Killing Two Birds … The Compost and Carbon Story

Global warming is the problem 

Global warming, due to anthropogenic (your and my) emissions of greenhouse gases (GHG), is a reality that all but a few fringe dwellers, now accept.

In a natural system plants photosynthesis CO2 from the atmosphere, expire oxygen and take up soil nutrients. Plants are eaten by animals which expire CO2 and both decompose to generate CO2 and soil organic matter. And thus the loop is closed in a continuous cycle through the biosphere. Sometimes this is described as the “new” carbon cycle.

Anthropogenic climate change is driven by the continuous addition of “old” carbon into this loop by mining and burning oil, coal and methane gas, amongst others, releasing carbon that has been buried in the ground (and thus taken out of the active carbon cycle) for millions of years. The system consequently becomes overloaded with carbon, and CO2 in particular. The additional CO2 traps the suns heat via another complex process and the result is a warming of the atmosphere.

So much for the science of global warming. Simple really.

In the modern world we further interupt this ‘new carbon’ natural cycle in lots of ways, but in the context of this article, the interruption occurs by us taking degradable plant and animal matter and putting it in landfill. Why is that a problem? Because in landfill organic matter breaks down (in the absence of air) to produce methane rather than carbon dioxide. Methane is at least 21 times more potent as a greenhouse gas than carbon dioxide.

We further complicate the issue by moving large tonnages of organic matter (food, fibre, etc) from the countryside (where it would normally decay on the ground in air) to the cities to be disposed into landfill. These flows are summarised below.

So where does compost fit into that cycle? It fits right in the middle . Producing compost from the plant and animal matter instead of landfilling it has enormous potential to significantly reduce the emission of methane from landfill, and the application of the compost to land actually places the carbon backinto the soil that the original plant and animal matter removed – this is referred to as resequestering the carbon from the atmosphere. Both of these direct consequences of compost production and application take carbon out of the active carbon cycle and thus reduce global warming.

The biggest benefit of composting with respect to global warming comes from avoiding methane emissions from landfill.

To see the potential GHG savings one only has to consider that composting in Australia already reduces emissions – at almost 4.5 million tonnes of CO2-e per year – by as much as the more costly method of attempting to capture of landfill gas from organics already placed in the landfill. And the compost industry is currently small by any estimate.

Although composting sits at the top of the waste management hierarchy at the moment only 3.7 million tonnes of putrescible waste is composted in Australia while the majority of organics (estimated at 11 million tonnes by Compost Australia) is landfilled.

Rather than treating organics as a waste it is time we recognised organic materials as a valuable resource that needs to be recycled back through the productive economy.

Australia has the oldest and most degraded soils in the world. Compost is one of the most effective ways to replenish and build soil carbon and to improve the physical, chemical and biological health of soils.

Which brings me to the second major benefit of compost in relation to climate change – the capacity of compost to sequester carbon in soil and thereby abate global warming.

The following figure (2) shows how much soil carbon can be built up through the ongoing application of composts to soils. This carbon enriches the soil, improving its physical properties, which improves its fertility, whilst taking the carbon out of the active carbon cycle.

We know by how much compost production removes carbon from the active carbon cycle because the original plant and animal material is not landfilled.

The real question that science is grappling with at the moment is how much of the carbon that is contained in the compost is “permanently” removed from the atmosphere. There is no simple answer to that at present but there is a lot of research underway.

Market potential for compost 

We are entering an economic period characterised by carbon constraints. What does that mean? It means all decisions of companies, governments and regulators will be scrutinised for their effects on atmospheric carbon – the higher the carbon pollution, the higher the costs of polluting.

Anyone who thinks that the (short term) delay in the CPRS means the death of market signals (pricing or regulation) for a price on carbon does not understand the gravity of the situation. Carbon pricing and control is coming – the longer we delay it, the greater will be the overall cost.

So how does that affect the compost sector? The relatively low uptake of composting is both an oversight and an opportunity.

But why has the composting industry been so slow in taking advantage of the opportunities afforded by a carbon constrained economy? Of selling its story to regulators and the market?

In the recent NRI Summit (June 3-4, 2010 Sydney) it was pointed out that greater uptake of compost products is hindered by two main barriers: a lack of product knowledge and price signals.

While product knowledge (soil fertility, plant productivity and climate change benefits) can be improved through seminars, demonstrations and hands on field trials with farmer participation etc, correcting the price barriers is a tougher nut to crack.

What price barriers? 

Firstly, in the agricultural sector composts have to compete against chemical fertilisers. Composts do not contain the same high levels of essential nutrients as fertilisers, and many potential purchasers of compost want a compost product that provides the same absolute nutrient level. Based on absolute levels, composts are more expensive than chemical fertilisers to apply to the land. But this is not the entire picture.

Composts have significant benefits over chemical fertilisers in the efficiency of nutrient uptake by plants, meaning that significantly less nutrient levels in compost provide the same plant growth as the higher levels found in chemical fertilisers. And composts can repair the degraded and acid nature of soils caused by continual chemical fertiliser applications.

Secondly, for those users of organic nutrient products in their farming systems, composts have to compete against untreated wastes such as non-composted manures and biosolids that are provided to the farmer for a low or even zero cost delivered. Compost Australia points out that this is only achieved because the potential cost of environmental damage of non-composted wastes (like biosolids) has been externalised. Composts and mulches on the other hand are regulated, process controlled and therefore relatively risk free. But process control comes at a price.

To level the playing field Compost Australia would like to see the government extending regulations to cover all organics applied to land. For example the 3F regulation in NSW is yet to apply to manures, animal bio-waste and biological liquids. All need to be captured under the same regulatory net to level the playing field.

In the meantime Compost Australia estimate that they are bearing a $30/t cost premium over unregulated products by producing AS4454 certified products and (in NSW) 3F compliant products. This is not translated into a sales price premium because farmers remain price sensitive and are not fully informed of the differences between these competing products.

Thirdly, composting processes compete with landfill for the supply of the organic wastes. While landfill gate fees continue to avoid the inclusion of their externality costs (the cost of global warming caused in part by landfill methane emissions) they will be artificially cheaper than the alternatives. Of the 1400 landfills in Australia (700 regulated landfills and 700 tips), fewer than ten (10) capture enough gas to claim carbon neutrality, and even that is subject to dispute.

While ever the global warming benefits of sequestering carbon in soil are not recognised and priced, the economic gains of composting will also not be fully recognised and reflected in the market price.

These issues are rightly the province of government and can only be fixed by government intervention. The CPRS was the first best option. With its deferral it is up to government to look for new solutions.

Compost Australia recommends that either the regulatory playing field be urgently levelled or better still, part of the monies raised by landfill levies be directed to improving compost infrastructure and competitiveness.

Abatement, green jobs and a better environment 

By addressing these market distortions government should recognise the benefits in abating climate change. Making compost financially competitive will open up the market and stimulate demand, which will result in reduced landfilling of organics, reduced methane emissions and lower production costs for compost through economies of scale.

For every additional million tonnes of compost produced the industry will create 330 new jobs. The economic benefits to agriculture and the environment are estimated to be at least $90 million per year per million tonnes of compost.

Putting it another way, if governments collectively invested $30/t applied to land to boost the sector for say 1 million tonnes, 330 new jobs would be created and an additional $90 million of economic benefit would be generated (300% direct return). The value of carbon abatement from reduced fertiliser use and tillage is additional and currently unpriced. Environmental services associated with compost use (such as soil enrichment, erosion reduction and reduced nutrient run‐off) are also not priced into this equation.

In summary, improving the effectiveness of the compost sector in diverting organics from landfill and back into Australia’s degraded agricultural soils is a “no brainer”. We need to align State and local governments, regulators, farmers and the composting industry to drive growth in scale and the rapid delivery of the (abovementioned) environmental gains.

Bring on the Organics Revolution.

Mike Ritchie.

Director Mike Ritchie and Associates