New energy from waste capacity is eligible to generate carbon offsets based on a Clean Development Mechanism offset methodology through the Verified Carbon Standard (VCS). To date, two facilities in North America have progressed through the carbon offset generation process, successfully validating and verifying their projects in accordance with the standard. The Lee County facility began generating carbon offsets with the 2007 emissions year, and the Hillsborough County facility has verified carbon offsets beginning with the 2009 emissions year. The credits are associated with the avoidance of landfill methane and displaced grid-connected fossil fuel electricity generation. Due to extensive conservatism on the part of the CDM methodology, approximately 0.15–0.3 tons of credits are generated per ton of waste processed, depending on the specific operation generating the offsets. This is in contrast to an overall net lifecycle greenhouse gas reduction of approximately 1 ton of carbon dioxide equivalents (CO 2 e) per ton of waste processed relative to the business as usual practice of landfilling. More realistic methodologies could generate offset credits at a rate approaching the life cycle benefits. However, even with the current methodology, the energy from waste carbon market could exceed 800 thousand metric tonnes per year, with a value of $1.6–$3 million a year, based on current voluntary carbon offset pricing.

A carbon offset program is likely to be part of any future federal cap-and-trade program and is included in both the U.S. House of Representatives passed American Clean Energy and Security Act of 2009 and the Kerry-Boxer Senate draft greenhouse gas legislation. Internationally, Energy-from-Waste (EfW) facilities in emerging economies are eligible for carbon offset credits under the Clean Development Mechanism of the Kyoto Protocol. These carbon offset credits can be purchased by developed countries, such as those in Western Europe, to help comply with their obligations under the Kyoto Protocol. Although a similar mandatory market does not yet exist in the United States, there is a growing voluntary market in carbon offsets and a set of standards designed to provide some order to this market. One of the key players in the voluntary market is the Voluntary Carbon Standard (VCS). Project types, such as EfW, that are eligible for credits under the Clean Development Mechanism are also eligible to generate voluntary carbon credits under the VCS. This paper reviews the current methodology for calculating offsets from EfW projects. The current methodology is very conservative, severely restricts the accounting for avoided landfill methane, and significantly underestimates greenhouse gas savings relative to life cycle assessments performed on waste management practices. The current methodology for offsets is compared and contrasted with a more realistic methodology more in line with life cycle assessment calculations. A review of the potential for EfW offsets under evolving state and federal programs and precedents for offsets generated based on avoided landfill methane is also completed.