What this document is
The State A / State B economic model for Philadelphia, with the two payment flows kept separate and the cost disadvantage stated rather than argued away.
- State A is approximately $72/ton under the proposed awards. State B is $100/ton. That is a $28 gap and this report does not dress it up.
- State B at Phase Initial: $36.50M a year in Beneficiation Fee against $43.80M a year in Circular Royalty™ from Year 2 — two independent gross flows, reported separately.
- Zero City capital at every phase, all regulatory work carried by Carbotura, and a destination that is neither landfill nor combustion.
Philadelphia
Economic Impact Report
This costs more per ton. The case is what comes back, what the City never has to fund, and where the material ends up.
State A — the current system
Philadelphia contracts its collection and disposal to private operators. Under the new awards the City expects to pay approximately $72 a ton for trash and $86 a ton for recycling, with officials estimating $7–8 million in first-year savings. Those awards require Council approval and are not executed.
Published figures for what the City pays today conflict — $65/ton and approximately $81/ton both appear in credible reporting — so this report uses the proposed $72/ton as the forward comparator and does not assert a single current rate.
A portion of the City’s residual is combusted at a facility in Chester, Delaware County. Published figures for how much conflict materially and none is asserted here.
State A figures are the City’s own and are not adjusted. This report takes no position on the City’s contracts, its contractors, or any proceeding concerning them.
State B — Advanced Circular Manufacturing under a CSA
What State B is not. Advanced Circular Manufacturing is not incineration, not waste-to-energy, not pyrolysis and not gasification. There is no combustion at any stage, no stack and no ash, and Carbotura does not sell power, electricity or hydrogen — energy is consumed internally, never a revenue line. State B is not a replacement thermal facility under another name.
In State B the City delivers its stream to an ACM plant and pays a Beneficiation Fee of $100/ton, escalating 2.5% a year. That is approximately $28/ton above the proposed State A rate, in every year of the model. Separately and independently, Carbotura pays the City a Circular Royalty™ on the same delivered tonnage.
| Year | Beneficiation Fee ($/ton) | Annual Beneficiation Fee ($M) | Royalty multiplier | Circular Royalty™ ($/ton) | Annual Circular Royalty™ ($M) |
|---|---|---|---|---|---|
| Year 1 (pre-royalty) | $100.00 | $36.50 | — | $0.00 | $0.00 |
| Year 1 (from Month 13) | $100.00 | $36.50 | 120% | $120.00 | $43.80 |
| Year 2 | $102.50 | $37.41 | 121% | $124.03 | $45.27 |
| Year 5 | $110.38 | $40.29 | 124% | $136.87 | $49.96 |
| Year 10 | $124.89 | $45.58 | 129% | $161.10 | $58.80 |
| Year 20 | $159.87 | $58.35 | 139% | $222.21 | $81.11 |
| Year 30 | $204.64 | $74.69 | 149% | $304.91 | $111.29 |
| 30-year gross | — | ~$1,602M | — | — | ~$2,185M |
Phase Initial, 365,000 TPY. Accrual basis throughout: Year n carries Mₙ × BFₙ. The two columns are independent gross flows and are never netted. Figures ILLUSTRATIVE.
The capital comparison
The per-ton line is not the whole comparison. Every route to the City’s 2035 goal requires someone to fund something.
| Path | City capital | Regulatory burden | Reaches the 2035 goal? |
|---|---|---|---|
| Continue contracted disposal | None directly | Contractor | No — it is landfilling and combustion, which the goal is to end |
| Municipal processing capacity | City-funded | City | Depends on technology; capital and operating risk sit with the City |
| Advanced Circular Manufacturing | $0 at every phase | Carbotura’s | Yes — neither landfill nor combustion |
Carbotura’s Phase Initial is a $570M facility — $75M for the first module and $55M for each of nine additional modules. That is Carbotura capital. The City commits none at any phase, and carries no permitting cost or risk.
Employment
Phase Initial supports approximately 250 direct full-time roles, rising to roughly 500 at Phase Medium and 1,000 at Phase Expanded. These are manufacturing roles — process operation, maintenance, quality, logistics.
Employment figures are ESTIMATED from the standard per-TPD baseline, not from a city economic study.
What could make this wrong
The cost gap is the main one. At $100/ton against a proposed $72/ton, this is $28 a ton more than the City’s forward contracts, and the City is pursuing savings. If the royalty is discounted or deferred in a reader’s assessment, the proposition weakens accordingly. We have stated the fee and the royalty separately precisely so that each can be judged on its own.
We have no operating plant. Carbotura is development-stage; no facility is at or past Commercial Operation Date. The CSA’s condition precedent exists so that risk does not sit with the City, and the first facility will be operating in this state before any decision here is required.
The window is long. New awards run to 2031 with an option to 2034. A reader could reasonably conclude this conversation can wait. Our view is that the lead time for a manufacturing facility is what makes starting early worthwhile, but that is a judgement, not a fact.
Composition and siting are both open. The stream split is ESTIMATED and no characterisation study has been performed. No site has been identified, and siting in this city carries weight beyond logistics.
Published figures conflict. Tonnage to waste-to-energy and the City’s current per-ton rate both have multiple credible published values. We have used the undisputed city-collected tonnage and the proposed forward rate rather than picking among them.
Appendix A — Basis of presentation
All financial figures USD, ILLUSTRATIVE until Term Sheet execution. Beneficiation Fee set at $100/ton. Circular Royalty™ computed under the Release 31 formula: the multiplier applies to the current-year escalated Beneficiation Fee. Accrual basis stated and kept; no table mixes bases. Accounting standard: US GAAP / GASB.
State A comparator is the $72/ton trash rate proposed under the City’s new awards, which require Council approval. It has not been adjusted. No per-ton cost saving is claimed anywhere in this report.
The Beneficiation Fee and the Circular Royalty™ are independent transactions and appear only as separate gross lines.
Appendix B — Sources
- City of Philadelphia — Zero Waste and Litter Action Plan and associated diversion reporting
- City of Philadelphia — Streets Department, Sanitation Division collection figures
- Published reporting on the City’s disposal contract awards and proposed per-ton rates
- Published reporting on diversion performance against the 2035 target