Adoption De-Paralysis: Examples of Elegant Policy Models for Anaerobic Digestion Development

19 january 2013

Progress and innovation in the renewable energy sector is frequently stymied by, what I call, the adoption paralysis. The technology may be sound, the economics attractive, the demand great and the environmental benefits substantial. But because a shift requires multiple parties who are all waiting for someone else to act first, an anxious inertia takes over. For example, look at alternative fuel vehicles: no one will buy them if there are no fuelling stations, and no one will build fuelling stations if there are no cars, and no one will build cars if no one will buy them. Chicken and egg, Catch-22, whatever you’d like to call it, it resembles two overly solicitous gentlemen at an open door. “No, please, go right ahead,” and, “I won’t hear of it. Please, you first.”

This is equally true in the field of organic material recovery.  There are anaerobic digestion technologies to fit almost any circumstance, rising tip fees create economic drivers, and the environmental benefits are enormous. Yet the U.S. lags far behind other countries, particularly Germany, in utilizing biogas to generate renewable energy. Germany receives 14% of its renewable energy from biogas sourced from over 6,800 digesters. Meanwhile the U.S. only has several hundred, most of which are on dairy farms. Part of this is due to the adoption paralysis.

Let’s look at some of the barriers here. For project developers, anaerobic digesters are expensive projects and one can easily imagine that building a multi-million dollar facility would be a little unnerving in the absence of a reliable supply chain. Also, financing can be difficult to secure without evidence of a steady supply of feedstock. On the other hand, for policymakers, landfill bans on food waste are not particularly reasonable when there is nowhere else to take it. So project developers, waste generators, regulators and policy-makers, non-profits, haulers and community activists all wait for someone to make the first move.

The state of Connecticut has found an innovative solution to adoption paralysis. Recognizing the desirability of removing food waste from the municipal waste stream, the state passed SB1116, which mandates that organic waste generators meeting a certain annual threshold must separate their waste and arrange for it to be brought to a compost facility or anaerobic digester. However, the law is only triggered once there are at least two permitted facilities that can accept food waste. Furthermore, a generator must be within a reasonable distance to one of the facilities, or else they remain exempt.

Voilá. Elegant in its simplicity, the entire legislation could almost fit on Twitter and makes the Gettysburg Address seem long-winded. Developers can go ahead and plan projects knowing that if they are built, feedstock will be available. Waste generators have the clarity of understanding what they will be required to do and when. Investors have peace of mind that the pieces will align.

Yet feedstock is only part of the picture for anaerobic digestion project developers. You still have to get the thing built, after all, and there are significant barriers to that, as well. A new technology entering a heavily regulated environment, such as solid waste, is like a snowboarder wandering into a ski race: they might be ready for action but the rules weren’t designed for them. All states have solid waste regulations but most have not been faced with the prospect of separating food scraps out of the wastestream. AD is thus something of a regulatory platypus: not quite transfer station, not quite compost site.

States are beginning to recognize the need to review, adjust and adapt decades-old regulations and policies to facilitate new technologies and systems. For example, Massachusetts is well into the process of revising its policies to expedite AD development. Like Connecticut, Massachusetts is also pursuing an organic waste ban and understands that a ban is not at all feasible if the processing capacity is insufficient. The proposed draft regulations would allow ‘as right’ permitting for AD facilities up to a certain annual tonnage, at which point the facility would have to go through a more comprehensive permitting process.

Diverting organic waste is a pressing public priority that is ready to be met by an eager private sector. Many states have recognized the value of organic diversion and recycling and are taking steps to adjust policy to reflect new technological developments and turn these waste materials into valuable resources. The key factors for policymakers are ensuring public health and safety, and preventing nuisances, while removing the barriers to project development. There is clearly a cascade effect going on as Vermont has enacted its own version of an organics ban.

Each state that takes the plunge provides more confidence to the next one that valuable resources can be removed from landfills without causing chaos. As these states proceed with regulatory and policy review, they could do worse than following the example of Connecticut and Massachusetts, which have graciously widened the door so we can all move forward together.