Note: This blog post was originally published on the MIT Public Service Center website. It’s the tenth post in a blog series sharing findings from a research project I’m working on throughout the month of January.
January 26, 2012
Paul Artiuch and Sam Kornstein are graduate students at the MIT Sloan School of Management. Throughout the month of January they are in India researching market-oriented approaches to reducing agricultural food waste. They will be sharing their project scope and some of their findings in this blog series.
Until now, we’ve spent the majority of our time exploring upstream agricultural supply chains – learning about what happens to food between farms and markets, before it reaches end consumers. Unlike many western countries, Indian consumers waste remarkably little food, as a use is found for nearly all left-overs and food scraps. However, this doesn’t mean that there’s no waste, and Pune, a four million person city three hours southeast of Mumbai, is implementing an innovative initiative to change that.
The other day we spent our morning with Santosh Gondhalekar, an engineer, energy expert, and founder of a bio-energy start-up company, Gangotree Eco Technologies. We had coffee with Mr. Gondhalekar in a garden outside his office, while he enthusiastically described how Pune is on its way to being India’s first waste-free city.
Each day, Pune generates about 1,400 tons of waste – 800 tons of organic waste and 600 tons of dry waste (e.g., paper, plastic, glass, and metals). In addition to the city’s municipal waste collection agency, Pune also has a sizable waste-picking community, with over 2,000 individuals who work full time as part of a cooperative to collect and sort the city’s waste. Nearly all of the dry waste has value so it gets sorted out by the waste pickers before being sold to recycling companies. The organic waste remains, and historically has been placed in a municipal dump.
Just a few years ago, the Pune Municipal Corporation engaged in a number of public-private partnerships to extract value from this organic waste. Here’s how it works: the city puts up the required capital to build bio-digestion facilities that can convert organic waste to electricity. Private companies then operate the facilities, selling the electricity back to the city to be used to power street lights. Excluding the upfront capital costs, the operation is profitable for the private firms. And for the time being, the city is willing to invest the capital, essentially subsidizing the projects, as they reduce the city’s waste burden, lowering the cost of maintaining municipal dump sites.
Currently 10 of these bio-digestion plants are operational, each converting five tons of organic waste to electricity every day. Mr. Gondhalekar took us to one of the sites, where we got to see exactly how the process works.
Each morning, city trucks pick up organic waste, primarily from the city’s hotels, and deliver it to the bio-digestion facilities. The hotels are required by law to pay a fee for this service, which generally covers the transportation costs. Once the waste arrives on site, waste pickers sort it to ensure that it’s 100% organic as other inputs could disrupt the bio-digestion process. The waste, or feedstock, is then chopped up and put into the bio-digester, where bacteria converts it to methane and compost. At the end of the day, the gas is scrubbed to convert it to 99% methane, and then burned in a generator that creates electricity. The compost is given to local farmers.
So far the initiative has been very successful, and there are plans to have 20 additional plants operational by the end of 2012. Pune has 144 city wards, and if each ward had its own bio-digester, the city would be able to extract electricity from all of its organic waste.
Mr. Gondhalekar has been involved with the planning and execution of these projects, and showed his enthusiasm for the initiative’s success. However, his company, Gangotree Eco Technologies, is working a new project he finds even more promising. His plan is to convert municipal organic waste to what he calls green coal.
Green coal has been around for quite some time, and is essentially compressed bio mass that can be burned in place of coal in furnaces and power generators. It’s an effective substitute for coal, and large companies including Cadbury and Coca-Cola have recently converted furnaces in some of their Indian plants to now use 100% green coal. Historically, it’s been made from farm waste – inedible husks and stalks that are left over after harvests.
Gangotree Enterpises has developed a proprietary technology to make green coal from municipal organic waste, the same inputs used in the city’s bio-digesters. This feedstock is easier to acquire than farm waste, and transportation costs are lower since cities are geographically concentrated. And the economics are compelling: the upfront capital costs are half those of a bio-digester, and the green coal pellets can be sold for three times the value of methane. This means that green coal plants should be profitable, even without any capital investment subsidies from the city.
Mr. Gondhalekar told us that his firm’s pilot plant is nearly finished, and Gangotree Eco Technologies is planning to license the technology, using a franchising model, to businesses in the region. Between the bio-digester expansion and Gangotree’s green coal initiative, Mr. Gondhalekar is optimistic that Pune can be a nearly waste-free city, and believes this model could work in many other parts of India as well.
It’s clear, however, that while these types of projects offer promising methods to reduce waste in countries like India, the economics would not work in developed countries. The reason is simple: both the bio-digestion and green coal models rely on cheap labor to collect, sort, and process the organic waste. In developed countries, labor can cost twenty times as much as in India, which would prevent similar initiatives from being economically viable. For now, however, Gangotree Eco Technologies has plenty of work to do in India.