A composting plant’s odoriferous problem

Orgaworld sees big money in compost. But first, there’s the matter of that stench.

Allan Tipping, a 44-year-old auto mechanic who lives on the southern edge of London, Ont., had just arrived home from a feast of barbecued ribs one night last fall when he climbed out of his truck and into a fetid cloud of stink, so shocking to the system, he says, he was immediately sick in his driveway. The stench, says Tipping, emanated from the nearby Orgaworld composting plant, which began processing thousands of tons of green bin refuse from Toronto, York Region and St. Thomas, Ont., in 2007—the same year it also started generating smell complaints from neighbours, at this point close to 1,000 in as many days of operation.

Residents struggle to describe the odour—“it smells like Orgaworld,” says John Pieterson, a 56-year-old mail carrier—but when pressed reach for analogues like “vomit” or a “rotting corpse.” Barbecues on the back porch? Not in this neighbourhood. The locals speak of checking the way the wind is blowing before inviting guests, and the winds of southern Ontario are fickle.

To help remove that element of subjectivity so essential to all matters smell-related, the Ministry of the Environment has for the past few years dispatched field officers around the facility for periodic “360-degree observations.” They quickly learned how to pick up its unique signature. “These are people who go to sewage plants and, although this may not sound pleasant, they understand what they’re smelling,” says Kanina Blanchard, London district manager for the ministry. “And Orgaworld has a very distinct odour.”

Its neighbours protest that Orgaworld, a Dutch company bought by Britain’s Shanks Group in 2007, promised odour-free composting, and blame the rancid atmosphere they say spews from the plant’s 40-m stack on the diapers, pet feces and plastic bags it handles alongside kitchen scraps and garden clippings. Predictably, residents bemoan the hit to their property values.

The misadventure represents just the latest in a string of clashes between composting outfits and their neighbours, often in smaller blue-collar towns where taking garbage from big urban centres is slowly developing into good business. Orgaworld is so far fighting for crumbs (just $13 million in revenue in Canada this year), but it has invested over $50 million for a toehold here, banking on a Canadian organics boom. Orgaworld plans to do a lot more, no matter how bad it stinks—indeed, the smellier the waste, the more money it stands to make.

Such is the problem in London that, last week, the ministry stepped in to suggest that Orgaworld shut down awhile. The company agreed, calling the voluntary closure a welcome chance to retool. “We have been upgrading the site and now we’ve said, ‘Okay, let’s deal with it, finally,’ ” says Ward Janssens, Orgaworld’s manager of international operations, who argues the trouble stems in part from the fact that London is the company’s first North American experience, and poses different challenges than its operations in the U.K. and the Netherlands. “By nature you have more waste, per capita, and the waste is more contaminated by plastics,” he says.

The shuttering has thrown into turmoil Ontario’s delicately balanced composting system. Toronto once sent a quarter of its green bin refuse to London; it may now have to resort to shipping that trash to a landfill. Nor is Orgaworld alone. Universal Resource Recovery, which has processed up to 25,000 tons of York Region’s organic waste in Welland, Ont., has been forced this year to throw millions of dollars into revamping its facility because of ongoing smell complaints. And when the city of Toronto last year scrapped its contract with Halton Recycling Ltd. after a Toronto Star investigation found the company was shipping organic waste to a Michigan landfill rather than actually composting it, the plant’s neighbours in Newmarket, Ont., breathed a cleaner-tasting sigh of relief: it meant the facility would no longer take on Toronto’s diapers, pet waste and plastic bags.

The ministry’s Blanchard notes that many composting plants manage to operate with no odour complaints. But industry observers say those few odoriferous operations have hoisted a smelly pong on the business. “We really need to get our collective stuff together as an industry and sort this odour issue out,” says Paul van der Werf, president of 2cg Inc., an environmental consultancy with a waste diversion focus.

All this serves to highlight how frail the organic composting industry remains in many parts of Canada—even in Ontario, where Premier Dalton McGuinty promised to divert 60 per cent of the waste from landfills by 2008. Observers say Ontario’s industry remains underdeveloped because McGuinty’s commitment has never been followed up by policy designed to drive large-scale organic composting. Although residential organic waste programs are now the norm in large cities, no mandate has been directed at industrial, commercial and institutional operations—big producers like hospitals and restaurants.

Hence all the small potatoes. Van der Werf estimates the market value of processing residential organic waste into compost, then selling the resulting fertilizer to farmers, at just $75 million a year in Ontario (throwing in industrial, commercial and institutional organic waste might put that figure just south of $100 million). “It’s not an industry—it’s definitely not an industry because it’s not viable yet,” says the Compost Council of Canada’s Susan Antler, who notes another policy driver: tipping fees, the per-ton cost of burying garbage at the landfill. Composting doesn’t become a profitable alternative to burying trash until those fees hit around $60; in Michigan, still the destination for a lot of Ontario trash, they hover at $30.

Europe’s dense populations and tight quarters have encouraged a thriving organics industry there. So, too, has the European Union’s directive asking members to reduce the amount of organic waste they landfill to 35 per cent of 1995 levels by 2016. It’s no surprise, then, that many organic waste operators in Canada are European (both Hamilton and the Region of Peel have partnered with the Christiaens Group, another Dutch firm, for their composting technology, while Moncton, Edmonton and All Treat Farms in Arthur, Ont., use the GORE Cover system developed in Germany).

Orgaworld’s two Canadian operations—the embattled London plant and a second facility that opened this year in Ottawa—sought to reproduce the company’s success in the Netherlands, Belgium and the U.K., where its parent company, Shanks, moved out of the landfill business and into composting a few years ago in response to high tipping fees. The shift has made Britain’s only listed waste management group an attractive morsel. Last year Shanks fought off a buyout attempt by Carlyle, the private equity investor.

Over half of Shanks’s business, according to its 2010 annual report, is in the Netherlands, with revenues of $570 million there this year. It did just one per cent in Canada, a market, the report states, “which has significant potential in terms of volumes and to date has few competitors.” Despite its trouble in London, Shanks is therefore being aggressive about getting a foothold in the Canadian market. Orgaworld is spoiling for a fight over its newer Ottawa plant, which under a provincial certificate of approval is allowed to handle only kitchen scraps and yard waste but which the company wants to see handle used diapers, pet waste and plastic bags, too (the Ottawa plant has run without complaint since January). A broader mandate would significantly increase the number of Orgaworld’s potential clients in eastern Ontario.

Peter Hume, the Ottawa councillor who pushed through his city’s green bin program in the face of major political hurdles, is fighting Orgaworld over that bid; the last thing he needs is voters getting sick to their stomachs. Orgaworld appears undeterred. “We’ve invested almost $30 million in London and almost $24 million in Ottawa,” says Janssens. “We’re planning to invest far more.”