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Methane Recovery Facility in Payatas: A Partnership between the Quezon City

Government and Pangea Green Energy, Inc.

Research · May 2017

DOI: 10.13140/RG.2.2.34079.36004

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 Methane Recovery Facility in Payatas:
A Partnership between the Quezon City Government and Pangea Green Energy, Inc.

Quezon City: At A Glance

Quezon City is one of the cities and municipalities

comprising the Metropolitan Manila. Largest
among others, Quezon City has a total land area of
16,112.8 hectares with a total population of 2.68
Million. It is host to more than 60,000 business
establishments, 61 hospitals and 60 health centers,
578 public and private schools, 231 community
parks and 4 major parks, 84 public and private
markets and 3 slaughterhouses.

With these figures, the City accounts for 20% to 25% of the estimated 80 Million tons of
municipal solid waste produced in Metro Manila. It actually generates 1,768 tons of
waste per day or 0.66 kg/cap/day. Almost half of which are biodegradable, 39% are
recyclables and the remaining are the residual wastes. These volume of garbage are
transported to the major solid waste repository of Quezon City - - - Payatas.

Payatas: A Closer Look

Payatas is located in the northeast portion of Quezon City. It is bounded by the La Mesa
Reservoir, Bagong Silangan, Commonwealth and Batasan Hills.

Payatas has been known as the solid waste dumpsite in Quezon City. Before, it is a
garbage disposal site open to all; but due to the 2000 Payatas tragedy, it is now catering
only to its mother city’s use.

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 Methane Recovery Facility in Payatas:
A Partnership between the Quezon City Government and Pangea Green Energy, Inc.

The Payatas dumpsite is divided into two sites – the old and the new. The 11-hectare
“old site” started operating in 1973 but was closed due to the ten-year old trash slide
incident. Currently, it is the 9.7-hectare “new site” which serves as the active disposal
facility of the City.

The PAYATAS Dumpsite: NEW SITE

Area: 9.70 hectare
Waste Intake: 7,000 cum./day
Average Wt.: 1,402 TPD
Per Capita Generation: 0.550kg/P/D
Waste Density: 210 kg./Cum.
Ave. Daily Truck Trips: 500 trips/day

Figure 1: Locational Map of Payatas Figure 2: Payatas “New Site” Profile

Payatas Then: A Glimpse from the Past

Payatas residents had been a victim of a disastrous incident that had killed 300 people.
It was in July 10, 2000 when the wastes that were stacked up to 50 feet high came
crashing down on the houses and shanties of residents, mostly scavengers, situated near
the actual garbage mountains. To make the situation worse, the methane gas emanating
from the huge pile caused instantaneous combustion and fire, inflicting burns and
inhalation problems. The dumpsite was momentarily closed, but was soon reopened

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 Methane Recovery Facility in Payatas:
A Partnership between the Quezon City Government and Pangea Green Energy, Inc.

due to the lack of alternatives for a waste disposal area in the National Capital Region. It
was then limited to the use of Quezon City.

To further ensure that the so-called Payatas tragedy be avoided, the City Government
created the Payatas Operations Group in November 2000 through an Administrative
Order to manage, operate, and secure the entire dumpsite.

Just in time, the Republic Act 9003, or the Ecological Solid Waste Management Act of
2000, was passed a year after. However, it was only in 2004 when the City complied
with the RA 9003 requirements to convert the open dumpsite into a controlled disposal
facility.

In May 2006, in compliance with the

Authority to Close issued by the
Department of Environment and Natural
Resources, the initial conversion efforts were
inputted in the components of the final
closure plan of the dumpsite.
Figure 3: Timeline of Payatas Events

These occurrences in Payatas paved the way for the Quezon City Government to
embark on the Payatas Landfill Transformation Program.

The Payatas Landfill Transformation Program: A Component of the City’s

Comprehensive Development Plan

The Quezon City Comprehensive Land Use Plan (CLUP) recognizes the compelling
need to prioritize, among others, the conversion of the Payatas dumpsite into a more

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 Methane Recovery Facility in Payatas:
A Partnership between the Quezon City Government and Pangea Green Energy, Inc.

environmentally sustainable disposal site due to its possible negative impacts to its
residents and the adjacent La Mesa Dam, to wit:

“Being an unsanitary open dump, the Payatas dumpsite is a critically

confronting issues as it poses danger not only to the residents in the vicinity but
to the immediate-lying La Mesa Dam which is the depository of domestic water
for Metro Manila. If only for public health considerations alone, there is
compelling reason to convert the present dumpsite into other environment-
friendly solid waste disposal system that can address both the garbage and
environment problems as well as the socio-economic needs of the residents in the
area.”

This and the City’s determination to avoid the recurrence of the 2000 Payatas Tragedy,
the Quezon City Government identified, in its Comprehensive Development Plan, the
Payatas Dumpsite Improvement Program as one of the development strategies under
the Environmental Management Sector, specifically for addressing the issues of the
City’s solid waste management.

This is further reflected in the Zoning Map of Quezon City, wherein the Payatas
dumpsite area is identified as a special development zone.

• Corsame • Ramos • Tumamao-Guittap | 4

 Methane Recovery Facility in Payatas:
A Partnership between the Quezon City Government and Pangea Green Energy, Inc.

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Quezon City’s CLUP and CDP thus provided the framework for the realization of the
Payatas Landfill Transformation Program.

Methane Recovery in Payatas: The Biogas Emission Reduction Project

Under the Payatas Landfill Transformation Program, there are several projects
identified and were already being implemented, at present. These include the Methane
Recovery Project, or technically known as the Biogas Emission Reduction Project.

• Corsame • Ramos • Tumamao-Guittap | 5

 Methane Recovery Facility in Payatas:
A Partnership between the Quezon City Government and Pangea Green Energy, Inc.

The Biogas Emission Reduction Project of Quezon City is the first registered Clean
Development Mechanism (CDM) initiative under the The Kyoto Protocol is an
Kyoto Protocol of the United Nations Framework international agreement that sets
binding targets for 37 industrialized
Convention on Climate Change in solid waste countries and the European
community for reducing greenhouse
management, not only in the Philippines but in
gas (GHG) emissions. These
Southeast Asia as well. amount to an average of five percent
against 1990 levels over the five-year
period 2008-2012.
Basically, it involves the extraction, collection, flaring Source: United Nations Framework
and conversion to energy of biogas from the dumpsite. Convention on Climate Change

Institutional Framework
The Quezon City Biogas Emission Reduction Project, as abovementioned, is an initiative
supported by the UN Framework Convention on Climate Change (UNFCCC), which
encourages the industrialized countries to stabilize their greenhouse gas (GHG)
emissions. This encouragement effort of the UNFCCC has translated into a more
concrete commitment called the Kyoto Protocol.

In the local level, this Project is greatly supported by the Ecological Solid Waste
Management Act of 2000, or Republic Act 9003, not to mention the mandates by the
Philippine Constitution of 1987 and the Local Government Code of 1991.

RA 9003 emphasizes the necessity for adopting an integrated environmentally-friendly

national framework for solid waste management. It gives provisions for institutional
mechanisms, comprehensive and sustainable waste management targets for the local
government units, as well as penal measures.

• Corsame • Ramos • Tumamao-Guittap | 6

 Methane Recovery Facility in Payatas:
A Partnership between the Quezon City Government and Pangea Green Energy, Inc.

With the conscious effort of complying with the requirements of RA 9003, Quezon City
has been awarded by the Department of the Environment and Natural Resources for the
promising positive impact of this Project.

Another important legal framework relevant to this Project is the Philippine Clean Air Act
of 1999, or Republic Act 8749.

RA 8749 describes the requirements for a comprehensive air pollution control and
management program. Related provisions to the Biogas Emission Reduction Project
include Section 11, which is about the Air Quality Control Techniques; Section 20, which
is about the Ban on Incineration; and Section 31, which is about the Greenhouse Gases.

Aside from RA 9003 and RA 8749, other relevant legislations that stand as the
institutional frameworks of the Biogas Emission Reduction Project are Republic Act 6969
(Toxic Substance and Hazardous Waste Act) and Presidential Decree 856 (Code of Sanitation)
for waste management; Presidential Decree 984 (Pollution Control Law) and the Republic
Act 9275 (Clean Water Act) for pollution control; Presidential Decree 1151, 1152 and 1586
(Philippine Environmental Policy, Philippine Environmental Code, Environmental Impact
Assessment Framework respectively) for the environmental laws.

The Agreement
On February 14, 2007, the Quezon City Government signed a 10-year period
Memorandum of Agreement with an Italian company along with its Philippine
counterpart, which is the Pangea Green Energy, Inc.

Generally, the MOA provides for the full autonomy of Pangea in carrying out its
functions to achieve the following Project objectives:

• Corsame • Ramos • Tumamao-Guittap | 7

 Methane Recovery Facility in Payatas:
A Partnership between the Quezon City Government and Pangea Green Energy, Inc.

 Address the environment, health and safety concerns of the local government of
Quezon City for its constituents, particularly those residing in the immediate
surroundings of the Facility.
 Promote the application of appropriate
technology and know-how for the
extraction, collection and processing of
biogas from solid urban wastes
 Demonstrate its environmental, social
and economic benefits.

In order to facilitate the project, the MOA clearly determine the roles of the Quezon City
Government and the Pangea, as follows:

LOCAL GOVERNMENT OF QUEZON CITY

 Control and jurisdiction over the project site
 Management of Quezon City Controlled Disposal Facility through the Payatas
Operations Group
 Governing body with authority over the operation of the Quezon City Controlled
Disposal Facility through their agreement with IPM Environmental Services Inc.

PANGEA GREEN ENERGY

 Project Development
 Feasibility Study
 Local Authorization
 Registration as a CMD Project
 Implementation
 Design and Construction
 Testing and Commissioning

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 Methane Recovery Facility in Payatas:
A Partnership between the Quezon City Government and Pangea Green Energy, Inc.

 Operation and Maintenance

 Financing
 100 percent of the Project Cost

The Operational Structure

As the representative of the Quezon City Government, the Payatas Operations Group
acts as the overall regulatory body that oversees the operations of partner private
entities, such as the IPM Environmental Services for site rehabilitation and
development; Pangea Green Energy, Inc. for the Biogas Emission Reduction Project;
Holcim Philippines, Inc. for the Used Tire Retrieval Project and Co-Processing of
Residual Plastics; DOST-ITDI for the pilot testing of the Plastic Densifier Technology;
and the Recycler’s Association for the recovery of the recyclable materials.

Figure 5: Operational Structure

• Corsame • Ramos • Tumamao-Guittap | 9

 Methane Recovery Facility in Payatas:
A Partnership between the Quezon City Government and Pangea Green Energy, Inc.

The Project Technical Description

The project is planned to be executed in two phases.

During first Phase, the combustion plant will be composed of a biogas extraction system
(wells and blower), a high-temperature torch for flaring the methane extracted and an
electrical engine for on-site power supply. The electrical engine will be fed by biogas
during plant operation (about 8,000 hours/year). An electrical connection to the local
grid will be provided in order to supply electricity requirement of the plant during
engine maintenance and start-up operations.

On the Second Phase which will begin on the third year, depending on the actual
availability of biogas and the financial and technical viability, Pangea will install a
bigger biogas electrical engine (about 700 kW) for the conversion of a portion of the
methane recovered to electricity that will be delivered to the local grid.

Figure 6: Process Flow Diagram of the Project

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 Methane Recovery Facility in Payatas:
A Partnership between the Quezon City Government and Pangea Green Energy, Inc.

The project area has a total of 66 wells each with its own monitoring equipment that
measures the amount of gas ready for harvest within its area. These are spaced at
approximately forty meters apart in both the old and new mounds. Each well is
connected to one of four controlling substations. Each substation conveys biogas from
each well into main lines up to the extraction plant. Before the biogas is received by the
electricity generator, the biogas collected passes through a heat exchanger and
condensate trap to remove remaining moisture. The extractor fan allows flow of biogas
to the high temperature flare and the electricity generator. Biogas is then combined
with oxygen and burned by the electric generator to produce power. The remaining
amount of biogas that is not consumed in the production of power is flared and released
into the air as carbon dioxide instead of methane.

Project Benefits
 Environmental Benefits
Environment Quality
Improvement
Energy Efficiency
Benefit Qualitative/ Quantitative
Value
Elimination or reduction of
explosion or fire hazards
Reduction of damage to
existing vegetation and
acceleration of re-use of land
Reduction of odor and
groundwater pollution
Improvement on the stability
of dumpsite through removal
of voids and perched water /
leachate.
Reduction of greenhouse gas Estimated emission
emissions reduction of 110,000 tonnes
CO2e per year
Production of energy from a Minimum average of 4,200
renewable source MWh per year

Reduction of greenhouse Displacement of grid

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 Methane Recovery Facility in Payatas:
A Partnership between the Quezon City Government and Pangea Green Energy, Inc.

gases from traditional sources electricity (CEF = 0.46

tCO2e/MWh)

 Benefit to the Community

Benefit
Supply of free electricity
Community-based development
Qualitative/ Quantitative Value
- Plantsahan ng Bayan Project
- Perimeter lights of the dumpsite
- Streetlamps along Visayas Avenue Extension
and Zamboanga Street in Brgy. Payatas
- Generation of employment; prioritization of
Payatas residents in the hiring process
- Capacity building of local stakeholders thru
education and training; socio-civil
responsibility

 Financial Benefits
o Donation of Proceeds from Emission Trading
The company earns emission reduction credits which can be sold to countries
that committed to reduce their greenhouse gas emissions through Emission
Trading, one of the three market-based mechanisms of the Kyoto Protocol. As set
out in Article 17 of the Kyoto Protocol, this allows countries that have emission
units to spare - emissions permitted them but not "used" - to sell this excess
capacity to countries that are over their targets.
Thus, a new commodity was created in the form of emission reductions or
removals. Since carbon dioxide is the principal greenhouse gas, people speak
simply of trading in carbon. Carbon is now tracked and traded like any other
commodity. This is known as the "carbon market."

The CER’s (Carbon Emission Reduction) units generated by the facility are
traded in the international market after these were certified and validated by a
third party consultant. The local government unit hosting the facility is given a
donation from the proceeds of the sales expressed in percentage in direct
proportion to the price per unit of CER.

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 Methane Recovery Facility in Payatas:
A Partnership between the Quezon City Government and Pangea Green Energy, Inc.

CER Price Range Donation to Quezon

(In Euro per Tonne) City (in percentage)

6.00 – 7.00 15
7.01 – 8.00 16
8.01 – 9.00 17
9.01 – 11.00 19
11.01 – 13.00 21
13.01 – 15.00 23
15.01 – 17.00 25
17.01 – 20.00 28
20.01 - up 32

Figure 7: Percentage of CER Donation to Quezon City

o Investment shouldered by foreign company

Clean Development Mechanism allows a country with an emission-reduction or
emission-limitation commitment under the Kyoto Protocol (Annex B Party) to
implement an emission-reduction project in developing countries. Such projects
can earn saleable certified emission reduction (CER) credits, each equivalent to
one tonne of CO2, which can be counted towards meeting Kyoto targets. The
mechanism stimulates sustainable development and emission reductions, while
giving industrialized countries some flexibility in how they meet their emission
reduction or limitation targets.

This project is a product of the above mentioned mechanism. Pangea Green

Energy is a company based in Italy; an industrialized country party to the Kyoto
Protocol. Since the investment is shouldered by the foreign company, the local
government does not have to divert any of its funds to cover the cost of the
project. This allows developing nations such as the Philippines to acquire
technology without the financial burden that would otherwise limit access and
utilization to more progressive nations.

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 Methane Recovery Facility in Payatas:
A Partnership between the Quezon City Government and Pangea Green Energy, Inc.

Payatas Project Magnified: The Public-Private Partnership (PPP)

Public Good Defined

What is your understanding

For residents in the vicinity of Payatas dump site, their
of public good? public health and safety is one good example of a public
Public goods are products and good. The main dumpsite hosts thousands of Filipino
services, consumption of
which are collectively families who consider it their home, where they work
enjoyed by the public. It is
non-divisible and non- and live. In July 2000, their safeties were greatly
discriminatory. The
undermined by a tragic slope failure which resulted to a
government being the
representative body of its severe garbage slide that killed close to 300 people.
citizens and the public,
production of such goods is
headlined by them.
The local government
of Quezon City in particular, improved the stability of
the dumpsite through reshaping of slope and
improvement of drainage system in the area. This
shows one effort of the government to safeguard
health and safety of the public.

Another example of a public good is clean air. Payatas dumpsite, being a mountain of
biologically decomposing matter that gives off huge volume of biogas, is an alive
catastrophe that slowly poisons the people in its vicinity. Methane, being the largest
emission to the atmosphere, is, as well, the most poisonous among the biogas. To
mitigate its effect, the local government of Quezon City tapped Pangea Green Energy to
extract, collect, flare and convert methane energy from the dumpsite.

Still in relation to clean air, and to further illustrate non-divisibility and non-
discriminatory of a public good, arises the market-based mechanism of the Kyoto
Protocol. This is one instrument used to control air pollution by setting pollutant

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 Methane Recovery Facility in Payatas:
A Partnership between the Quezon City Government and Pangea Green Energy, Inc.

emission limit allowed for a country. Highly industrialized countries on the other hand,
are permitted to buy emission reduction credits (ERC) or finance environmental projects
that reduce greenhouse gases emissions in other countries. The credits gained can be
used to meet the emission limit set for them. To generalize the concept, reduction of air
pollution may not be happening in some parts of the world but practiced in some less
industrialized countries is still applicable for the purpose because these countries, may
it be first or third world, belong to one earth and shares one atmosphere.

The project undertaken by Pangea at the Payatas dumpsite involves vacuuming of

methane gas and processing it to power an electric power generator. Phase 1 of the
project produces 200 kW and Phase 2 is
projected to produce 700 kW power.
The project being at its first stage,
produces electricity as its by-product
only. Thus, at present, electricity can be
considered also as a public good since it
is collectively enjoyed by the Payatas
residents through lights provided along
perimeter of the dumpsite and street lamps along Visayas Ave. Ext. and Zamboanga St.,
Payatas. Free electricity is also enjoyed by everyone through the Plantsahan ng Bayan
Project, where a certain location in the Payatas area is supplied with free electricity for
everyone’s use.

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 Methane Recovery Facility in Payatas:
A Partnership between the Quezon City Government and Pangea Green Energy, Inc.

Private Goods Defined

What are private goods? The most common form of private good in a public-private

Private goods are produced

partnership such as the case study presented above is the
by private entities, which technology, in this case is the facility that converts waste
have direct control over their
operation and production. into methane, as provided by Pangea. Since the

Normally, such undertakings government cannot provide such an expensive technology,

would result to
profitability to its owner. as well as the technical expertise in operating such, a
private entity came into the picture.

Figure 8: Technologies Used by Pangea Green Energy, Inc.

As discussed, Kyoto Protocol is a market-based mechanism to reduce emissions of

greenhouse gases as agreed by most developed nations. For the Methane Extraction
Project of Payatas, Pangea Green Energy conducted the feasibility study during its
planning stage. They were, as well, responsible for the design, construction,
commissioning and operation of the Biogas Plant.

Aside from this private entity providing the technology and the financing for the whole
project, the main product of Pangea Green Energy from methane extraction, which can

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 Methane Recovery Facility in Payatas:
A Partnership between the Quezon City Government and Pangea Green Energy, Inc.

be considered as a private good, is Emission Reduction Credits (ERC). The private good
owner profits from this project through the ERC which they sell to highly industrialized
countries committed to reduce their greenhouse gas emissions.

Figure 9: UNFCCC Matrix of CER Issuances

Public Goods treated as Private Goods

In the realm of planning for the public sector in the Philippines, public-private
partnership has emerged as the framework for accelerating infrastructure development,
usually accompanied by technological advancement. In this setup, the private sector
provides for the public infrastructure, which normally calls for proper sharing of project
cost.

Often, public goods are treated as private when the government cannot finance such
causes or due to lack of resources such as funds, technical know-how and machinery.

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 Methane Recovery Facility in Payatas:
A Partnership between the Quezon City Government and Pangea Green Energy, Inc.

One concrete example for this Public-Private Partnership (PPP), as was already
explained in the abovementioned discussions, is the Methane Recovery Facility in
Payatas, or the Quezon City Biogas Emission Reduction Project.

Comments and Suggestions

In an interview with a Pangea representative, it was learned that only 20% of the
methane extracted from the dumpsite were used to fuel the electricity generator. The
remaining 80% were flared and converted to carbon dioxide. This is because of the
generator capacity of 200kW that limits the plant operation. Given that methane is an
effective fuel to generate electricity, flaring 80% of it is a great waste of resource which
might only increase the carbon dioxide pollutant in the vicinity of Payatas dumpsite.

In line with this, it is therefore important for the government to pass regulations in
order to monitor and evaluate how the private entities operate biogas plants. The
government should further understand the technology, through seminars and crash
courses, in order to have criteria during evaluation of procedures and overall operation
of a biogas plant. In return, they can thoroughly peruse contracts executed between
public and private entities and make sure all important factors are considered and the
public good is safeguarded.

Conclusion

The local government of Quezon City pioneered and become successful in the
conversion of Payatas dumpsite into a controlled waste disposal facility. As shown in its
success in terms of timeliness, effectiveness and support garnered from various
stakeholders of the project, its replication to other existing sanitary landfills is
POSSIBLE.

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 Methane Recovery Facility in Payatas:
A Partnership between the Quezon City Government and Pangea Green Energy, Inc.

Based on the success story of the Payatas dumpsite, it is best to recognize that the
implementation of projects like this requires multi-disciplinary and multi-sectoral
efforts. In this endeavor, all stakeholders - from public agencies, people’s organizations,
academe and the private sectors - were consulted and made involved with the project.
This project just shows that each entity is linked and that each one should work together
for its success.

“May Pera sa Basura…”

• Corsame • Ramos • Tumamao-Guittap | 19

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