California recyclers anticipate a 'tsunami' of food waste, focusing on infrastructure and end-market development

Editor's note: This article is the second in a multi-part series exploring the market impacts of California's comprehensive organic waste reduction law, SB 1383.

In recent years, public and private operators have made significant investments and competed over how and how aggressively to expand California's organic waste processing capacity to meet SB 1383 requirements.

Some view SB 1383 as the driving force behind the industry's largest infrastructure deployment since the advent of single-stream recycling, and companies involved in promoting single-stream recycling back then are now re-entering the fray.

Several major in-state haulers, including WM, Republic Services, and Recology, are investing in new composting facilities, primarily using or converting to aerated static pile systems, which are suitable for processing source-separated organic waste. Companies like Anaergia are investing in anaerobic digestion facilities, which they say are crucial for handling more complex mixed waste. Meanwhile, stakeholders across the state are also seeking to strengthen end markets and weighing the many pros and cons of different technological pathways.

WM has expanded its organic waste infrastructure in California through years of acquisitions and plans to develop further new facilities. Among customers it serves with organics recycling, the three-cart source-separated collection system is the most common.

The company has stated that its focus in California is on composting infrastructure rather than anaerobic digestion, because third-party digestion capacity can still be used if necessary, but it also continues to "evaluate and explore other technologies, including digestion." WM currently operates four composting facilities in California, along with a CORe pretreatment facility for co-digestion, and has installed Anaergia's OREX extrusion technology at one site—Anaergia being a company focused on anaerobic digestion and organic waste pretreatment.

"For most of our customers, we do have options. But do we need more facilities? The answer is yes," said Alex Oseguera, WM's director of government affairs in California. If waste volumes grow as expected, the industry "definitely needs more facilities statewide."

Republic Services hired Chris Seney as director of organics operations in 2018, after years in the composting industry, with the primary task of preparing for SB 1383 compliance and developing organic waste infrastructure. He says obtaining permits for any type of organics recycling facility has recently become "extremely difficult" and often takes years. The company recently opened California's first fully solar-powered composting facility in San Diego County.

Overall, Republic operates six composting sites in the state (plus one in neighboring Arizona) and three commercial pretreatment facilities. Seney believes composting is more mature and economical than anaerobic digestion, although Republic also uses some digestion facilities.

Seney notes that many jurisdictions already collecting yard waste are considering adding food scraps to that cart, joining a feedstock stream suitable for composting. This helps maintain the three-cart system, which is also seen as the "most economical way" to comply with SB 1383.

"It's a proven system, and the outcome is as guaranteed as possible. If you set up a gray cart for non-organic municipal solid waste, a green cart for organics, and a blue cart for recyclables, then you can meet 1383 requirements with the three-cart approach," Seney said.

Recology is similarly focused on composting, operating five facilities in the state, including a large one near Vernalis with a daily processing capacity exceeding 1,200 tons—nearly half of which comes from San Francisco—and another near Lamont. Company spokesperson Robert Reed said via email that the latter "is permitted to receive additional material, providing cities in this densely populated region with a specialized location to process compostable materials." Recology's other composting facilities also have extra capacity.

As for the recommended collection method, Recology also favors the most common model it helped pioneer.

"Land use varies greatly from city to city, so no one solution fits all locations. However, the three-cart approach pioneered in San Francisco offers many significant benefits," Reed said. "Customers find it simple and convenient to put recyclables in one cart and compostables in another."

The case for anaerobic digestion and mixed waste collection

Organics market experts such as environmental engineer Eugene Tseng argue that California cannot achieve its organic waste diversion goals with three-cart collection alone sent to composting or anaerobic digestion. Moreover, when all trade-offs are considered, that approach is more costly.

"Most Californians can't afford three carts, and composting facilities also can't handle the coming 'tsunami' of food waste and its contamination," said Yaniv Scherson, chief operating officer of Anaergia. He added that source-separated collection is especially challenging for multifamily housing and commercial customers.

Anaergia's approach uses extruders (OREX, short for organic extraction) to separate the wet organic fraction from certain mixed waste streams. That fraction is sent from three OREX units operating in California to co-digestion facilities at wastewater treatment plants or standalone digesters, such as the facility the company recently opened in Rialto, east of Los Angeles. That facility is permitted to process up to 700 tons of organic waste and 300 tons of biosolids per day. It is one of the few large digesters built recently in California; others are operated by CR&R in Perris, Mustang Renewable Power Ventures in Santa Barbara, and EDCO in San Diego County.

"As more food is mixed with green waste, composting sites will face limits and surcharges due to the inevitable increase in contamination, and there are also limits on the amount of food that can be composted," Scherson said. "I think that's where anaerobic digestion will play an early penetration role in the market." Anaergia is particularly focused on building co-digestion facilities using the existing capacity of about 150 eligible wastewater treatment plants in the state, which Scherson sees as a key pathway to helping meet the state's decarbonization goals.

Although many large waste haulers say there is no business case for building their own digesters, they do use existing facilities in areas like Los Angeles—where the city's commercial waste franchise program, in effect since 2017, has already required significant organics investment. Scherson says that with OREX units operating at WM and local hauler Universal Waste Systems, Anaergia likely processes about half of the city's commercial organic waste.

WM's Sun Valley facility is equipped with an OREX system that handles both source-separated and mixed material, and recently partnered with local Los Angeles city and county enforcement agencies on a case study to evaluate measurement standards for verifying compliance at high-diversion facilities. Under SB 1383, jurisdictions allowing mixed waste collection must demonstrate that the processing facility used meets a "high diversion" standard, meaning at least a 75% recovery rate by 2025.

According to parties including Scherson and Tseng, the initial regulatory language required labor-intensive and potentially dangerous manual sorting of the processed wet residual stream. CalRecycle recently approved a new method for evaluating organic material output from such facilities, which reduces the need for manual assessment and has drawn interest from other parties in the state.

Some see the future of these high-diversion facilities as uncertain, due to concerns that organic material in mixed streams may degrade and lose value. Opponents also note that it is unclear whether any facility in the state can meet the 75% recovery threshold. CalRecycle does not expect to have data on that until next year.

Nevertheless, some jurisdictions are still pursuing this path for SB 1383 compliance. The Western Placer Waste Management Authority recently awarded its mixed waste MRF operating contract to FCC Environmental Services and plans upgrades. The project will also include upgrades to the authority's yard waste composting site.

Athens Services in the Los Angeles area is another company often mentioned for its franchise in mixed waste. Multiple jurisdictions contract with the company for collection services in the San Gabriel Valley, where Athens operates Los Angeles County's largest mixed waste MRF, along with large-scale composting operations in the region. Athens did not comment for this article.

Other mixed waste processing facilities in the state include the Sunnyvale SMaRT Station. Sunnyvale awarded the operating contract to a GreenWaste Recovery subsidiary to sort four material types—yard trimmings, MRF fines under 2 inches, source-separated residential and commercial food scraps—and ultimately compostable waxed paper products. GreenWaste currently holds the contract to compost these materials. GreenWaste's operations in San Jose also sort mixed waste from residential customers.

"We're not worried about meeting diversion requirements and the various requirements for high-diversion organic facilities. We either already meet them or are close with minor additions," said Greg Ryan, chief operating officer of GreenWaste, adding that these systems are important because customer sorting behavior is inconsistent. "Ultimately, through audits and verification of mixed waste processing facilities, I believe mixed waste systems will achieve higher diversion rates."

Permitting process becomes a barrier to growth

Ryan says one reason there are not more mixed waste processing facilities is that designing, permitting, and building such operations can take years. It would have been nearly impossible to complete within the short window between finalization and implementation of the SB 1383 regulations. If San Jose had not taken a step in that direction through a 2011 contract, Ryan says the city's infrastructure might not have scaled up either.

Bill Camarillo, CEO of composting company Agromin, says he knows well the long timelines for scaling up. Agromin currently operates 21 organic processing and composting facilities in the state, though not all accept food waste. Last year, the company produced and sold more than 1 million tons of compost, which it says makes it the largest organics recycler in the state.

Camarillo's company spent 12 years trying to get a permit for a facility in Santa Paula, finally receiving approval in February. He says the delays were partly due to evolving facility scope planning to accommodate the growing demand for organic processing capacity driven by new state laws, but also due to bureaucratic hurdles. Although another facility in Oxnard had a relatively faster four-year permitting period, it still shows the complexity involved.

"In today's environment, figuring out how to get a permit for a commercial composting center is a minefield," Camarillo said. The main issue is a lack of coordination among the various permitting agencies that regulate water, air, land use, and local planning. Additionally, as projects drag on, staff turnover at these agencies is common, further adding to the learning curve. "Once you get caught in the planning gears, it's like trying to build a residential development—you're stuck there forever."

As work continues over the coming years, California will undoubtedly see more investment in organic processing capacity. CalRecycle Director Rachel Machi Wagoner says permitting issues are "of great concern to us." The agency has been in discussions with a range of government entities about "how to streamline the permitting process to help build facilities where they're needed," but she says the issue will remain complex.

Market momentum

In many commodity markets, supply grows with demand, and SB 1383 has established mechanisms to increase demand for outputs from organic processing, such as compost, mulch, and renewable energy. One state estimate suggests the law could generate "an additional 5.5 million tons of compost and more than 14 billion cubic feet of biomethane" by 2025.

California is mandating that cities and counties significantly expand procurement activities to support markets for these "organic waste products," while allowing jurisdictions some flexibility in what they purchase. Annual procurement requirements are based on jurisdiction population; for example, Los Angeles is expected to need to procure at least 313,867 tons of organic material this year. Some have questioned how cities can actually use such large volumes, leading the City and County of San Francisco to partner with a conservation district to give away some of its purchased compost to farmers in the county.

Matt Cotton, principal of Integrated Waste Management Consulting, says California has the capacity to find markets for growing output. He cited a 2019 University of California, Merced study that found farmland has enough capacity to absorb most of the finished compost the law would generate, with positive soil benefits, and that urban green spaces are another untapped potential area.

"We have almost endless agricultural markets," he said, noting that dozens of major crops grown in California are the largest produced in the U.S. "The market for (compost) is not a problem in California."

Cotton's 2019 market study identified agricultural markets as the largest destination for recycled organic products, accounting for 65% of statewide supply, with compost making up 85% of that. Next were landscaping and nursery applications, along with other small but growing opportunities such as transportation projects.

Many say applying compost to crops is a win-win because it sequesters carbon in the soil and advances climate change response. Recology's Reed is particularly enthusiastic about this application, often emailing statistics and case studies about farms benefiting from compost use.

"Farms want Recology compost because it helps them grow more food and conserve water," he wrote. "Many vineyards and orchards use Recology compost to grow cover crops like mustard, which pull carbon and nitrogen from the atmosphere and press them deep into the soil."

Although these benefits are widely recognized, the reality of turning collected organic waste into products desirable enough for large-scale use is more complex. California has a strong agricultural compost market, and demand for various products is expected to be even greater due to SB 1383 procurement requirements, but the state also has strict standards for material quality.