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Food Waste Co-Digestion at Water Resource Recovery Facilities Business Case Analysis

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Food Waste Co-Digestion at Water Resource Recovery Facilities Business Case Analysis PROJECT NO. ENER19C17/4792 Food Waste Co-Digestion at Water Resource Recovery Facilities Business Case Analysis Food Waste Co-Digestion at Water Resource Recovery Facilities: Business Case Analysis Prepared by: Carol Adaire Jones Craig Coker Ken Kirk Lovinia Reynolds 2019 The Water Research Foundation (WRF) is a nonprofit (501c3) organization which provides a unified source for One Water research and a strong presence in relationships with partner organizations, government and regulatory agencies, and Congress. The foundation conducts research in all areas of drinking water, wastewater, stormwater, and water reuse. The Water Research Foundation’s research portfolio is valued at over $700 million. The Foundation plays an important role in the translation and dissemination of applied research, technology demonstration, and education, through creation of research-based educational tools and technology exchange opportunities. WRF serves as a leader and model for collaboration across the water industry and its materials are used to inform policymakers and the public on the science, economic value, and environmental benefits of using and recovering resources found in water, as well as the feasibility of implementing new technologies. For more information, contact: The Water Research Foundation 1199 North Fairfax Street, Suite 900 6666 West Quincy Avenue Alexandria, VA 22314-1445 Denver, Colorado 80235-3098 www.waterrf.org P 571.384.2100 P 303.347.6100 [email protected] ©Copyright 2019 by The Water Research Foundation. All rights reserved. Permission to copy must be obtained from The Water Research Foundation. WRF ISBN: 978-1-60573-436-1 WRF Project Number: ENER19C17/4792 This report was prepared by the organization(s) named below as an account of work sponsored by The Water Research Foundation. Neither The Water Research Foundation, members of The Water Research Foundation, the organization(s) named below, nor any person acting on their behalf: (a) makes any warranty, express or implied, with respect to the use of any information, apparatus, method, or process disclosed in this report or that such use may not infringe on privately owned rights; or (b) assumes any liabilities with respect to the use of, or for damages resulting from the use of, any information, apparatus, method, or process disclosed in this report. The Environmental Law Institute This document was reviewed by a panel of independent experts selected by The Water Research Foundation. Mention of trade names or commercial products or services does not constitute endorsement or recommendations for use. Similarly, omission of products or trade names indicates nothing concerning The Water Research Foundation's positions regarding product effectiveness or applicability. ii The Water Research Foundation Acknowledgments The research team would like to thank the many cycles of Environmental Law Institute interns who have contributed to the project throughout its duration, including interns Matthew Beyer, Candela Cerpa, Serena Choi, Jessica Foster, Kathryn Goodwin, Ian Hardman, Samantha Holtz, Alejandra del Maar, Kathleen McLean, Matthew Glen Miller, Kashaf Momin, Ian Moor, Simon Silverberg, Jessica Sugarman, Bryan Williams, and Christopher Wright; and Law Clerks Robert Abrams, Leigh Barton, Tim Briscoe, and Bridget Grotz. The team also would like to thank the Michael Curley, ELI Visiting Scholar, for his guidance on water sector financing, and Michael Salter, ELI Visiting Attorney, for his research on state policies. Research Team Principal Investigators: Carol Adaire Jones, Ph.D. Environmental Law Institute Craig Coker, M.S. Coker Composting and Consulting Ken Kirk, J.D. Past Executive Director, NACWA Project Team: Lovinia Reynolds, B.S. Environmental Law Institute WRF Project Subcommittee and Other Contributors Jay V. Bassett, B.C.E. United States Environmental Protection Agency Joe Cantwell, P.E. Leidos Engineering LLC Lauren Fillmore, M.Sc. Consultant, former Program Director at the Water Environment & Research Foundation Tim Flanagan, B.A. Monterey Regional Waste Management District Nora Goldstein, B.A. BioCycle: The Organics Recycling Authority Lisa McFadden, ENV SP Water Environment Federation Christopher Muller, Ph.D., P.E. Brown & Caldwell Logan Olds, M.A. Victor Valley Wastewater Reclamation Authority Food Waste Co-Digestion at Water Resource Recovery Facilities: Business Case Analysis iii Case Study Leads City of Stevens Point Chris LeFebvre, B.S. Joel Lemke, B.S. Central Marin Sanitary Agency Jason Dow, P.E. Kim Scheibly, M.S. (Marin Sanitary Services) Derry Township Municipal Authority William G. Rekhop III, P.E. Wayne Schutz, B.S., M.E.P.C. Dubuque Iowa Wastewater Resource & Recovery Center William O’Brien, B.S. Jonathan Brown, B.S. (retired) Los Angeles County Sanitation Districts David Czerniak, B.S. Mark McDannel, M.S. Ken Rademacher Victor Valley Wastewater Reclamation Authority Logan Olds, M.A. Water Research Foundation Staff John Albert, MPA Chief Research Officer Ashwin Dhanasekar, M.S. Research Manager Kristan C. VandenHeuvel, MS Program Director iv The Water Research Foundation Abstract and Benefits Abstract: Co-digestion of food wastes with wastewater solids at water resource recovery facilities (WRRFs) can provide financial benefits to WRRFs, as well as a broad range of environmental and community benefits. With fewer than one in 10 WRRFs using anaerobic digestion (AD) to process wastewater solids, and about one in 10 of those co-digesting high strength organic wastes (HSW), there appears to be significant untapped potential for co-digestion. The goals of this report are 1) to provide insights about successful business strategies that WRRFs in the U.S. have employed to create value and manage the risks of adopting co-digestion of food waste – including fats oils and grease (FOG), food manufacturing residuals, and food scraps – with wastewater solids to enhance recovery of biogas, soil amendments, and nutrient products; and 2) to present a framework for WRRFs to analyze the opportunities co- digestion could provide in their own institutional, market, and policy contexts. The framework is intended to help WRRFs develop a long-term business strategy and implementation plan that leverages those opportunities in a way that advances their mission and long-term goals. Benefits: • Develops a framework for WRRFs to analyze the sustainability of co-digestion and develop a business case for a co-digestion program and for individual projects suited to their context. • Presents six major case studies (Chapters 4-9) and 25 minor case studies (Appendix B) that provide examples of successful business strategies, as well as examples where co-digestion was not a good fit. • Summarizes lessons learned about successful business strategies that WRRFs in the U.S. have employed to create value and manage the risks of adopting co-digestion of food waste. • Identifies solutions to address financial impediments and manage financial risks. • Summarizes lessons learned about the role of public policy in supporting WRRF successful business strategies. Keywords: Business case, co-digestion, anaerobic digestion, risk management, value creation, food waste, FOG, HSW, food scraps, energy recovery, tip fee revenues, return-on-investment criteria, Utility of the Future. Food Waste Co-Digestion at Water Resource Recovery Facilities: Business Case Analysis v Contents Acknowledgments ........................................................................................................................................ iii Abstract and Benefits .................................................................................................................................... v Tables ............................................................................................................................................................ x Figures ...........................................................................................................................................................xi Acronyms and Abbreviations ....................................................................................................................... xii Executive Summary .................................................................................................................................... xvii Chapter 1: Overview of Report .................................................................................................................................. 1 1.1 Motivation and Goals of Report ..................................................................................................... 1 1.2 Potential Benefits of Co-Digestion ................................................................................................. 2 1.3 Tapping Unrealized Potential: The Way Forward ......................................................................... 3 1.4 Project Approach and Methods ..................................................................................................... 5 1.5 Outline of the Report ...................................................................................................................... 6 Section 1: Building a Business Case: Framework for Decision-Making Chapter 2: WRRF Co-Digestion: Current Status, Policy Context, Drivers and Impediments .............................11 2.1 Key Characteristics of U.S. WRRFs Adopting Co-Digestion ........................................................11 2.1.1 Distribution of Adoption over Geography
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