Technoeconomic and environmental assessment of biogas energy recovery in wastewater treatment plants considering carbon credit

Wastewater treatment plants (WWTPs) contribute to the circular economy by recovering energy from biogas produced through anaerobic digestion, supporting greenhouse gas mitigation and energy diversification. This study presents an integrated technical, environmental, and economic assessment of three biogas recovery pathways in WWTPs: thermal sludge drying (S1), electricity generation using internal combustion engines (S2), and combined heat and power (S3). Based on design data and literature parameters, the analysis considered energy production, emission reductions, project costs, economic indicators, carbon credit revenues and transaction costs, and sensitivity analysis. Scenario S2 achieved the highest electricity generation (10,347 MWh/year) and greenhouse gas emission reductions (2585 tCO 2 /year) but also required the highest biogas consumption (5.31 × 10 6 m 3 /year) and capital investment (US$ 4.24 million), resulting in the lowest economic performance (Net Present Value, NPV of US$ 0.11 million). In contrast, Scenario S1 required the lowest biogas demand (0.73 × 10 6 m 3 /year) and presented the best economic performance, with an NPV of US$ 1.41 million, an internal rate of return (IRR) of 30%, a payback period (PP) of 3.4 years, and a Levelized Cost of Thermal Energy (LCOth) of 0.0342 US$/kWh. Scenario S3 provided a balanced solution by simultaneously generating electricity and heat, achieving an NPV of US$ 1.30 million, an IRR of 15%, and a Levelized Cost of Electricity (LCOe) of 0.063 US$/kWh. Carbon credits had only modest influence on project profitability under current market conditions, although they may enhance project attractiveness by supporting compliance with climate policies and internationally recognized sustainability standards. The results demonstrate that the most suitable energy recovery pathway depends on WWTP scale and biogas availability. Thermal utilization is more attractive for small-scale facilities, whereas CHP becomes increasingly advantageous as biogas production increases.