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A closer look at the burning question

Thermal waste-to-energy involves converting residual waste into electricity, typically through direct combustion or high temperature gasification. It promises to put rubbish to good use – reducing greenhouse gas emissions by diverting waste from landfill and offsetting electricity generation from the grid. However the reality is not that simple.

The analysis of thermal waste-to-energy emissions is often assumption driven, and fails to accurately account for extensive energy capture at modern landfills and major changes already underway in the waste and electricity sectors. Well intentioned policy, supported by inaccurate analysis, risks unneccesarily locking in high emissions in the waste sector for decades to come.

In this bulletin, we explore the drivers of waste to energy emissions and consider how the trade offs between landfill energy and thermal waste-to-energy will likely change over the next ten years.

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Thermal waste‑to‑energy is the process of converting rubbish into electricity, typically through direct combustion. It promises to reduce emissions by killing two birds with one stone – diverting waste from landfill and offsetting high emissions electricity generated in the grid.

Several large waste‑to‑energy projects have been supported recently, partially based on their promised emissions reductions.

Unfortunately, it isn’t that simple. Frontier Economics recently investigated the potential emissions from thermal waste‑to‑energy, looking closely at two recently approved projects in Western Australia and Victoria. We found that the analysis of thermal waste‑to‑energy emissions often depends on three faulty assumptions:

  1. That waste‑to‑energy will forever offset electricity produced by the highest emissions alternative – either black or brown coal
  2. That the alternative to thermal waste‑to‑energy is to dispose waste in a landfill with poor gas capture and zero energy recovery
  3. That the composition of waste won’t change over time, despite plans for widespread introduction of green waste diversion.

These assumptions aren’t true today, and will become even less accurate over time.

We found that thermal waste-to-energy risks locking in unnecessarily high emissions for the long‑term despite changes in the electricity and waste sectors that should make emissions reductions possible. Well intentioned policy, supported by faulty analysis, can easily lead to poor environmental outcomes.

For an overview and to see the key findings, read our bulletin: Emissions from landfill and thermal waste-to-energy.

Read the full report:  Assessing emissions from waste to energy.

Frontier Economics economists Alexandra Humphrey Cifuentes and Rosemary Jones presented a paper at OzWater21 on 5 May 2021. Decision making in the urban water sector is subject to an increasing number of challenges. "Flexible planning for an uncertain future: Applying adaptive pathways thinking to the water sector" presents an approach which values flexible decision-making.

Key points from the paper include:

Ensuring secure, reliable & cost-effective management of the water cycle is critical to support economic growth & to meet community’s growing expectations for liveable & healthy environments.

Urban population growth, climate change and interdependencies between infrastructure systems are placing significant pressure on ageing water-related infrastructure, and the health of our waterways, environment, and people. However, their impact and the appropriate policy, regulatory and investment response is uncertain.

In this context, a challenge for decision-makers is to identify resilient and flexible decision-making pathways, which are well placed to respond to uncertainty and change. Economic tools and techniques such as adaptive pathways (or real options) analysis builds on cost benefit analysis to value this flexibility, by modelling costs and benefits of responding (or not responding) to new information in future. Decision-makers can then compare the value of flexibility to the cost of the investment, and more importantly, accurately compare the costs and benefits of different options. This is extremely valuable information when making critical decisions about significant infrastructure investments.

While engineering and planning expertise in adaptive infrastructure already exists across the sector, robust approaches to placing an economic value on that flexibility and using economic analysis to explore maximum value infrastructure pathways under uncertainty is an underutilised decision-making tool.


The Federal Court has declared by consent that Tasmanian Ports Corporation Pty Ltd (TasPorts) had breached section 46 of the Competition and Consumer Act by imposing a new port access charge on one of its customers, Grange Resources Ltd, after Grange notified TasPorts that it was going to switch to Engage Marine Tasmania Pty Ltd, a new provider of towage and pilotage services.

TasPorts is a corporation wholly owned by the State of Tasmania. It owns and operates the majority of ports in Tasmania and performs a range of port and marine operations at ports around Tasmania. Before Engage Marine entered the market, TasPorts was the sole supplier of pilotage and towage services at all major ports in Tasmania. TasPorts does not own Port Latta; it is owned by Grange, which operates the Savage River iron ore mine and exports iron ore from Port Latta in northern Tasmania. Grange was dissatisfied with the quality of service and the prices charged by TasPorts for towage and pilotage services; and it decided to purchase these services from Engage. TasPorts responded by imposing new port access charges on Grange.

The Australian Competition and Consumer Commission (ACCC) retained Frontier Economics to advise on the economic issues of the case. The ACCC lodged the expert testimony of Philip Williams of Frontier Economics (and a Statement in Reply to the testimony lodged by TasPorts) with the Court.