Organics Legislative and Regulatory Update Howard Levenson, Ph.D. Deputy Director, CalRecycle August 8, 2016

Today’s Topics Setting the stage – tons of organics need homes Organics policy drivers What will it take to get to 75%? Organics infrastructure Infrastructure issues End-use incentives CalRecycle? CDFA Healthy Soils Cross-Agency activities

What are Organics? Green Materials Wood waste Food Materials Manure DPR Brown Bag 11/18/2014 What are Organics? Green Materials Wood waste Food Materials Manure

State Policy Drivers Governor Brown’s 5 Pillars AB 32 Short-Lived Climate Pollutant Plan Healthy Soils Initiative CalRecycle – direct drivers

Governor Brown’s 5 Pillars http://www.arb.ca.gov/cc/pillars/transportation/notice2.pdf Reduce petroleum use in cars and trucks by 50% Increase electricity from renewable sources to 50% Double efficiency savings at existing buildings Reduce release of methane, black carbon, other short lived climate pollutants Manage farm and rangelands, forests, wetlands to store carbon

AB 32 Scoping Plan New update under development Reduce GHGs to < 1990 levels ARB Scoping Plan Update 2014 http://www.arb.ca.gov/cc/scopingplan/scopingplan.htm Waste Management Sector Potential for 20-30 MMT GHG reductions Activities support AB 341 New update under development

AB 32 Scoping Plan Funding/incentives for infrastructure e.g., Greenhouse Gas Reduction Program $$ Regulatory/statutory provisions e.g., direct regulations on organics in landfills? Short-Lived Climate Pollutant policy Emission reduction factors Permitting Procurement

Short-Lived Climate Pollutants Draft released 9/30/15 http://www.arb.ca.gov/cc/shortlived/shortlived.htm Reduce methane, black carbon, fluorinated gases Key points for CalRecycle: Divert 90% of organics by 2025 Align financial incentives with organics diversion Collaborate on permitting and developing markets Support research on landfill emissions, water savings from compost use

Healthy Soils Initiative Increase carbon in California’s agricultural soils Incentivize use of beneficial products from expanded organics infrastructure to build organic matter content of agricultural soils CDFA lead, CalRecycle and ARB support http://www.cdfa.ca.gov/EnvironmentalStewardship/HealthySoils.html Compost – NRCS COMET Planner conservation practice standard

CalRecycle – Direct Policy Drivers AB 939 50% diversion requirement on jurisdictions AB 341 75% statewide by 2020 Not transformation or disposal-related activities Doesn’t change AB 939 mandate on jurisdictions AB 1826 Mandatory commercial organics recycling AB 1594 ADC ≠ recycling aqfter 1/1/20 AB 876

Disposal Stream - 2014

75% -- Where Are We Now?

Projected Tons To Reach 75%

What Will 75% Take? Moving > 20 million tons/year out of landfills No way to achieve 75% goal without organics ~40% of disposal > 10 MT/year suitable for compost, mulch, AD, biomass Food waste biggest category ~6 million tons/year Has to be handled locally or regionally  Dozens/100s of new or expanded facilities

Infrastructure Types Aerated Static Pile composting Anaerobic DPR Brown Bag 11/18/2014 Infrastructure Types Aerated Static Pile composting Anaerobic Digestion

Current facilities Origins of feedstock

Potential Facility Shortfall Composting Estimated Excess Capacity (in tons per year) Anaerobic Digestion Permitted Capacity (Tons per year, excess unknown) POTW Average Flow (Millions of gallons per year)

More Local Organics Processing Facilities Needed Los Angeles area detailed example

More Local Organics Processing Facilities Needed Sacramento area detailed example

Organics Infrastructure: Facility Needs # of facilities to handle additional 10 million tons At 500 TPD  180,000 TPY  ~50 expansions or new At 300 TPD  100,000 TPY  ~ 100 expansions or new At 1000 TPD  365,000 TPY  ~ 30 expansions or new 30-100 expansions or new facilities needed

Infrastructure Cost Needs DPR Brown Bag 11/18/2014 Infrastructure Cost Needs Composting  $8-15 million for 100,000 TPY facility Anaerobic digestion  $30-50 million for 100,000 TPY facility Total infrastructure investment of $2-3 billion to handle 10 million TPY organics

Infrastructure Issues DPR Brown Bag 11/18/2014 Infrastructure Issues Landfill costs Siting Permitting & environmental regulations CEQA Markets Financing

Competition with Low Landfill Tip Fees DPR Brown Bag 11/18/2014 Competition with Low Landfill Tip Fees Average cost of landfilling ~$45/ton Contracted rates are lower Some California landfills as low as $25/ton

Siting Local land use Planning Zoning CEQA NIMBY

Permitting CalRecycle solid waste facility permit Air districts Ozone, particulate matter standards New source review – BACT, offsets State Water Resources Control Board/Regional Water Quality Control Boards Statewide General Waste Discharge Requirements for Composting Operations - ponds, pads, berms CalRecycle solid waste facility permit

Environmental Regulations DPR Brown Bag 11/18/2014 Environmental Regulations CalRecycle regs on composting & in-vessel digestion Air districts – prohibitory rules VOC emissions from composting operations Nuisance odors Enforcement issues – who will enforce Regional water boards – general orders CDFA - land application, rendering

Markets: Procurement and Demand DPR Brown Bag 11/18/2014 Markets: Procurement and Demand Mostly local or regional – need local demand Sustainable landscaping DWR – Model Water Efficient Landscape Ordinance CUWCC - Rebate-Eligible Landscape Conversion Stds. Caltrans –erosion control & landscaping CDFA - agricultural & rangelands Need to quantify and monetize co-benefits Need to ensure product quality

Markets: Clean Products Calrecycle finished product testing standards Metals, pathogens New CalRecycle limit for physical contaminants Glass & plastic < 0.5% by 2017 Sorting/screening improvements for food materials Labeling info: US Composting Council, CDFA re: nutrients Working with Water Board & CDFA on direct land application of uncomposted green materials Potential spread of pests not fully addressed

Markets: Pipeline & Grid Connections DPR Brown Bag 11/18/2014 Markets: Pipeline & Grid Connections Cost of grid interconnection & pipeline injection Quality of gas Testing & reporting

State Financial Incentives CEC: Alternative Transportation Fuel Grants ARB: Low Carbon Fuel Standard Treasurer: CPCFA Tax-Exempt Bonds, CalCAP CEC/CPUC: Renewable Portfolio Standard BOE: Manufacturers Tax Rebate CalRecycle: RMDZ Loans CalRecycle: Greenhouse Gas Grants/Loans

CalRecycle Greenhouse Gas Grants & Loans Competitive grants and loans to reduce GHGs and divert materials from landfills by expanding existing capacity or establishing new facilities in California Benefit disadvantaged communities Co-benefits: Enhanced air/water protection Job creation In-state biofuel/bioenergy production

CalRecycle Greenhouse Gas Programs (FY 14/15) 2 Grant Programs ($20 million) Organic materials ($15 million) Fiber, Plastic, and Glass ($5 million) 1 Loan Program ($5 million, revolving) Organics & Fiber, Plastic, and Glass (also separate RMDZ loan funds)

Cycle 2 (FY 16/17) Grants - $100 Million proposed in budget ~$60M organics infrastructure, $10M food waste prevention Subject to approval of Legislature and Governor Tentative Dates: ?? Loans - $5 million more available?? Plus RMDZ Loans - $5 million (+ FY 14/15 $7 million)

Organics Incentive Payments? Existing financing = grants/loans for upfront capital investment costs New concept: Complement/replace with payments at back end for actual production Help overcome marginal costs of processing and marketing products Mechanism: use tip fee/generator revenue for payments ~$50 million/year, for 5 years? Would complement CDFA end-use incentive Requires legislation

CDFA Healthy Soils Incentives? Would complement grants/loans for upfront capital investment costs Proposed in Governor’s Budget Would complement CalRecycle end-use incentive if that is enacted If implemented at $5 million/year, would incentivize ~10% of annual compost production

Key Ongoing Activities GGRF funding?? Healthy Soils Initiative AB 1045 working group ARB/CAPCOA working group Land application Compost co-benefits quantification Water-efficient landscaping AB 1826 Compliance SLCP and rulemaking

ARB SLCP Rulemaking If ARB adopts SLCP plan with 90% organics goal, then: Scoping meetings in late 2016 Coordination with air districts, CalRecycle, stakeholders, many others Rulemaking activities and workshops in 2017 Regulation would be due in 2018

DPR Brown Bag 11/18/2014 Questions? Howard Levenson, Deputy Director howard.levenson@calrecycle.ca.gov CUWCC May 2014