Article written by Jacqueline Ong and originally published by Inside Waste
Is there a compelling case for councils to go down the FOGO path? For NSW at least, the government is supportive of increasing organic diversion rates and has put its money where its mouth is with the Waste Less Recycle More initiative.
MRA Consulting Group director Mike Ritchie told Inside Waste councils should examine the various benefits of implementing a FOGO system.
“There are potential savings that come with avoiding landfill levies. Also, new and additional composting and diversion from landfill projects may now earn carbon credits under the Federal government’s Direct Action plan,” Ritchie said.
There are currently two waste-related methodologies under the Emissions Reduction Fund – AWT diversion of organics from landfill and landfill gas flaring – but this may soon change.
MRA’s Julien Gastaldi, together with the WMAA carbon committee are participating in an ERF technical group to develop a methodology for the diversion of organics from landfill by composting. Once this is up and running, there will be more opportunities to use organics to generate carbon credits.
The NSW government’s WLRM program is a big incentive.
“The WLRM Organics Infrastructure Fund will provide funding to local government for new or enhanced kerbside collection services for food and garden organics waste. Grants will also be given to councils that switch to or enhance their three-bin systems,” Ritchie explained.
“Under WLRM, there is also the organics infrastructure program, which supports new and enhanced on-site processing of organic waste, food donation projects as well as council home composting programs.
“In addition, there’s the Love Food Hate Waste program, which funds awareness and education initiatives.
Whether you’re in NSW and can take advantage of the funding available or in WA where the landfill levy has just increased, Ritchie recommended doing a cost/benefit analysis of FOGO versus landfill first, which is what MRA does for its clients.
“MRA has a Full Cost Model, which compares bin options and tonnages with all available treatment or processing options, including composting and landfill, and quantifies the results in terms of cost, greenhouse gas emissions, vehicle kilometres travelled and diversion from landfill,” Ritchie said.
The key issue, Ritchie said, is determining whether FOGO is in fact a cost-effective solution.
“This is driven by the opportunity cost of landfill. Cheap landfill means a lesser likelihood of FOGO collection and composting. The business case for FOGO is improving in the levy areas, but less in rural Australia,” Ritchie said.
There is also the issue of transport costs eroding profitability, since composting facilities in metropolitan areas need to account for the costs in transporting materials.
“Some composters have under-priced at tender and then are left trying to move compost into locally oversupplied markets. The big compost market is rural Australia and we need to price compost to get it there,” Ritchie said.
Finally, a big barrier is the lack of information on the benefit of recycled organic products in both crop production/animal production and soil enhancement.
While the challenges are certainly real, Ritchie noted that there are also a lot of misconceptions around FOGO that should be cleared up.
For instance, some are of the opinion that there are simply not enough markets for compost.
“This is an unrealistic fear. Australian soils are the most degraded in the world and farmers need and want compost… but at the right price and quality. Market size and robustness are a function of supply and demand. If more organics from households are “pushed” by councils to the compost processors, the composters will charge, via tender, a market gate fee, which covers all processing, quality control and transport costs,” Ritchie said.
“Councils will pay for the real cost if the user market is further away or the composters is required to meet specific quality standards, processors will charge more in a competitive market. Of course there are lags and transaction errors but the market price will rise to cover the full costs.
“There is every chance that the compost market could double or triple from its current million tonnes per year in less than a decade. For processors, developing new markets further afield is a nice problem to have. Composters must not assume they can sell into oversupplied local markets and must price additional transport costs into tenders. This will result in a general rise in composting gate fees.”
Another misconception is that FOGO is too political to introduce when in fact, councils that have run these systems say they do get “very high” community engagement.
There are right ways to engage the community and the most successful engagements come through participatory planning and decision making where groups are fully consulted on all question and at all stages.
For those who think FOGO is “too expensive”, Ritchie said: ” with rising landfill gate fees, driven by levies, FOGO is generally line ball or slightly cheaper than landfill in 2015 and will certainly be cheaper over a longer period.”
“Rural areas with cheap landfills find it more difficult to justify FOGO on economic grounds but often the landfills are artificially cheap and are accruing unfunded liabilities. If council fix the landfill pricing problem, FOGO or GO often become price competitive.”
Another common myth is that there are “lots of stockpiles of compost” in Australia. In fact, very little is stockpiled and when they it is, it’s usually due to seasonal demand and supply.
Ritchie offers some advice to councils that are thinking about implementing a FOGO system.
#1 Don’t change too much at once
“One council changed the residual bin from 240 litres (weekly) to 120 litres (fortnightly) and added a 240 litre FOGO bin at the same time. They did this in summer and faced significant community backlash due to odour and misuse,” Ritchie revealed.
#2 Educate and keep educating
“Penrith was one of the first to move to FOGO and had a 30% contamination rate. Four years on, it has an 11% contamination rate and one of the highest diversion rates of any council in Australia.”
#3 Generally keep the FOGO bin weekly
“Only one council in NSW has fortnightly FOGO. It is a long time between services and most opt for the organics bin to go weekly. I think that is prudent. My view is keep it simple at first and add embellishments later once the basic system is bedded down”.