BILL ANALYSIS Ó SENATE COMMITTEE ON ENVIRONMENTAL QUALITY Senator Wieckowski, Chair 2015 - 2016 Regular Bill No: AB 655 ----------------------------------------------------------------- |Author: |Quirk | ----------------------------------------------------------------- |-----------+-----------------------+-------------+----------------| |Version: |6/15/2016 |Hearing | June 29, 2016 | | | |Date: | | |-----------+-----------------------+-------------+----------------| |Urgency: |No |Fiscal: |Yes | ------------------------------------------------------------------ ----------------------------------------------------------------- |Consultant:|Joanne Roy | | | | ----------------------------------------------------------------- SUBJECT: Rendering: inedible kitchen grease: registration fee: additional fees. ANALYSIS: Existing law: 1) Pursuant to the Integrated Waste Management Act (Public Resources Code (PRC) §40000): a) Establishes a state recycling goal of 75% of solid waste generated be diverted from landfill disposal by 2020 through source reduction, recycling, and composting. b) Requires each local jurisdiction to divert 50% of solid waste from landfill disposal through source reduction, recycling, and composting. c) Requires CalRecycle and local agencies to promote waste management practices in order of the following priority (PRC §40051): i) Source reduction. ii) Recycling and composting. iii) Environmentally safe transformation and environmentally safe land disposal. d) Defines "source reduction" as any action which causes a AB 655 (Quirk) Page 2 of ? net reduction of solid waste. "Source reduction" includes, but is not limited to, reducing the use of nonrecyclable materials, replacing disposable materials and products with reusable materials and products, reducing packaging, reducing the amount of yard waste generated, establishing garbage rate structures with incentives to reduce the amount of wastes that generators produce, and increasing the efficiency of the use of paper, cardboard, glass, metal, plastic, and other materials. "Source reduction" does not include steps taken after the material becomes solid waste or actions which would impair air or water resources in lieu of land, including, but not limited to, transformation. (PRC §40051). e) Requires a commercial waste generator to arrange for recycling services and requires local governments to implement commercial solid waste recycling programs designed to divert solid waste from businesses. f) Requires generators of specified amounts of organic waste (i.e. food waste and yard waste) to arrange for recycling services for that material. g) Requires the California Environmental Protection Agency (CalEPA), in coordination with the California Department of Resources Recycling and Recovery (CalRecycle), and California Department of Food and Agriculture (CDFA), to develop and implement policies to aid in diverting organic waste from landfills. (PRC §42649.87). i) Requires CalEPA, through CalRecycle, to promote the goal of reducing at least five million metric tons of GHG emissions reductions per year through the development and application of compost on working lands; and requires CalEPA and CDFA to ensure proper coordination of agency regulations and goals. ii) Requires CalEPA and CDFA to assess the state's progress towards developing organic waste processing and recycling infrastructure necessary to meet the goals specified in AB 341 (Chesbro), Chapter 476, Statutes of 2011), AB 1826 (Chesbro), Chapter 727, Statutes of 2014, the State Air Resources Board's May AB 655 (Quirk) Page 3 of ? 2015 Short-Lived Climate Pollutant Reduction strategy concept paper, and CDFA's Healthy Soils Initiative. 2) Requires the State Air Resources Board (ARB), under the California Global Warming Solutions Act of 2006 (commonly referred to as AB 32), to determine the 1990 statewide greenhouse gas (GHG) emissions level and approve statewide GHG emissions limit that is equivalent to that level, to be achieved by 2020, and to adopt GHG emissions reductions measures by regulation. (Health and Safety Code §38500 et seq.) 3) Provides for the regulation of holding, segregation, and disposal of animals unfit for human food purposes such as requiring licensing of renderers and collection centers and registration of inedible kitchen grease (IKG) transporters. (Food and Agriculture Code (FAC) §19051 et seq.) 4) Defines "rendering" as recycling, processing, and conversion of animal and fish materials and carcasses and IKG into fats, oils, proteins, and other products that are used in the animal, poultry, and pet food industries and other industries. (FAC §19213). 5) Requires every person engaged in the business of rendering to obtain a license from CDFA for each rendering plant. (FAC §19300). This bill: 1) Makes findings and declarations regarding rendering as an effective tool to eliminate pathogens, protect air and groundwater resources, and reduce GHG emissions compared to other alternative disposal options; and describes rendering. 2) To the extent feasible, requires CDFA to consider the regional "highest and best use" of unprocessed waste animal material and inedible kitchen grease (IKG) from inspected establishments, retail stores, custom slaughterers, and custom processors when developing regulations and policies governing the handling and recycling of these regulated materials and establishments. 3) Increases the maximum annual fee charged to licensed AB 655 (Quirk) Page 4 of ? renderers and collection centers and the registration fee for transporters of IKG. Background 1) Statewide waste diversion goals. CalRecycle is tasked with diverting at least 75% of solid waste statewide by 2020. Currently, an estimated 35 million tons of waste are disposed of in California's landfills annually, of which 32% is compostable organic materials, 29% is construction and demolition debris, and 17% is paper. In addition, CalRecycle is charged with implementing Strategic Directive 6.1, which calls for reducing organic waste disposal by 50% by 2020. According to CalRecycle, significant gains in organic waste diversion (through recycling technologies of organic waste, including composting and anaerobic digestion) are necessary to meet the 75% goal and to implement Strategic Directive 6.1. 2) Mandatory commercial organics recycling. According to CalRecycle, AB 1826 (Chesbro, Chapter 727, Statutes of 2014) requires businesses to recycle their organic waste on and after April 1, 2016, depending on the amount of waste they generate per week. AB 1826 also requires that on and after January 1, 2016, local jurisdictions across the state implement an organic waste recycling program to divert organic waste generated by businesses. Mandatory recycling of organic waste is a component in achieving the state's recycling and GHG emission goals. 3) Food scraps management. According to CalRecycle, Californians throw away nearly 6 million tons of food scraps or food waste each year. This represents about 18% of all the material that goes to landfills. In order for California to reach its goal of 75% source reduction, recycling, and composting, food waste must be addressed. Options for recycling food waste include: a) Rendering. According to CalRecycle, rendering refers to the processing of grease, fat, meat, or bone into usable products. Rendering companies process animal by-products into saleable commodities. Collection service areas, costs, and types of materials accepted vary. AB 655 (Quirk) Page 5 of ? Grease from restaurants is a common by-product collected and processed by rendering or tallow companies, but many companies will also collect or accept meat, fat, bone, and dead animal carcasses. b) Anaerobic digestion. According to the United States Environmental Protection Agency (US EPA), anaerobic digestion is a process where microorganisims break down organic materials, such as food scraps, manure, and sewage sludge. This is done in the absence of oxygen. Recycled food waste through anaerobic digestion produces biogas and a soil amendment - biogas is made primarily of methane and carbon dioxide and the solids remaining from the anaerobic digestion process can be land applied or composted and used as a soil amendment. Food waste can be processed at facilities specifically designed to digest the organic portion of municipal solid waste. It can also be co-digested at wastewater treatment facilities and manure digesters. Co-digestion is a process whereby additional, energy-rich organic materials (e.g. food scraps or fats, oils, and grease) are added to dairy or wastewater digesters. Co-digestion uses existing infrastructure to divert food scraps and fats, oil, and grease from landfills. c) Composting. According to CalRecycle, compost is the controlled decomposition of organic material such as leaves, twigs, grass clippings, and food scraps. A wide range of materials may be composted, but they must consist of principally organic components (i.e. carbon-containing remnants of residues of life processes). Compost products may vary since the properties of any given compost depend on the nature of the original feedstock and the conditions under which it was decomposed. Composting is a means of controlling and accelerating the decomposition process. An overabundance of soil organisms is responsible for transforming the organic matter in compost into carbon dioxide, water, humic substances (components of soil that affect physical and chemical properties and improve soil fertility) and energy in the form of heat. Most composting facilities use a thermophilic process, which breaks down the waste with AB 655 (Quirk) Page 6 of ? heat-loving bacteria, and relies on high temperatures to meet pathogen reduction standards. Composting diverts organic materials out of landfills and turns it into a product that is useful for soil restoration. In addition to improving the quality of soil, compost prevents soil erosion, reduces the need for chemical fertilizers, herbicides, and pesticides, and enables better soil water retention. However, composting of animal tissue may raise concern due to potential public health and safety risks related to composting's effectiveness in destroying disease pathogens. Also, federal regulations prohibit feeding "ruminants to ruminants" and possible grazing of cattle on land that has had compost containing animal tissue applied to it may increase the risk of diseases such as mad cow. Comments 1) Purpose of Bill. According to the author, "The rendering industry is critical to the health and safety of California. Rendering is an effective tool in eliminating many human and animal disease pathogens, protecting our groundwater and air resources, and greatly reducing [GHG] emissions compared to other alternative disposal options?More funds are needed to maintain an effective enforcement system for [the IKG] program." 2) Rendering and GHG emissions reductions compared to other options. AB 655 provides that "rendering is an effective tool to?greatly reduce greenhouse gas emissions compared to other alternative disposal options." A question arises as to what alternative disposal options that rendering is being compared to, and under what circumstances. Compared to composting, anaerobic digestion, or landfilling? Such a conclusion should be based on life cycle analyses. Factors may include: how and where the material is sourced, how it is processed and transported, and the end use. Because there are a variety of end uses of rendering as noted in the bill, such as "soaps, paints, varnishes, cosmetics, explosives, toothpaste, pharmaceuticals, leather, textiles, and lubricants used daily in most households," saying AB 655 (Quirk) Page 7 of ? definitively that rendering is better in terms of GHG emissions reductions requires life cycle analyses of those uses. The Committee may wish to consider whether it may be inappropriate to unequivocally say that rendering reduces GHG emissions significantly when life cycle analyses for all of these options have not been conducted. 3) §19300.1(b). §19300.1(b) of AB 655 states, "Therefore, to the extent feasible, the department shall consider the regional "highest and best use" of unprocessed mammalian, poultry, fish material, and inedible kitchen grease from inspected establishments, retail stores, custom slaughterers, and custom processors when developing regulations and policies governing the handling and recycling of these regulated materials and establishments." a) What does "regional 'highest and best use'" mean? i) Regional. The term "regional" is unclear and not defined. What is considered a region? How many regions are in the state? Can regions overlap one another? What factors go into determining the borders of a region? Is it based on city or county limits? Or distance from a generator to a rendering, anaerobic digester, or composting facility? If so, what is an appropriate number of miles to consider feasible for transportation? Should economic or GHG emissions from transporting the material be factored in? Does the number of generators in an area help determine a region? Should a minimum number of options for disposal be considered to help determine the size of a region? This bill does not provide any parameters on how to determine what "regional" means. ii) "Highest and best use." The term "highest and best use" is not defined in the bill. However, it is referenced in quotation marks - What does this refer to? Does this refer to a provision in statute? From whose perspective is the use considered highest and best? What factors should be considered when determining highest and best use - public health issues, GHG emissions reductions, economic impacts, AB 655 (Quirk) Page 8 of ? or environmental benefits and protections such as air or water quality? Is "highest and best use" referring to the following food recovery hierarchy recommended by the US EPA? (1) Source reduction - Reduce the volume of surplus food generated. (2) Feed people - Donate excess to food banks, soup kitchens and shelters. (3) Feed animals - Divert food scraps to animal feed. (4) Industrial uses - Provide waste oils for rendering and fuel conversion and food scraps for digestion to recover energy. (5) Composting - Create a nutrient-rich soil amendment. (6) Landfill/incineration - Last resort to disposal. If so, then it may be noted that for "industrial uses," the US EPA specifies, "waste oils for rendering and fuel conversion and food scraps for digestion to recover energy." It appears that the US EPA may recommend anaerobic digestion over rendering for food scraps, which would likely include meat scraps - it may be noted that anaerobic digestion is under the purview of CalRecycle, not CDFA. This seems somewhat incongruous with the findings and declarations about rendering in this bill. If the bill is requiring CDFA to consider "highest and best use" when developing regulations and policies governing the handling and recycling of meat scraps, and is referencing the food recovery hierarchy recommendations by the US EPA, a question arises as to why the bill requires CDFA to consider options outside of its jurisdiction. b) CDFA as sole determiner. This bill requires CDFA to consider regional "highest and best use" when developing regulations and policies governing the handling and recycling of meat scraps. The handling and recycling of AB 655 (Quirk) Page 9 of ? meat scraps is not solely a CDFA issue. CDFA regulates renderers and the rendering process. CalRecycle regulates waste haulers, anaerobic digestion, composting, and landfill facilities. The State Water Resources Control Board (SWRCB) regulates advanced wastewater treatment facilities that may recycle food wastes. The wording of the bill emphasizes the importance and value of rendering compared to other alternative disposal options (that are not within the purview of CDFA) and concludes with "therefore" CDFA, to the extent feasible, must consider "regional 'highest and best use'" when developing regulations and policies governing the handling and recycling of specified materials. Handling and recycling are broad terms. Concern has been raised that the wording implies a possible overreach of CDFA in areas of handling and recycling meat scraps that may go beyond its jurisdiction, such as anaerobic digestion and composting. Also, the bill contains no requirements for CDFA to work or consult with its sister agencies in making such considerations. c) "Unprocessed." AB 655 pertains to "unprocessed mammalian, poultry, fish material." The term "unprocessed" is not defined. At what point does animal material transform from being unprocessed to processed? It is unclear what "unprocessed" animal material means. d) Technical error. The findings and declarations should not contain §19300.1(b) because mandating CDFA to act in a specified manner is a directive, which is not a finding nor a declaration. 4) What's the beef about? Some clear lines exist as to who may transport and receive waste meat, poultry, and fish materials based on the type of generator. For example, US Department of Agriculture or CDFA Meat Inspection Program (MIP) facilities, such as slaughterhouses and meat/poultry processors, use registered transporters to take the materials to rendering facilities - these are governed by CDFA in the Food and Agriculture Code. On the other hand, the materials from restaurants and residences are transported by solid waste haulers and can end up at anaerobic digestion, composting, or landfill facilities - these are governed by AB 655 (Quirk) Page 10 of ? CalRecycle in the Public Resources Code. However, there seems to be a long-standing dispute regarding authority/jurisdiction (and market share) over transporting and end use of waste meat, poultry, and fish material from retail establishments such as delicatessens, grocery stores, super markets, butcher shops, and other retail stores that sell fresh or frozen meat. In addition, in recent years, as the state has looked more at increasing renewable energy, decreasing fossil fuel consumption, and reducing GHG emissions, there seems to be more of an interest in looking at meat scraps from retail stores as organic waste materials for anaerobic digestion or composting. Are retail stores and their meat scraps more like restaurants, which are governed by CalRecycle, or more akin to meat/poultry processors, which are governed by CDFA? Or is this material a combination of both? 5) Conclusion. Meat scraps are generally thought of as waste to the general public, but they are a valuable commodity. Although some waste meat, poultry, and fish materials from specified generators are clearly governed by either CDFA or CalRecycle, a bone of contention is present over meat scraps from retail establishments. The various methods for dealing with waste meat, poultry, and fish materials all have merit and serve a variety of purposes - statutorily choosing one as the king of all other options would be imprudent. Because of the issues raised above, the Committee may wish to consider amending AB 655 to remove and replace §19300.1 with an uncodified section to do the following: a) Require CalRecycle and CDFA, in consultation with the State Water Resources Control Board, the Air Resources Board, and Department of Public Health, to work together to address issues related to the regulations and policies governing the handling and recycling of waste meat, poultry, and fish materials from retail establishments, including, but not limited to, grocery stores, supermarkets, and delicatessens, butcher shops, and other retail stores that sell fresh or frozen meat. b) Among the factors that shall be considered are: AB 655 (Quirk) Page 11 of ? i) Environmental protection and benefits, e.g., air and water quality; ii) Public health considerations, e.g., prevention of human and animal disease pathogens; iii) Reduction of GHG emissions; and, iv) Economic considerations and impacts. c) Hold a minimum of three public workshops with at least one held in northern, central, and southern California. d) Report findings and make recommendations to the Legislature no later than July 1, 2018. Related/Prior Legislation AB 1045 (Irwin, Chapter 596, Statutes of 2015) required CalEPA to establish policies and goals to encourage recycling of organic waste and coordinate oversight and regulation of organic waste recycling facilities. AB 1826 (Chesbro, Chapter 727, Statutes of 2014) required generators of specified amounts of organic waste, including green material, to arrange recycling services for that material. AB 1566 (Holden, Chapter 595, Statutes of 2014) increased the authority of CDFA and the California Highway Patrol (CHP) to oversee and enforce laws related to the collection, transportation, storage, and rendering of inedible kitchen grease. Among other things, extended the sunset for the collection of annual fees charged by CDFA by five years, from July 1, 2015 to July 1, 2020. SB 25 (Padilla, 2010) would have specified that "renderer" and "rendering" do not include facilities or activities that are already licensed by CalRecycle. DOUBLE REFERRAL: This measure was heard in Senate Agriculture Committee on June 21, 2016, and passed out of committee with a vote of 4-0. SOURCE: California Grain and Feed Association Pacific Coast Rendering Association AB 655 (Quirk) Page 12 of ? SUPPORT: None received OPPOSITION: California Compost Coalition California Refuse Recycling Council Californians Against Waste Inland Empire Disposal Association League of California Cities Los Angeles County Waste Management Association Recology Republic Services, Inc. Rural County Representatives of California Solid Waste Association of Orange County Waste Connections, Inc. ARGUMENTS IN SUPPORT: According to support, "Rendering is the process of turning animal tissue from the livestock, food processing, and food service industries into valuable by-products?The rendering industry provides critical health and safety infrastructure in California. The process of recycling animal tissue into stable, value-added by-products is important for the state's economy. The rendering industry also provides necessary disposal alternatives which include a sterilization step, eliminating dangerous pathogens and bacteria, as a safe management alternative. Every year, the industry recycles over 60 billion pounds of organic material and turns it into useful ingredients such as biofuels, industrial lubricants, various soaps, paints and varnishes, cosmetics, pharmaceuticals, leather, and textiles used daily in most households?[T]his measure will direct administrative agencies to consider, to the maximum extent feasible, the 'highest and best use' of materials regulated by the department within the rendering program which includes livestock carcasses, offal, animal tissue, expired meat, [IKG], and interceptor trap grease." ARGUMENTS IN OPPOSITION: AB 655 (Quirk) Page 13 of ? According to opposition, "Our concerns are focused on a longstanding dispute over the regulatory jurisdiction of fully inspected animal byproducts from retail establishments. This is an important feed stock for composting and anaerobic digestion. These materials are currently fully and effectively regulated by CalRecycle and the California Public Resources Code. [AB 655] establishes a 'highest and best use' standard. Such a hierarchy already exists in §40051 and §40196 of the California Public Resources Code. We, therefore, believe that inserting a new standard in the Food and Agriculture Code will not only be duplicative, it will result in further conflict and confusion. The sponsor, in testifying in favor of this measure before the Senate Agriculture Committee, stated that this language was taken directly from CalRecycle regulations. We are unaware of any such language in CalRecycle regulations. Further, when asked the author's office for that language in CalRecycle's regulations, they did not provide us any regulations, rather they provided us with a document titled, 'Safely Disposing of Waste Meat, Poultry and Fish Material Guidance and FAQs.' Nowhere in that document is there language regarding 'highest and best use.'" -- END --