High costs, unclear rules stall waste-to-energy growth, says business group report

MANILA, Philippines — Despite growing momentum for waste-to-energy (WTE) projects in the Philippines, high project costs, regulatory uncertainty, and insufficient waste supply remain major roadblocks to the sector’s development, the Makati Business Club (MBC) said in a policy note released on June 24.

For years, WTE—which involves converting waste into electricity or heat—has sparked debate among environmentalists, policymakers, and local communities across the country.

In its policy note titled “Waste-to-Energy Momentum Builds in the Philippines,” MBC emphasized that government agencies and private stakeholders recognize the urgent need to address these persistent barriers.

The findings stemmed from a public-private sector roundtable held by the business group in May, involving representatives from key agencies such as the Department of Energy (DOE), Department of Environment and Natural Resources (DENR), and Department of Interior and Local Government (DILG), alongside private WTE developers and waste service providers.

They acknowledged that while interest in WTE is rising, the technology remains significantly more expensive compared to traditional landfill disposal. According to the policy note, many local government units (LGUs) still favor landfills because dumping fees often fail to reflect long-term environmental costs, making landfills appear cheaper upfront.

“[T]he fees paid to dump waste often do not reflect the full cost over time. These fees usually cover only the immediate expense and not the added costs of hauling waste long distances, managing landfill sites, or dealing with environmental effects later on,” the policy note stressed.

Participants in the discussion noted that clearly understanding these hidden or long-term costs could help identify scenarios where WTE projects may become more economically viable.

Clearer policies needed

Regulatory clarity also emerged as a critical issue, with the private sector calling for clearer, consistent guidelines from national agencies to better coordinate with local governments. Participants stressed that aligning policy, planning, and investment across different levels of government is crucial to making WTE initiatives viable.

“Strong leadership, clear institutional roles, and better alignment across agencies and LGUs will be important,” the policy note said.

“A system-wide view of procurement, infrastructure, and governance can help reduce risks and improve project outcomes,” it added.

Participants also highlighted the need for a fundamental shift in how WTE is viewed in policy and investment discussions. According to the policy note, WTE must be recognized not only as a waste disposal solution but also as a critical component of the country’s energy infrastructure.

The report explained that since much of the cost of WTE comes from handling and processing waste, ensuring fair and predictable pricing for electricity generated by these plants is essential to improving their financial feasibility.

Pooling waste, boosting viability

Another significant barrier identified was the challenge of ensuring WTE plants consistently receive enough waste to operate efficiently. Since most LGUs do not individually generate sufficient waste volumes, regional cooperation, including clustering municipalities to pool waste resources, was recommended.

To address these issues, the DOE plans to include WTE and biomass projects in its next renewable energy auction scheduled for the fourth quarter of 2025.

Recent policy updates have also clarified that WTE projects may qualify for incentives under the Renewable Energy Law, even when the waste used is not primarily organic—potentially increasing the financial viability of future projects.

The roundtable concluded with stakeholders committing to continued dialogue and cooperation. MBC said it will release a more detailed policy brief in the coming weeks, outlining additional recommendations for both public and private sector stakeholders.

 

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(2025/07/07-11:36)