Tijuana Compost Market Assessment by EFCWest

MARKET ASSESSMENT FOR COMPOST PRODUCTS & SERVICES IN TIJUANA, MEXICO

MARKET ASSESSMENT FOR COMPOST PRODUCTS AND SERVICES IN TIJUANA, MEXICO

Report Auhtors: Elaine McCarty, Annie Power, Lauralee Barbaria and Sarah Diefendorf August 2016 Under EPA grant: #99T23701 2

Table of Contents 1 OVERVIEW / EXECUTIVE SUMMARY ................................................................................. 5 1.1 Drivers .................................................................................................................................... 5 1.2 Competition ........................................................................................................................... 5 1.3 Markets .................................................................................................................................. 5 1.4 Diversion Market .................................................................................................................... 6 1.5 Compost Market ..................................................................................................................... 6 2 INTRODUCTION ................................................................................................................ 7 2.1 Objective ................................................................................................................................ 7 2.2 Assessment Exclusions ............................................................................................................ 7 2.3 Methodology .......................................................................................................................... 8 Table 2.3.1 Research Sectors and Interviews ................................................................................. 8 2.4 Background ............................................................................................................................ 9 3 ASSESSMENT OVERVIEW ................................................................................................. 10 4 MARKET NEEDS / DRIVERS ............................................................................................... 12 4.1 Diversion Of Organic Material From Landfills ........................................................................ 12 Figure 4.1.1 Municipalities with High Vulnerability/Risk of Climate Event Occurrence .............. 12 4.2 Compost Products To Promote Soil Health And Soil Management ........................................ 13 4.3 Consistent, Safe Compost Supply to Meet Demand ............................................................... 14 5 MARKET INDICATORS ............................................................. Error! Bookmark not defined. 5.1 Willingness to Implement Policy and Legislation ................................................................... 15 5.2 Waste Management Projects in Strategic Plans .................................................................... 16 5.3 Availability of Government Funding and Subsidies ................................................................ 16 5.4 Reduction Targets for Greenhouse Gases .............................................................................. 17 Figure 5.4.1 Matrix for Mitigation Actions in the Medium Term (2020-2050) ............................ 18 5.5 Growing Volumes of Organic Waste ...................................................................................... 18 Table 5.5.1 Estimates of Tijuana Municipal Solid Waste per Year ............................................... 19 Figure 5.5.1 US Yard Trimmings and Food Scraps Disposed & Recovered ................................... 19 6 FEEDSTOCK ANALYSIS ...................................................................................................... 19 6.1 Feedstock Categories ............................................................................................................ 20 Table 6.1.1 Factors for Composting Feedstocks .......................................................................... 20 6.2 Landscape Debris .................................................................................................................. 21 6.3 Food Processing Residuals .................................................................................................... 21 6.4 Pre Consumer Food Residuals ............................................................................................... 21 6.5 Post Consumer Residuals ...................................................................................................... 22 7 MARKET ASSESSMENT ..................................................................................................... 22 7.1 Landfill Diversion .................................................................................................................. 22 Table 7.1.1 Typical Landfill Diversion Sectors .............................................................................. 23 3

Figure 7.1.1 Organic Material Diversion ...................................................................................... 24 Table 7.1.2 Potential Organics Waste Stream for Tijuana Compost Facility (reported as tons per year) ............................................................................................................................................. 25 7.2 Potential Targets for Landfill Diversion Sector ...................................................................... 25 Table 7.2.1 Estimates for Organics from Two Large Maquiladoras ............................................. 26 7.3 Potential Compost Markets .................................................................................................. 31 Table 7.3.1 Projected Market for Compost Products in Tijuana 2016 â&#x20AC;&#x201C; 2018 ............................. 31 Table 7.3.2 Tijuana Construction Companies ............................................................................... 33 Figure 7.3.1 Volume Projections of Compost Products in Tijuana for 2016 ................................ 34

8 PRICE ............................................................................................................................... 34 8.1 Landfill Diversion Pricing ....................................................................................................... 34 Table 8.1.1 PASA Tipping Fees ..................................................................................................... 35 8.2 Compost Product Pricing ....................................................................................................... 35 Table 8.2.1 Competitive Pricing for Compost Products-Mulch, Soil Blends, Woodchips ............. 36 9 COMPETITIVE ANALYSIS AND MARKET SECTORS .............................................................. 36 Table 9.1.1 Competitive Analyses ................................................................................................ 37 10 SUMMARY OF FINDINGS ................................................................................................ 38 11 DEFINITIONS .................................................................................................................. 41 12 ENDNOTES ..................................................................................................................... 43

OVERVIEW / EXECUTIVE SUMMARY

This assessment provides an overview of the compost market in the Tijuana region of Mexico to inform businesses and funders about the potential to support and develop compost services and products. 1.1

DRIVERS

New or updated legislation, changing attitudes about environmental health, and the overuse of chemicals, fertilizers and pesticides are all drivers for increased demand for natural mulch, compost and amended soil products. The main market drivers for composting in the Tijuana region are: • • • •

1.2

Willingness to implement policy and legislation at the local, state and federal level Waste management plans that are influencing development projects Increasing availability of government funding and subsidies that facilitate and support composting infrastructure Growing practice of composting as a method to amend poor soils and meet mandates for reduction of greenhouse gas emissions COMPETITION

Few organizations have the expertise and infrastructure to collect and receive organic waste inputs and produce and sell compost, especially if they seek to operate at a profit. Private or public organizations (such as waste management companies or municipalities) with existing transport infrastructure and access to land to establish a compost facility are potential competitors, although they currently lack sufficient drivers. Due to lackluster pricing in the compost market, it is unlikely that a for-profit business would pursue this path at this time. The landfill that serves Tijuana maintains extremely low tipping fees, making landfill disposal a less expensive option than diverting organic wastes for compost. Thus the low cost of waste disposal represents additional potential competition that might deter organics from diversion to the compost market. In addition, because organics represent 30% of the waste stream, the primary waste service provider in Tijuana, Promotora Ambiental (PASA), may counter external compost efforts with its own diversion program to prevent losses in revenue. Given the foregoing factors, a nonprofit entering the compost market space could be well positioned to take advantage of the burgeoning need for a sustainable organic waste diversion infrastructure. A nonprofit business model is the preferred structure because it can provide services at reduced cost, which will allow it to compete with existing low tipping fees. 1.3

MARKETS

Research and analysis indicates that composters have two market opportunities for revenue generation:

• •

Customers who pay tipping fees to drop off organic material to be turned into compost (landfill diversion), and Customers who buy compost products

The combined revenues from both market sectors must pay for all of the steps required to create compost out of what was once considered waste and to bring those products to market. 1.4

DIVERSION MARKET

Interviews with maquiladoras and large businesses located in Tijuana highlight an immediate need to divert organic materials from the landfill. Tijuana’s free trade zone is populated with companies such as Samsung, Panasonic, Schneider Electric and others at the forefront of redefining waste and utilizing best practices to manage products and processes to recover resources and avoid sending material to the landfill. Their large presence in the region provides a landfill diversion market sector not typically available for most municipalities. With preliminary discussions indicating that many of these businesses are already dedicating resources to achieve waste reduction goals through Corporate Social Responsibility (CSR), Global Reporting Initiative (GRI) and other sustainability objectives, the demand for waste reduction infrastructure that can support their efforts is high and there is an opportunity for public/private partnerships with shared goals to succeed. In addition to feedstock from maquiladoras and multinational corporations, landscape debris from government agencies and commercial landscapers and pre or post consumer organics from food processors and large food production operations provide additional viable feedstock options. 1.5

COMPOST MARKET

In the Tijuana region, there is a lack of mulch, woodchips, and compost soil blend products produced to quality standards and available at discounted bulk prices. The following market sectors that have a need for compost products available in bulk at volume discount rates should be targeted. •

•

Municipal Departments and Government Agencies: Historically, Tijuana’s Public Works Department has procured approximately 600 cubic meters of compost-amended soil products per year. In addition, the new law in Tijuana that requires dedicated green space for new development projects has the potential to drive compost demand. Commercial Landscapers: There are 15 landscape companies that provide full service landscape design, implementation and ongoing maintenance for large commercial customers and public or private development projects in the Tijuana region. Residential Landscapers: There are many landscaping companies with less than five employees who focus mainly on landscape maintenance for residential and small commercial properties. It is estimated that there are 150 residential landscapers that buy compost products. Public/Private Project Developers: There are a number of public, commercial and residential development projects scheduled each year that require compost/soil products.

INTRODUCTION

The US Environmental Protection Agency (EPA) Region 9 tasked the Environmental Finance Center West (EFCWest), a project of Dominican University of California, Barowsky School of Business, to conduct a market assessment of compost products and services for an urban compost center in Tijuana, Mexico. Centro de Composteo Urbano (CCU), a project of the Tijuana based non-profit Tijuana Calidad de Vida (TCV), will utilize this assessment in the development of its business plan for the compost center. 2.1

OBJECTIVE

The objective of this market assessment is two fold. It will inform businesses and funders about the potential market for compost services and products using Tijuana and the CCU pilot as a model and it will inform the overall viability of TCV’s compost program. Information specific to the Tijuana area is highlighted and market differences for other regions of Mexico are noted where information was gathered. 2.2

ASSESSMENT EXCLUSIONS

Compost production, market barriers and market opportunities vary greatly by region. Proximity to feedstock streams, markets for the resulting product, and availability of municipal infrastructure are all variables that impact the success of a new compost project or venture. In the case of infrastructure, it is essential to understand the model and local agreements for pickup, sorting, and transportation of materials (hauling) for a particular locale or region. This study, based primarily in the Tijuana Baja California region, and the resulting assessment, exclude residential food scraps, agricultural by-products, fats, oils, grease and bio solids for the following reasons: •

•

• •

Lack of Municipal Infrastructure: Tijuana currently lacks municipal infrastructure to pickup and separate residential organic materials and prevent contamination with non-organic waste. Alternatively, effective infrastructure for food waste does exist in Mexico City, where trucks are configured to sort food scraps and organic materials on the pickup routes. Lack of Agricultural Sector: Tijuana does not have an agricultural sector, and therefore lacks the opportunity to access farm-based organic wastes. Additionally, high transportation costs make shipping products from distant farms impractical. Compatibility with Recovery Market: Fats, oils, and grease are more appropriate for recovery through other practices to generate products such as biodiesel. Capacity of Startup Compost Operation vs. Complexity of Material: Organic material derived from the livestock industry (manure) and biosolids (organic material obtained from treated wastewater) involve extra layers of complexity for transport and compost production. Issues related to permits, public health, worker safety, product consistency and the ability to get certifications for compost processes and content were considered beyond the capacity of a startup compost operation.

2.3

METHODOLOGY

The framework used for this market assessment includes: 1. 2. 3. 4.

Identification of the problems and/or needs that a compost facility and its products solve Design and methodologies for information collection, including information types and sources Data collection; secondary and primary research Analysis, findings and recommendations

Primary research was conducted through informal in-person and phone interviews. Trips to Mexicali, Ensenada and the Tijuana region resulted in 33 in-person meetings and interviews with government agencies, nonprofits, industry associations, maquiladoras, businesses and funding agencies. In addition, 21 phone interviews were conducted with the support of interns and the TCV team, for the purpose of gathering data to identify market sectors, understanding compost facility best practices, clarifying market needs and gaining insights from industry experts. Research questions were individualized and designed to gather general aspects of waste management for each marketing sector during interviews. A Spanish translator offered immediate translation, verbally presenting planned questions and answers, as well as follow-on questions specific to sectors. Table 2.3.1 displays the market sectors researched, the number of contacts identified and interviews completed, both in person and by phone. Not all contacts were willing to be interviewed. Table 2.3.1 Research Sectors and Interviews

Sector

Description

Contacts

Interviews

Agriculture

Livestock, fruit and vegetable, grape/wine producers

Associations/ Trade Groups

Maquiladora, business, restaurant, agricultural, landscape associations

Commercial

Maquiladoras and companies with waste reduction goals

Compost Processors

U.S., Mexico, compost processors

Developers

Public and private real estate development projects

Food Service Providers

Fast food, restaurants, airports, military facilities, hospitals

Foundations

Foundations currently supporting compost/waste initiatives

Government Local

Department of Public Works, Environmental Protection Ayuntamiento Tijuana and Council Members

Government County/State

Infrastructure and Urban Development (SIDUE) Agricultural Development (SEFOA)

Environmental Protection (SPA)

Government Federal

Livestock, Agriculture Development, Fisheries, Food (SAGARPA) National Institute of Statistic and Geography (INEGI) Secretary Environment and Natural Resources (SEMERNAT)

Greenhouses

Viveros - Greenhouses

Hospitality

Hotel chains, conference centers, casinos

Industry Experts

Compost and waste industry subject matter experts

Landscape Industry

Landscapers, landscape architects, facilities managers Home owners associations, facilities managers

Military Facilities

Facilities with food services and landscaping requirements

Retail

Grocery stores, fruit / vegetable distributors and markets

Schools Universities

Public and private schools and universities

Sports Venues

Playing fields - schools, universities, stadiums and golf courses

Utilities

Public and private utilities

Secondary research data was collected through reports, government publications, periodicals, webinars and surveys. Information was also gathered during attendance at the following two events:

• •

2.4

US-Mexico Border 2020 Waste Policy Forum Meeting held February 10-11, 2015, where EFCWest delivered the presentation, “Advancing Organic Markets in Tijuana”. National Sustainable Materials Management Summit - Hosted by National Recycling Coalition, May 12-13, 2015. BACKGROUND

Composting in Mexico Mexico, in particular Mexico City, has been involved with composting for decades. A 2005 study conducted by the Instituto Nacional de Ecologica identified 63 compost centers that operated at some time in the states of Mexico, Morelos and the Federal District. Examples of plants still in operation include: Bordo Poniente, Cuautitlan Izcalli, Atizapan de Zaragoza, National Autonomous University of Mexico (UNAM) Autonomous Metropolitan University (UAM), Jiutepec, Queretaro and Jalapa, among others.1 In 2012, Mexico City closed Bordo Poniente, the largest landfill facility in Mexico. As part of an integrated plan for disposal of roughly 12,600 tons per day of trash, 40% of which was organic, a new compost facility was constructed.2 According to Ricardo Estrada, who directs the city's recycling and 9

composting programs, since the compost facility came online, roughly 80 percent of the city’s organic waste is composted and, he stated, “It’s going to be a resource that we didn’t have before.” Until compost quality improves, Mexico City and other municipalities are restricting the use of the compost to fertilize green spaces including parks and medians.

Composting in Tijuana The “Border 2020: US-Mexico Environmental Program” (Border 2020) and the prior binational program, “US-Mexico Border 2012” (Border 2012), work to protect public health and the environment in the USMexico border region by applying sustainable development principles. As a result of grants funded by the Border 2012 and Border 2020 programs, a non-profit in Tijuana, Tijuana Calidad de Vida (TCV), launched a pilot project and established the Centro de Composteo Urbano (CCU), or The Urban Compost Center. The pilot program produced 150 tons of compost mulch from over 400 tons of landscape trimmings provided by the public works department, Dirección de Servicios Públicos Municipales (Municipality of Tijuana). CCU also achieved wide support from local residents, civil society, businesses and multiple levels of government. From the private sector, the Maquiladora Index Association donated building materials, while the electrical utility, Comisión Federal de Electricidad (CFE), provided discounts for power usage and delivered landscape trimmings from maintenance operations to CCU. The success of the pilot program led to a long-term goal for TCV to establish a viable, self-sustaining compost program. In response, the U.S. EPA provided grant funding to EFCWest to develop a business and marketing plan that would allow CCU to grow and become a viable nonprofit organization producing compost in Tijuana.

ASSESSMENT OVERVIEW

At a broad level, municipal composters have two market opportunities for revenue generation: 1. Customers who pay tipping fees to drop off organic material to be turned into compost, known as landfill diversion 2. Customers who buy compost products The combined revenues from both market sectors must cover all costs of creating compost from waste and bringing the compost product to market. Both of these markets have multiple market sectors though the viability of each sector is dependent upon: • • •

Types of organic input streams that are made into compost Competitive rates to receive and process organic material at landfills Quality and availability of compost products

Landfill Diversion In the Tijuana/Baja area, currently no municipalities are diverting organics from the landfill or producing compost products. Likewise, there are no private commercial compost providers in the area.

There is, however, a growing interest by government agencies, maquiladoras, businesses and residents to divert organic materials from the landfill in order to reduce waste, mitigate impacts from climate change events, replenish depleted soils, promote organic material reuse, and meet sustainability and climate action plan goals.3 This interest is a positive indicator for the development of a compost facility in the region.

Existing Compost Products In Tijuana, availability of natural products such as woodchips and mulches is limited, especially in bulk, and at the volume necessary to meet the needs of landscapers, developers, facilities managers, and government market sectors. Mulch Compost Blend Woodchip and mulches are generally imported from the United States and available only in expensive small pre-bagged quantities at the local Home Depot.

Topsoil Compost Blend A handful of nurseries, also known as Viveros, produce and bag compost soil products to sell in Tijuana. Amended soil and compost products are also available in pre-bagged quantities at Comercial Mexicana, Soriana, Wal-Mart and a handful of other retailers.4 Research identified one commercial level facility on the outskirts of Tijuana, Petremex 5, that produces amended soil for sale in bulk quantities.

Markets: Diversion & Product To address the landfill diversion and compost product markets, this market assessment reports on: • • • •

Market drivers creating the need and opportunities for compost products and services Indicators for entry into the market for compost products and services Feedstock pros and cons for market entry Viable products and services for entry into the compost market

TARGET MARKET NEEDS

Interviews conducted primarily with government agencies and the private sector identified the need for compost products and services that meet three critical needs: 1. A cost effective alternative to divert organic material from the landfill 2. Compost products to promote soil health and reverse impacts of poor soil and waste management 3. A consistent safe supply of compost products to meet increasing demand 4.1

DIVERSION OF ORGANIC MATERIAL FROM LANDFILLS

Climate Change In Baja California, the majority of waste generated by residents and businesses is transported and dumped into landfills. In the Tijuana metropolitan area for instance, all waste generated by the growing population of 1.6 million people, commercial enterprises and a large presence of multinational companies is transported and dumped into the only landfill in the area, Santa Alicia. At the landfill, there is no separation of pre or post consumer food scraps or landscape debris for reuse. Instead, these organic materials become an environmental and health liability as they break down and generate methane, a greenhouse gas (GHG) that, according to EPA, is at least 25 times more potent than carbon dioxide. 6 Additionally, the National Climate Change Strategy 10-20-40 Vision, published by the Federal Government of Mexico, identifies Tijuana as a highly endangered municipality vulnerable to climate events. 7 In 2012, the Mexican government committed first to halt the increase of climate warming gases by 2026, and then reduce them by 22% by 2030.8 Diverting organic materials from the landfill to compost, will help mitigate climate events and vulnerabilities for many municipalities in Mexico. Figure 4.1.1 Municipalities with High Vulnerability/Risk of Climate Event Occurrence

Figure 4.1.1 from the Federal Government National Climate Change Strategy 12 -20-40 Vision document, (2013)9, represents municipalities in Mexico with high vulnerability due to climate events.

Corporate Social Responsibility Interviews with maquiladoras and large businesses located in Tijuana highlighted an

immediate need to divert organic materials from the landfill. Companies such as Samsung, Panasonic, “Hermosillo Stamping and Assembly Schneider Electric and many others have Corporate Social Responsibility (CSR), Global Reporting Initiative Plant attained zero waste-to-landfill (GRI) or other sustainability objectives for waste status early this year, giving the reduction. Campus facilities for these organizations company the distinction of being generate large volumes of food scraps from employee landfill free in all of its México cafeterias and landscape debris that can be diverted manufacturing plants.” from the landfill to a compost facility. The only Ford Motor Company solution currently available for companies in the 2015 Sustainability Report Tijuana area to meet waste reduction and zero waste goals is to transport the organic material to an incineration facility many hours away, a wasteful process that counteracts their waste reduction efforts. 4.2

COMPOST PRODUCTS TO PROMOTE SOIL HEALTH AND SOIL MANAGEMENT

Erosion and Pollution Control Diversion and reuse of organic materials for composting offsets many of the negative impacts of poor soil and waste management practices. There is a growing market for compost and compost-based products to manage runoff and erosion through green infrastructure. Environmental agencies, nonprofits and construction firms utilize compost to manage erosion and sedimentation, restore watersheds with native plant species and filter pollution from water run-off. The bi-national watershed area, Tijuana River National Estuarine Research Reserve, is focusing on erosion and sediment control and salt marsh restoration as part of the five year Comprehensive Management Plan (2010).10 Efforts will focus on controlling erosion in Los Laureles Canyon by improving sediment basins, restoring salt marsh and habitats and promoting sustainable development practices in Los Sauces Canyon. Tijuana’s urban canyons along the U.S. Mexico border developed at an alarming rate, leaving little or no vegetation that serves as a natural filter. As a result, storm water pollution and sediment run off in the canyons is intensified, negatively impacting the health of the wetland. Low Impact Development (LID) has emerged as a highly effective and attractive approach to controlling storm water pollution and protecting watersheds in already urbanized communities.11 In response to the water management efforts of environmental organizations, urban planners, construction companies and developers are starting to use compost products such as compost berms and socks to reduce environmental impacts. While there is no producer of compost berms or socks in the Tijuana or border region, an interview with a U.S. producer of these products, Filtrexx, revealed that the company is considering expansion into this region of Mexico.12

Soil Depletion Overuse of chemical fertilizers and poor agricultural management practices deplete the soil and contribute to poor long-term soil health. Repeated application of chemical fertilizers and excessive tillage result in pollutants such as nitrates and phosphates entering streams, rivers, and coastal waters. Amending soils with compost improves filtration rate and water holding capacity, while also naturally 13

supplementing nitrogen, phosphorous and potassium at a rate more compatible with the needs of the plants. By supplementing soil with compost in large grassy areas such as golf courses, sport fields, cemeteries, and parks, use of chemical based fertilizers and pesticides that pollute the environment can be reduced. Discussions with the Tijuana Golf Course facility manager and the procurement director responsible for buying fertilizers and pesticides signaled a market opportunity for compost products.

Increased Plant / Crop Health and Resilience to Pests Applying compost can improve plant health, an important line of defense against pests, diseases and environmental stress for landscape planting and grass areas. In addition, the financial and environmental costs of pesticide and fertilizers can be reduced with the use of compost that builds soil strength and long-term resilience. The Association of Organic Growers in Ensenada, Union Agricola, is comprised of small (5 â&#x20AC;&#x201C; 8 hectares) to large farms that produce fruits and vegetables. Though a large variety of vegetables are produced, strawberries and tomatoes are the most prevalent crops in the area. At an onsite meeting with one grower, an administrator shared that a compost producer in San Quintin provides them with compost and stressed the importance of having consistent, safe compost products for the organic growers.13 In the United States, the agricultural industry is still largely an untapped market for compost use says Al Rattie, Director of Markets Development for U.S. Compost Council.14 In California the agricultural industry is beginning to use compost to improve water holding capacity and to reduce the use of chemical fertilizers. Jepson Prairie Organics transforms San Franciscoâ&#x20AC;&#x2122;s food scraps into compost tailored to the agricultural industry. Their compost facility produces about 150,000 cubic meters of compost annually and supplies more than 200 Napa Valley wineries.15 The Tijuana/Mexicali regions lacks a commercial agricultural sector, so while there is a valuable market opportunity for compost products in the agricultural sector overall, it cannot be considered a sustainable, viable market for Tijuana composting products at this time. 4.3

CONSISTENT, SAFE COMPOST SUPPLY TO MEET DEMAND

Legislation Mexicoâ&#x20AC;&#x2122;s new and updated legislation for mandatory green spaces and climate change mitigation are drivers of increased demand for compost products. For example, Foliage Ley de Fraccionamientos requires that 3% of the land for residential use and 1% of the land for commercial development projects be dedicated to green space. Given the propensity for new legislative mandates to arise that mitigate environmental impacts, public and private development projects adhering to new regulations have some of the highest potential compost product demand.

Product Safety and Consistency Changing consumer attitudes about chemicals, fertilizers, pesticides, and environmental health are also long term drivers for retail customers to change their behavior and buying decisions towards natural mulch and compost products. Increasing preferences for healthier lifestyles, gardening and food production with reduced artificial ingredients are providing a push on the market directly from 14

consumers. In addition, some Tijuana restaurants are offering organic foods and products and would be likely candidates for food diversion from the landfill. In the U.S., organic garden compost and mulch products adhering to content and safety standards are readily available. Research indicates that a consistent source of safe compost available at discounted prices will drive and help meet the need for safe compost products. Standards In Tijuana and Mexico overall, few or no regulations or policies for compost content or processing are in place for pathogens and quality control. In our interview with regional plant nurseries, they reported the use of sand from the river, manure, chalk and sawdust as the input for their self produced products. Certified compost products, especially in bulk are hard to acquire. The number of private compost producers in Mexico is limited. Research identified CompostaMex which has multiple facilities, many near Jalisco, and Compostera de Occidente, in Guadalajara. Both have voluntarily implemented process and input standards for organic certification. Landfill/compost municipal facilities in Mexico that voluntarily implemented ISO standards were also identified. The Municipality of Atizipan facilities, for example, have implemented ISO 9001, 14001 and 18000 standards.

SIGNALS FOR OPPORTUNITY

There are five critical market indicators that signal good timing for entry into the compost products and services market in the Tijuana area: 1. 2. 3. 4. 5.

Willingness to implement policy and legislation to promote best practices Waste management projects in strategic plans Availability of government funding and subsidies Reduction targets for greenhouse gases Growing volumes of organic waste

All five indicators are discussed in greater detail below. 5.1

WILLINGNESS TO IMPLEMENT POLICY AND LEGISLATION

There are a number of new and updated laws at the federal, state and municipal levels that demonstrate an interest in implementing legislation and ordinances for waste management and more specifically, composting. There is a growing belief that integrated waste management practices will enable the production of compost and the growth of compost markets.

•

5.2

Federal level: Mexico promulgated the federal law for Ley de Prevención y Gestión Integral de Residuos (Prevention and Integral Waste Management), administered by the Mexican Federal Secretariat of “What we want to achieve is the Environment and Natural Resources implementation of a country-wide solid waste (SEMARNAT), that provides directives policy and to have access to the expertise for municipalities to create solid available in the U.S. to implement new waste management plans for all technologies and policies at all levels, and to waste streams that promote waste yield specific results in the area of solid minimization and reuse. 16 waste…” State level: Baja California Carlos Sanchez-Gasca, promulgated the state law for Ley de Director General of Urban and Tourism Prevención y Gestión Integral de Development Residuos de Baja California.17 Baja 2015 Border 2020 U.S.-Mexico Environmental California also established the bylaws Program Waste Policy Forum to comply with state law (Reglamento de la Ley de Prevención y Gestión Integral de Residuos Baja California). Municipal level: Local government agencies have supported a local non-profit, Tijuana Calidad de Vida, in a pilot compositing project by providing landscape waste. As a collaborative effort between the three layers of government, the Tijuana municipal government expected to receive funding for composting equipment for the pilot compost facility. WASTE MANAGEMENT PROJECTS IN STRATEGIC PLANS

The Tijuana, Tecate and Playas de Rosarito Metropolitan Strategic Plan, referenced as PEM 203418, provides guidelines to achieve significant change in environmental, economic, urban, social, and institutional development for the larger metropolitan area. PEM 2034 includes the following goals that promote the development and use of organics and composting: • • • • • 5.3

Integrated waste management Metropolitan composting center Metropolitan afforestation programs Protection and conservation of water recharge and metropolitan natural areas River basin management and environmental education projects AVAILABILITY OF GOVERNMENT FUNDING AND SUBSIDIES

Mexican federal and state government funds to support waste management programs, including organics and compost production, are available in Mexico and Baja California. In 2015, SEMARNAT seriously considered a proposal for $3,500,258 Mexican pesos (MXN) in capital for the Municipality of Tijuana to purchase equipment, construct leasehold improvements and provide training for TCV.19 16

While budget cuts ultimately prevented funding for the project, the consideration demonstrates increasing awareness by municipalities to comply with federal and state regulatory requirements to find alternatives to simply disposing all wastes into landfills. Examples of funding sources include: •

•

The North American Development Bank Community Assistance Program (CAP) provided assistance to support Border Environment Cooperation Commission (BECC) and SEMARNAT’s solid waste program goals.20 SEMARNAT has allocated grant funding for municipalities under the solid waste program goals of the federal program to establish Solid Waste Management Plans and support infrastructure needs.21

In addition, the Commission for Environmental Cooperation’s 2015-2016 operational plan includes funding for the study “North American Initiative on Organic Waste Diversion and Processing” to identify opportunities to process and divert organics from landfills and raise awareness on best practices and policies for composting.22 5.4

REDUCTION TARGETS FOR GREENHOUSE GASES

In 2012, the Mexican government committed to first halt the rise of climate warming gases by 2026, then reduce them by 22% by 2030.23 Diverting methane-producing organics from landfills to create compost is a common strategy for municipalities to reduce greenhouse gases.24 As mentioned previously, the National Climate Change Strategy 10-20-40 Vision, published by the Federal Government of Mexico, identifies Tijuana as a highly endangered municipality, vulnerable to climate events. The Matrix for Mitigation Actions in figure 5.1 below relates greenhouse gas reduction potential to the economic benefits of mitigation strategies.25 The recycling/composting data point indicates this strategy provides co-benefits of greenhouse gas reductions and economic benefit. The economic benefit of this strategy is second only to the use of landfill gas.

Figure 5.4.1 Matrix for Mitigation Actions in the Medium Term (2020-2050) Circle sizes represent the project feasibility given current conditions--the wider the circle, the greater the feasibility. The black arrow highlights the position of recycling and composting on the economic and climate mitigation potential spectrums.

With greenhouse gases from organic materials in the landfill contributing to Tijuanaâ&#x20AC;&#x2122;s vulnerability to climate change, a waste management system that includes a compost facility clearly will provide both economic and environmental benefits. 5.5

GROWING VOLUMES OF ORGANIC WASTE

A 2012 study conducted by McKinsey and Company, Waste Management Optimization in Tijuana, reports that the Municipality of Tijuana generated 772,132 tons of Municipal Solid Waste (MSW) per year (see Table 5.5.1). Further research from the study estimates that 30% of the domestic waste is organic. Projections indicate that by 2030, Tijuana will be generating approximately one million tons of MSW per year with domestic waste generation expected to grow by 27% by 2025.

Table 5.5.1 Estimates of Tijuana Municipal Solid Waste per Year

Source of Waste

Percentage

Tons/year (2009)

Tons/day

Domestic

70%

540,492

1,481

Commercial and Industrial

30%

231,640

634

Total

100%

772,132

2,155

Source: McKinsey Study 2012 - Instituto de Municipal Planeación Plan

30% Organic

As presented in Figure 5.5.1, industry trends in the United States show increases in organic materials generated and recovered as compost. A recent report, The State of the Composting in the U.S. (July 2014), identified 4,914 composting operations in 44 states, whereas a decade ago there were only a handful of residential and commercial food scrap collection programs. This number has increased to 180 communities averaging 5,155 tons of diverted food scraps per facility per year. 26 Figure 5.5.1 US Yard Trimmings and Food Scraps Disposed & Recovered

Many of the same drivers that have fueled the increase in organic diversion in the U.S. are relevant to the targeted diversion markets in Tijuana. These drivers include: • Rising need for green infrastructure • Ongoing concerns over solid waste management costs • Emerging interest in sustainable food production and reduced chemicals • Growing demand to curb landfill methane emissions • More stringent levels of regulations • Increased need to enrich and build soil health

FEEDSTOCK ANALYSIS

Before discussing the compost market sectors, it is important to understand the sources, types, and availability of feedstock, as well as the pros and cons for compost production and processes, and their impact on product quality and price. Both the degree of separation of feedstock types and the degree of contamination with non-organic materials impact the quality of the compost products produced. These

factors also affect the infrastructure and operational changes necessary for organics to be diverted from the landfill to a compost facility for customers in the diversion market. 6.1

FEEDSTOCK CATEGORIES

Categorization of feedstock varies by country, state and municipality. For the purposes of this assessment seven potential feedstock categories were evaluated: • • •

• • • •

Landscape debris: Yard and landscape trimmings, trees, discarded flowers, brush and leaves Food processing residuals: Organic materials generated as a by-product of industrial food processing sector (no fats, oil or grease) Food residuals (pre consumer): Food scraps generated during food preparation in restaurants, cafeterias, hospitals; spoiled/blemished fruits and vegetables in retail and wholesale markets; not mixed with post consumer food or compostable containers or utensils; meat and dairy often separated Food residuals (post consumer): Mixed food scraps from restaurants includes meat and dairy, compostable containers, coffee grounds, etc. Agricultural residuals: Materials generated by farmers during the production and harvesting of agricultural crops, poultry, livestock and associated farm products (includes manures) Fats, oils and grease: Derived from meat, cooking oil, shortening, butter, margarine, baked goods, sauces and dairy products usually from commercial operations such as restaurants. Biosolids: Solids derived from treatment of sanitary wastewater that have been treated through controlled processes to reduce pathogens, stabilize solids and prevent vectors

Table 6.1.1 depicts preferred and non-preferred feedstock types, characteristics, variables and relevant pros and cons to market sectors. The feedstock types are ranked based on typical processing time, contamination levels, and the ease of implementation for diversion customers and production complexity. The Implementation Impact column reflects the level of operational changes necessary for diversion customers to separate organic materials prior to pickup. The market sectors prioritized for this assessment have a dependable supply of at least one of the four preferred feedstock categories. 27

Table 6.1.1 Factors for Composting Feedstocks

Type

Processing Tipping Contamination Time Fees (Non-organics)

Implementation Impact (Diversion Customers)

Production Complexity

Preferred Landscape Debris

3 – 6 Weeks

Low

Food Processing Residuals

6 – 9 Weeks

High

Medium

Food Residuals

6 – 9 Weeks

High

Low

Medium

Type

Processing Tipping Contamination Time Fees (Non-organics)

Implementation Impact (Diversion Customers)

Production Complexity

Pre Consumer Food Residuals Post Consumer

6 – 9 Weeks

High

Agricultural Residuals

6 – 9 Weeks

Low

Medium

Medium - High

High

Fats, Oils, Grease

6 – 9 Weeks

Low

N/A

High

Biosolids

6 – 9 Weeks

N/A

High

Non-Preferred

6.2

LANDSCAPE DEBRIS

Landscape Debris is relatively clean organic waste, with the shortest production cycle, few contaminants and no health hazards. Diverting landscape debris will have minimal impact on the operations of diversion customers. Major sectors generating landscape debris in Tijuana include government departments, utilities and the landscape industry. Landscape debris as a compost feedstock is a sound option. 6.3

FOOD PROCESSING RESIDUALS

The waste streams from sectors that generate food-processing residuals are well defined and relatively free of contaminants making them a reliable and manageable feedstock source. Large maquiladoras and multi-national companies pay higher tipping fees than municipalities for organic disposal and are willing to make operational changes to meet corporate social responsibility waste reduction goals, making them an attractive target for compost operations. When infrastructure challenges can be overcome, food processing residuals are highly desirable compost feedstock. 6.4

PRE CONSUMER FOOD RESIDUALS

Pre consumer food residuals are similar to food-processing residuals in that they contain few contaminants in the feedstock. For wholesale and retail distributors of fruits and vegetables such as Costco, Calimax and large Mercados, there are minimal operational changes required to divert organic materials from the landfill to a compost facility. However, for restaurants, hotels, hospitals and cafeterias, separating food scraps generated during food preparation from the rest of the waste stream requires greater operational modifications and is therefore more difficult to implement.

6.5

POST CONSUMER RESIDUALS

Post consumer residuals are the most prevalent feedstock and one of the most complex to use in compost production. They differ from pre-consumer food residuals because organic food materials and compostable packaging are mixed together, leaving many opportunities for contamination. This feedstock requires strong oversight and significant operational changes to minimize contamination with non-organic materials. Regardless, it is a high priority for diversion for the maquiladoras/multinational CSR sector. Establishments in the hospitality sector, restaurants, hotels and convention centers, sports venues, restaurants and take away fast foods and other eating establishments will be slower sectors to divert this food waste because it will require significant operational changes and customer education.

MARKET ASSESSMENT

To review, composters have two market opportunities for revenue generation: • •

Landfill Diversion: Customers who pay tipping fees to drop off organic material to be turned into compost (landfill diversion) Compost Sales: Customers who buy compost products

The combined revenues from both market sectors must pay for all of the steps required to create compost out of waste and to bring those products to market. The landfill diversion market and the compost product market both have multiple market sectors. The viability of the market sectors is dependent upon the types of organic input streams the competitive rates to receive and process organic materials at landfills and the quality and availability of compost products. 7.1

LANDFILL DIVERSION

Market sectors in the landfill diversion market are growing as local, county and state governments, businesses and communities evaluate options for managing organic materials. Diversion market information was gathered from public and private organizations that generate landscape debris or food residuals from produce sales, food preparation, food services, manufacturing processes and landscape activities. One of the most important market factors is the difference between the cost (tipping fee) to send food and organic waste to the landfill versus the cost to divert wastes to a compost facility. Tipping fees and revenues paid by landfill diversion customers are affected by a variety of factors, including: • • • • •

Organization Type (Public or Private entity) Category of organic materials to be dropped off Negotiated contracts with the landfill concessionaire Who provides the pickup and transportation of organic materials Level of contamination of input streams

In the Tijuana region for instance, the municipality picks up and transports all residential waste to the landfill operated by Promotora Ambiental (PASA), a private concessionaire. The fees for this service are set by a long-term contract. In contrast, PASA provides the pickup and disposal of organic materials for 22

private commercial customers directly and charges much higher tipping and transportation fees than those paid by the municipality to service the residential sector. Landfill market sectors willing to pay higher tipping fees and sectors with consistent volumes of uncontaminated input streams are a higher priority as target markets. Typical market sectors for the landfill diversion market as well as priority and non-priority sectors for new compost facilities are shown in Figure 7.1.1 below. Priorities depend upon the capacity and maturity of the operational procedures and standards of the compost facility. Priority sectors were identified by their ability to generate â&#x20AC;&#x153;Preferred Feedstockâ&#x20AC;? as discussed earlier in Table 6.1.1. Table 7.1.1 Typical Landfill Diversion Sectors

Sector

Description

Priority Sectors

Municipal Government

Department of Public Works, Environmental Protection Ayuntamiento Tijuana and Councilman

County/State Government

Infrastructure and Urban Development (SIDUE) Agricultural Development (SEFOA) Environmental Protection (SPA)

Federal Government

Livestock, Agriculture Development, Fisheries, Food (SAGARPA) National Institute of Statistic and Geography (INEGI) Secretary Environment and Natural Resources (SEMERNAT)

Landscapers

Landscapers, landscape architects, facilities managers, home owners associations, facilities managers, sports venues

Utilities

Public and private utilities

Food Processing

Companies with organic residuals from manufacturing processes

Mercados and Food Distributors

Wholesale fruit and vegetable markets (Mercados) and super markets

Maquiladoras

Manufacturing and multinational organizations with waste reduction goals

Non-Priority Sectors

Food Service Providers

Fast food, restaurants, airports, military facilities, hospitals, sports venues

Hospitality

Hotel chains, conference centers, casinos

Retail

Grocery stores, fruit / vegetable distributors and markets

Schools Universities

Public/private schools and universities, food and playing fields

Agriculture

Crop residuals

In Figure 7.1.1 above, landfill diversion volume estimates were captured for seven target market sectors: 1. 2. 3. 4. 5. 6. 7.

Municipal Departments County Government Agencies Landscapers (maintenance and designers) Utilities (Electrical Utility) Mercados (wholesale distributors and retail markets for fruits and vegetables) Maquiladoras (small subset) Companies (small subset)

The following figure and table are provided as a possible scenario for a small, local composting production facility in Tijuana. Volumes for organics diversion in both the figure and table are based on conversations with representatives from various public and private organizations in Tijuana. These estimates and the associated scenario provide a basis of understanding for how an appropriate mix of organics could be achieved from sources within a municipality. In this example, food distributors were limited to Mercados because they demonstrated a greater willingness to participate and fewer barriers to overcome. Figure 7.1.1 Possible Scenario for Organic Material Diversion

Landscapers 13%

Mercados 17%

Maquiladoras 18%

Maximum Organic Intake 3,153 Tons Municipal Departments 43%

Figure 7.1.1 represents a scenario of organic material diverted from the landfill to a small urban compost center. Food diversion estimates are a subset of maquiladoras and the Mercado sectors.

Volume data specific to Tijuana was not captured for Companies food service providers, such 3% as hospitals, airports, hotels, Electrical Organic Material For Diversion schools, etc., or for County Utility Landscape and Food agriculture since these were 4% 2% not priority sectors. Any of these could be potential market sectors depending upon the geographic location or the ability to manage complex feedstock at a composting facility.

Table 7.1.2 Potential Organics Waste Stream for Tijuana Compost Facility (reported as tons per year)

No. Of Org.

Landscape Trimmings

Food Scraps

Organic Material

Municipal Departments

1,350

County

135

Utility

Landscapers

405

Maquiladoras

511

568

Companies

100

Mercados

520

Total

2,032

1,122

3,153

Organization

7.2

POTENTIAL TARGETS FOR LANDFILL DIVERSION SECTOR

This section focuses on the use, drivers, barriers, opportunities and recommendations for each of the following researched market sectors: • • • • • •

Maquiladoras and Companies Municipal Departments Utilities Local Landscapers County State and Federal Agencies Mercados (Markets and Produce Distributors)

Maquiladoras and Companies Description: The large presence of maquiladoras and multinational companies in Tijuana provides a landfill diversion market sector not typically available for most municipalities. Tijuana’s free trade zone is populated with companies at the forefront of redefining waste and utilizing best practices to manage products and processes to recover resources and avoid sending materials to the landfill. Preliminary discussions with these organizations indicated that many are already dedicating resources to achieve Corporate Social Responsibility (CSR), Global Reporting Initiative (GRI) and other sustainability goals to reduce waste and achieve zero waste targets. During an on-site interview, members of the Panasonic green team shared that they already separated 0.4 tons a month of food scraps generated from their cafeteria that services 500 employees.28 However, because they don’t have other options, they are still sending this organic material to the landfill or out for incineration. Schneider Electric shared that they are in the process of establishing in-house food

services for employees and stated they are willing to establish processes and procedures for organic material separation to prepare for landfill diversion if available.29 Additional information was gathered from Heritage International, a consulting firm specializing in materials management, on potential regional and state volumes of organic materials from companies such as Eatons, Honeywell and Tyco. These companies are looking for options to divert organic material from the landfill to support their zero waste goals. Volume: As shown in Table 7.2.1, the combined estimate of organic materials generated by just two large maquiladoras in Tijuana, Eatons and Honeywell, is estimated at 569 tons per year; 90% percent of this organic material is pre and post-consumer food waste.30 Table 7.2.1 Estimates for Organics from Two Large Maquiladoras

Type of Organic Material

Percentage

Tons/year 2014

Tons/month

Food

90%

511

Landscape Debris

10%

100%

569

Total Drivers: • • • •

Urgency to show progress for CSR and zero waste reporting Decreases in the costs of waste management Ease of implementation Credibility of compost provider including quality certificates and standards

Barriers: • • • • •

Time-consuming market sector to evolve due to slow sales cycles, approval processes Difficulty in getting on approved vendor lists May need specific metrics for reporting High customer support expectations Taking revenues from existing hauler or landfill can cause political backlash

Opportunities: • • •

Willingness to pilot after credibility of compost facility established Readiness to change processes, procedures and oversight to make zero waste goals Global accounting to evaluate total cost of waste management not just disposal costs

Recommendations: • •

Wait until compost products are consistent and processes mature Propose pilot with landscape debris and pre consumer food residuals initially

Municipal Government Description: The Tijuana Public Works Department generates landscape debris through maintenance activities performed at the municipality’s parks and government facilities. The public works department utilizes its own trucks to transport the landscape debris to the landfill, paying low tipping fees negotiated in a long-term contract. The feedstock stream of landfill debris generated by the municipality is cyclical with peak volumes generally available March – October. Contractual agreements with third part haulers can be negotiated by municipalities to provide or outsource compost processing. Revenue protection clauses for the waste hauler will need consideration. Volume: Based on historical data gathered during the CCU pilot and subsequent data provided by the City of Tijuana, it is estimated that an average of 1,350 tons per year of landscape trimmings and associated tipping fees are available to the compost facility by the City's Public Works Department alone (see Table 7.1.2). Drivers: • • • •

Regulatory compliance Costs savings (transport distance, wear and tear on trucks, tipping fees, total cost of waste management, cost avoidance) Improved quality of life for the citizens of Tijuana and the region Ease of implementation

Barriers: • • • • • •

Extremely low tipping costs from landfill concessionaire Slow implementation of Climate Action and integrated Solid Waste Management Plans Ongoing education necessary on benefits of compost and impact of organics on climate change Turnover of municipal and department leaders Relationships with existing vendors Lack of policy for compost production and standards

Opportunities: • •

Procurement Policy for compost and standards Federal and state grants for innovative management of waste or organics

Recommendations: • • • •

Establish relationships and begin processing organic materials from municipalities first Negotiate contracts that span multiple administrations and election turnover Schedule ongoing education at municipal facilities on compost benefits Gather metrics that will meet municipalities’ goals for climate change, waste management, health, etc.

Utilities Description: Public and private electric and water utilities generate landscape debris during ongoing maintenance and cleanup, especially during storm events. Utilities generally have their own trucks for transport of landscape debris. In Tijuana, the electric utility, Comisión Federal de Electricidad (CFE) demonstrated interest in diverting landscape debris to the compost pilot as a cost effective alternative to landfilling. Volume: It is anticipated that CFE would have a continuing interest in composting at least 10 tons of landscape (tree) trimmings per year. Drivers: • •

Costs savings (transport distance, wear and tear on trucks, tipping fees) Ability to take fluctuating, sometimes large volumes of landscape debris

Barriers: • •

Non flexible hours for drop-off Relationships with existing vendors for organic material disposal

Opportunities: • • • •

Water utility interest in water run-off management practices that utilize compost products Relationships with other municipal departments Onsite chipping in areas where there are downed trees due to weather events Provide education in schools linking compost and soil health to water health

Recommendations: • •

Establish relationships and begin processing as soon as possible Education on benefits of compost

Landscapers Description: There are many landscapers and landscape designers in the Tijuana region. Many are single person organizations. Based on statistical data provided by Inegi, it is estimated that there are approximately 150 landscapers, (2-5) employees and 15 large landscape companies that provide landscape design and maintenance in the Tijuana area. Property managers, facilities managers, and home owner associations can request diversion to a compost facility for landscapers in their employ and local landscapers are already familiar with the benefits of compost as a natural solution. Volume: Over 40 local landscapers participated in the CCU pilot, dropping off approximately 1 ton of garden debris in small truckloads monthly. An extremely conservative volume estimate of 150 landscapers in the Tijuana area, each bringing in a minimum of 1 ton a year, provides 150 tons of landscape debris diversion. Drivers: •

High private sector commercial costs for tipping fees 28

• •

Drop-off convenience Local landscapers are already familiar with the benefits of compost as a natural solution and will help brand recognition and informal marketing

Barriers: • • •

Hard market segment to reach Distance to transport landscape debris to composting facility Lack of understanding by property and facility managers on values of diversion or the value of compost so they do not direct landscapers to divert landscape debris from the landfill

Opportunities: • •

Pick up landscape debris onsite Word of mouth marketing through discount for referrals of new landscape diversion customers

Recommendations: • •

“How to” training classes at compost facility for plant care, etc., for home gardeners and landscaper designers to drive new business relationships Compost discount for new landscapers dropping off landscape debris

County, State and Federal Agencies Description: There are other government agencies at the county, state, and federal level that have projects that will generate landscape materials for diversion. County, state and federal road, transportation, environmental protection, water quality and health projects can generate landscape debris, though these groups may not be familiar with compost production as an alternative to the landfill. The need for education on the benefits of diverting from the landfill and for buying compost products will lengthen the time to develop this market sector. Volume: In an interview with the Tijuana municipality, it was estimated that the county, which is responsible for transportation and roads, would divert approximately 10% of the volume diverted by the municipality, which amounts to about 135 tons. Drivers: • • • •

Cost competitiveness Compliance Ease of implementation Metrics for climate change goals at federal and state level

Barriers: • • •

Lack of education on the value of diverting organics and using compost Climate change regulations, metrics and enforcement are slow to evolve Low tipping fees

Opportunities: • • •

Federal and state grants for innovative management of waste or organics Joint grant proposals for compost infrastructure Existing solid waste management plans and goals

Recommendations: • • • •

Establish relationship Review and understand solid waste management goals and policies Track annual grants and other funding opportunities that match goals and policies Collect metrics that match goals and policies

Mercados (Markets and Produce Distributors) Description: Research, interviews and meetings conducted with food service and retail companies that distribute and sell fruits and vegetables (Costco, Calimax, Comercial Mex, Albertsons) and large wholesale distributors (Mercados Abastos) highlighted an untapped market for landfill diversion service in the Tijuana area.31 COSTCO stores in the U.S. divert fruit and vegetables to compost facilities, however the decision is left to each store manager. Cost benefits for diverting will be an educational effort as part of the sales cycle. The large wholesale distributor of fruits and vegetables, Mercados Abastos shared that they are open to handling spoiled or blemished produce differently. Currently the food is sent to pig farmers in the area to save waste disposal costs. There are many secondary street markets that sell produce that would be potential market opportunities, especially fruits and vegetables that are too spoiled or damaged for human consumption. Volume: The volume of fruit and vegetable waste generated by the Mercado was approximately 1.4 tons a day. Drivers: • • • •

Ease of implementation Cost savings Metrics (for those that have CSR goals) Public Relations

Barriers: • •

Concern about people foraging for food if not removed quickly from site Lack of willingness to change current operations and procedures

Opportunities: • •

Parent companies of multinationals corporations operating in region, such as COSTCO and Walmart, have CSR goals; leverage to urge regional operators to follow suit Mercado operators are open to discussion and alternative options

Recommendations: •

Establish relationships 30

• •

Education on benefits of compost Develop capacity to remove food waste quickly from sites

7.3

POTENTIAL COMPOST MARKETS

As discussed above and as noted in the United States, the need for and use of compost is growing annually. While this bodes well for the industry as a whole, there is also a need for regulations, specifications and standards so the public can feel safe using compost products. Table 7.3.1 below provides projections for compost needed for select sectors from 2016 to 2018. 32

Table 7.3.1 Projected Market for Compost Products in Tijuana 2016 – 2018

Cubic Meters Compost Products

2016

2017

2018

Commercial Landscapers

425

510

612

Municipal Departments

600

720

864

City Development Projects

100

120

144

Residential Landscapers

150

180

216

1,275

1,530

1,836

Consumers Markets

Total

In the Tijuana region, there is a lack of mulch, woodchips and compost soil blend products produced to quality standards and available at discounted bulk prices. Five market sectors are targeted that have a need for compost products that are available in bulk at volume discount rates: 1. 2. 3. 4. 5.

Municipal Departments Commercial Landscapers Residential Landscapers Public Project Developers Private Commercial Developers

Municipal Departments Historically, Tijuana’s Public Works Department has procured approximately 600 cubic meters of compost-amended soil products per year.33 The materials are used in the city’s parks, recreational areas and landscaping for government facilities. The municipality buys compost from a limited number of approved vendors; a recent compost product was purchased from Vivero Tijuana at a price of 350 pesos per cubic meter. This vendor delivers the compost products and has lenient credit terms (120 days). Public Works Department employees shared that compost products are used to improve the health of the soil, increase plant growth, conserve water and decrease the need for fertilizers.

Ongoing education provided to municipal departments in Tijuana on the environmental, economic and health benefits of utilizing compost will increase the municipal demand for compost products. In addition, the new law in Tijuana that requires dedicated green space for new development projects, 3% for residential and 10% for commercial, Ley de fraccionamientos, actualizacion de la legislacion en cuanto a foliaje y areas verdes, has the potential to drive compost demand

Commercial Landscapers Data captured from INEGI estimate there are 15 landscape companies that provide full service landscape design, implementation and ongoing maintenance for large commercial customers and public or private development projects in the Tijuana region. Included in this sector are golf course and sports arena managers, who tend to rely heavily on chemical applications (fertilizers and pesticides) to promote growth and control pests and weeds. This sector could benefit financially from cost savings derived from utilizing compost in their landscape management practices as well as gain increased social capital through the use of more sustainable land management practices.

Residential Landscapers There are many landscaping companies with less than five employees who focus mainly on landscape maintenance for residential and small commercial properties. It is estimated that there are 150 residential landscapers that buy compost products. Purchase cycles for this group are seasonal with the peak period generally falling between March and October.34 According to the United State Composting Councilâ&#x20AC;&#x2122;s Director of Market Development, Al Rattie, landscapers are probably the single largest market using compost in the U.S. Purchase drivers for this group are typically product quality, consistent product performance, convenient pickup location and competitive prices.

Public Project Developers Information gathered from commercial landscape companies and the Mexican State Secretaria de Infraestructura y Desarrollo Urbano del Estado (SIDUE) (Secretary for Infrastructure and Urban Development) show that there are a number of public development projects scheduled each year that require compost/soil products.35 As an example, in 2015 the Bosque de la Ciudad (City Forrest) project required 500 cubic meters of soil and soil amendments. Currently project developers tend to purchase soil and soil amendment products from Petremex or area nurseries.

Private Commercial Project Developers There are at least 15 large commercial development projects and several residential projects underway in Tijuana.36 To meet the need of these development projects, there are almost 200 construction companies, many with a large number of full time employees (Table 7.4.1 below). These companies and affiliated landscapers will be in the market for compost products priced for bulk sale. In addition, private developers require compost products for residential and commercial projects. For instance, in 2015, 201 cubic meters were required to build a private park.

Table 7.3.2 Tijuana Construction Companies

0 â&#x20AC;&#x201C; 30 Employees

Greater than 30 Employees

Total in Tijuana

Construction - Roads, Bridges etc.

Construction â&#x20AC;&#x201C; Utilities (Water, Electricity, Telecom)

Construction - Urbanization

Building of Commercial Properties and Services

Construction - Buildings and Industrial Plants

Multifamily Building Construction

Family Housing Construction

Road Work - Installation of Signs & Protection

Supervision of Commercial & Residential Real Estate

158

193

Company Type

Total 37

Source INEGI - Census 2010

Compost Sales Projections by Sector Figure 7.3.1 represents a conservative estimate of potential product sales by market sector for a small composting center. While private commercial developers are considered a potential market, at the time of this report, they were not available for interview; therefore, initial compost sales are provided for four of the five potential markets.

Figure 7.3.1 Volume Projections of Compost Products in Tijuana for 2016

Volume Projections of Compost for 2016 Residential Landscapers City 12% Development Projects 8% Municipality 47%

Commercial Landscapers 33%

Total 1,275 Tons

PRICE

As discussed earlier in this document, generally speaking, the tipping and transportation fees paid by the commercial sector to remove organic materials are much higher than those paid by municipalities. In the Tijuana region for instance, the municipality picks up and transports all residential waste to the landfill operated by a private concessionaire. On the other hand, commercial customers in Tijuana are serviced by a business (PASA). Though the same landfill is used for waste disposal by both entities, the municipality benefits from much lower costs gained through contractually negotiated rates. 8.1

LANDFILL DIVERSION PRICING

The projected price for landfill diversion service to receive landscape trimmings and other organic wastes needs to be competitive with the tipping fees and delivery costs charged by PASA, the current landfill transport provider. The projected price for landfill diversion services to source compost feedstock must be cost competitive with current sector specific waste disposal fees to make a regional compost facility viable. PASA tipping fees by customer type are noted in table 8.1.1 below and are also offered in Table 6.1.1 as a scale from low to high.

Table 8.1.1 PASA Tipping Fees

Customer Type

Fee (MXN)

Pricing Unit

Landscapers

450

Per truckload

Municipality (up to 1,350 tons/year)

150

Per ton

Municipality (beyond 1,350 tons/year)

350

Per ton

Fees for all sectors, including maquiladoras and businesses with zero waste goals, should be negotiated by volume, type of materials, pickup frequency and transport costs in a manner that supports a competitive pricing model. For example, the complexity of managing food resources results in increased operational costs. When combined with a strong demand for the premium service of diverting food scraps, this translates into higher fees for this service. 8.2

COMPOST PRODUCT PRICING

To gather price points relevant to the Tijuana area, products and prices were analyzed from the Big Box stores in Tijuana, viveros (greenhouses) and smaller retailers. Studies of composting centers in Mexico and the United States were also gathered for comparison; however, pricing and markets are very localized. Because there are no composting facilities in Tijuana that produce and offer mulch or wood chips in bulk by the cubic meter, prices were gathered from two facilities located in southern California near the border, the Greenery in San Diego38 and Agriservice, Inc. in Oceanside, for use as pricing reference points.39 These two compost facilities have different operating models with the Greenery compost center being a public entity run by the City of San Diego, and Agriservice, Inc. being a public/private partnership with the City of Oceanside. With weather patterns, soil conditions, and compost and mulch production techniques similar to CCU, these facilities are appropriate models for comparison. Research and site visits to Home Depot and Petremex indicate, however, that price varies, with commercial landscapers and project managers working on development projects paying higher prices for local mulch and mulch blend products than those found in the California market. The price differential can be explained, in part, by the lower price associated with bulk offerings at the California facilities. Because of its centrality, CCU is ideally located to its potential markets. Price and superior product quality will draw buyers from Home Depot, located only a few blocks from the Center. While initially CCU products will not be available in small bags for distribution to retailers, self-bagging will be available on-site for those seeking smaller quantities thus enabling CCU to cultivate a diverse customer base from the beginning. Once product consistency and the ability to bag and deliver products becomes economically viable, CCU will consider utilizing retailers as a distribution channel. Table 8.2.1 below shows price of different compost products in Mexican pesos (not including delivery or taxes).

Table 8.2.1 Competitive Pricing for Compost Products-Mulch, Soil Blends, Woodchips

Locations

Price (MXN) Cubic Meter

2-4”- (2) weeks processing yard waste only

SCAL

98-235

Forest Fines* Brush & Tree Trimmings 1½”-3”

SCAL

295

Viveros - Landscapers – Soil, sawdust, manure

Tijuana

300 - 600

Petremex (Terra Posta) - Sand, sawdust, beer **

Tijuana

900

70% Top Soil 30% Compost (Certified Organic)

SCAL

300

Chips <2” Some plastic 10 wks. yard & food

SCAL

Natural Wood 1/2” – 4”

SCAL

393- 471

Colored Chips Red & Brown 2”-4” Non Toxic

SCAL

668

Tijuana

1910

Category

Mulch

Soil Blends

Wood Chips

Ingredients / Description

Colored Woodchips - Home Depot (2 Cu. Ft. bags only)*** * Forest fines are brush and tree trimmings ground to ½ “ sizes ** Petremex blend not produced to US Composting Council Standards

*** Price for colored chips calculated on number of bags needed for a cubic meter time

COMPETITIVE ANALYSIS AND MARKET SECTORS

Composting, like recycling, is a complex market system largely because stiff competition may exist for both the feedstock and the compost product. The same organic material that a compost facility considers raw material for their product, is a source of service revenue for waste hauler and landfills; therefore, both perspectives need to be considered in a competitive analysis.

Diversion Market In the Tijuana area, only one company, PASA, manages organic and inorganic waste pick-up and landfill operations. Any reduction in the waste stream may be viewed as a threat to its revenue and competitive responses are likely. With an established infrastructure and existing customer relationships, PASA has an edge over competitors entering the market. However, if the substantial waste reduction/landfill diversion drivers of companies with CSR, GRI and other sustainability objectives are considered, PASA’s competitive advantage in the waste disposal market weakens. Any new compost operation will need to capitalize on this growing market sector to both define and fortify its market position. While changing consumer attitudes about health and the environment will drive buying behavior for natural compost products, they will also propel consumers to change behavior regarding household waste management. CCU sponsored campaigns to divert household and commercial organic waste from the landfill combined with the sustained push government has exhibited towards more sustainable waste and land management practices will provide additional leverage for gaining market share and

reduce the risk of entering a monopolized market. The widespread support CCU received from the community during its pilot phase provides credibility to this claim.

Compost Production Market While there are three significant competitors in the commercial compost market, CCU can strengthen its position and reduce its competitive risk by capitalizing on current product limitations and lack of quality control in the marketplace. In addition, its nonprofit operating model will provide additional strategic advantage. Table 9.1.1 below outlines the advantages and disadvantages of the competitors in the compost product market. Table 9.1.1 Competitive Analyses

Competition

Petremex

Viveros

Home Depot

Tijuana Compost Center (CCU)

Advantages

Disadvantages

Well established market for soil products

Limited products offerings no mulch, woodchips

Ability to sell soil products in bulk

Non-centralized location

Easy access to feedstock - sand, wood dust and beer dregs

Established processes but no certifications

Core business is not compost

Close relationship with landscapers

Limited or no mulch or woodchip products

Handmade compost - sand, lime, manure

Inconsistent products non-certified

Visibility for home gardeners

Small quantities of products in bags only

Products not available in bulk or discounted rates

A variety of products are imported from Limited or mulch or woodchip US products Brand familiarity and central location

Prices expensive due to small volumes

Existing relationships for feedstock

Competing with existing waste management for feedstock

Non-profit business model

Lack of capital for operations

Potential for wide range of products

Inconsistent production

Central Location within Tijuana

Currently, in the Tijuana region, there is no municipal compost production, only one commercial bulk compost producer with a limited product line, and no certified producer of compost materials in the region. The CCU business model is positioned to capitalize on these market weaknesses enabling it to capture a share of the market.

10 SUMMARY OF FINDINGS This market assessment reviewed key considerations in introducing a compost facility in the Tijuana area. As is the case with any new venture, the difficulty of market entry cannot be overstated, and the importance of understanding your market cannot be underestimated. As reviewed in this report, careful attention needs to be paid to a wide range of factors.

Market Needs Important consideration must be given to the whether the needs of the market provide sufficient incentive for growth of the compost product market. The market analysis indicates that compost products and services meet three critical needs: • • •

Landfill diversion Market demand for compost and mulch products Environmental best practices to reverse the negative impacts of poor soil and waste management

These needs are ongoing and becoming increasingly important over time, thus signifying the need for expanded and more comprehensive offerings capable of keeping up with the changing landscape of the industry.

Market Entry Indicators Consistent trends in environmental awareness and commitment toward environmental protection on governmental, industry, and consumer levels indicate the compost industry is a growth market able to support expansion and additional players. The following indicators are signals the time is right for market entry: • • •

Favorable legislation Compost capacity to mitigate climate change causes and impacts National trends towards healthier environments and homes

At a critical time, compost production and services, with the capacity to reduce climate vulnerabilities, is poised to expand and meet the changing needs of government, industry, the community and the environment.

Market Entry Opportunities While the variety of feedstock options offer multiple points to enter the market, of the seven categories of organic feedstock examined, yard and landscape trimmings offer the best market entry opportunity for multiple reasons: •

Short, non-complex production cycle 38

• •

Relatively clean organic waste with little contamination Minimal infrastructure impact for diversion customers

Secondarily, food waste from industrial processing is the next most attractive market entry point for the following reasons: • • • •

Well defined waste streams Waste streams relatively free of contaminants Higher tipping fees mean greater profit potential Diversion customers highly incentivized by sustainability goals and objectives

As infrastructure and production become streamlined, expansion into processing other preferred feedstocks may be considered based on feasibility and profit potential. Mexico City serves as a model for residential food scrap collection though collection of this feedstock is not conceivable for this region at the current time.

Ideal Compost Product Markets A wide potential customer base for compost products is viable, however, based on efficiencies and pricing, the greatest opportunities in Tijuana lie in the: • •

Sale of woodchips, sawdust and soil for commercial landscapers, government agencies and maquiladora companies Sale of soil to plant nurseries

A focus on these target markets should not preclude product offerings to smaller market segments so long as efforts don’t preclude profitability.

Education Supports Industry Growth Industry growth can be stimulated by ongoing educational outreach to the general public, public and private sector institutions, industries and businesses to inform on: • • •

Legislative requirements Best practice alternatives to landfilling that meet CSR policies How compost contributes to healthy environments and homes

Education on these matters is a cyclical process in that increased awareness generates the desire for more information which, in turn generates increased awareness. By consciously tapping into and directing this process, industry growth can be energized.

Market Entry Challenges Though there are many indicators supporting entry into the compost marketplace, challenges to market entry must be considered, including: • • •

Permits to manage composting practices are not standardized Compost standards in Mexico are still being drafted, though U.S. or European standards are in use Capital investment to acquire the most efficient equipment is significant

Collaboration, public/private partnerships, community organization and other efforts focused on education, implementing best practices, streamlining processes and producing community wide benefits are tools that can be leveraged to overcome these challenges.

Recommendations The following recommendations are provided to establish a local, commercial compost facility in Tijuana.

•

Develop a deep understanding of the complexity of the compost market, including inputs (organic materials as feedstock) and outputs (compost product for sale)

•

Research and master the challenges in maintaining consistent quantity and quality of compost product, including: o

Ensuring consistent, uncontaminated feedstock

Using strict protocols for compost production

•

Build relationships with priority sectors to ensure consistent supply of compost feedstock

•

Study competitors, understand how products are packaged, priced and sold in Tijuana

•

Create liaisons and build relationships with city and county officials and current waste management providers to anticipate the disruption that diverting organics from current waste stream will cause current waste management infrastructure and operations.

•

Invest in market education and outreach to garner support from all stakeholders.

11 DEFINITIONS Agricultural Composting: Composting conducted by an agricultural operation on lands used for farming. Agricultural Residuals: Materials generated by the customary and generally accepted activities, practices, and procedures that farmers engage in during the production and preparation for market of poultry, livestock and associated farm products; from the production and harvesting of agricultural crops; and materials resulting from aqua-cultural production. Includes manures not managed as part of a Confined Animal Feeding Operation (CAFO). Biosolids: Solids derived from primary, secondary or advanced treatment of sanitary wastewater that have been treated through one or more controlled processes that significantly reduce pathogens and reduce volatile solids or chemically stabilize solids to the extent that they do not attract vectors. Compost: A stabilized (see â&#x20AC;&#x153;stabilityâ&#x20AC;?) organic product produced by a controlled aerobic decomposition process that can be used as a soil additive, fertilizer, growth media or other beneficial use. Composting: The accelerated biological decomposition of organic matter under managed aerobic conditions resulting in compost. Corporate Social Responsibility Report: A report published by a company or organization about the economic, environmental and social impacts caused by its everyday activities. It presents the organizationâ&#x20AC;&#x2122;s values, governance model, positive and negative impacts and demonstrates the link between its strategy and its commitment to sustainable global economy. Often considered synonymous with other terms triple bottom line report, sustainability report and others. Crop Residues: Materials generated by the production, harvesting and processing of agricultural or horticultural plants. These residues include but are not limited to stalks, stems, leaves, seed pods, husks and roots. Feedstock: Organic material used in the production of compost. Food Processing Residuals: Organic materials generated as a by-product of the industrial food processing sector that are non-toxic, non-hazardous, and contain no sanitary wastewater. The term does not include fats, oil, grease and Dissolved Air Flotation (DAF) skimmings. Food Scraps/Residuals (Pre-consumer): Food scraps from the commercial/institutional sector including but not limited to vegetables, fruits, grains, dairy products and meats generated during preparation, manufacturing processes and distribution to consumers. Food Scraps/Residuals (Post-consumer): Food scraps from households, restaurants and food service providers including but not limited to vegetables, fruits, grains, dairy products, meats, and compostable foodservice ware/packaging that may be commingled. Global Reporting Initiative (GRI): GRI is an international independent organization that promotes the use of sustainability reporting as a way for businesses, governments and other organizations to understand and communicate the impact of business on critical sustainability issues such as climate change, human rights, corruption and many others. Landscape Debris: Yard trimmings such as leaves, grass clippings, brush, garden materials, tree trunks, tree stumps, holiday trees, trees or shrubs pruning, discarded flowers. Maquiladora: A foreign or Mexican owned factory at which materials and equipment are imported duty free for assembly, processing or manufacturing into products for export. Mixed Solid Waste: Mixture of organic and inorganic discards and may contain household and other municipal solid wastes that are excluded from regulation as hazardous wastes. 41

Mulch: Any organic or inorganic material used on the soil surface to reduce weeds, conserve soil moisture, improve water infiltration, or for aesthetic purposes. Organics: The biodegradable component of the waste stream that is of biological origin but does not contain any hazardous waste (EPA). Run-off: Precipitation that has fallen onto the composting facility and flows off of the facility. Source Separated Organics: Organic material that has been separated from non-compostable material at the point of generation, including but not limited to yard trimmings, food residuals, vegetative materials, woody materials, and compostable products. Stability: Inverse measure of the potential for a material to rapidly decompose. Measured by indicators of microbial activity, such as carbon dioxide production, oxygen uptake, or self heating. Stormwater: Precipitation that has not come into contact with raw feedstocks or active composting piles. Tipping Fee: A charge levied upon a given quantity of waste received at a waste processing facility. In a landfill it is generally used to offset the cost of opening, maintain and closing a landfill site. Throughput: Amount of material, in tons or cubic yards, a facility can process in a given amount of time. United Nations Global Compact: A voluntary initiative based on CEO commitments to implement universal sustainability principles and take steps to support UN goals. Vector: Any insect, rodent or other animal capable of transmitting, directly or indirectly, infectious diseases to humans or from one person or animal to another. Windrow Composting: Process in which decomposing organic materials are placed in long piles for the purpose of producing compost. The piles are periodically turned or agitated to assure all parts of the decomposing material reach the desired stability. Zero Waste: Zero Waste is a goal to guide people in changing their lifestyles and practices to emulate sustainable natural cycles, where all discarded materials are designed to become resources for others to use. Designing and managing products and processes to systematically avoid and eliminate the volume and toxicity of waste and materials, conserve and recover all resources, and not burn or bury them (Zero Waste International Alliance). There are a variety of zero waste certifications including UL 2799 Zero Waste to Landfill with diversion rates from 80% to 100%.

12 ENDNOTES 1

Instituto Nacional de Ecologia Study for SEMARNAT (2005) Study of composting plants in Mexico http://www2.inecc.gob.mx/publicaciones/libros/499/experiencias.html 2

ZDNET, May 23, 2012 Mexico City launches massive composting project, http://www.zdnet.com/article/mexicocity-launches-massive-composting-project/ 3

Baez, Raul Avila. "Meeting with Index Tijuana Re: Maquiladoras." Personal interview. 3 June 2015. Raul Baez is the Director General of the Maquiladoras Index or association. 4

Retail stores visited on June 3, 2015 research visit to Tijuana.

"Petremex Composting Products and Production Processes." Personal interview with facility operator. 21 July 2015. The interview took place during an on-site visit to the Petremex composting facility. 6

USEPA. https://www3.epa.gov/climatechange/ghgemissions/gases/ch4.html

"Mexico (2013): National Climate Change Strategy." Mexico (2013): National Climate Change Strategy. International Partnership on Mitigation and MRV. pg. 47, Web. 29 July 2015. <http://mitigationpartnership.net/mexico-2013-national-climate-change-strategy-10-20-40-vision>. 8

UN Framework Convention on Climate Change. United Nations--INDC, 30 Mar. 2015. Web. 17 July 2015. <http://www4.unfccc.int/submissions/INDC/Published%20Documents/Mexico/1/MEXICO%20INDC%2003.30.2015 .pdf>. 9

“Tijuana National Estuarine Research Reserve: Comprehensive Management Plan.” National Estuarine Research Reserve. Final, September 2010. http://trnerr.org/wp-content/uploads/2015/04/TRNERR-ComprehensiveManagement-Plan-2010-2015-Final_Sept2010.pdf 11

http://www.nrdc.org/water/pollution/storm/chap12.asp.

Kolodge, Craig. "Compost Berms as a Product Line." Telephone interview. 27 Feb. 2015. Mr. Kolodge is the Western Regional Representative for Filtrexx International. Discussed compost berm manufacturing in Tijuana and contacts with Filtrexx resources there. 13

Gilberto Paz, Regional President, Union Agricola. Interview. 24 Oct. 2015.

Platt, Brenda, et al. State of Composting in the US. Institute for Local Self Reliance, July 2014. http://ilsr.org/wpcontent/uploads/2014/07/state-of-composting-in-us.pdf 15

Biocycle, August 2012, Volume 53, No. 8, pg. 33, “Farms, Vineyards, Groves Reap Compost’s Benefits” https://www.biocycle.net/2012/08/15/farms-vineyards-and-groves-reap-composts-benefits/

"Environmental Regulation of Waste in Mexico." SEMARNAT. Semarnat.gob.mx. Web. 29 July 2015. <http://app1.semarnat.gob.mx/dgeia/informe_2008_ing/07_residuos/recuadro7_6.html. NOM-161 SEMARNAT2011 for Special waste management. 17

"Law of Prevention and Waste Management: Baja California." LEY DE PREVENCIÓN Y GESTIÓN INTEGRAL DE RESIDUOS PARA EL ESTADO DE BAJA CALIFORNIA Publicado En El Periódico Oficial No. 40, De Fecha 28 De Septiembre De 2007, Tomo CXIV. Ww.tijuana.gob.mx. Web. 28 July 2015. <http://www.tijuana.gob.mx/Leyes/pdf2011/leyes/Leypreresiduos_22OCT2010.pdf>. 18

"PEM2034 , Plan Estrategico Metropolitanos De Baja California - Tijuana - Tecate - Rosarito." PEM2034 , Plan Estrategico Metropolitanos De Baja California - Tijuana - Tecate - Rosarito. Web. 02 Aug. 2015. <http://pem2034.herobo.com/>. 19

Grant submission to SEMARNAT available upon request

"NADB: Current Projects." North American Development Bank. Web. 15 July 2015.

http://www.cec.org/Storage/164/19277_CEC_Operational-Plan_2015-2016_v6.3-e2.4_15July2015.pdf

http://faculty.washington.edu/slb/docs/CCAR_Composting_issue_paper.pdf http://www.climateactionreserve.org/how/protocols/organic-waste-composting/ 25

Processing time, Contamination Impact and Complexity estimates are based on conversations with compost system vendors and operators. Tipping fees are based on conversations with Tijuana landfill operators and customers.

Ortega, Ivan Borraz, Natalay Rosales, and Cesar Lopez. Personal interview. 4 June 2015. Interview conducted with the "Green Teams" of Scheinder, Panasonic, and Plantronics. 29

Ortega, Ivan Borraz, Natalay Rosales, and Cesar Lopez. Personal interview. 4 June 2015. Interview conducted with the "Green Teams" of Scheinder, Panasonic, and Plantronics. 30

Panasonic

Schneider

Estimated volumes of Compost Products are based on conversations and interviews with representatives from organizations in Tijuana, including customers, and from city development plans. 32

Ricoy, Karina Navarro. "Volumes of Compost Purchased by the City." Personal interview. 21 July 2015. Ms. Ricoy works for the public works department of Tijuana, Forestacion y panteones. 34 Liera, Agronoma Octavio, and Yadira Rodriguez. "Seasonal Cycle of Compost Sales." Telephone interview. 8 June 2015. Contacted Real Mex Stone and Vivero La Centro which are greenhouses in Tijuana. We discussed seasonal cycle of compost products and costs. 35

"Public Works in Progress-Tijuana." SIDUE-Ministry of Infrastructure for Baja California. Baja California-Gobierno Del Estado, n.d. Web. 2 Aug. 2015. <http://www.sidue.gob.mx/contenido/ObrasPublicasTijuana.aspx>. 36

Martinez, Martin Nicolas. "Landscape Market Analysis." Personal interview. 3 June 2015. A landscape architect at GRA Diseno y Construccion 37

"Instituto Nacional De Estadística Y Geografía (INEGI)." Instituto Nacional De Estadística Y Geografía (INEGI). Web. 18 July 2015. This is based on the Census 2010. 38

Robertson, Renee. "Operations & Costs of Mira Mar Composting Center." Telephone interview. 22 July 2015.

Matava, Mary. "Compost Center Operations & Cost Analysis." Personal interview. 09 Feb. 2015. Ms. Matava is the President of Agri Service in Oceanside.