Compost or methane — the two business models competing for your food scraps

Once a city sets up separate collection of household food scraps, two exits are waiting at the far end. One is a composting facility, which keeps oxygen moving through the material and turns it, over some months, into a soil amendment. The other is an anaerobic digester, which shuts oxygen out, captures the methane that results and sends it to a generator or into a gas grid. Textbooks present these as parallel technologies, aerobic and anaerobic. Seen as businesses, though, they are nothing like equals — because one sells its product into a market and the other sells its product to a policy. That difference has quietly, and decisively, governed which kind of plant gets built and where.

This series has so far worked through the greenhouse-gas arithmetic, the history of chemical fertiliser and the landfill, the places where mandates stumbled, and twenty years of Japan's Food Recycling Act. A single wall keeps reappearing in all of them: the thing that ought to work somehow does not. That wall is usually explained by inconvenience, or by a public that has not been persuaded. This article looks at it instead from the side of money — because more often than not, separation fails to take hold not because people lack conviction but because nobody downstream makes a living from it, or because the person who does make a living from it is standing somewhere else entirely.

The earlier column on the science and societies of composting covered what the microbes are doing and what collection systems the world's cities have built. This article does not go back there. It takes up four things only. Where does a composting facility's money actually come from? What does plastic in the feedstock cost, in cash? What price has extended producer responsibility attached to the words 'certified compostable'? And what, in the end, decides whether a given load of scraps becomes soil or becomes gas? Following the figures brings into view a structure of distribution that environmental debate rarely puts on the table.

Picture the income statement of a composting facility and most people sketch the same thing: make good compost, sell it to farmers. The real structure is rather different. At its centre sits the gate fee — the per-ton charge levied on the municipality, hauler or food business that brings material through the door. Revenue from the compost itself is, at most facilities, far smaller than the gate fee, and at some there is little left of it once haulage is deducted. Composting is designed less as an industry that manufactures fertiliser than as a service industry that accepts organic matter. Take that view and the variables that decide whether the business lives or dies change entirely.

That fee is not set freely. Composting is only one of the options open to whoever holds the material; a landfill or an incinerator is always available instead. The gate fee therefore has a ceiling, and the ceiling is the price of the competing disposal route. Where landfill is cheap, a composter can only attract feedstock at a fee too low to service its plant and payroll. Where landfill is dear, the identical plant turns an ordinary profit. Two cities with the same terrain and the same climate, one with a composting facility and one without — what usually separates them is not technology but the price posted at the landfill down the road.