input–output conversion ratio is 0.5; each composting plant produces 534 tons of compost
annually with annual operational days of 200.
The major source of revenue for the compost
plants is the sales of compost to different clients.
Based on existing compost plants surveyed in
Kenya, the average price of compost is 162
USD/ton. Based on the experience of existing
compost businesses in Kenya, not all of the
compost produced is sold in the first few years of
operation and thus it is assumed that 50% of
production is sold in the first two years, 70%
from third to fifth year and 85% in rest of the
period. Operating and maintenance costs are
assumed to be 3% of the total investment cost.
A discount rate of 12% is assumed based on the
Kenya Central bank rate (https://www.
centralbank.go.ke/rates/central-bank-rate/). The
selling price of the compost and other input costs
are subjected to an escalation of 2%. A straight
line method of depreciation is used for depreciable capital costs assuming a useful life of
15 years. Taxes and interest were not included in
the analysis.
Another potential source of revenue for the
decentralized compost business model is from
trading carbon credits. Depending on their eligibility, carbon credits are traded on either the
regulatory Clean Development Mechanism
(CDM) market or the voluntary carbon market.
Based on the World Bank (2014), carbon credit
prices in the EU ETS range about USD 5–9 (€ 4–
7) in 2014, while prices were USD 18 (€13) in
2011. In this study, it is assumed that carbon
credits are worth on average USD 7 per ton of
CO 2 equivalent.
4.2 Environmental Assessment
The environmental assessment of a decentralized
compost business model is conducted based on
comparison with a reference or baseline scenario.
The baseline scenario is the benchmark to compare project alternatives. The current operation of
open dumping is assumed to be the baseline
scenario for comparison. Under the alternative
decentralized compost business model, MSW is
composted in 45 small scale compost plants,
each having a capacity of 10.5 ton/day of
incoming waste. The process used for composting is open windrow composting. Other fractions
remaining from the composting business model
are dumped in a nearby dumpsite. Decentralized
composting helps in local collection of the waste
and provides savings in terms of the transportation cost of the waste. At the same time with
50.9% of the organic fraction of the waste being
diverted to the compost plant, the environmental
effects of dumpsites are also restricted (UNEP
2010).
The total emissions under the baseline scenario include emissions from the open dumping
of MSW. The emissions from the decentralized
compost business scenario include emissions
from composting of MSW, emissions from
transportation of inorganic fractions and transportation of compost to end users. The study
focuses on GHG emissions and other emissions
such as ammonia (NH 3 ) from composting are not
included in this study as it is assumed that the
plants would use proper turning of compost piles,
which would reduce NH 3 emissions (Aye and
Widjaya 2006). The compost is sold to farmers
about 20 km from the plants. It is assumed that
the compost is to be used as complementary
input to other inorganic fertilizers and thus no
inorganic fertilizer is assumed to be replaced by
the compost. Moreover, emissions associated
with machines or equipment used in the compost
business are excluded from the scope of this
study.
The estimation of environmental emission
was based on a number of studies (Shafie et al.
2014; Ruiz et al. 2013; Aye and Widjaya 2006).
The GHG emissions avoided as a result of
diverting MSW to composting are measured in
terms of the avoided tons of CO 2 per ton of
incoming waste (Table 3). The avoided emission
from the open dumping of MSW is assumed to
be 0.47 ton/ton of input while during composting, GHG emissions of 0.32 ton/ton of organic
fraction of MSW is assumed. Under the alternative scenario, a truck with a maximum capacity
of 15 tons is assumed to be used to transport the
inorganic fraction of the MSW and the final
32
S. Gebrezgabher et al.
annually with annual operational days of 200.
The major source of revenue for the compost
plants is the sales of compost to different clients.
Based on existing compost plants surveyed in
Kenya, the average price of compost is 162
USD/ton. Based on the experience of existing
compost businesses in Kenya, not all of the
compost produced is sold in the first few years of
operation and thus it is assumed that 50% of
production is sold in the first two years, 70%
from third to fifth year and 85% in rest of the
period. Operating and maintenance costs are
assumed to be 3% of the total investment cost.
A discount rate of 12% is assumed based on the
Kenya Central bank rate (https://www.
centralbank.go.ke/rates/central-bank-rate/). The
selling price of the compost and other input costs
are subjected to an escalation of 2%. A straight
line method of depreciation is used for depreciable capital costs assuming a useful life of
15 years. Taxes and interest were not included in
the analysis.
Another potential source of revenue for the
decentralized compost business model is from
trading carbon credits. Depending on their eligibility, carbon credits are traded on either the
regulatory Clean Development Mechanism
(CDM) market or the voluntary carbon market.
Based on the World Bank (2014), carbon credit
prices in the EU ETS range about USD 5–9 (€ 4–
7) in 2014, while prices were USD 18 (€13) in
2011. In this study, it is assumed that carbon
credits are worth on average USD 7 per ton of
CO 2 equivalent.
4.2 Environmental Assessment
The environmental assessment of a decentralized
compost business model is conducted based on
comparison with a reference or baseline scenario.
The baseline scenario is the benchmark to compare project alternatives. The current operation of
open dumping is assumed to be the baseline
scenario for comparison. Under the alternative
decentralized compost business model, MSW is
composted in 45 small scale compost plants,
each having a capacity of 10.5 ton/day of
incoming waste. The process used for composting is open windrow composting. Other fractions
remaining from the composting business model
are dumped in a nearby dumpsite. Decentralized
composting helps in local collection of the waste
and provides savings in terms of the transportation cost of the waste. At the same time with
50.9% of the organic fraction of the waste being
diverted to the compost plant, the environmental
effects of dumpsites are also restricted (UNEP
2010).
The total emissions under the baseline scenario include emissions from the open dumping
of MSW. The emissions from the decentralized
compost business scenario include emissions
from composting of MSW, emissions from
transportation of inorganic fractions and transportation of compost to end users. The study
focuses on GHG emissions and other emissions
such as ammonia (NH 3 ) from composting are not
included in this study as it is assumed that the
plants would use proper turning of compost piles,
which would reduce NH 3 emissions (Aye and
Widjaya 2006). The compost is sold to farmers
about 20 km from the plants. It is assumed that
the compost is to be used as complementary
input to other inorganic fertilizers and thus no
inorganic fertilizer is assumed to be replaced by
the compost. Moreover, emissions associated
with machines or equipment used in the compost
business are excluded from the scope of this
study.
The estimation of environmental emission
was based on a number of studies (Shafie et al.
2014; Ruiz et al. 2013; Aye and Widjaya 2006).
The GHG emissions avoided as a result of
diverting MSW to composting are measured in
terms of the avoided tons of CO 2 per ton of
incoming waste (Table 3). The avoided emission
from the open dumping of MSW is assumed to
be 0.47 ton/ton of input while during composting, GHG emissions of 0.32 ton/ton of organic
fraction of MSW is assumed. Under the alternative scenario, a truck with a maximum capacity
of 15 tons is assumed to be used to transport the
inorganic fraction of the MSW and the final
32
S. Gebrezgabher et al.