The SB 1383 Progress Report
No later than July 1, 2020, CalRecycle in consultation with CARB, shall analyze the progress made in achieving the SB 1383 organic waste reduction goals for 2020 and 2025. As we wait for the official process to begin, we celebrate the progress we have made and provide comments as stakeholders. SB 1383 is so much bigger than just composting, as it includes the collection fleets, the facilities that pre-process, and the local markets. This is bigger than just diversion, as SB 1383 is about reducing short-lived climate pollutants and mitigating climate change impacts. The industry, in the wheelhouse of the circular economy, provides one the most cost effective greenhouse gas reduction programs, and is already embedded in most local Climate Action Plans.
While CalRecycle was developing SB 1383 regulations, the China Sword kept falling on the recycling industry, exposing our vulnerability. The statewide recycling rate fell from 50% in 2014 to 40% in 2018, on the way to 33% in 2020 with a full China ban. Rate increases were sought to sustain the blue cart of recycling. SB 1383 went through four drafts, sending signals of regulatory uncertainty to some and denial to others. Adoption of SB 1383 regulations this fall is progress that will send a clear market signal to the composting industry and local governments to make new capital investments so that additional organic waste recycling infrastructure can be established.
After SB 1383 was enacted, about $1 billion in capital investment was leveraged using $153 million in grant seed money from CalRecycle and CEC to develop composting facilities and anaerobic digesters (that also produce RNG for the fleet that collects SB 1383 organic waste). Capacity was developed in regional markets for new tons, but local jurisdictions struggled with rate increases to get the organic materials there. Even before the pandemic, rates were becoming inelastic on the green cart while also funding the blue cart. With CalRecycle and CEC grants no longer available, other incentives will need to be identified. The proposed $7 billion bond measure with $300 million for CalRecycle awaits, if it can make it to the November ballot. Bumping the $1.40/ton state landfill tipping fee of 1993 is the obvious funding source as cheaper disposal has encouraged more landfilling. Millions more organic processing capacity tons and billions of dollars are still required, where a $10/ton tipping fee surcharge could raise $400 million per year in incentives for infrastructure and to stimulate the economy.
Significant progress towards the mandates has not occurred, as commercial organic waste disposal has bounced up 27%, instead of being reduced by 33% in 2018, on the way to 50% reduction in 2020. Regulatory barriers have not diminished, but have been raised. Cal-EPA failed to deliver on the AB 1045 promise that was supposed to offer permit coordination among the agencies. Instead, CARB is installing regulatory walls, and making us pay for it, by levying the huge cost of fleet electrification, reducing RNG demand, and flippantly increasing the carbon intensity of RNG from negative to plus 45, chilling the development of anaerobic digestion facilities. CARB, in consultation with CalRecycle, under Cal-EPA, is talking in circles, disrupting the carbon-negative circular economy that has been established to implement SB 1383.
When CalRecycle determines that significant progress has not been made, CalRecycle may, upon consultation with stakeholders, include incentives or additional requirement to facilitate progress. California should be proud, having made great progress on achieving renewable energy, low carbon fuel standard, and greenhouse gas reduction goals in 2020, with a balanced blend of regulations and incentives. But our dirty waste secret is that California flopped on the 75% statewide recycling rate and SB 1383 goals for 2020, while up against a collapsing export market and now an unforgiving pandemic. Economic recovery can be centered on the SB 1383 circular economy with a bond measure or tip fee increase to pay for it.