Biowaste, which includes food, garden and agricultural materials, makes up a significant portion of municipal waste. If this waste is improperly landfilled under anaerobic conditions, it releases methane (CH₄), extremely strong greenhouse gas. The global warming potential (GWP) of methane is 28–36 times higher than CO₂ over 100 years, and even around 80 times higher over 20 years. Modern strategies are therefore globally moving towards separate collection and recycling of bio-waste. From 2024, it is mandatory for all EU Member States to ensure separate collection of bio-waste in order to significantly reduce landfilling of organics and related methane emissions.

Two key recycling methods

There are mainly two methods for processing biowaste that are key to reducing greenhouse gas (GHG) emissions: anaerobic digestion (AD) and aerobic composting.

Anaerobic digestion (AD): Organic material decomposes without access to oxygen in a special reactor. This produces biogas, consisting primarily of methane (CH₄) and carbon dioxide (CO₂). This biogas can be burned to produce energy or purified into biomethane, thereby replacing fossil fuels. This process both captures methane that would otherwise escape from the landfill and produces renewable energy. The residual digestate (stabilized biofertilizer) also increases soil fertility and can replace chemical fertilizers. It is estimated that the gaseous product from AD (biogas/biomethane) releases up to 90 % less CO₂ than the same amount of natural gas, leading to a drastic reduction in carbon footprint.

Aerobic composting: The waste decomposes in the presence of air. This process minimizes methane formation and produces mostly CO₂ and water. Proper composting thus de facto flushes out the methane potential of the waste that would otherwise escape. The resulting high-quality compost (humus) serves to enrich the soil and, in addition, binds carbon in organic matter, thereby improving soil structure. Although lower emissions of nitrous oxide (N₂O) are also taken into account, aerobic composting is advantageous because methane, a much stronger greenhouse gas, is minimized.

Carbon credits as an incentive

Biowaste recycling projects are financially motivated by a carbon credit system. If organic waste were to end up in a landfill, it would generate CH₄ emissions. By preventing these emissions, the project (AD or composting) creates savings that are credited as credits in CO₂ equivalents (CO₂e). The savings are calculated by comparing the project emissions with the so-called baseline landfill scenario.

Leading certification standards such as Verra (VCS) a Gold Standard (GS4GG), actively support these types of projects. Verra uses CDM-based methodologies (e.g. AMS-III.F, ACM0022) that precisely define the conversion of processed waste into reduced CH₄ emissions. In addition, projects under the Gold Standard must demonstrate benefits for the Sustainable Development Goals (SDGs), such as land improvement and local development.

The key requirement for obtaining credits is additionality (additionality) – the project would not have been implemented without the income from the credits. Transparent measurement of the processed waste and corresponding calculations are also necessary. For example, the “Black Earth” composting project in the USA demonstrated additionality by processing organics that were not required to be composted. This project was able to save 5837 tCO₂e per year by diverting approximately 8000 tons of food waste.

Successful examples from practice

There are successful examples of implementing these technologies around the world that reduce emissions and generate credits:

1. Europe (Romania): DN Agrar has installed industrial composting lines to process cow manure and other biowaste. This aerobic composting, which is certified according to the Gold Standard, minimizes methane emissions that would otherwise be generated by anaerobic decomposition in landfill.
2. Asia (India): The myclimate group has installed over 8,000 small household biodigestion units in villages in Karnataka. The biogas produced has replaced wood and kerosene cooking, eliminating harmful CO₂ and CH₄ emissions. The dual-registration project (both CDM and Gold Standard) would not have been possible without the revenue from carbon credits.
3. Latin America (Brazil): The Waste and Biomethane Treatment Center (CTTR) in Manaus produces biomethane from municipal and food waste. The project demonstrates how reducing landfill emissions combined with renewable energy generation contributes to decarbonization.

Measurement and verification challenges

Although the benefits are clear, certification brings complex challenges. Reliable determination of the baseline scenario (what would end up in landfill) and detailed monitoring of inputs and outputs are administratively demanding. The calculations apply a projection versus reference methodology and work with parameters such as the CH₄ production potential per tonne of organic matter. Verra and other standards require monitoring of waste quantity, composition and amount of biogas/compost produced.

Another complicated aspect is multi-gas aspect, where composting must also take into account N₂O in addition to methane. In addition, verifiers must avoid duplication – if a country already declares methane reductions in its national inventory, the same reductions may not be sold on the voluntary carbon market. The costs of auditing and monitoring (according to ISO 14064-2) are also significant, especially for small projects.

Conclusion

Anaerobic digestion and composting are firmly established greenhouse gas reduction tools within carbon markets in 2025. Thanks to established methodologies (Verra VCS, Gold Standard, etc.), investors can monetize verified CH₄ emission reductions. Strong additionality guarantees, reliable measurement of CO₂e savings and market development remain key to future success, helping to achieve global climate goals faster. Co2AI