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Cyprus Energy Featured

The fuel no-one wants but the government must sell

The European Commission says the Solid Recovered Fuel the Pentakomo plant produces must find a take within two years

A new waste management scandal is brewing, this time over the waste treatment unit in Pentakomo, in the Limassol district, which is slated to open on October 28.

Just weeks before it opens no buyer has yet been found for the fuel the waste treatment plant will be producing, and it was only last week that the government rushed to launch a tender competition to find a company willing to take it. Finding a buyer is part of the terms of the deal with the European Commission, which co-funds the around €70m project.

A cabinet-appointed committee to investigate why the tenders were not launched earlier and the general terms and conditions of a project – dating back to the Papadopoulos government –  was also sworn in last week.

But even this late-stage investigation is now in jeopardy after auditor-general Odysseas Michaelides entered the fray this week. He has questioned the impartiality of the committee which is headed by Cyprus bar association chief Doros Ioannides who happens to be the brother of current labour minister Zeta Emilianidou.

This is because some cabinet members should be a target of the investigation, Michaelides said – referring to agriculture and interior ministers Nicos Kouyialis and Constantinos Petrides, as well as Petrides’ predecessor Socratis Hasikos.

Michaelides wrote a letter to the attorney-general, advising that the latter, rather than the cabinet, should empanel the investigative committee and define its mandate.

Adding to the pressure is the European Commission which has described the methods the Pentakomo plant will use to produce the fuel as outdated. It is also concerned about the carbon footprint that the Solid Recovered Fuel (SRF) will leave if the government cannot find a local buyer and has to try and export it.

Time is running out. The European Commission will give the government just two years to find a buyer from the day the plant opens.

Agriculture Minister Nicos Kouyialis told the Sunday Mail this week that he was certain the government will be able to find a buyer within the deadline set by the European Commission and avoid any sanctions.

“A way for disposing of the fuel will be found within the two-year period,” Kouyialis told the Sunday Mail, adding that a lot will depend on the quality of fuel.

“Depending on the quality we might even have to pay for it to be taken,” he said.

The construction of the unit was part of government plans to manage municipal waste which dates back to the late Tassos Papadopoulos administration.

The interior ministry was tasked with implementing the creation of waste management units. One has already been constructed in Koshi, Larnaca, and that at Pentakomo was the second. Another, earmarked for Nicosia, was aborted after objections from the finance ministry.

The consultant hired by the then government proposed that a waste management plant based on the mechanical biological treatment (MBT) system was the most suitable for Cyprus. The MBT system combines a sorting facility with a form of biological treatment.

Pentakomo will produce Solid Recovered Fuel (SRF), produced by shredding and dehydrating solid waste such as biodegradable waste, food and kitchen waste, green waste, and paper.

But SRF is a fuel only suitable for heavy industry, and apart from the Vassilikos cement factory, Cyprus has no heavy industry. An initial plan to build a facility near the waste treatment plant to turn the fuel to energy was rejected in 2012 over concerns of its environmental impact.

Solid Recovered Fuel can only be used in heavy industry

In addition to that, the European Commission has in recent years been warning member-states to avoid constructing any more plants based on the MBT system because it is outdated technology.

Despite all of this, the Christofias government decided in 2012 to propose the project to the EC. According to Sunday Mail sources, the Greek company Enviroplan who were the government’s consultants proposed the MBT system. It was a technology in which the German company Herhof – a subsidiary of Helector, the Greek waste-management company – specialised. Helector is currently embroiled in an overcharging scandal concerning the Paphos and Koshi landfills.

But when later in 2012 a group of the Jaspers technical assistance group that assists countries aiming at applying for co-funded projects to the EC, arrived on the island for the first evaluation of the project, they warned that a waste-to-energy unit must be ready by the time the SRF is produced.

Because such a unit had already been rejected, the government then counter proposed seeking a contractor to take in the SRF. They reassured the team of experts a year later when they visited the island again that it would launch a tender to find a taker.

Despite strong reservations expressed by Jaspers, the government insisted that it would be able to sign a contract with a company to take the fuel.

Meanwhile, the EC was pressuring for the tender competition to be announced as soon as possible to make sure that there was market for the fuel, and proposed for a Plan B in case there was no good response from the market.

The government then asked the Vassilikos cement factory whether they were willing to take in the fuel, but the company told them this would depend on the quality of the fuel.

But apparently this wasn’t enough for the EC’s directorate-general for environment. In 2014 it issued a negative opinion on the project stating that it had “some serious concerns about this project and more specifically the production of SRF”.

The directorate general asked the government to take a clear decision on how they are planning to use the produced SRF.

“Is there a market for it in the island? Has the quantity that will be produced been properly calculated, so as to be sure there will be an off-take for it?” the directorate asked.

It also raised concerns over the possibility of the fuel being exported to other countries.

“In such a case the carbon footprint may be significant and outweigh the environmental benefits of the production of SRF.”

It is now 2017, the plant opening is just weeks away and the EC has given Cyprus two years to find a taker.

Yet another headache for the government is the auditor-general’s demand that any investigation must look at the administration’s decision to scrap the original decision to set up a waste treatment plant in Nicosia which made closing the Kotsiatis landfill impossible. The continued operation of Kotsiatis may lead to a fine from the EU to the tune of €30,000 per day since 2013.

Rubbish from Nicosia is deposited at Kotsiatis.

Defending their actions, both Kouyialis and Petrides argued that scrapping the Nicosia plant was actually a money-saver because the problems arising from the Pentakomo facility – no domestic demand for SRF – would simply have doubled.

Kouyialis said another reason for nixing the plant in Nicosia was that the Koshi, Larnaca, waste management facility is under-utilised.

He added that if the Koshi plant were able to operate at full capacity, by also accepting waste from Nicosia, this would render Kotsiatis redundant.

The Koshi facility currently serves the Larnaca and Famagusta districts. It converts waste to compost.


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