Setback for FOGO recycling plan
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In May last year, Environment Minister Reece Whitby and his federal counterpart Tanya Plibersek trooped out to Red Hill waste management facility to announce a big package of government grants.
The grants were to support the development of three multi-million-dollar facilities to process food organics and garden organics.
That’s the waste collected in the green-topped FOGO bins that are an increasingly common sight in Western Australia.
The state government hopes all local governments in the Perth and Peel region will adopt FOGO by 2025.
It has committed $20 million to support this shift, which is a key plank in its aim to slash the amount of municipal waste dumped in landfill.
Getting local councils on board is just one part of the challenge.
Another is having facilities to process the FOGO material and turn it into products that can be sold in the commercial market.
That’s where last year’s round of grants came in.
Private companies C-Wise Holdings and GO Organics, and the Eastern Metropolitan Regional Council, were planning to invest a total of $54 million in processing facilities, helped along by $11 million in government grants.
Collectively they would recycle up to 275,000 tonnes of FOGO into compost.
That’s about half the organic material that would be collected if all councils in Perth signed up to the three-bin FOGO system.
However, the plan has suffered an early setback.
While C-Wise, GO Organics and a third private company, Purearth, are pressing ahead with their projects, the EMRC has scrapped its FOGO processing facility.
The EMRC operates Red Hill, north-east of Midland, on behalf of six municipalities.
It had selected French company Sacyr – the same company that operates the Water Corporation’s Binningup desalination plant – as preferred proponent to build the FOGO plant.
The $18 million project was expected to initially process 60,000t of organic waste each year before being scaled up to 100,000t.
“We cancelled the tender due to cost spiralling in the hot industrial construction market,” chief executive Marcus Geisler told Business News.
“Even after extensive value engineering workshops, we could not make it happen.”
The EMRC has gone back to the drawing board as other regional councils in WA assess their options for FOGO processing.
Mindarie Regional Council, which handles waste management for about one third of Perth, recently extended its tender for a FOGO processing facility by four months, to the end of March.
The options include repurposing MRC’s resource recovery facility at Neerabup, which processed 100,000t of waste material per year prior to its closure two years ago.
Illustrating the large sums of money at stake in the waste sector, the closure triggered an $85 million payment to SUEZ subsidiary BioVision to bring an early end to their 20-year contract.
MRC believes Neerabup’s proximity to its member councils makes it an attractive location, avoiding the need to transport organic material long distances to other facilities.
Resource Recovery Group (formerly the Southern Metropolitan Regional Council) is heading in a similar direction but at lower cost.
With a capital works budget of $5 million, it is refurbishing a facility at Canning Vale to support increased FOGO processing and other opportunities.
The Canning Vale facility has to date been used to pre-process and decontaminate organic material for transport to composting partners Purearth and GO Organics.
All players in the sector are wanting to avoid the issues that have beset the Bunbury Harvey Regional Council, including production of low-quality compost, and needing to draw down its reserves to process stockpiled material.
Private plays
Four private sector companies currently dominate the sector and all plan to expand their operations.
Global company Veolia processes more than 80,000t per year at its North Bannister facility, 90 minutes’ drive south of Perth.
The facility was upgraded two years ago and the company is currently evaluating concepts for further expansion.
“It was a no-brainer to invest in North Bannister two years ago, which is why we are so far out of the starting blocks already, and Veolia has the potential to duplicate the existing facility too,” chief operating officer, resource recovery, Craig Barker said.
Veolia processes kerbside organics for the City of Rockingham, City of Joondalup and City of Belmont, and FOGO for the City of Nedlands.
The company has also installed a food waste de-packager at its Welshpool facility, with all of this material sent to North Bannister for composting.
Meanwhile, C-Wise Holdings has operated a composting facility at Nambeelup, near Mandurah, since 1996.
Nambeelup is licensed to process 90,000tpa, which includes green waste sourced from the Shire of Murray, City of Mandurah, and Shire of Serpentine-Jarrahdale.
Like other players in the sector, C-Wise takes organic waste from other suppliers, including industrial waste from Simcoa, cereal waste from the agribusiness sector, and liquid waste such as brewery sludge and grease trap.
Chief executive Greg Watts said the company was keen to proceed with development of a second composting facility at East Keralup, also near Mandurah, at a cost of $28 million.
That was despite the cost pressures in the construction sector.
“We’re still confident and committed to building that facility,” Mr Watts said.
“We think there is enough organic by-products in the market to run both operations.”
Mr Watts said C-Wise was still negotiating debt funding with banks but did not envisage any issues.
“The banks are fairly keen to talk,” he said.
“They see the future in organics and the circular economy and are fairly keen to put money forward for quality green projects.”
East Keralup will be licensed for 200,000t, and Mr Watts expects half that will be FOGO-derived.
GO Organics, which was bought by national horticultural and garden supplier Brunnings in 2010, plans to expand its composting facility north of Perth, near Gingin.
At a cost of $7.4 million, the project will expand the facility’s annual capacity from 50,000t to 124,000t, with half being FOGO.
Director Donovan Farrell said civil works were well progressed and equipment had been purchased.
He said GO Organics was working with universities, local councils, and the agriculture sector to ensure FOGO became a valuable resource.
“We have to do it in a way that works for everyone, commercially and environmentally,” Mr Farrell said.
Near Northam, Purearth is planning to double the capacity of its facility to 100,000t, despite missing out on a government grant.
Director Paul Curtis said he anticipated the facility would process about 60,000t of FOGO, with the balance coming from other organics such as brewery waste, grease trap, and green waste from the Shire of Mundaring.
Markets
Mr Watts said a key challenge for the sector was developing new markets for its end products, which included compost, potting mix and commercial landscaping supplies.
“We’ve always said to the government that you need to build the market first,” Mr Watts told Business News.
“We can’t go down the same path as the east coast, where they rolled out all this money to set up FOGO facilities and there was no market development.”
Each player in the sector has a different approach.
Go Organics, for instance, is able to sell into the retail market via the Brunnings brand, while Purearth supplies the market via its sister company Little Loads.
C-Wise is targeting broadacre agriculture as the big opportunity.
“We are very purposefully developing a market in broadacre agriculture so that when East Keralup is up and running we have offtake agreements that are ready to go,” Mr Watts said.
“It’s going back into the foodbowl where it has its best effect.”
The company sold 6,000t of organic material to the farm sector last season and has pre-sold 20,000t for the 2024 seeding season.
Mr Watts said C-Wise had sponsored trials in recent years, from Katanning in the south to Calingiri in the north, to find the best locations for its compost.
It is working very closely with Elders and has some direct sales to farmers, allowing them to reduce the amount of synthetic fertiliser they use.
“Most of the farmers getting on board are excited by the circular economy nature of this, they want to leverage the benefit of carbon-neutral wheat,” Mr Watts said.
“That’s our speciality. We’ve been doing that for twenty years.”
He said the sector would welcome any support from government, in consumer education, helping local councils with third-bin rollout, and facilitating collection and processing contracts.
Mr Whitby said the state government would continue to bolster WA’s recycling capacity this year.
“That includes through development of the State’s first waste infrastructure plan, which is nearing finalisation and will be published in the coming months,” he said.
“This plan will provide industry with a long-term framework to guide planning and development of waste infrastructure throughout WA.
“Additionally, the Waste Authority, through its market development strategy, has identified several key market sectors for FOGO-derived products.
“Market research conducted for that report identified urban amenity and landscaping, extensive agriculture, intensive agriculture, rehabilitation, and remediation as key sectors.
“This work will help build demand for FOGO-derived products and avoid stockpiling.”
One of the big unknowns is how many local councils will adopt a three-bin FOGO system.
Of the 33 local councils across Perth and Peel, nine currently deliver FOGO services and a further 11 have committed to do so by 2025.
The others are assessing their options.
A key option for many councils is whether they sell their waste to the giant waste-to-energy operations that are being built by private consortia and due to commence around the middle of this year.
Avertas Energy plans to incinerate 400,000t of waste per year while East Rockingham Waste to Energy will process 300,000t.
There is a critical difference between the two projects.
Councils planning to sell waste to the East Rockingham project, including members of the West Metropolitan Regional Council, have signed ‘waste arising’ contracts, which means there is no minimum volume.
They only promise to deliver the residual waste after recyclables, organics and green waste have been separated.
In contrast, councils supplying Avertas, including members of the Rivers Regional Council and the City of Canning, have signed ‘take or pay’ contracts.
If they introduced a FOGO system, it would reduce the volume of waste they have available for delivery and could breach the terms of their contracts.
That is unlikely to stand in the way of the state government meeting its FOGO target.