Adianto P. Simamora, The Jakarta Post, Jakarta
The Bekasi municipality is hoping to generate funds through the trade of carbon by offering the ten-hectare Sumur Batu sanitary landfill site in Bantar Gebang to investors.
The head of the city's environmental agency, Dudi Setiabudi, said the Sumur Batu landfill currently handles 1,600 cubic meters of solid waste per day and produces 66,000 tons of carbon dioxide (CO2) annually.
"We are now in the process of tendering the project to investors who are interested in developing it as a Clean Development Mechanism (CDM) project," Dudi said.
Dudi visited the office of the Designated National Authority (DNA) on Wednesday to discuss the planned project, which will destroy methane gas generated at the landfill.
The DNA is a government body tasked with approving local DNA projects before they are submitted to the United Nation's Executive Board which has the final say on whether or not projects are viable.
Dudi said that several foreign companies from countries including Korea, Japan and France had expressed interest in the project.
"The initial investment needed to secure the required technology to process methane gas is over Rp 9 billion (approximately US$1 million) so we have to determine the winner through a tendering process," he said.
He said that based on a feasibility study conducted by the World Bank, the project could be extended for up to 21 years.
Dudi said that his administration had prepared all documents required to register the project with the DNA.
"We have discussed the plans with people living in close proximity to the planned project. They welcome the CDM idea because the project will mean landfill is managed better," he said.
The Bekasi administration is expected to register the project with the DNA in June.
The Sumur Batu landfill site, which is located near the 108-hectare Bantar Gebang landfill belonging to the Jakarta administration, is currently operated by the Bekasi Sanitation Agency.
However, Dudi said that residents living near the facility often complain about the poor waste management system which causes air and water pollution.
"We hope private investors can develop a waste management system that may reduce air and water pollution. The CDM project will benefit local people and provide extra income to the administration," he said.
The CDM is in accordance with the Kyoto Protocol, which encourages developing nations, including Indonesia, to develop projects that reduce greenhouse gas emissions.
Developers of projects receive a Certificate of Emission Reduction from the United Nations Executive Board, which specifies the amount of carbon that can be traded to rich nations.
A ton of CO2 reduction is currently valued at between US$5 and $10.
However, many predict that a ton of CO2 reduction may eventually reach up to $30.
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