“Mauritius’ Circular Economy Has Emerged as a Business Imperative: The Case of its Waste-to-Energy Sector”

By Neekhil Bhowoniah 

World Bank Financial Sector Consultant, Trade Policy Researcher

Waste-to-Energy is not particularly new in Mauritius. Landfill gas has been used for over a decade now, precisely since 2011. The Waste-to-Energy sector is presently not a sustainable business in Mauritius, and this will, in all likelihood, delay the green transition of the economy to embracing a circular one, away from linear. As a matter of fact, official statistics reveal that for the year 2022, only some 118 thousand tonnes of oil equivalent (ktoe) – corresponding to 10.1% as primary energy requirement – was met from locally renewable energy sources, and the remaining 89.9% (1,336 ktoe) were from imported fossil fuels. When compared to 2021 figures (139 ktoe), this represents a decrease of 15.1% in energy supply from local renewable sources, while the country’s reliance on fossil fuels imports increased by 11.4% (from 1199 to 1336 ktoe) between 2021 to 2022.

A critical feature of the Mauritian economy is its “smallness,” which means a limited territory with a narrow resource base, limited labour and capital for waste management, including its remoteness from international markets. Natural disasters like floods, cyclones, and other extreme weather events are no longer viewed as a risk, but are rather seen as an expectation, mainly due to increased frequency and intensity. The potential for more frequent extreme weather events implies they must be planned for and mitigated against through greater focus on policy availability and exclusions.

“Weaknesses in Mauritius remain at the legislative level, particularly with regard to its regulatory framework”

Weaknesses in Mauritius remain at the legislative level, particularly with regard to its regulatory framework. This has been well documented by the World Bank’s recently published Business Ready Report (2024), in which Mauritius scored lowest in terms of Utility Services, with a total score of 41.48 out of 100. A granular look at the findings indicates that, out of the three pillars, ‘Regulatory Framework’ was the most impacted one – with a score well below average, relative to the other two – Public Services and Operational Efficiency.

Mauritius’ Renewable Energy Roadmap 2030 aims to achieve a 60% renewable energy share in its energy mix by 2030, with a required estimated investment of USD 1.35 billion, aligning itself with Sustainable Development Goals 7 (Affordable and Clean Energy) and 12 (Responsible Consumption and Production). Yet, there is much urgency for Mauritius to redesign its overall notion of a circular economy in a bid to address its short, medium and long-term goals, and thus achieve its target of 60% by 2030. Though Mauritius is ahead within the Sub-Saharan region in terms of energy projects and initiatives, it still has not succeeded in enhancing the environment of certainty and predictability when it comes to waste management. Indeed, Mauritius continues to suffer from climate-related data inconsistencies, with challenges around collecting, disaggregating, and managing. Statistical and economic data collection remains limited and is not achievable throughout the entire value chain.

“Another concern is mastering the metrics, mostly in terms of selecting relevant data points for reporting purposes”

Actually, Mauritius is faced with a high diversity of actors with overlapping mandates, preferences, and areas of expertise. Owing to the absence of one unifying actor within the Waste-to-Energy sector, it is likely that coordination amongst stakeholders from different institutions has emerged as a response to a fragmentation on both international and national levels. Here, the main reason is the lack of a national green taxonomy. Unlike Rwanda, which has had its green taxonomy approved by Cabinet on April 17, Mauritius is currently unable to set itself as the regional hub for green finance in Africa. This gap is likely to hinder the development of regulatory frameworks to distinguish the scope of what activities, investments and assets can (or not) be considered to be supportive of a transition to a low emission and climate-resilient economy, and most importantly ensure accountability and transparency. This raises key questions as to what is going to be the plan to achieve. Which resources will be needed? How to deal with the waste-to-energy mandate? And how will the government set itself up with various stakeholders to tackle the cross-cutting issues?

Another concern is mastering the metrics, mostly in terms of selecting relevant data points for reporting purposes. No wonder the ESG reporting landscape is complex, and institutions are exposed to various international frameworks, such as SASB, IIRC Integrated Framework, TCFD, WEF, GRI, CDP, GHG Protocol… There can be confusion over various reporting frameworks, coupled with inconsistencies across industries. What should be the reference points that listed companies use for reporting environmental and social practices? Although Mauritius already has ESG-related legal frameworks in place, perhaps the biggest challenge right now is the establishment of a specific ESG legislation to overcome challenges in common quantitative definitions, including unclear conceptual boundaries.

All hope is not lost

It seems that the institutional framework is controlled at the political level – which has been good enough for the economy so far. Yet, it is important for the Waste-to-Energy sector to include strategic planning along with technical works. A strategic plan will allow the industry to anticipate things that are most likely to happen and to prepare accordingly. Similarly, through strategic planning, various stakeholders can anticipate certain unfavourable scenarios before they happen and ensure they take necessary precautions to avoid them. Ideally, this would be an effective way to promote open strategic autonomy with the Waste-to-Energy sector.