MORRISTOWN, NJ -- (Marketwired) -- 08/26/13 -- Covanta (NYSE: CVA), a world leader in sustainable waste management and renewable energy, announced today a new 20-year agreement with New York City Department of Sanitation to transport and sustainably dispose of municipal solid waste ("MSW") delivered to a pair of marine transfer stations located in Queens and Manhattan. Covanta is the largest owner and operator of Energy-from-Waste ("EfW") facilities in North America and plans to utilize capacity at existing facilities to convert the City's MSW into clean energy. It is anticipated New York City will deliver approximately 800,000 tons of MSW per year which reflects the City's continued efforts to reduce waste generation and increase recycling.
"New York City is a leader in addressing climate change which makes us particularly proud that they chose Covanta and our Energy-from-Waste solution to help achieve one of their important sustainability goals," said Anthony Orlando, Covanta president and chief executive officer. "This contract is also important to Covanta because it will provide a significant and stable base of revenue, further enhancing our already predictable business model."
The agreement is for 20 years of service and it provides New York City with options for two additional five-year periods. It calls for waste to be transported via sealed containers using a multi-modal approach including barges and railcars which will significantly reduce long-haul truck transportation of MSW. Service for the Queens marine transfer station is expected to begin in early 2015, with service to the Manhattan marine transfer station to follow in 2016 when construction work is expected to be completed by New York City. To fulfill its obligations under this agreement, Covanta must purchase equipment, including barges, railcars, containers and intermodal equipment. Covanta expects its total investment to purchase this equipment will be approximately $110 million. This investment will be made over several years beginning in 2013.
The decision to utilize Energy-from-Waste facilities marks a major milestone in reaching the City's goal of diverting 75 percent of solid waste from landfills. Recovering energy and metal from post-recycled waste at EfW facilities provides communities like New York City with an environmentally superior alternative to landfilling. According to the US EPA, for every ton of MSW processed at Energy-from-Waste facilities, greenhouse gas emissions are reduced by the equivalent of approximately one ton of carbon dioxide emissions. This is possible due to the avoidance of methane from landfills, the offset of greenhouse gases from fossil fuel electrical production and the recovery of metals for recycling.
Covanta is a world leader in sustainable waste management and renewable energy. The Company's 45 Energy-from-Waste facilities provide communities and businesses around the world with an environmentally sound solution to their solid waste disposal needs by using waste to generate clean, renewable energy. Annually, Covanta's modern Energy-from-Waste facilities safely and securely convert approximately 20 million tons of waste into clean, renewable electricity to power one million homes and recycle over 430,000 tons of metal. Energy-from-Waste facilities reduce greenhouse gases, complement recycling and are a critical component to sustainable solid waste management. For more information, visit www.covantaenergy.com.
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