Waste Diversion in Ontario; a Broken Business Model

This week in the Toronto Star there was further reporting of abuses of waste that was supposed to be diverted and sent for composting, being sent to landfill instead.

The problem of less waste being diverted than expected, to my mind lies in how the waste industry's current business model works.

The simple version of this story is that waste is seen as a liability and the rewards go to people who take the waste off the municipalities hands.

The rewards are best if you have a landfill; you take waste, get paid an attractive fee and bury it in a hole in the ground. Without a landfill you have to pay part of the fee to someone who has one. Thus the landfill operators are the big winners in this game. Until waste is recognized as an energy resource and should be used to create liquid fuels or electricity, this is unlikely to change.

Recyclers make their money by extracting resalable materials from the waste stream and selling these commodities on the open market.In good times they make money, but in low commodity cycles recycling is a tough business. Many of them would like to have alternatives to landfill and so would their customers.

There seems to be no particular incentive for landfill operators to find alternatives to landfill, unless the capacity of their landfill is almost used up. Most see the solution as finding other landfill sites and until we find viable alternatives they are probably right. I've spoken to a number of landfill operators and they believe that landfill is here to stay. They also feel that most alternatives are too capital intensive to justify serious attention at this time.

The article focussed on Dongara Pelletizing Plant sending waste to landfill instead of processing it into energy pellets. This story highlights an excellent example of what is wrong with the system, not what is wrong at Dongara.

York Region doesn't pay them for energy pellets delivered to customers. The way their deal works, they get paid the tipping fees for each tonne of garbage delivered to their plant regardless of what happens to it. It's off the municipality's hands, so they no longer need to worry. When and if Dongara dumps it in landfill, irrespective of the reason, by my rough calculations they appear to make about $20.00 per tonne. Its not much, but if the Star is right and they have no market for their product, that might become an important source of revenue. Is it any wonder that they take advantage of it?

In a contract of that nature, there ought to be a penalty for dumping instead of processing, rather than a reward as is currently the case. The $84 per tonne paid by York Region is a significant premium as is pointed out in the article, but it should be tied to diversion only.

Until there are incentives that drive the right diversion behavior, many promising solutions are unlikely to survive. Most are capital intensive and require investors to take significant risks. Why do that, when there are cheaper and safer investments in the area of waste handling and diversion?

What is recycling at the molecular level?

We owe the quality of our lives to our ability take resources and turn them into products we need.

The products we need are then used or consumed and what we don't want is thrown out.

What we throw out goes to be recycled or land filled. Less than 50 % of what we dispose of is recycled, the rest is dumped in landfill for future generations to worry about.

Most of us acknowledge that landfills are a necessary evil, what we don't question much are the alternatives to landfill.

The way we handle waste today assumes waste is a liability.
What if we were to assume that waste is a valuable distributed energy resource? It in fact contains, on a ton for ton basis, about 50% of the energy of coal.

How would we handle it then?

It would become clear that disposal is the lowest level of use for a resource. Incineration is little better. Granted, we can use the energy we generate to fire kilns or create steam for generators, but in reality this is very low level recovery.

We can improve our ability to recycle and I think this is happening all the time, but much of what goes to land fill is beyond recycling as it is currently done. It is a mixture of a wide range of materials, some of it rotting and odorous, much of it is moist and each component contaminates the other components. So what do we do with this stuff?

We tend to think of recycling at a product level. Paper is recyclable, metal is recyclable, glass is recyclable and so are plastics. But what if we look at this material at the molecular level?

Much of what goes to landfill has high levels of carbon. Items such as organics, paper, plastics fibres, carpeting, wood rubber and even asphalt shingles all contain carbon along with hydrogen and oxygen. These elements are bound together in a variety of complex compounds often containing other elements as well.

But instead of thinking about this material at a product level, what if we viewed it at the molecular level? We'd see that it contains valuable energy and compounds which can be transformed into other valuable resources.

We can take this material, vaporize it so it breaks down to its basic molecules. Once we've done this, we can produce what is known as syngas. Syngas is a combination of carbon monoxide and hydrogen and these two components can be used to make a wide variety of valuable fuels and chemical feed stocks. These can either be used as fuels or used as resources to make other useful products.

This is recycling at the molecular level.

It assumes waste has value and in fact enables us to put a value on municipal solid waste. If one takes into account what can be made and sold from MSW, a rough back of the envelope calculation shows that each ton of garbage may be worth around $300 a ton. This technology exists, is available and will become the norm sometime in the near future. More can be learned about this process at www.alternativefuelscorp.com

If that's the case, what we dump in landfill in North America each year may be worth upwards of $70 billion.

Do we want to keep burying it in a hole in the ground or do we want to turn it into something useful, thereby cleaning up the environment, reducing methane escape into the atmosphere and eventually getting rid of landfill altogether?