.

4.2 Do you foresee any near term developments favoring waste to energy projects in your country?

Taking into account that a feed-in tariff for the energy produced from the biomass was already

adopted, there is a possibility that waste to energy projects using biomass may be successfully

developed in the Ukraine.