BILL ANALYSIS Ó AB 323 Page 1 Date of Hearing: April 29, 2013 ASSEMBLY COMMITTEE ON NATURAL RESOURCES Wesley Chesbro, Chair AB 323 (Chesbro) - As Introduced: February 12, 2013 SUBJECT : Solid waste: recycling: diversion: green materials SUMMARY : Requires the Department of Resources Recycling and Recovery (CalRecycle) to phase out recycling credit for green waste (e.g., yard waste) used in the operation of a landfill. Requires large generators of organic waste, as determined by CalRecycle, to subscribe to recycling services for this material. EXISTING LAW: 1)Establishes the California Integrated Waste Management Act of 1989, which: a) Specifies a state policy goal that 75 percent of solid waste generated be diverted from landfill disposal by 2020. b) Requires each local jurisdiction to divert 50 percent of solid waste from landfill disposal. c) Requires a commercial waste generator (including multi-family dwellings) to arrange for recycling services and requires local governments to implement commercial solid waste recycling programs designed to divert solid waste from businesses. 2)Establishes the California Global Warming Solutions Act of 2006 (AB 32), which requires the California Air Resources Board (ARB) to: a) Adopt regulations requiring the reporting and verification of statewide greenhouse gas (GHG) emissions. b) Adopt a statewide GHG emissions limit equivalent to 1990 emissions levels by 2020. THIS BILL : AB 323 Page 2 1)Establishes legislative findings and declarations regarding California's progress in waste reduction and recycling and the benefits of diverting compostable organics from solid waste landfills, including GHG emissions reductions, water quality improvements, and agricultural applications. 2)Requires CalRecycle to: a) Adopt regulations by January 1, 2020 that specify the use of green material as alternative daily or intermediate cover (ADC or IC) does not constitute diversion. Authorizes CalRecycle to delay the effective date of the regulations for up to two years if it determines that sufficient regional green material processing infrastructure will not exist to handle this material. b) Analyze the public health and safety effects of the use of residual fines (e.g., the material left over after removing the recyclable materials) from material recovery facilities (MRFs) and materials left over from the composting process (compost overs) for ADC and other forms of beneficial use in the design and operation of a solid waste landfill. c) On or before January 1, 2015, adopt regulations for the use of MRF fines as an authorized material for use as ADC and beneficial reuse at solid waste facilities in the state if, based on the analysis conducted, CalRecycle determines that MRF fines or compost overs would serve as adequate cover. The regulations shall: i) Contain performance standards, and may also include standards for screening, processing, and testing material recover facility fines; ii) Ensure that the material does not contain hazardous materials above approved thresholds; and, iii) Require that any compost overs used as ADC or for beneficial reuse in the design and operation of a solid waste landfill shall not exceed five percent of the incoming material at the source compost facility, by weight. d) The regulations adopted by CalRecycle relating to the AB 323 Page 3 use of MRF fines and compost overs as ADC shall not include the use of residual fines from mixed waste processing facilities. e) Adopt regulations by January 1, 2017 that would require a large-quantity commercial organics generator to arrange for separate organics collection and recycling services, which may include but are not limited to self-hauling. Authorizes CalRecycle to establish different timelines for different types of organic materials, different types of large-quantity commercial organics generators, and different regions of the state, provided that these requirements come into effect by January 1, 2017. 3)Defines the following terms: a) "Commercial solid waste" to include all types of solid waste generated by a store, office, or other commercial or public entity source, including a business or multifamily dwelling of five or more units. b) "Large-quantity commercial organics generator" (organics generator) to mean a business that generates significant amounts of organic waste, including but not limited to, food waste and green materials, that is traditionally disposed of in a solid waste landfill, as determined by CalRecycle. 4)Makes technical and conforming changes to the law. FISCAL EFFECT : Unknown COMMENTS : According to the author, "AB 323 will help California achieve the state's air quality, GHG, and waste reduction goals by diverting organic materials from landfills." Meeting the state's recycling goals . CalRecycle is tasked with diverting at least 75 percent of solid waste statewide by 2020. Currently, organic materials make up one-third of the waste stream and food continues to be the highest single item disposed at over 15 percent of disposal. CalRecycle is also charged with implementing its Strategic Directive 6.1, which calls for reducing organic waste disposal by 50 percent by 2020. According to CalRecycle, significant gains in organic waste diversion are necessary to meet the 75 percent goal and AB 323 Page 4 implementing Strategic Directive 6.1. Recycling technologies for organic waste include composting, anaerobic digestion, and other types of processing that generate renewable fuels, energy, soil amendments, and mulch. Compost and other soil amendments that can be produced from organic materials have been shown to improve soil health by incorporating organic matter, beneficial micro-organisms, and nutrients and reduce the need for chemical pesticides and fertilizers. These products also conserve water by allowing water to penetrate the soil more quickly and decreasing runoff. Recycling organic materials also creates local jobs. According to CalRecycle, composting creates an average of four jobs for every 1,000 tons of material, approximately four times more than landfilling. Waste reduction and GHGs . According to ARB, a total reduction of 80 million metric tons (MMT), or 16 percent compared to business as usual, is necessary to reduce statewide GHG emissions to 1990 levels by 2020. ARB intends to achieve approximately 78 percent of the reductions through direct regulations. ARB proposes to achieve the balance of reductions necessary to meet the 2020 limit (approximately 18 MMT) through a cap-and-trade program. The 2012-13 Budget Act authorized DOF to allocate at least $500 million from cap-and-trade revenue, and make commensurate reductions to General Fund expenditure authority, to support the regulatory purposes of AB 32. The Governor's proposed 2013-14 Budget includes a brief discussion of Administration priorities for investment, emphasizing investments in the transportation and energy sectors from which large reductions in GHG emissions are possible. In addition, areas to be examined during the planning process include sustainable agriculture practices (including the development of bioenergy), forest management and urban forestry, and the diversion of organic waste to bioenergy and composting. ARB's draft three-year investment plan for cap-and-trade revenues includes waste diversion as a funding priority. Recycling organic waste provides significant GHG reductions over landfilling. Composting and other organics processing technologies, including anaerobic digestion, reduce GHGs by avoiding the emissions that would be generated by the material's AB 323 Page 5 decomposition in a landfill. Landfill gas is generated by the decomposition of organic materials such as food, paper, wood, and yard waste. Fifty percent of landfill gas is methane, a GHG that is 21 times more efficient at trapping heat than carbon dioxide. While most modern landfills have systems in place to capture methane, significant amounts continue to escape into the atmosphere. According to ARB's GHG inventory, approximately 7 million tons of CO2 equivalent are released annually. That number is expected to increase to 8.5 million tons of CO2 equivalent by 2020. Landfill gas to energy and organics . Under legislation enacted last year [AB 1900 (Gatto) and AB 2196 (Chesbro)], California electricity generation from landfill biomethane is eligible for renewable energy credit, which may increase the demand for landfill biomethane. While these bills may help the state achieve its renewable energy goals, it is important to ensure that they do not inadvertently impact the state's recycling goals, as landfill gas is generated by the decomposition of organic materials. Related legislation . Two bills that will also be heard in the Natural Resources Committee on April 29th provide additional funding and incentives for organic waste processing. 1)AB 1021 (Eggman) would make projects that use "recycled feedstock" eligible for sales and use tax exclusions authorized by the California Alternative Energy and Advanced Transportation Financing Authority. 2)AB 1023 (Eggman) would establish the Greenhouse Gas Reduction through Recycling, Composting, and Recycled Content Manufacturing Program, which would require CalRecycle to develop incentives for waste reduction, recycling, composting, and recycled content manufacturing projects that reduce GHG emissions. REGISTERED SUPPORT / OPPOSITION : Support Biodegradable Products Institute Breathe California California Biomass Energy Alliance California Climate and Agriculture Network AB 323 Page 6 California Coastal Protection Network California Compost Coalition California League of Conservation Voters California Resource Recovery Association Californians Against Waste Center for Biological Diversity City and County of San Francisco CleanWorld Coalition for Clean Air Environment California FEED Resource Recovery F.M. Booth Mechanical GAIA Green Sangha Greenaction for Health and Environmental Justice Harvest Power Inc. Humboldt Waste Management Authority Los Angeles Alliance for a New Economy Lyles Construction Group Marin County Hazardous and Solid Waste Management Joint Powers Authority Napa Recycling and Waste Services Natural Resources Defense Council Northern California Recycling Association Otto Construction Peabody Engineering Peninsula Sanitary Service, Inc. Planning and Conservation League Recology, Inc. Regatta Solutions, Inc. Rethink Waste Sierra Club California Stanford Recycling Center Peninsula Sanitary Service, Inc. StopWaste.Org US Composting Council Vasko Electric Zanker Opposition County Sanitation Districts of Los Angeles County Los Angeles County Solid Waste Management Committee/Integrated Waste Management Task Force AB 323 Page 7 Analysis Prepared by : Elizabeth MacMillan / NAT. RES. / (916) 319-2092