Blue Sphere, an emission reduction project integrator, has signed a term sheet to implement clean development mechanism projects at two landfill sites in Uzbekistan to destroy waste methane gas and to produce compost.

The projects will involve the construction and installation of a flaring system at two closed landfill sites with an option of power generation, subject to economic factors. The landfill sites were closed in 2004 and are projected to continue to create and emit methane until 2024.

At the landfills, there will be composting of municipal solid waste in aerobic conditions. The compost is and will continue to be sold for use as fertilizer. The maintenance cost of the project will be financed by revenues generated from the sale of fertilizer. The landfills generate approximately 25 tonnes of compost per day.

The annual estimated certified emission reductions (CER) for the landfills is 135,000 CER’s per year. The CER’s expect to start in 2011 and go through until 2024. Of this amount, Blue Sphere expects to net 855,000 CERs.

The total gross income to Blue Sphere over the 21 year life of the project based on 135,000 CER’s per year is estimated by management at $18m, calculated at current and escalating CER prices. The total investment for the projects is estimated at $5.1m, not including costs of a power generation system.

Shlomi Palas, CEO of Blue Sphere, said: “President Obama has made emission reduction a key component of his cap and trade program and companies producing a negative impact on the environment are purchasing carbon credits to offset their impact.

“We have the projects to minimize emission reduction and as this particular project demonstrates, a large company has already purchased the credits even before operations have commenced.”