Asian Development Bank (ADB) regressing on climate commitments in Asia

Dear ADB President Asakawa, Managing Director Woochong Um, VP Ashok Lavasa (Private Sector Operations), and Members of the ADB Board of Directors,

We are writing to collectively urge an immediate reconsideration of the proposed financing for a new waste-to-energy (WTE) incineration project in Binh Duong Province, Viet Nam (Project Number: 56118-001). Formally reported as “Viet Nam: Binh Duong Waste Management and Energy Efficiency Project”, once operational, this project is expected to burn 200 tons of industrial and municipal solid waste per day.

This letter outlines the key reasons why the project should be urgently put on hold until it is revised rather than proceeding to the Board for approval, specifically: 1) in light of the absence of a finalized guidance note on WTE as mandated by the new 2021 Energy Policy (required to provide specific screening measures at all stages of the project cycle)  to meet the requirements of paragraph 71 of the policy that the choice of feedstock is a result of a prudent order of waste management and WTE will be the last option, approving this project would be a breach of due process; 2) the lack of any evidence-based information to illustrate how the project will actually tackle climate change and support making cities more liveable as per operational priorities of ADB’s Strategy 2030 (see the Project’s Initial Poverty and Social Analysis); 3) the unsubstantiated claim that WTE incineration is a viable source of renewable energy source; 4) high risk of safeguards violations in light of the lack of clarity how the implementing company’s own ESMS can be relied upon when across the region, WTE incineration plants systematically circumvent national pollution control laws while undermining standards upheld by international conventions.

Below, we elaborate why deploying the ADB’s limited resources to facilitate the building of such an unnecessary, risky, and resource-intensive project lacks foresight — most especially given the urgent need to support borrowing member countries to rapidly scale up options for reliance on locally relevant, decentralized renewable energy generation, and waste management systems.

1. Background: Missing guidance notes on WTE incineration

We are alarmed by the fact that this project is proposed in the absence of the staff guidance note on WTE. Until today, the guidance note has not been finalized and made publicly available. In our latest conversation with senior management-level staff in the Sustainable Development and Climate Change Department, it was made clear that the guidance notes will be applied before the approval stage of a project cycle.  As mandated by the new Energy Policy, the staff guidance will elaborate upon the screening criteria for ADB operations involving natural gas, large hydropower plants, and WTE plants. On WTE, the guidance note should provide criteria to ensure that the feedstock used in ADB’s proposed projects on WTE incineration will follow “a prudent order of waste management priorities”. This means, before WTE incineration is considered to be installed, ADB operations must ensure first the reduction of waste generation, material reuse, and recycling to take place. 

The guidance note on WTE must reinforce and not undermine paragraph 71 of the new Energy Policy, ensuring prioritization of waste management options in which WTE incineration is the last option. WTE incineration is an end-of-pipe solution to waste. Its existence does not stimulate higher and more important solutions for waste management which are reduction, reuse, and recycling. In fact, it disincentivizes upstream solutions due to its huge financial implications for local governments’ budgets through the high cost of construction and operational costs. In many cases, national governments need to subsidize the tipping fee, feed-in tariff, or false renewable energy subsidy. 

There is no clear evidence-based rationale for the Board to approve the WTE incineration component of this non-sovereign loan worth USD 7 million before the guidance note is in place and duly adhered to by ADB staff. The project does not indicate any means to reduce waste generation, such as first supporting the implementation of a ban on single-use products and packaging, a deposit-refund system, or local programs to promote reuse and refillable containers, food loss and food waste prevention — all of which could in fact help make the cities in the project area more livable. The project also does not include a component of material recycling for recyclable metal, plastic, paper, and cardboard. Additionally, it is also unclear whether the composting plant will treat source-separated waste or mixed waste — a critical factor in ensuring a high-quality organic management process. Lastly, there is no initial analysis on waste composition and generation conducted to justify that the WTE component has followed a prudent order of waste management priorities. 

Given the absence of a guidance note, there is no way for civil society to verify how the implementing company, BIWASE, will adopt the best internationally available standards in accordance with international conventions as mandated by the new Energy Policy. In this regard, we note with concern that the company’s website also does not list any intent to follow international guidelines for emissions or other environmental, health, and safety standards.

Support for WTE incineration would also hamper efforts to avoid harming livelihood opportunities for the poorest of the poor working along the waste value chain as required in the new Energy Policy. WTE incineration facilities create the least jobs compared to composting, recycling, remanufacturing, and repair. Therefore, it will most likely lead to an extensive loss of employment and loss of livelihood for those working in the informal waste sector. Furthermore, the presence of incineration plants also typically lead to a drastic loss of income for the informal waste sector. This happens because incinerator plants demand a constant and huge amount of waste with high-calorific content which is found in recyclables. Expansion of WTE incineration capacity would also contradict Viet Nam’s national recycling targets.

2. WTE incineration is not a low-carbon investment

The claim that this project is aligned with the operational priorities of ADB’s Strategy 2030 —in particular the key operational priority on tackling climate change— is very concerning to us as civil society organizations directly advocating for climate, energy, social and economic justice. Waste incineration projects are heavily reliant on burning plastic. This makes WTE incineration plants no different than any other fossil-powered energy generation system. Incinerating plastic which is 99 percent made of fossil fuels emits 2.7 tonnes of CO₂e for every tonne of plastic burned. Further, when energy is recovered, incinerating one tonne of plastic still results in 1.43 tonnes of CO₂e — way higher than real renewable sources such as wind and solar.

WTE incineration is not a low-carbon technology; in fact, it is more emission-intensive than the average emission intensity on the grid, including coal-fired and gas-fired power plants. In both the U.S. and the E.U., WTE incineration is considered among the dirtiest sources of energy and the most emissions-intensive form of power generation on the  grid. The US Environmental Protection Agency states that incinerators emit more carbon dioxide per megawatt-hour than coal-fired, natural-gas-fired, or oil-fired power plants. A recent scientific paper further proves that incinerators emit more greenhouse gas emissions per unit of electricity produced than any other power source. This finding is corroborated by a study on European incinerators which shows that the carbon intensity of electricity produced from WTE incinerators is twice the current European Union average electricity grid intensity — significantly greater than energy produced through conventional fossil fuel sources.

Lastly, waste incineration has no place in any decarbonization plans. WTE incineration facilities are expected to operate for about 25 years with significant GHG emissions as explained above — causing both carbon lock-in and feedstock lock-in effects. This hinders countries from achieving their climate targets and improving their waste prevention and recycling rate. This process would also encourage more extraction of resources, since discarded materials have been destroyed rather than recovered, thus indirectly contributing to more emissions.

3. Municipal and industrial solid waste is not a renewable energy source 

The Intergovernmental Panel on Climate Change (IPCC) defines renewable energy as energy created from natural processes that do not get depleted, such as bioenergy, direct solar energy, and those derived from wind, or ocean. IPCC also states that only the organic component of municipal solid waste is considered renewable. Hence, fossil components of waste streams such as plastic materials are non-renewable. In the case of this project, 840 tons per day of organic waste would be taken by the composting facility. Thus, it is likely that WTE will rely on burning non-organic waste fraction, especially fossil-derived plastic. 

Additionally, both municipal and industrial solid waste contains recyclable and reusable materials lost from the economy that needs to be re-mined, re-grown, and re-manufactured which incinerators destroy. Reuse and recycling also save more energy and prevent more greenhouse gas emissions compared to waste incineration. Therefore, investments in burning discarded materials such as plastic, paper, and glass that are derived from finite natural resources undermine climate goals.

Labeling WTE incineration as a renewable energy source project has severely unjust energy transition implications. This fact is well reflected in the U.S. where waste incineration is considered one of the most expensive ways to generate energy. A more recent study also shows that WTE incineration is nearly four times higher than solar power and onshore wind energy and 25 percent more expensive than coal-fired power plants. WTE incineration also reflects the weak financing model for an industry that has become increasingly dependent on renewable energy subsidies to stay afloat. 

4. Potential safeguards violation of WTE incineration projects

We question the project environment safeguard categorization as well as the suggestion in the Project Initial Poverty and Social Analysis that it will make surrounding cities more livable. The project is currently categorized as a Category B. WTE incinerators cause long-term public health and environmental damage. Case studies of waste incineration projects throughout Asia and the Pacific have unequivocally demonstrated causal connections to adverse and irreversible environmental impacts. Paragraph 36 of ADB Safeguards Policy 2009 (SPS 2009) requires borrowers to avoid any release of hazardous substances and materials subject to international bans and phaseouts. This clearly conflicts with two international conventions. Both Minamata and Stockholm conventions have identified waste incineration as a major source of mercury and dioxins which are highly toxic and must be phased out immediately.

This project also does not reflect compliance with SPS 2009. In paragraph 35, the borrower is mandated to minimize the generation of hazardous and non-hazardous waste resulting from project activities. WTE incineration does not eliminate waste as it only converts domestic waste into toxic waste in the form of ash. For every four tons of waste burnt, it is expected that there will be at least one ton of toxic incinerator fly ash and bottom ash. Furthermore, paragraphs 34 and 35 also require borrowers to prioritize waste prevention, reuse, and treatment (i.e. composting and recycling) — compliant with resource conservation principles and a prudent order of waste management priorities. Similarly, Viet Nam national law on Environmental Protection also mandates all organizations to prioritize upstream preventive measures.

A report by IPEN shows that toxic ash and other residues from waste incineration around the globe contain dioxins, furans (PCDD/Fs), and a range of other highly toxic Persistent Organic Pollutants (POPs), which occur at levels threatening to human health and the environment. Also, WTE incineration emits fine and ultra-fine particles that contain high amounts of toxic compounds and pose a serious threat to the environment and human health. 

The Danish Environmental Protection Agency released findings showing that the Norfos incineration plant has repeatedly exceeded the limit value for toxic emissions for dioxins and furans since 2014. More recent research conducted in Kaunas (Lithuania), Pilsen (Czech Republic), and Valdemingomez (Spain) show that WTE incinerators contribute to high dioxin levels in the vicinity of the plants. Long-term studies from state-of-the-art WTE incinerators in Harlingen (the Netherlands) and Sant Adrià de Besós (Spain) reveal emissions of toxic pollutants far beyond the limits set by EU laws. A similar long-term study in 2019, showed that UK incinerators breached their air pollution limits 127 times — with five different facilities reporting more than 10 permit breaches. There were 96 hours of abnormal operations where toxic pollutants such as dioxins are very likely to be released and not monitored.

The toxic contamination is not incidental, but systemic as shown by the recent news of Lausanne dioxin contamination in Switzerland. The country’s fourth-largest city is currently trying to cope with the effects of a recent discovery of wide-scale soil pollution caused by toxic compounds from an old garbage incinerator. This incident has caused an EU-wide investigation into impacts at other incinerator locations and should be a wake-up call for the ADB management – it is time to end support for WTE incineration. 

Incinerator bottom ash from burning waste also contains significant total concentrations of elements that are a ‘high level of concern’ based on EU REACH hazard classifications. For example, studies from a municipal solid waste incinerator in Phuket (Thailand) have shown that the ash emitted contains high concentrations of dioxins. The accumulated ash is stored adjacent to the plant and near the coastline, without protective barriers to prevent dioxins from leaking into the sea. Close to the plant, it was found that some of the fish and shellfish samples, also wild bird eggs, had elevated POPs levels. Furthermore, there is growing evidence that waste incineration exacerbates microplastic contamination in surrounding areas, for example, up to 102,000 microplastic particles are found per metric ton of waste incinerated.

The national regulation on industrial waste incineration also uses lower safeguards standards on dioxins emission in flue gas (QCVN 30: 2012/BTNMT). The emission standard for dioxins in flue gas is 0.6 ng TEQ/Nm³. That is six times lower than the Industrial Emissions Directive (2010/75/EU) of the European Parliament (EU IED) standard which set 0.1 ng TEQ/Nm³ for dioxins emissions in the flue gas. Additionally, the national law on Environment Protection also only requires once a year dioxins and furans monitoring in incinerator wastewater and flue gas — which is less than what is required by the EU IED on the monitoring frequency.

We note with concern that in the past, ADB has also supported one WTE project in Viet Nam which has been reported as non-compliant with ADB SPS yet remains to be in operation to this day. This first ADB-funded WTE plant in Viet Nam (Project Number: 50371-001) is located in the solid waste treatment area of Xã Trường Xuân Commune of Thới Lai District, which is 36 km from Cần Thơ City. According to the ADB’s own Environmental and Social Monitoring Report and Annual Environmental and Social Performance Report, there are several instances of significant safeguards violations (SPS 2009; Safeguard Requirement 1: Environment; paragraphs 33, 34, 35, and 36).

1. Lack of monitoring of toxic persistent organic pollutants

In 2019, the operator of Cần Thơ WTE plant has signed an MoU with ADB providing assurances that the Plant shall meet the emissions limits based on the EU IED. This directive is often referred to as the best international standard on WTE incineration. 

In the reports, dioxins and furans are not monitored continuously, but rather only monitored once every three months by third-party laboratories. Moreover, these toxic pollutants are only measured over an average sampling period of two hours. In practice, this would only represent 0.1% of the total operation time per year. Even if the measurement of dioxins and furans meets the limitations stipulated in the EU IED, the sampling period is recorded for only six to eight hours; i.e. representing 0.4% of the annual operation at best. 

2. ​​Lack of testing parameters for toxic pollutants 

The Environmental and Social Monitoring Report has highlighted several missing testing parameters for the incinerator bottom ash, including those related to heavy metals, dioxins, and furans. It also underscored the lack of capacity of local government authorities to manage toxic incinerator ash adequately. In fact, Cần Thơ City Government does not have any safeguard measures for securing incinerator toxic ash. Currently, the city government is still in the planning stages for developing a fly ash landfill within the solid waste treatment area in the Thới Lai District. Notably, the EU IED also requires monitoring of dioxins contained in WTE incineration wastewater. Yet, no such measurements are reported from Cần Thơ WTE.

3. Lack of meaningful consultations and insufficient information disclosure

Crucially, ADB’s own Environmental and Social Monitoring Report of the respective project also indicates the need to conduct additional consultation to ensure affected communities around the site are fully informed of the project. The report highlighted that the project needs to inform local communities about the grievance system. From our perspective, it is also critically important that ADB and project staff communicate the potential risks of toxic emissions and ash released from the plants to surrounding households in a  language they understand.

These three concerns are indicative of the serious risks from WTE incinerators, which as recognized by international laws and growing evidence even in countries with superior regulatory environment, has to be avoided than mitigated. Without any requirement that mandates continuous sampling and information disclosure from emission monitoring activity, WTE incineration plants pose significant health risks to local communities. It is crucial to ensure the establishment of working project grievance mechanisms that enable secure, independent reporting channels to avoid risks of reprisals and retaliation. This should be accompanied with regular meaningful consultations with the affected communities, conducted in a language they understand, in spaces where they can express concerns and raise questions free of fear of reprisals. In cases where serious safeguards requirements are not fulfilled, the Board must withdraw from these projects. 

In light of the above information, we are calling on the ADB to 1) decisively withdraw the WTE component from the proposed Binh Duong Waste Management and Energy Efficiency Project (56118-001); 2) publicly disclose the guidance note on WTE online; and 3) include compliance with the guidance note as a mandatory provision on the project data sheet if/when new WTE projects are proposed — allowing civil society groups and local communities to follow up accordingly. At a minimum, taking these steps would help provide a basis for clarity for civil society and community groups to evaluate whether and how the Bank is diligently prepared to follow a prudent order of waste management priorities in its project investments and ensure a transparent set of screening standards are firmly in place for staff and project proponent guidance.

We look forward to your timely response. Thank you.
 

Sincerely,

Cc: 

• Won Myong Hong, Project Officer, Private Sector Operations Department
• Suzanne Gaboury, Director General, Private Sector Operations Department
• Christopher Thieme, Deputy Director General, Private Sector Operations Department
• Priyantha Wijayatunga, Chief of Energy Sector Group, Sustainable Development and Climate Change Department
• Bruce Dunn, Director, Safeguards Division