Energy-from-Waste … part of the solution October 1, 2008

Energy-from-Waste … part of the solution

October 1, 2008

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About Covanta

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Covanta Overview

• Covanta is the world’s largest Energy-from-Waste company– Operate in 8 countries and 15 states throughout the

U.S.– Headquarters in Fairfield, New Jersey– More than 3,000 employees worldwide

• Provider of long-term renewable energy and environmentally safe waste disposal– Recipient of numerous state and federal awards for

safety and environmental excellence

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$0.6

$2.2

$3.3

$4.3

1/1/05 1/1/06 1/1/07 1/1/08

$0.6

$2.2

$3.3

$4.3

1/1/05 1/1/06 1/1/07 1/1/08

Financial StrengthFinancial Strength

• NYSE Company (CVA)

• Enterprise value exceeds $6 billion

• Revenue exceeds $1.4 billion

• 2008 Financial Guidance(1)

● $550 - 575 million adjusted EBITDA● $380 - 420 million cash flow from operations

(1) As of April 24, 2008. This information is not being reaffirmed or updated as of the current date.

Covanta Market Capitalization ($Billion)

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Energy from Waste - Vital roll in U.S.Renewable Energy and Waste Management

Wood & Other

Biomass44%

Energy-from-Waste

18%

Geothermal17%

Wind20%

Solar1%

Recycling26%

Energy-from-Waste

8%

Landfill66%

Annual U.S Waste Generation = 388,000,000 Tons

Annual U.S Renewable Generation = 87,213,000 megawatt hrs

Source: 2004 Joint Study by Biocycle and Earth Engineering Center of Columbia University

Source: US Department of Energy, Energy Information Administration 2005 Report

• Covanta owns and/or operates 38 Energy from Waste facilities and 6 biomass to electric facilities with many more in planning and development

• Covanta produces almost 10% of America’s non-hydro renewable electricity – enough to power over a million homes

• Covanta converts over 5% of the nation’s post-recycled waste into energy

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Covanta’s Consistent PerformanceCovanta’s Consistent Performance

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Environmental Health and Safety Programs

• 24 Facilities in OSHA’s elite VPP STAR Program

– Covanta’s Alexandria facility received the VPP STAR award and our Fairfax facility has been recommended for the VPP STAR as well.

• Environmental Leadership– 23 EPA performance track facilities– First to install mercury control– New patented low NOx technology– Numerous industry, environmental,

and community awards• Virginia Environmental Excellence • Sustainable Florida Leadership• Michigan Clean Corporate Citizen

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About Energy from Waste (EfW)

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Safe, reliable waste disposal

Reduces greenhouse gas emissions

Clean, renewable electricity 24/7

Recover metal for recycling

Clean Energy from Waste

• Population growth

• Climate change

• Dependence on fossil fuels

• Resource management

Metal: 50 lbs

Power: 560 kWh

Ash: 10% of original volume

Municipal Solid Waste (MSW): 2000 lbs

EfW is a specially designed energy generation facility that uses household waste as fuel.

Waste is combusted to produce valuable energy and help solve some of society’s big challenges

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Typical EfW Facility Layout

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EfW 0.2 billion tons Recycling 0.5 billion tonsRecycling 0.5 billion tons Landfill 1.0 billion tons

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U.S.~ 90 EfW facilities ~ 30 million TPY

Western Europe~ 400 EfW facilities

~ 65 million TPY

Asia~ 325 EfW facilities

~ 55 million TPY

Landfill

Recycling/Composting

EfW

EfW roll in Global Waste Management

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Covanta in Virginia

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COVANTA FAIRFAX – Partnership/ Business Model

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The I/95 Energy/Resource Recovery Facility in Fairfax CountyThe I/95 Energy/Resource Recovery Facility in Fairfax County

• Began commercial operation in 1990

• Processes approximately 3,000 tons

of MSW each day while producing

more than 90 megawatts of renewable

energy

• Service Agreement Deal – Client

delivers waste and pays Covanta an

O&M fee to operate the facility

• In 2000, completed CAAA retrofit of the facility to lower emission and

meet new Federally enforced air emission guidelines

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The I/95 Energy/Resource Recovery Facility in Fairfax CountyThe I/95 Energy/Resource Recovery Facility in Fairfax County• All debt is paid off in 2011.

• The facility provides 13.7% of

Virginia’s Renewable Power (22%

excluding Hydro).

• Since 1990, the facility has:● Produced 10 million MWhs for the region—

enough to power 75,000 homes each year● Safely disposed of approximately 19M tons of MSW, avoiding the use of

19M barrels of oil● Recycled 375,000 tons of Ferrous metal and 3,500 tons of Non-Ferrous

metals

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The Alexandria/Arlington Resource Recovery FacilityThe Alexandria/Arlington Resource Recovery Facility• Began commercial operation in 1988

• Processes 975 tons of MSW a day while generating up to 23 megawatts of renewable energy

• Tip Fee Deal – Client pays a tip fee ($/ton) on all jurisdiction tonnage (2/3 of plant volume)

• In 2000, Covanta completed a $40M CAAA retrofit of the facility to lower emission and meet new Federally enforced air emission guidelines

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The Alexandria/Arlington Resource Recovery FacilityThe Alexandria/Arlington Resource Recovery Facility• In 2007, installed a new ferrous

separation system for metal recycling

• All debt is paid off in 2013

• Provides enough energy to power 20,000 homes each year

• Since 1988, the facility has:– Produced 4 million MWhs for the region- enough to power

20,000 homes each year

– Safely disposed of approximately 7,000,000 tons of MSW, avoiding the use of 7,000,000 Barrels of oil

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PermitLimit/Unit

2004 – 2006Actual Results

% Below Limit

Particulate (mg/dscm) 27 1.9812/Unit (avg) 92.7%

Dioxin/Furan (ng/dscm) 30 1.1466/Unit (avg) 96.2%

Mercury (mg/dscm) 0.080 0.0006/Unit (avg) 99.3%

Lead (mg/dscm) 0.44 0.0061/Unit (avg) 98.7%

Cadmium (mg/dscm) 0.040 0.0002/Unit (avg) 99.5%

SO2 (ppm) 29 1.78/Unit (avg) 93.9%

HCl (ppm) 29 1.08/Unit (avg) 96.3%

Actual vs. Allowable Emissions

Alexandria Upgrade Stellar Emission Results

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EfW - Benefits to the Local VA Host Communities

• Long Term Stable Waste Disposal Pricing• Clean Renewable Power – Less Demand for Fossil Fuel Power (Oil

& Coal)• Recycling:

– Recycling Credits: Ferrous and Non-Ferrous Metals Recovery– NOx Credits

• Reduces - Landfill Usage and Greenhouse Gases• Minimize Truck Traffic• Community Relations Programs / Charitable Contributions• Provides Local Employment – approximately 135 jobs• More than $3M spent on local businesses annually

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Recycling Rates

• EfW plants work together with community’s recycling program.

– Fairfax County - 35%– Alexandria - 29% (5% inc. in 07 – Fe Metal)

– Arlington - 42.7%

– Commonwealth of Virginia – 32.2%*

* 2005 data

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EfW Regulatory & Policy Landscape

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The Best Option After Recycling—Energy-from-Waste

250 million tons of garbage

dumped in landfills

Renewable energy generated from landfills - 6 billion kWh

30 million tons of

garbage is processed into

renewable energy

Renewable energy generated from EfW facilities - 15 billion kWh

Preserves land; offsets greenhouse gases; provides energy recovery five times greater

than landfill gas to energy

Energy-from-Waste

Landfills

A misuse of valuable land; generates methane gas – a leading contributor to

global warming; inefficient energy recovery

For every ton of waste processed in an Energy-from-Waste facility, we offset one ton of carbon dioxide equivalent by reducing the amount of methane generated by landfills

and decreasing our dependence on fossil fuels.

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• Adopting environmentally sustainable waste disposal practices– EfW is the most attractive, sustainable solution for waste disposal after recycling

• Generating clean energy from renewable fuels

– U.S. Environmental Protection Agency states EfW “produces electricity with less environmental impact than almost any other source”

– Baseload power – 24 hours a day, 7 days a week

– EfW can be important contributor to overall renewable portfolio

• Potential to produce about 5% of U.S. electricity needs

• Home grown electricity benefits energy security

• Reducing greenhouse gas emissions to combat global warming– Offsets up to one ton of carbon dioxide equivalent for each ton of waste processed

– Reduces need for landfills, which generate methane, a potent greenhouse gas

– Reduces dependence on fossil fuel power: one ton of waste ~ ¼ ton of coal

Environmental Benefits of Energy-from-WasteOne solution helps address 3 challenges

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United States• Recognized as renewable in 23 states and current Federal policy

• Federal legislation – outcome uncertain– Renewable electricity tax credits currently included – likely extension

– Renewable Portfolio Standard (RPS) and Climate Change being debated

– Whether or not EfW should benefit from these policies is specifically being debated

Europe• EU Landfill Directive –

– 65% reduction in landfilling of biodegradable Municipal Solid Waste– Significant Landfill taxes & other incentives to recycle and recover energy

• Not subject to CO2 emission caps

China• Preferential electricity tariff • Target 30% EfW by 2030

EfW Regulatory & Policy Landscape

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• One billion tons/yr of waste buried in landfills EfW Opportunity

• U.S. and Canada

– EfW re-emerging with higher fossil fuel prices

– Pending regulation on renewable energy and climate change will be the driver

• Europe

– EU Landfill Directive – significant impact on the U.K. in particular

– Increasing demand for renewable power generation

– Significant focus on Climate Change

• China

– Growing middle class and urbanization – increasing waste generation

– Land at a premium, making landfills less attractive

– Regulatory incentives for renewable power generation benefit EfW

Global Growth Opportunity in Energy-from-Waste

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Thank You

Paul E. Stauder

Senior Vice President

Covanta AmericaPstauder@covantaenergy.com