A long-imagined goal to turn organic waste into biogas that can fuel garbage trucks is inching closer to reality after RethinkWaste issued nearly $50 million in green bonds this week, marking a step forward for an effort to make major facility upgrades at the Shoreway Environmental Center in San Carlos.

Aimed at reducing waste and greenhouse gases and improving recycling operations, the improvements the bonds will help pay for are expected to modernize the sorting equipment used at the waste authority’s recycling plant and begin a pilot to convert organic material into a clean energy source, said Joe La Mariana, executive director of RethinkWaste. Though major upgrades have been considered as the facility enters its 10th year in operation, La Mariana said officials began work on a financial analysis of the facility’s operations last summer to determine how large-scale improvements could be funded.

Increasingly stringent standards for fiber-based recyclables put in place by China last year and a growing interest among officials to reduce the amount of waste sent to landfills were among the priorities officials considered in identifying some $25 million in capital projects needed for the 16-acre site northeast of the Holly Street and Highway 101 interchange, noted La Mariana. He said the staff and the board of the joint powers authority RethinkWaste represents, also known as the South Bayside Waste Management Authority, recognized interest rates were much lower today than they were when the authority first borrowed bonds to construct the facility in 2009.

By refinancing old facility bonds, the authority was able to save $10 million and reduce annual debt service payments by $500,000, said La Mariana, who added the authority will also be able to leverage another $5.5 million the authority has been saving in a capital reserve fund. La Mariana explained the authority was able to bring in $10 million in new funds to help underwrite these projects, noting the $50 million in bonds the authority is borrowing constitute the first bonds issued in San Mateo County for green infrastructure. The financing for the bonds follows the guidelines of the International Capital Markets Association Green Bond Principles, which provides investors with assurance of the deal’s pro-environment credentials, according to a press release.

“This transaction was a winner on all levels,” he said. “The ratepayers won, the infrastructure won.”

Now the financing of capital improvements has taken a major step, La Mariana is hoping a pilot to convert organic waste into clean energy can be launched by the end of the year in the facility’s transfer center, where compost and waste destined for a landfill is processed. He said the facility has estimated some 30% of the green waste coming to the facility from ratepayers ends up in landfills, where it generates methane. As part of the pilot, staff at the transfer center will separate out clean, organic material and combine it with reclaimed water to form a slurry that would be taken to the Silicon Valley Clean Water wastewater conveyance system in Redwood Shores. La Mariana said the material would be then processed in the wastewater treatment plant’s anaerobic digestive tanks, where methane and biogas would be harvested.

He said that those gasses could then serve as a clean energy source for the wastewater treatment plant and that, once data on the pilot is analyzed, officials will explore ways they can expand the capacity of the system. La Mariana hoped they could consider bringing surplus energy produced at the wastewater treatment plant back to the San Carlos facility as an alternative to the diesel fuel used by Recology garbage trucks and semi-trailer trucks transporting material on and off the site.

La Mariana acknowledged that a conversion of the fleet’s fuel source to biogas is an aspirational goal, and that biogas is not a perfectly clean energy source. But he noted the effort, which he said has been supported by San Mateo County and state grants, would mark a shift in the energy used at the site.

“It burns much cleaner and it’s locally sourced,” he said. “That will complete the loop of converting trash to energy.”

He also looked to planned upgrades to the site’s recycling facility to help the authority adjust to recent major shifts in the commodities market for recyclables. Instead of sending a significant portion of the recycled material produced at the facility to China, the waste authority has been sending material to Vietnam, South Korea, Malaysia, Taiwan and India, among other countries, noted La Mariana. But he noted those countries have, in turn, raised the standards of the materials they will accept, spurring an effort to adjust the recycling plant’s equipment to deal with these changes and the influx of cardboard boxes La Mariana said are part of the “Amazon effect.”

By sorting the materials so they can be marketed effectively on an international market, La Mariana is hoping revenue from recycled materials will increase and keep rates down for ratepayers.

“It’s to our economic advantage to separate the high-grade material and sell it at the highest price,” he said.

To this end, La Mariana said technology such as high-speed material identification equipment leveraging artificial intelligence will sort recyclable material faster and clean it more effectively before it is shipped. He noted officials are also keeping an eye on a rise in the use of non-recyclable, single-use plastics sent to landfills, which La Mariana said was the focus of a statewide industry summit RethinkWaste hosted earlier this year.

La Mariana commended RethinkWaste’s many partners, staff and the officials serving on the authority’s board of directors and finance committee for recognizing the importance of the financial planning effort expected to help fulfill and exceed not only its environmental goals but also those of its 12 member agencies. Though he acknowledged good timing with the markets was behind the authority’s ability to take this step, he expressed gratitude to the many players involved in the effort for their hard work and sense of collaboration.

“It’s really a cool moment,” he said. “You don’t get these opportunities often where it all comes to fruition.”

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