December 15, 2009 | General

Economic Realities Of Funding Waste Diversion

BioCycle December 2009, Vol. 50, No. 12, p. 20
The City of Toronto has pushed back its deadline to achieve 70 percent diversion of household and small business wastes by 2010. Construction of a 94,000 tons/year anaerobic digester facility to process SSO is proceeding.
Peter Gorrie

THE terse announcement in early October was disappointing but not a surprise: The City of Toronto, Ontario won’t meet its ambitious waste diversion target timeline, said Geoff Rathbone, General Manager of Solid Waste Management Services. Three years ago, City Council approved a plan that called for 70 percent of household and small business wastes to be kept out of landfills by the end of 2010. That deadline will be pushed back at least two years, according to Rathbone.
The ultimate aim, dubbed Target 70, “is still something we are striving towards,” he says. “We still think it’s ultimately an achievable goal. Toronto’s diversion rate still puts us near the top of North American cities of our scale and complexity. We can be very proud of … what we’re doing.”
Toronto – Ontario’s capital and Canada’s most populous city – is consistently lauded for recycling, reusing or digesting/composting as much as possible of the 1.1 million tons of garbage its 2.6 million residents and thousands of small businesses generate each year. Its current overall diversion rate, averaging 45 percent for residential trash, is lower than those claimed by other cities: Edmonton (Alberta), San Francisco and Los Angeles say they’re already at 70 percent; Chicago and Seattle boast more than 50 percent. But Toronto earns high marks for the quantity and wide range of materials involved, its stringent collection and payment systems and the fact that half of the households are in high-rise and multiunit buildings where promoting recycling is especially tough.

In part, despite measures intended to shelter it from market fluctuations, Toronto’s program, like most elsewhere, has been hit by the economic recession that pummeled prices for recyclable materials. It also must cope with an array of new products and packaging that are difficult and expensive to process. Add delays and growing pains in North America’s first organics management program based on anaerobic digestion, and little wonder the goal had to be pushed back.
The program also faces uncertainty. The Ontario government recently proposed a radically different province-wide diversion plan with new financing, rules and goals (see “Ontario Diversion Vision,” November 2009). Since a final decision awaits public consultations, it’s not clear how the changes might impact Toronto’s program, but Rathbone expects it to be “very, very significant.” For example, under the new plan, industry may be directly responsible for municipal recycling, which could reduce or eliminate the role (and control) for a city like Toronto.
Toronto launched recycling in the late 1980s with curbside collection of newspapers, cans and bottles in bright blue plastic boxes, containers that remain the symbol of the diversion effort even though they’re no longer used. Each household now gets three carts (all with wheels). About one-third of the waste stream is comprised of an expanded list of the so-called Blue Box items – most paper-based discards; glass bottles and jars; steel, aluminum and many other metals; and increasing varieties of plastics. These go into a navy blue cart. A 13-gallon Norseman forest green cart is for the 30 percent made up of kitchen scraps and other compostable matter. That’s known as Green Bin service. Garbage destined for landfill is put into a charcoal grey container.
The program will soon expand to include curbside collection of electronic gear such as televisions and computers, as well as tires. Residents must take hazardous materials to one of six widely scattered depots, although the city is experimenting with pick-ups at high-rise buildings. Seasonal collection of yard trimmings, leaves and Christmas trees – all to be chipped or composted – and pick-up of large appliances for dismantling are to continue.
Green carts are emptied each week; the grey and blue versions go out on alternate weeks. Participation is mandatory. Householders who put recyclables in the grey cart face a fine of $105 (98.27 US), although enforcement is spotty.
The system has changed the look of Toronto, particularly downtown where the carts dominate the cramped front porches of century-old homes. As the containers are pushed along sidewalks and up and down stairs, they add a distinctive rumble and bump to collection days.

A province-wide regulation requires all cities and towns with more than 5,000 people to run a Blue Box program. The cost is partially covered by revenues from recycled materials. If that’s not enough (and it never has been), the shortfall is equally split between the municipality and the businesses – known as stewards – that either produce or import the materials.
As part of Target 70, Toronto revamped how it raises its share of the shortfall. Previously, the cost of all waste collection and recycling, calculated as $209 (195.60) annually per household, was included in the property tax, the city’s major source of revenue. The new scheme cuts the tax by that amount and, instead, imposes an explicit solid waste fee. The charge depends on which of four grey-cart sizes a householder selects.
The fee for the smallest, which holds the equivalent of one typical green garbage bag, is $199 (186.27) per year, $10 (9.36) less than the previous amount. All other sizes cost more. The fee for the largest cart, equal to 4-1/2 bags, is $399, (373.46) or $190 (177.84) extra. Since no more than one cartful can be put out each pick-up day, the system encourages householders to choose the smallest they can manage and, to avoid exceeding their cart’s capacity, recycle as much as possible. Sixty percent of homes are in the two smallest waste bins. There is no charge for the blue and green carts.
A similar incentive applies to multiunit buildings: Building owners pay a hefty fee based on the volume of waste they produce, but collection of Blue Box items and organics, is free. This year, the new fee system raised $54 million (50.54 million) more than the city would have received through the property tax, and these extra monies are in turn used to fund the new waste diversion services.
Toronto prohibits incineration of garbage. For now it’s hauled to a landfill in Michigan. Under current plans, starting in 2011, it’s to go to the Green Lane landfill, a new city-owned site near St. Thomas, Ontario, two hours to the west of Toronto. The city is planning to build a materials recovery facility (dirty MRF) to extract any remaining recyclables and organics from the rubbish. Methane from the landfill will be captured for a cogeneration plant.

The Blue Box materials are commingled in regular packer garbage trucks. They are processed at two suburban plants where they’re sorted and marketed for a wide variety of buyers. One plant is owned and operated by a private contractor, Metro Municipal Recycling Services Inc. The other is owned by the city and run by Canada Fiber.
The program has had uneven results. The diversion rate for single-family homes is about 60 percent. But in townhouses and high-rise apartments and condominiums – which comprise half of Toronto’s more than one million housing units, and where recyclable materials must be lugged to bins in basement rooms and Green Bin service is just being introduced – the diversion rate is a mere 15 percent. For the nearly 20,000 small businesses that participate, it’s 43 percent.
Financing has been contentious since the Blue Box program was devised as a compromise between soft drink companies and environmentalists over the switch from refillable glass bottles to throwaway plastic. For many years, the industry contributed a set annual amount that the provincial government distributed to municipalities. In 2004, the province introduced the current system that, for the first time in North America, required packaging and printed paper producers to directly pay part of the cost of Blue Box recycling. (Municipalities still pay the entire cost of the Green Bin and most other components of waste diversion.)
Calculation and control of the stewards’ Blue Box payments is shared by Waste Diversion Ontario (WDO), a nonprofit established by the provincial government, and an industry group known as Stewardship Ontario. Companies make their payments to StewardEdge, which in turn sends the money to WDO for distribution to municipalities. While this may change under Ontario’s new plan, municipalities get the revenue from the sale of recyclables, and then they and the stewards split (50/50) the shortfall between that revenue and the municipalities’ costs. As a result, when markets and prices weaken, the municipality and industry each must pay more.
The overall cost of Toronto’s Blue Box program is about $180 (168.53) per ton, Rathbone says. In September 2008, revenues from recycled materials came close to matching that figure: The weighted average, or composite, price, on the value of 14 materials, hit a record $173 (161.97) per ton. Then, the global economy went into freefall, and the market for recyclable materials tumbled with it. By December, the composite price had plummeted to $42.50 (39.79). Since then, it has slowly climbed back to the $90 (84.22) range, still well below the $135 (126.32) that Toronto officials had counted on. Overall, payments from StewardEdge cover just four percent of the total annual cost of Toronto’s waste management system.
Revenues have also been hit because there’s not as much of some materials to sell. With newspaper circulation falling and papers having fewer ads and pages, blue carts contain smaller piles of newsprint. Slower sales of consumer goods mean less cardboard and Styrofoam packaging.
The impact hasn’t been as calamitous as the raw pricing numbers might suggest. The amounts paid to municipalities by WDO – determined annually with checks sent out every three months – are based on three-year rolling averages that smooth fluctuations. In Toronto, Rathbone also created a buffer: When revenues exceeded the budgeted level, the excess went into a contingency fund, or “rate stabilization reserve,” for tougher times.
Most buyers continue to take Blue Box materials, albeit at dramatically reduced prices, says Ben Bennett of the Municipal Waste Association. China’s imports of plastic film and the tubs that contain products such as margarine and yogurt are down. But most recyclables remain in North America, and “we’ve been quite heartened that the stuff is still moving,” Bennett says.
Still, the recession cut Toronto’s Blue Box revenues by nearly $12 million (11.23) this year. The result: Rathbone won’t have enough for all the expansion plans required for the 2010 target. Most important, the introduction of the Green Bin into high-rises has been delayed by a year. So, too, has construction of the $115 million (107.63) dirty MRF at the Green Lane landfill. That plant, projected to add eight percentage points to the diversion rate, is at least two years away.
In the midst of this turmoil, the Ontario government has proposed amendments to the diversion system that include requiring stewards to pay the entire cost of, and eventually run, the Blue Box system and other small components of diversion. A second phase will incorporate organics recycling. “It is about shifting our thinking from waste to worth,” Environment Minister John Gerretsen says in his introduction to a recently released report that recommends this Extended Producer Responsibility.
In fact, the province has begun the shift: Starting next spring, the stewards responsible for hazardous wastes and electronic goods (as well as vehicle tires, to be collected in a separate program) will pay the entire cost of recycling them. Rathbone looks forward to full funding. “It begins to change how materials are designed and made … if a manufacturer is paying the cost of disposal.” They might curtail the introduction of products that are difficult, and sometimes impossible, to process (see sidebar).
The Ontario government report, aimed at boosting a province-wide diversion rate of only 22 percent, suggests a ban on some materials or imposition of disposal fees that would deter their use. It recommends the government designate what materials are to be diverted and set targets and timetables for each. For the first time, these regulations would also apply to large industries and commercial businesses. It would be left to the stewards to decide how to comply. It isn’t yet clear whether province-wide goals would take precedence over any previously set by municipalities.
Toronto supports the changes but if the province imposes weaker targets, the city will stick with its own, Rathbone says. It will also look for a continued role in waste diversion. The Blue Box is just a small part of a comprehensive system that includes organics and several other waste streams, as well as equipment and procedures for handling them, he says. “It’s difficult to pull one piece off.”

Toronto will build a 94,000 tons/year anaerobic digestion facility to handle the increasing stream of organic wastes from its homes and small businesses. The plant is scheduled to go into operation in mid-2011, around the time the city is also to complete expansion of its Green Bin program into 5,000 high-rise apartment and condominium buildings.
An earlier plan called for construction of two 61,000-ton plants at separate locations. It was changed after only two companies, in mid-August, submitted proposals to build the first one and both exceeded the budget limit. City officials now are negotiating with the proponent of the technically superior, lowest cost submission, from AECOM Canada Ltd., in hopes of keeping the cost of the single, larger plant to around $64 million, (just over $60 million US), says Rathbone.
The revamped scheme also calls for renovation and upgrading of the lone current plant, which currently can handle up to 41,300 tons/year. It was to have closed when the second plant began operating. Constructing just one digester should take less time than building two, one after the other, Rathbone says. That’s good news since Toronto’s organics recycling system is in what he calls “a very tight situation” in terms of processing capacity. Postponing the rollout of the Green Bin program to high rises by a year should ease the capacity challenge; the city estimates that roughly 55,000 tons were be generated by that residential sector.
Residents of the city’s 510,000 single-family homes have been separately putting out kitchen scraps and other organic wastes since 2005. The program is mandatory; participation is said to be 90 percent and it captures most of the potential stream. Toronto was the first sizeable city in North America to opt for anaerobic digestion, instead of composting, its organic wastes. The system is more expensive – sales of the resulting compost earn only one-fifth what it costs to run the system – but it can handle a wider range of materials and allows residents to put the wastes in plastic bags. (Historically, Toronto flared the biogas from this plant thus was not getting any revenue offsets from energy generation.) The plant’s relatively small footprint also permits processing within the city’s borders.
AECOM is a global engineering giant based in Los Angeles. Its Toronto facilities (the current and proposed plants) employ the BTA process, licensed for North America and the United Kingdom by Canada Compost Inc., based in Newmarket, a suburban city north of Toronto.
The organic material, which includes kitchen scraps, paper towels and napkins, tissues, disposable diapers, kitty litter, dog feces and soiled paper food cartons, is first liquefied in a hydropulper. The bags and plastic bits from diapers rise to the top and are skimmed off for disposal. Heavier contaminants sink and are removed from the bottom. The organic material is heated and sent to the digester where, in constant motion, it undergoes anaerobic decomposition. Biogas produced by the digester is to be refined to pipeline gas quality and supplied to the local gas distribution system for eventual use by the for Toronto’s solid waste collection vehicles and to offset consumption of natural gas in city facilities.
The process produces a semisolid digestate that’s cured aerobically into compost – either at a city facility where it’s combined with yard wastes and leaves and then given to residents, or by one of the contractors Toronto has hired to handle its excess organics, who sell it for use on farm fields or in parks. Those outside processors are required because of the stress on the system. Households and small businesses put 132,300 of organic waste into green bins this year, generating more than 90,000 tons that couldn’t be handled at the city’s lone plant.
But some of those contractors have been a headache: The city dropped processors in Quebec because they weren’t set up to handle the wastes in the condition they arrived, i.e., liquefying inside plastic bags. Last summer, after complaints about odors, the provincial Environment Ministry temporarily closed a 220 tons/day operation in Welland, Ontario, near Niagara Falls, while its owner upgraded containment and air handling. And the city fired another contractor found to be hauling organic wastes to a Michigan landfill.
The program also faces criticism for letting residents put their organics in plastic bags and recycle disposable diapers. Opponents complain that the plastic, accounting for one-fifth of what goes into the green bins, ends up in landfills, and bits of residue contaminate the final compost. Municipalities bordering Toronto require that residents use paper or biodegradable plastic, they note.
Rathbone counters that Toronto opted for anaerobic digestion precisely because that process can handle plastic bags. They’re essential to reduce the “yuck” factor, “ensuring that householders never have to touch their bin contents and, in the case of apartment and condo dwellers, allows them to drop off organics at a central location without having to carry a pail back and forth,” he says. The system removes all plastic pieces larger than half a grain of rice and Toronto’s compost meets the most stringent Canadian standards, he adds. It’s hoped that markets, perhaps artificial lumber, will develop for the bags.
The 90 percent participation rate in single-family homes is nearly double that achieved by Toronto’s neighbors, notes Ben Bennett of the Municipal Waste Association. “There’s a trade-off,” he says. “If you can get more diversion and a small portion has to go to landfill, that’s better than not.”

Peter Gorrie is a freelance writer based in Toronto, Ontario, specializing in energy and environment issues.
Sidebar page 24
Packaging Trends Impede City’s Recycling
THE possibility that industry may have to cover the costs of municipal recycling programs in Ontario (see main article) may go a long way to addressing recycling challenges posed by some consumer product packaging. Here is a sampling experienced by the City of Toronto:
• Packaging increasingly contains laminates of two or more plastics – some detergent bottles are a recycling nightmare of four – that can’t be separated. As an added impediment, new PVC full body wrap labels confuse the optical scanners at the sorting plants, they must be removed by hand, increasing costs.
• The clear, hard plastic clamshells and boxes that are taking over the packaging of fresh berries, greens and fast foods are stamped with the Möbius Loop symbol and a number indicating the resin used to make them. While those markings suggest the packages can be recycled, there’s no known market.
• Plastic film is easy to recycle, except when, as happens more and more often, it’s wrapped around bottles or flats of soft drink cans.
• In a reprise of the shift that spawned the Blue Box, sellers of bottled water are replacing refillable 20-litre (21-quart) containers with 15-litre (15.8-quart) single-use models. While the new ones are recyclable, they’re so big they jam the current sorting equipment and require expensive reconfigurations.
• Coffee cans, formerly all metal, now have paper-fiber sides. That means, while they require the same space and handling, they’re worth less to the steelmakers who recycle them in their blast furnaces.
• Thinner steel and aluminum soft drink cans and plastic water bottles create a similar problem – less revenue for the same amount of handling. In fact, the use of aluminum is in sharp decline, eliminating an important revenue source. “In the 1990s, there was a commitment by industry that they’d continue to use aluminum to help municipalities offset the costs of recycling programs. That’s gone by the wayside,” says Craig Bartlett, who until last year worked with Geoff Rathbone in Toronto and now works for the Durham Region.

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