Cape Town has successfully auctioned R36 million in carbon credits – a result of its innovative waste-to-energy projects aimed at reducing greenhouse gas emissions at landfill sites.

The funds from the auction will be ring-fenced for urban waste management projects that aim to further reduce pollution and enhance environmental health, according to a statement from the city. This development follows the city council’s decision to auction carbon credits, capitalising on high demand for credits in the South African market. Demand currently exceeds supply by approximately 3,4 times.

Carbon credits are awarded for each tonne of greenhouse gas destroyed through city projects registered with the United Nations-approved Clean Development Mechanism. Cape Town has implemented gas extraction infrastructure at the Bellville, Coastal Park and Vissershok landfill sites to capture methane emissions, which have a global warming potential about 25 times greater than carbon dioxide.

“Perforated pipes or ‘wells’ are drilled into the landfill sites to extract methane gas. This gas is then collected and used as fuel to produce electricity, which powers our operations at these landfills,” explains Alderman Grant Twigg, a member of the Mayoral Committee for Urban Waste Management.

This method reduces harmful methane emissions while providing a renewable energy source for the city’s operations, he says.

Mayor Geordin Hill-Lewis welcomed the R36 million return from the city’s first carbon credit auction, noting that Cape Town is “just getting started” in scaling its waste-to-energy initiatives. “These projects are win-win scenarios; they reduce emissions, generate electricity and bring in revenue from carbon credit sales, which can be reinvested into further infrastructure improvements,” Hill-Lewis said.

He added that around 40% of Cape Town’s R120 billion 10-year infrastructure pipeline is dedicated to increasing the city’s resilience to climate change. This includes significant investments in water and sanitation as well as waste management improvements.

For the fiscal year 2024/25, about 75% (R9 billion) of Cape Town’s R12 billion infrastructure budget is allocated to projects that will directly benefit lower-income households and communities. “We expect our landfill waste-to-energy initiatives to pay for themselves in time between the sale of carbon credits and a reduction in bulk electricity purchases from Eskom,” Hill-Lewis said.