Kevin Johnson and Eric Martin Discuss Impact of COVID-19 on Waste-to-Energy Industry

Natural resource attorneys Kevin Johnson and Eric Martin contributed an  article to the Bloomberg Law Environment & Energy Report titled “INSIGHT: Waste-to-Energy Projects Not Immune From Covid-19,” published April 6, 2020. In the article, the authors discuss the disruptions that are likely to occur in the waste-to-energy (WTE) industry due to the COVID–19 pandemic.

WTE facilities include municipal waste combustors, anaerobic digestion facilities, which produce renewable natural gas (RNG) from various types of organic waste, and landfills that produce electricity from the methane they generate. RNG production from organic waste, landfills and other sources has increased about 30 percent annually over the last few years.

State and/or local government “stay at home” or shut-down orders may present obstacles for developers of RNG-focused WTE projects contractually obligated to meet construction or development schedules often found in feedstock and offtake agreements.

For operating WTE facilities, their supply of feedstock in the form of municipal solid waste (MSW) will be affected, as some 60% or more of MSW is generated from waste from offices, restaurants, bars, shops, and certain manufacturing facilities and other enterprises that are shut down.

Many WTE facilities facing issues described above may soon be examining their energy offtake agreements to see if they offer any leeway for not satisfying those obligations as well as assessing the ability of their waste suppliers to do the same in making timely feedstock deliveries.

The authors conclude: “In any event, it will be important for WTE facilities to be in frequent and clear communication with their feedstock suppliers and energy off-takers to mitigate the effects of the Covid-19 pandemic on their operations and to maintain good relationships with their contracting partners going forward.”