BioCycle May 2004, Vol. 45, No. 5, p. 38
Pennsylvania composting company has built a strong base, but until the regulatory landscape changes in the state – hopefully pretty soon – they will be conservative in their expansion.
“Over six million feet ‘served.'” Pennsylvania-based composter AgRecycle, Inc. could borrow a line from McDonald’s and erect a sign with that slogan at the city’s Point State Park, the most heavily-trafficked green space in the city, with an estimated three million visitors per year. Compost provided by AgRecycle helps keep the grass healthy and growing, even under all that foot traffic.
The city park soil renovation is one of several high profile projects that have helped AgRecycle grow into one of the most successful composters in the eastern U.S. Carla Castagnero and Dan Eichenlaub launched AgRecycle in 1991, after the state implemented comprehensive solid waste management legislation that included a ban (effective in 1990) on landfilling loads that contain primarily leaves. Castagnero, a former environmental attorney, was recruited by Eichenlaub, owner of a landscape construction company he founded in the 1970s. Since 1988, the soils department of Eichenlaub, Inc. had been producing limited amounts of compost using yard debris and grass clippings from its job sites.
AgRecycle did the Point State Park project in Pittsburgh in 1994. “The city did a major soil renovation project which required plenty of compost,” Castagnero recalls. “The parks superintendent had looked at some of the other projects we had been doing. He has a wonderful attitude; he’s not afraid to try new things, new technology. With all the foot traffic in the city parks, they need to make some tough choices to keep the park green and growing.” AgRecycle’s most recent high profile project is use of its compost in the renovation of the entrance to Fallingwater, one of Frank Lloyd Wright’s architectural masterpieces.
Obviously, the public projects have helped educate the masses in a region where compost is a relatively new landscaping tool. “When we started, nobody knew what compost was. People often mistook it for spent mushroom substrate,” says Castagnero. To see the benefits of compost, she adds, “it’s much easier to walk through the Pittsburgh Zoo (another large- scale customer) where the planters all have compost, as opposed to Mrs. Jones’ backyard.” Coincidentally, AgRecycle collects the zoo’s herbivore manure and other vegetative waste for composting.
All told, AgRecycle markets tens of thousands of cubic yards of compost annually. The fact that demand for its compost exceeds its supply may sound like a good thing, but to Eichenlaub and Castagnero, it’s a frustration. “After 13 years, we are still competing with landfills for clean organic feedstocks,” says Eichenlaub. “In addition, in western Pennsylvania, only Allegheny County, where Pittsburgh is, has a burn ban on leaves and other yard trimmings. But we feel a few things are coming up on the horizon that will help to break this log jam.” That includes an effort by the Pennsylvania Department of Environmental Protection (PADEP) to impose a $4/ton increase to an existing surcharge on municipal waste disposed at landfills, and impose that same fee on the residual waste stream, which includes industrial organics. (DEP separately regulates municipal and residual wastes).”This may actually make composting more enticing than going to a landfill, which would help us attract more feedstocks,” he adds.
GENERAL PERMIT BRINGS FEEDSTOCK DIVERSIFICATION
AgRecycle opened its first composting site on 41 acres in a rural area outside of Pittsburgh. It prepared ten of the 41 leased acres for composting, and obtained a permit-by-rule registration from the PADEP, which only allows yard trimmings to be processed. Because of its remote location, AgRecycle opened three dropoff/retail sites – one in the city of Pittsburgh and two in the suburbs. Hundreds of landscaping firms bring material to these sites, which also are used to sell finished compost and mulch.
Gradually, AgRecycle expanded its processing capacity. It owns or contract-operates seven composting sites in and around the Pittsburgh metro area. The facilities are located on several types of land, including a former farm and coal mine overburden areas that aren’t suitable for building. All but one operates under a permit-by-rule. The firm uses mobile equipment, including a Jenz grinder, a Frontier turner and a Bivitec screen, to process materials at all sites. The driver transporting the equipment also operates it a the stie, so only one person is needed for both tasks. The only dedicated equipment at each location is front-end loaders.
The one exception to the permit-by-rule sites is in Washington County. It is located on coal overburden land, and is leased from a municipality in the county. AgRecycle, along with other members of the Pennsylvania Composting Association (now the Organics Council within the Professional Recyclers of Pennsylvania), worked with PADEP to create a General Permit for composting sites. Facilities with a general permit can accept preconsumer vegetative residuals (industrial, commercial and institutional), manure and paper (e.g., newsprint, corrugated, paper fibers), as well as yard trimmings. “That cooperative effort took four years,” says Castagnero, adding that the AgRecycle site in Washington County received the first general permit issued by the state. “It was very important to our company as well as other private composting companies in the state to have the general permit to take these diverse waste streams to build our feedstock volumes. The state has been very generous in funding public sector sites to compost yard trimmings, so to keep the private sector operations going, we had to be allowed to accept organic wastes that are generated by the commercial sector.” Because of the high cost and lengthy process to obtain a general permit, only about four or five companies in Pennsylvania have general composting permits at this time.
In 2003, yard trimmings, leaves and grass clippings comprised close to 40 percent of feedstocks received at the Washington County site. Vegetative food residuals, primarily from food processors such as a snack food company, accounted for about 20 percent of the flow, followed by herbivore manure with bedding (about 18.5 percent). Clean wood waste, including fine wood fibers, made up 11 percent of the flow. Paper fractions (including corrugated, fibers from manufacturers and newsprint) accounted for 14 percent.
When AgRecycle applied for the permit, it included a broad list of materials (i.e., categories versus specific feedstocks). Currently, the general permit limits the amount of moisture an acceptable material has in it (it can’t be a slurry as defined by EPA). Unfortunately, this means that off spec syrup from a beverage manufacturer near the composting facility cannot be accepted. “The compost piles would benefit from addition of a material like this,” says Eichenlaub, “so we are working with PADEP to consider some changes to the permit.”
The arrangement for the site in Washington County provides an excellent example of how a private composter can fill a public sector need. Pennsylvania’s landfilling ban on leaves applies to jurisdictions with a population over 10,000. Washington county officials were evaluating options for composting infrastructure and approached AgRecycle for advice, especially with regard to managing the costs.
“We went through several scenarios,” recalls Eichenlaub, “starting with each municipality in the county building its own site, then what it would cost to have one central site. With a central site, the cost per cubic yard dropped by about half. Then we discussed the possibility of building a facility to process not only what municipalities bring in, but also servicing private companies in the region that have clean organics that would be allowed under a general permit. The cost then dropped tremendously. Next, we discussed that municipal governments shouldn’t use tax dollars to subsidize private industry if it is bringing material there. So we suggested an approach where AgRecycle would lease the land from the municipality where the site is located, and then provide a rebate to the municipalities on every cubic yard of material brought in by private sector generators. On the surface, they are paying $8 to $10/cy to tip their own leaves, but they get money back on each cubic yard of nonmunicipal material brought in. Basically, we wanted to maintain the market pricing but give municipalities a win with a below market rate tip fee. And the more volume we bring in from private generators, the more the municipalities’ costs are offset.”
Participating municipalities used some of their grant monies to help establish the site. AgRecycle covers the cost of equipment, labor and related expenses, and also receives the finished product to market. The site is located off two interstate highways, which makes it accessible for both participating municipalities and private sector generators in the area, adds Eichenlaub. “That is partly why we have the general permit at that site, because there is industry in that area with a range of different materials we can take. The county also provides us with referrals, directing companies it receives recycling inquiries from.” Gate fees vary depending on the material, e.g., wood fines cost less to tip than wooden spools.
Through trial and error, AgRecycle has learned the best ways to handle various types of food residuals. One example is potato peelings.. “They can be very wet, so the operators know they have to basically construct a bunker filled with semicomposted material, as well as very woody material to absorb some of the moisture if a particular load is on the wetter side,” explains Castagnero. Food residuals are unloaded into the bunker, then a loader mixes the amendment in and adds that material to a semiactive windrow. State regulations limit the size of windrows to 8-feet high by 16-feet wide. She adds that handling feedstocks from food processors and manufacturers is not difficult because they produce a uniform material. “The operators at the site know exactly what’s coming in and how much.”
Depending on the feedstock, active composting takes four to 11 months. The curing phase ranges from a minimum of 30 days to up to 90 days. “Winter weather and very ‘delicate’ products sometimes necessitate such a lengthy curing time,” explains Castagnero. “By delicate product, I mean a one-eighth inch commodity that is going to a golf course, for example. We spend more time bringing product to market than most of our competitors, so while there is more competition out there, not much of that product is intended for the really high-end market.”
To protect its piles of finished compost while they are curing from the elements, AgRecycle uses Compostex UR fabric covers, made by Vermont-based Texel. “We had a problem using plastics; the sun’s rays would cause tiny flecks of the material to break off and mix with the compost,” she adds.
Controlling odors has not been a significant problem for AgRecycle, according to Castagnero. “We’ve always been obsessive about managing odors. We won’t accept an odor problem – such as food that is already rancid or yellow grass. All of our contracts stipulate that we have the right to refuse loads. A lot of composters are afraid to refuse loads because they will lose money, but that is not smart composting business.”
A CUBIC YARD IN, HOW MUCH OUT?
After 12 years of managing compost operations, AgRecycle can be fairly specific about the volume of feedstocks its sites can handle, thus optimizing site capacity, maximizing production, and determining how much product will be available to market. For example, with mixed yard trimmings composting, the reduction rate is approximately 5-to-1 over the entire composting period. With some of the vegetative food residuals, reduction rates can be as high as 28-to-1, and “there are items that are everywhere in between those figures,” explains Castagnero. “I think this reduction rate is probably the most forgotten aspect of figuring out the true economics of the composting process as during this reduction phase, one has to dedicate the costs associated with site space, labor, and equipment usage to an ever diminishing volume.”
Eichenlaub adds that in the case of food residuals, tipping fees need to cover the cost of processing because “food doesn’t generate you very much compost. At the same time, food residuals like we receive don’t require a lot of preprocessing, and they bring the benefits of nutrients and moisture. All those elements factor in to how we set the tip fee for food residuals.” In general, he adds, AgRecycle evaluates its tipping fees (and overall economics) based on four key factors: 1) Reduction rate; 2) What the feedstock adds to the composting process; 3) How much preprocessing is needed; and 4) What the feedstock gives you on the back end in terms of quantity and quality of compost.
Generally, AgRecycle has to charge less than the waste hauler to secure commercial and industrial feedstocks, especially if the generator needs to add a second dumpster or do some separation of organics and nonorganics. To avoid price wars with the haulers, AgRecycle tries to sign long-term contracts with the generators (typically three to five years). “If a waste company finds we are servicing a generator, they will offer a lower price just to gain the customer back,” he explains. “Then, when the contract with the hauler comes up for renewal, the price will go back up again. By offering long-term contracts, we can honor a competitive rate and have the feedstock flow.”
Lately, tipping fees have been rising in the western part of the state, which is a plus for AgRecycle. “Tipping fees had been very, very low for a very long time – in the low $20s,” says Castagnero. “They were so cheap, (businesses) didn’t consider it worth their time to divert waste rather than landfilling it. But now fees are in the $30s, so more are doing it.” If the state implements a $4/ton fee on residual waste that is landfilled, e.g. organic residuals from a food processor, that will make AgRecycle’s tip fee even more attractive than going to a landfill, adds Eichenlaub.
Eichenlaub and Castagnero continue to work with the PADEP to amend the bonding requirements currently imposed on composters that were originally designed for landfill operations. “These requirements make it very difficult for us to repermit our sites under the general composting permit,” says Eichenlaub, “mostly because the costs and liabilities involved are very high. We have a proven track record now with the Washington County site, and we feel we are making progress in demonstrating that such strict bonding requirements are not necessary. Once the bonding issue is resolved, we will go through the lengthy and expensive repermitting of our other sites. We think in the long run it’s well worth it as we have a growing waiting list of generators who want to bring us their feedstocks.”
CULTIVATING HIGH END MARKETS
AgRecycle sells standard compost and compost/soil blends and makes specialty blends for rooftop gardens, planting mixes and containers. “We are end product quality-driven all the way,” emphasizes Castagnero. “Compost markets are becoming polarized. When you start out, you need to make a determination – you’re either going to go after the high end market or go for low price sales and sell as much as you can. If you try to get into the middle ground, you’ll get lost. You need to choose one or the other.” Experience also helps: “All of our site managers have been with us a long time.”
Consistency also has been important, she points out, in delivering promised amounts of compost to bulk customers, year after year. “The application has to be uniform; if you’re selling quarter-inch compost, it has to be quarter-inch, and fully cured,” she notes. “To develop long-term customer relationships, it’s really important to be able to guarantee the same quality and same amount on the same date, year after year. Somebody who is doing greenhouse potting needs to know that when you promise to deliver on March 20, AgRecycle is going be there.”
Selling its compost for prices ranging from $21 to $33 per cubic yard (FOB), AgRecycle serves a wide range of customers, “everything from organic farmers to cemeteries to golf courses to commercial landscapers (more than 400 of those) to school districts” in a three-state area. “We have worked very hard to establish ourselves in those markets,” says Castagnero. “We sell out of material every year; we don’t have enough feedstock to meet the market demand. While that may sound like a nice problem it’s not. We know that for fall planting we always have to have another batch ready to go on Labor Day weekend. If a developer calls, we take orders; we have taken orders up to 24 months in advance for projects requiring as much as a couple thousand yards of material.” To serve residential customers, AgRecycle sells through four local garden centers, who sign contracts agreeing to deliver compost to customers in amounts as small as one yard.
Castagnero notes that “a lot of our customers who buy compost have no clue how it is made.” As another effective marketing and educational tool, in its early years, AgRecycle held annual lunch or dinner events at its compost sites, inviting a “broad range of people, from customers who are curious about how compost is made, to potential end users, potential drop-off customers, to local government personnel” and more. Now that the company is established in the community, the dinners are held biannually, or in conjunction with a special event.
Not content to sit still, AgRecycle branched out into the rubber recycling business several years ago,. Pittsburgh’s Frick Art & Historical Center hired the firm to spread 31 tons of shredded tires across 31,000 square feet of its lawn, using a $45,000 Community Waste Tire Recreational Grant from the PADEP. The crumb rubber topdressing is intended to reduce wear and reseeding costs, lengthen the growing season and conserve water. The rubber bits also help protect the bottoms of the grass blades from foot traffic. Subsequently, crumb rubber has become “a steady seller to our established customer base,” says Castagnero.