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Covanta Starts Building its First Total Ash Processing System

Zacks Equity Research

Covanta Holding Corporation CVA has begun constructing its first Total Ash Processing System (“TAPS”) in Fairless Hills, PA, next to Covanta’s existing metals processing facility.

The primary objective of this system is in sync with this sustainable waste and energy solutions provider’s motto, which is to ensure that no waste is ever wasted. TAPS will process more than 400,000 tons of ash from multiple Covanta Energy-from-Waste (“EfW”) facilities and thereby reduce the volume of ash requiring landfill disposal by nearly 65%.

This facility is expected to begin commercial operation from the second half of 2019.

Importance of TAPS

TAPS will utilize a unique technology to segregate the combined ash from Covanta’s Efw facilities into its component parts. This separation of ash will provide Covanta with new business opportunities through the recovery of small metal fractions and the recovery of aggregate for reuse as construction material.

The TAPS facility holds immense growth potential for Covanta through proper management of ash generated from its EfW units. It will also help in venturing new markets by marketing the byproducts generated from the segregation of ash.

There is strong demand for heavy metal steel in the United States. Covanta might plan to increase production from its metal processing facilities, with the excess ash taken care of by the new processing facility.

The success of the pilot TAPS projects holds the key for the emergence of more such projects in the coming years. Depending on the success of the project, the company might set up more EfW facilities to manage waste and provide clean energy to customers.

Price Performance

Covanta Holdings’ shares have lost 9.7% in the past three months, narrower than its industry’s decline of 12.8%.

Zacks Rank & Other Key Picks

Covanta currently has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Other top-ranked stocks from the same industry include NextEra Energy Partners L.P. NEP and Central Puerto S.A. Sponsored ADR CEPU and FuelCell Energy Inc. FCEL. While NextEra Energy Partners and Central Puerto both sport a Zacks Rank #1, FuelCell Energy holds a Zacks Rank #2.

The Zacks Consensus Estimate for NextEra Energy Partners, Central Puerto and FuelCell Energy for 2019 has moved up 3.2%, 15.1% and 5.9%, respectively, in the past 60 days.

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