COMPOST MARKET ASSESSMENT -- EXAMPLES
Unpublished -- from Case Studies by Sandra Cointreau
Composting is a natural process wherein micro-organisms present in waste’s organic matter are encouraged to grow and eat waste. These micro-organisms, various common bacteria and fungii found in soil, need air, proper moisture, and access to clean non-toxic food in order to eat and grow. As they eat, they use of the air in their immediate area and eat all of the waste near them. They can not walk around inside the pile, so the waste piles must be periodically turned so that they are again placed in an area with access to air and food. Eventually, after about 6 to 7 turnings of the waste piles, or after about 6 to 8 weeks of time, they will have eatten all the good waste and they will die. Compost is their dead bodies, small spongy black particles that feel soft and smell sweet and earthy.
Sometimes, partially composted (about 30 to 45 days old) is put in small piles with special earth worms. They will eat the waste in the small piles and move around. After about 30 days, they will complete their eatting and will need to be screened and put on new piles. The material which is left is their “casting”, or their excreta. This too feels soft, spongy, and is a rich black color with a good smell. This is called vermi-compost.
In all countries, some of the solid wastes generated within urban areas are technically and environmentally suitable for purposes of producing compost. In lower income countries, the municipal solid waste is better for composting than the waste in high income countries; because it is higher in putrescible vegetable material, higher in moisture, lower in non-compostable materials such as paper, plastic, metal, and glass, as well as lower in hazardous elements such as heavy metals and pesticides. For a comparative perspective on the greater amenability of wastes from lower income countries to be composted see Table 1.
A large portion of the municipal solid wastes in developing countries could be converted into a compost of high quality and farmers in the agricultural area around cities would welcome receipt of high quality compost -- particularly if it is made from food wastes from restaurants, hotels, markets, and slaughterhouses, as well as garden wastes from parks and yards. However, this fact alone does not provide justification for implementing composting facilities.
Sanitary landfill is the lowest cost disposal option in all low income countries, except in those rare instances where land acquisition costs (including resettlement costs) are inordinately high. Composting costs are usually more expensive than sanitary landfilling by a factor of 2 to 3 in low income countries, as indicated in Table 2. In the USA (1998), costs for composting were reported as 36 $US/tonne of food and yard waste in Hutchinson, Minnesota (where tipping fees at the sanitary landfill are 46 $US/tonne) and 22 $US/tonne of food waste in Redondo Beach, California (where tipping fees at the sanitary landfill are 38 $US/tonne)[1].
To break even, compost needs to sell for the cost of production, minus the tipping fee received (which is typically equal to the cost or tipping fee of sanitary landfill. In the USA, compost costs are now roughly equivalent or lower than the cost (or contractor price) of sanitary landfill. Therefore, any income would be a profit. When bagged and enhanced with chemical fertilizers or enzymes, compost sells (to urban gardeners) for a markedly higher price than when sold in bulk. For example, 1998 prices in Connecticut, USA are 15-16 $US/18 kg bag for composted dehydrated poultry manure -- or about 860 $US/tonne.[2] Similarly, 1998 prices in Mauritius for imported bagged and enhanced compost from food and yard waste were 23 Rupiahs/2.3 kg bag -- or about 434 $US/tonne.[3]
While compost fetches a higher price when bagged, only a small market wants such small quantities of compost. Most farmers want large amounts, purchased by truck load. Enhanced compost product sold in bulk in Bangalore, India in 2001 sells for about 1,600 Rs./tonne – or about 34 $US/tonne, while vermicompost sells for about 2,750 Rs./tonne – or about 58 $US/tonne. Unenhanced compost in bulk sells for only 900 Rs./tonne – or about 19 $US/tonne. (Vermicomposting requires much more land than composting, because the piles can be not high or they would crush the worms. Area requirements are 5 to 10 times greater. Therefore, at large plants, vermicomposting should be only a final stage, wherein worms eat partially composted product.). Fresh cow manure sold locally is available for only 300 Rs./tonne – or about 6 $US/tonne.
In most developing countries, the cost of implementing sanitary landfill probably would be $US 5 to 10/tonne. On the other hand, the cost of composting probably would be $US 10 to 20/tonne (depending on the level of mechanization utilized to speed up the process). At a composting cost of $US 10 to 20/tonne of refuse being composted, the cost of compost product would be at least $US 30 to 60/tonne because it takes a minimum of 3 tonnes of refuse to produce 1 tonne of compost (unless there is minimum segregation of non-compostables before the waste arrives at the composting plant, in which case it could take 4 to 5 tonnes of waste arrivals to produce 1 tonne of compost).
Only if the cost differential between composting and sanitary landfilling can be covered by the sale of compost would it be appropriate for composting to be implemented. The key question to be answered is whether the demand for compost exists or can readily be developed, and whether the prospective compost purchasers have adequate income or access to investment financing to cover the cost differential for composting.
One way to quickly assess the market demand is to examine the local price for animal manure. If compost production can achieve a price below the sale price of manure, the compost will be marketable if its quality can be maintained. Manure from cows and chickens is generally considered a more attractive organic soil amendment than compost, because its quality is consistent and there is no risk of hazardous constituents, such as heavy metals or pesticides. In general, animal manure has an NPK value of about 1.6/1.3/3.3. Compost NPK varies from a low of 0.1/0.1/0.1 to a high of 1.8/1.7/2.3.
Compost needs to be matured before application to soils. Application of immature compost (characterized by a C/N ratio over 30:1) can cause decompostion to continue in the soils and lead to anaerobic conditions and anaerobic decomposition by-products, including phytotoxic levels of organic acids, ammonia and nitrite. Compost with a C/N ratio of about 20:1 is desireable. Most compost plants hold compost for a 30 day period, after the nearly two months of composting, in order to obtain mature safe compost that is ready for soil application. Based on the published literature, the typical composition of compost is described below:
Moisture -- 30 to 50% by weight
Inert Matter -- 30 to 70% by weight
Organic Matter -- 10 to 30% by weight
Particle Size -- 2 to 20 mm
- Nitrogen -- 0.1 to 1.8%
- Phosphorus -- 0.1 to 1.7%
- Potassium -- 0.1 to 2.3%
The quality of compost needs to be assured by source segregation of wastes which would be harmful to soils and crops. Heavy metals are of special concern. Based on standards provided by the Council of European Communities, the concentration of heavy metals in any soil amendment (including compost or treated wastewater) should be low enough that regular applications of appropriate compost quantities would be below the following maximum annual loadings on soil (in kg/hectare/year) :
- Cadmium -- 0.15
- Copper -- 12
- Nickel -- 3
- Lead -- 15
- Zinc -- 30
- Mercury -- 0.1
While soil loadings annually are the preferred way of managing compost, it is easier to simply monitor the compost composition at the plant. The India Gazette published solid waste management regulatory guidelines in 1999, which included maximum permissible limits for heavy meals in compost product, as noted below:
- Arsenic 20ppm maximum
- Cadmium 20 ppm “
- Chromium 300 ppm “
- Copper 500 ppm “
- Lead 500 ppm “
- Mercury 10 ppm “
- Nickel 100 ppm “
- Zinc 2500 ppm “
Composting does not negate the need for sanitary landfill. Some wastes are not compostable, and should not be sent to the plant. Also, after composting, there are residuals from the process. These residuals are the hazardous, noncompostable or recyclable items removed from the initial sorting stage, as well as the items screened and density separated from the compost product after composting (such as sand, stone, broken glass, and ash). The Bangalore compost plant in India reports that there 2001 residuals comprise 10-15% of the incoming weight of waste, and 70% of the incoming volume, which indicates an appreciable landfill space is required for residuals disposal. The volume is high because these are often light density residuals, such as plastics and paper.
Controlled landfill of compost residuals should be acceptable, as they have been subjected to treatment by composting. Nevertheless, collection and treatment of the contaminated drainage is necessary. Recirculation of treated leachate can be conducted to avoid discharge, otherwise the discharge must meet government’s discharge regulations for the size and quality of local receiving water.
GLOBAL PERSPECTIVE ON
REFUSE DIFFERENCES
LOW
INCOME
COUNTRY
/MIDDLE
INCOME
COUNTRY
/HIGH
INCOME
COUNTRY
KG/CAPITA/DAY
/0.4 to 0.6
/0.5 to 0.9
/0.7 to 1.8
PUTRESCIBLES %
/40 to 85
/20 to 65
/20 to 50
PAPER %
/1 to 10
/15 to 40
/15 to 40
PLASTIC %
/1 to 5
/2 to 6
/2 to 10
METAL %
/1 to 5
/1 to 5
/3 to 13
GLASS %
/1 to 10
/1 to 10
/4 to 10
RUBBER,MISC.%
/1 to 5
/1 to 5
/2 to 10
FINES %
/15 to 60
/15 to 50
/5 to 20
MOISTURE %
/40 to 80
/40 to 60
/20 to 30
DENSITY KG/C.M.
/250 to 500
/170 to 330
/100 to 170
LOWER KCAL/KG
/800 to 1100
/1000 to 1300
/1500 to 2700
Notes:
1. Country categorization by income is based on 1992 GNP data from the 1994 World Development Report published by the World Bank. Waste data based on a wet, "as received", condition (i.e, not oven dried).
2. Compaction trucks achieve load densities of 400 to 500 kg/c.m. in both developing and industrialized countries, based on their hydraulic mechanism designs. Higher densities result from high soil and water contents present at high levels in the wastes of some countries.
3. For self-sustained incineration, a year-round minimum of 1300 kcal/kg lower calorific value (i.e., as received) is needed. For waste-to-energy plants, 2200 kcal/kg is the minimum calorific value desired.
4. Some Eastern European cities within middle income countries have marginally suitable levels calorific value for incineration of 1300 to 1600 kcal/kg.
Source: Sandra Cointreau 1993
DISPOSAL COSTS BY ALTERNATIVE TECHNOLOGIES
LOW
INCOME
COUNTRY
/MIDDLE
INCOME COUNTRY
/HIGH
INCOME
COUNTRY
AVE. INCOME FROM GNP /370 $/cap/yr
/2,400 $/cap/yr
/22,000 $/cap/yr
OPEN DUMPING
/0.5-2 $/m.t
/1-3 $/m.t.
/5-10 $/m.t.
SANITARY LANDFILL COST
/3-10 $/m.t.
/5-12 $/m.t.
/20-50 $/m.t.
TIDAL LAND RECLAMATION
/3-15 $/m.t.
/10-40 $/m.t.
/30-100 $/m.t.
COMPOSTING
/5-20 $/m.t.
/10-40 $/m.t.
/20-60 $/m.t.
INCINERATION
/40-60 $/m.t.
/30-80 $/m.t.
/70-100 $/m.t.
Note:
1.Income based on 1992 Gross National Product data from the 1994 World Development Report published by the World Bank. Costs are estimated from 1992 information.
2.Composting costs in 1990 in Delhi, India and Bandung, Indonesia, by labor intensive systems of lowest costs were about 7 $/m.t. Composting costs in Bangkok, Thailand for a slightly more mechanized system are about 36 $/m.t.
3.Incineration costs in 1992 in Surabaya, Indonesia (without pollution control) were about 43 $/m.t., for refuse at a calorific value of 1100 kcal/kg at the source and 1200 kcal/kg after 5 days of drying in the pit. Fuel must be added daily, even during the dry season and even after 5 days drying in the pit, in order to sustain combustion.
4.Incineration costs in 1992 in Japan were about 90 $/m.t., for refuse at a calorific value of 1600 kcal/kg at the source and 2000 kcal/kg after source segregation of dry wastes. No fuel is required as the refuse is well above the 1300 kcal/kg minimum year-round to sustain combustion.
5.$/m.t means US Dollars per metric tone, and $/cap/yr means US Dollars per capita per year.
- There are significant economies of scale in landfills. Landfills below 300 tonnes/day lose economies of scale and cost 2 to 3 times more than landfills of over 500 tonnes/day.
Source: Sandra Cointreau, 1993
Discussion from Izmir, Turkey report, 1994, on the market for compost:
(Note: 1$US = 30 TL in 1994)
The Izmir compost plant keeps no records of its customers, their agricultural products, their compost application rates, or their transport distance. There is no information on customer satisfaction with the compost product, the price and availability of competitive products (such as animal manure) available to the customer, or amount which customers could afford and would be willing to pay for the product. Given the paucity of information on market demand potential, prices are arbitrarily established by Izmir City's Council. At the prices being charged, not even recurrent expenditures are being recovered and Izmir City is subsidizing the rural agricultural community.
As part of the study, there were discussions held with agricultural experts in state government. There are 379,442 hectares (ha) of land in Izmir Province in agriculture. More than half of the land is in vegetable farming. About one-fourth is in production of trees for pulp and paper use. Field and fruit crops make up most of the remainder of agricultural land use. It is generally accepted by local agronomists that vegetable cropland would benefit from application of an average of 3 tonnes/ha/year of compost. Therefore, there is theoretically a market for about 600,000 tonnes/year of compost -- much more than the amount being produced by Izmir.
According to the information available, most of the farms are small -- 68% are less than 20 ha, and about 20% are between 20 and 50 ha. The farmers' yields and costs for production of key crops is 4,380 kg/ha and 1,678 TL/kg of wheat; 1,075 kg/ha and 7,113 TL/kg of cotton; and 867 kg/ha and 37,955 TL/kg of tobacco. For these crops, costs range from 7.3 million TL/ha to 32.9 million TL/ha. Given that the cost of compost production is roughly 900,000 TL/tonne of compost product (see next paragraph), purchase of the recommended 3 tonnes/ha/year would cost 2.7 million TL/ha and could have a significant impact on farmers' profitability. Much more data needs to be collected to assess this further.
For fiscal responsibility, it is inappropriate for a City to use its revenues to subsidize a commercial product used by the rural communities outside of the City. Izmir has an obligation to its citizenry to provide disposal by the most cost-effective system. If composting costs more than the lowest cost system, those benefitting from it must pay the difference. Therefore, farmers should pay the full cost differential between the costs of sanitary landfill and the costs of composting. For purposes of this discussion, using current costs, controlled landfill in Izmir costs about 4 $US/tonne of refuse and composting costs about 10 $US/tonne of refuse. The cost differential is about 6 $US/tonne, or 180,000 TL/tonne of refuse. It takes about 5 tonnes of refuse to make 1 tonne of compost at the existing plant. Therefore, the compost product would need to be sold for about 30 $US/tonne, or 900,000 TL/tonne of compost. The current price paid by farmers for compost is only 50,000 TL/tonne.
Discussion from Greater Montego Bay (GMB), Jamaica report, 1994, on the market for compost:
(Note: 1$US = 30 $JA in 1994)
A high portion of the farm land in Jamaica produces extensive (i.e., low revenue) crops. The revenues from extensive crops generally would not be adequate to significantly create a market demand for compost. Major extensive crops include sugar cane, root crops, and maize. However, there are also intensive (i.e., high revenue) crops such as tomatoes, bananas, coffee and flowers. Whether the revenues from these intensive crops are sufficiently high to enable farmers to invest in compost needs to be explored in some detail. It also needs to be explored whether these crops exist within an economic transport distance (i.e., about 50 km by road) from the GMB. However, to illustrate the potential, farmers growing bananas have a gross revenue of $JA 120,000/hectare, $JA 125,000/hectare for coffee, and $JA 300,000/hectare for vegetables. The net revenue for these crops is expected to be about 25% of gross revenue, based on local agricultural extension service experience. The coffee and banana farmers are not generally operating at a subsistence level and are expected to be able to reinvest in their land for improved production yield and higher quality fruits. On the other hand, most of the vegetable farms are considered to be operating at a subsistence level because of the high fertilization requirement of their crops, and ability to reinvest would be limited.
If we look at compost costs in terms of whether they fall within the current investment levels made by farmers, we can see that the potential for selling the product at a price which covers cost does exist -- so long as transportation costs are minimal. The closest agricultural areas providing a potential market for compost are Cambridge and Catadupa, where bananas, coffee, and cocoa are grown.
Most farmers producing intensive crops now spend about 8,000 $JA/hectare on chemical fertilizer. According to rural agricultural experts in the GMB area, local application rates for compost are 3 to 10 metric tonnes/hectare at establishment (i.e., during the initial planting year for coffee and banana) or about 3 metric tonnes/hectare for maintenance (i.e., for vegetables and flowers). For an application rate of only 3 metric tonnes/hectare, the compost cost would be $JA 2,700-5,400/hectare (plus transportation costs which can be substantial because compost is bulky and 1 tonne takes up 3-4 cubic meters of truck capacity). Because compost could conceivably reduce the farmers dependence on chemical fertilizer (by complexing and adsorbing the chemical nutrients so that they are more available over a longer period of time), a $JA 4,000/hectare reduction in costs for chemical fertilizer would nearly compensate for the costs of adding compost.
The product which would compete with compost as a soil conditioner is manure from animals or poultry. Poultry farming is the major supplier of manure in Jamaica. There are two poultry processing plants located on the South Coast of Jamaica, and related poultry farms are near. No poultry farms are within the GMB area. Currently, coffee farms provide a demand for poultry manure and within St. Catherine Parish poultry manure is priced at $JA 280 to 300/ton (or $JA 309 to 331/metric tonne). Therefore, manure is priced much lower than the cost of compost would be.
From 1957 to 1974, Jamaica was the world's largest producer of bauxite. While Jamaica's position as the world's leader has been lost to Australia and Guinea, Jamaica still has a significant production of bauxite. Bauxite is removed from the ground through open strip mining. Upon completion of mining, the land is reclaimed by return of the original top soil material and then planted with crops or trees. Land reclamation activities provide one potential market for compost. In 1992, bauxite accounted for roughly 85 percent of the mining in Jamaica, at 11,367,000 tonnes mined. Country-wide, bauxite mining companies reclaim about 100 hectares annually, according to the Jamaica Bauxite Institute, and reclamation costs average US$ 11,115/hectare.