How Organic Waste Processing in Bali Helps Build a Viable Circular Economy for Plastic

“By separating organic waste from plastics and other non-organic waste—and effectively processing it—the food chain can be strengthened by enriching soil and biomass. At the same time this helps secure a country's food supply, provide low-cost energy, increase landfill longevity and materially reduce a nation's carbon emissions.”

Did you know that the value of recyclable plastic material that is contaminated by organic waste is reduced by a third or more, depending on the material type and level of contamination?

Few realise just how important it is to find a solution for organic waste and build a gainful plastic recycling economy at the same time.

It also adds complexity to the recycling value chain because the additional step of washing materials is required, which further erodes already thin recycling margins. This cost is passed back to frontline operators and waste pickers, who receive less revenue.

What’s more, organic waste is very moist and heavy. It can make up to 60 to 85 per cent of municipal waste by weight, which puts undue strain on waste collection trucks and other processing equipment.

Once in landfill, not only does organic waste lose any additional utility, it also releases harmful, fast-acting methane gas—a greenhouse gas. which has 24 times warming potential of CO2.

By separating organic waste from plastics and other non-organic waste—and effectively processing it—the food chain can be strengthened by enriching soil and biomass. At the same time this helps secure a country’s food supply, provide low-cost energy, increase landfill longevity and materially reduce a nation’s carbon emissions.

One man who saw this problem first hand in Bali and addressed it was David Kuper. An innovative retired chemical engineer from Switzerland, he was able to solve both the organic processing value equation and lack of buyer trust for organic waste.

Back in Ubud in 2001,  the Ubud Rotary Club became interested in addressing the problem of waste that refused to go away. Club President at the time was none other than Mr Kuper, who was also a founding member of Bali Fokus (now the Nexus 3 Foundation).

As he had some years’ experience working for the Swiss Government’s aid agency in Indonesia, he was well-equipped with technical and management expertise, plus he had the local knowledge.

So David, along with the Rotary and Bali Fokus, initiated the first of the organic waste projects in 2003. That failed to get off the ground satisfactorily, but undeterred, they started again in 2004.

This time, with the help of a successful local tourism entrepreneur, who had a network of political connections throughout the district, they focused  on a village called Temesi. This was in a poorer area east of Ubud, where the main landfill dump for the district of Gianyar is located.

They persuaded the Temesi community and the district government to agree to a pilot project to recycle part of the waste stream to the existing landfill and arranged for the necessary consents to be processed in a matter of days (rather than the usual weeks or months).

Believing in the importance of a circular economy, David saw the growing piles of waste around him and decided to build an organic waste processing centre.

Temesi Recycling was born.  Initially, it involved a partnership with the Gianyar Waste Recovery Project, the Rotary Club of Bali Ubud (since disbanded), the Yayasan Bali Fokus Foundation and the Yayasan Gelombang Udara Segar (GUS) Foundation.

Another Bali-based expert who was involved in the early days of Temesi Recycling was Sean Nino. Not only did he work on the quality assurance system, but he created a trusted Temesi compost brand, as well as developed a marketing strategy. 

As assistant manager for the Temesi project in 2010, Sean was also co-founder of Eco-Mantra, which has been building a framework to define Bali´s local ecological carrying capacity.

He believes that Temesi Recycling currently provides the most feasible waste management process in Indonesia.

Not only is it in line with current demographics in Indonesian communities, but it reduces CO2, it utilises organics and monetises the waste stream in a way that ensures an ongoing operation.

Sean explains that the challenge for most waste systems is that organics are processed at a loss. The revenue derived from selling common organic products, such as compost, is simply not enough to cover the costs of production. This is often because comparable chemical fertilisers are subsidised by as much as 70% to 90% in Indonesia, while compost is not.

When soil is regularly nourished with compost it becomes dark, crumbly, and filled with beneficial organisms, minerals, and other nutrients. Plus, it requires less fertiliser than soil that is not enriched regularly with compost.

In fact, the continual use of chemical fertilisers without composting can throw a soil’s chemistry out of balance, discouraging microbe growth. This ultimately depletes the vitality of agricultural land and requires continuously increasing chemical inputs.

Even if chemical fertiliser and organic compost production were on a level playing field economically, potential compost buyers are also often fearful of potential contamination of the food chain from chemicals, heavy metals, or other harmful elements when waste material is not sorted well at its source. 

David Kuper’s Swiss network of leaders included friends from South Pole—a Swiss-based carbon finance consultancy—which had been part of developing the “Gold Standard” for carbon credit verification.

Temesi Recycling became the first Indonesian organisation to complete the Kyoto Protocol’s Clean Development Mechanism (CDM) process, allowing it to sell carbon offsets from composting and create an invaluable additional revenue stream to subsidise its compost operations.

Sean explains how it works:

Temesi processes roughly 30 to 40 tons of organic waste per day (10,000 tons per year). Its compost sales of Rp 1,000/kg ($0.07/kg) covered only a third of their operational costs. To resolve this economic constraint, Temesi applied for grants that allowed it to survive through the CDM certification process (a 40-month process costing USD 50,000).

Once certified, they took out a grant for USD 240,000 from the Swiss-based myclimate foundation that was paid back over time by getting an initial carbon price per credit of USD 22.00 from myclimate and then USD 14.00 until the loan was paid back.

Even though Temesi’s 10 years with CDM concluded on November 3, 2018, they were able to extend their income by getting carbon credits for another five years (at USD 8.50 per credit) through the Gold Standard voluntary market certification, which motivated them to develop better local markets for compost.

Every carbon credit is equal to emissions savings of one tonne of CO2.

Temesi was able to sell around 9,000 credits per year through myclimate. That was enough to cover their remaining operational costs, while also setting aside a small reserve.

Given the stringent CDM requirements, an ISO 9000 quality assurance system and compost-testing protocol were also adopted.

Besides enabling their compost to pass the strict CDM verification criteria, this level of certification builds buyer trust in their compost for any application—including food production for human consumption—and secures a slightly higher price than compost materials lacking a quality guarantee.

While Temesi Recycling is clearly a success story, and has been acknowledged as such by gaining an award from the UN Environment Programme (UNEP), the original vision to build similar industrial-scale organic recycling systems across Indonesia didn’t materialise.

Today—thanks to the dedication and inspiration of environmental champions like David Kuper and Sean Nino—the Temesi Recycling still operates in Bali. Of course, it would help to multiply the benefits of this project and other waste management initiatives, if there was a change in subsidies to make organic composting—and plastic recycling—more attractive as entrepreneurial ventures.

The TEMESI pilot facility started operating on June 25, 2004 with a capacity of 4 tons per day. Since then the facility has gained wide local and international attention and has thus raised high expectations. In the pilot facility, the waste recovery procedures were optimized. At the facility’s research centre and laboratory, large scale forced aeration composting and alternative organic waste treatments were studied. The pilot and early facility operation received various international academic supports. For more, go to: http://temesirecycling.com/.

Solid waste is a serious and growing problem throughout tropical Asia. Waste management technologies and policies have not kept pace with the increase in waste production. The island of Bali in Indonesia is an atypical case in which both production and awareness of waste are relatively advanced. As such it is a useful case for exploring the wider problem and possible solutions. This article reviews the current state of solid waste management in Bali. Read more about this in the report “Solid waste management in tropical Asia: what can we learn from Bali?” by Graeme MacRae for the International Solid Waste Organisation (ISWO).

Applying for CDM credits might be too tedious, complex and expensive for many NGOs and social enterprises, but you can read much more about how and where it has worked on the official CDM/UNFCCC site.

Until market dynamics change and compost can compete on its own merit, countries will continue to struggle with what to do with the lion’s share of organic waste—a truly missed opportunity for many countries.

Sponsoring voluntary credits, and supporting organisations to apply for them, is one of the most substantial opportunities for the private sector and government to catalyse the processing of large amounts of organic waste—ultimately building a viable plastics recycling circular economy in the process.