What this document is
The commercial structure of one Circular Supply Agreement sized against the city-collected stream, with the two payment flows set out separately and the cost position stated without decoration.
- Phase Initial takes 1,000 TPD — 365,000 tons a year, 61% of the city-collected stream. Phase Expanded at 4,000 TPD addresses effectively the whole citywide total, across two process buildings, reached by other municipalities and commercial haulers joining the City’s CSA on its consent, behind the City’s own priority on availability and capacity.
- One CSA, no elections: the City pays a Beneficiation Fee and receives a Circular Royalty™, as two independent gross transactions that are never netted.
- The agreement carries a condition precedent requiring an operating facility that meets our stated claims and standards. The City is not held to performance until it is satisfied.
Philadelphia
Circular Supply Proposal — City of Philadelphia
One Circular Supply Agreement — 30-year minimum, zero City capital, and a condition precedent that puts the proof obligation on us.
What this proposal is, in five points
- One agreement. A Circular Supply Agreement (CSA) between the City and Carbotura, 30-year minimum term, continuing perpetually unless a 24-month Non-Renewal Notice is served. No elections, no alternative structures to choose between. Other municipalities and commercial haulers may join the City’s CSA as additional Feedstock Providers, on the City’s consent. The City holds priority on availability and capacity: its own tonnage is served first, and joined tonnage takes what remains.
- A condition precedent on an operating facility. The CSA requires an operating facility meeting our stated claims and standards. Until that is satisfied, the City is not held to performance.
- Two payment flows, never netted. The City pays a Beneficiation Fee on delivered tonnage; Carbotura pays a Circular Royalty™ on the same tonnage. Independent transactions, reported separately and in full.
- It costs more per ton than what the City pays today, and we say so. $100/ton, the floor of our range, against roughly $72/ton proposed. The case is the royalty and the destination, not the gate rate.
- Zero City capital. Carbotura finances, owns and operates at every phase, and carries all permitting and classification work at its own cost.
The stream this is sized against
Philadelphia disposes roughly 1.5 million tons of residential and commercial material a year. Most of that is privately contracted commercial material the City does not direct.
The portion the City actually controls and contracts for is the 600,000 tons collected annually by the Sanitation Division, alongside about 85,000 tons of recyclables. That is the basis used throughout this package — not the headline 1.5 million, which would overstate what is actually available to commit.
Diversion sits at about 40% and has been flat for years, against a City target of 90% by 2035 measured from a 2015 baseline.
Published figures for how much of the City’s material goes to waste-to-energy conflict materially — approximately 400,000 tons a year, approximately 30% of municipal waste, and 180,000 tons a year all appear in credible sources. This package does not assert any one of them. The 600,000 tpy city-collected figure is not in dispute and is sufficient to size a deployment.
Siting — not identified, and not a burden to relocate
No candidate site has been identified or assessed. Siting is a Joint Working Group item and would follow authorisation, not precede it.
There is a point worth making plainly in this city. Siting a facility that handles another community’s material is not a neutral act, and Philadelphia knows that better than most. A site selection process here has to answer to the neighbourhood that hosts it, not only to logistics. Carbotura’s position is that siting is done jointly, in public, and that a facility which produces no stack emissions and no ash is a different proposition to host than one that does — but that is for the host community to weigh, not for us to assert on their behalf.
What the requirement looks like: Phase Initial at 1,000 TPD needs a single industrial-zoned site of approximately 12–20 acres, with the process inside one building. Phase Expanded at 4,000 TPD is a campus of two process buildings, each under our 2,000 TPD per-building ceiling, on roughly 50–75 acres. Site figures are ESTIMATED.
The commercial structure
One structure. The City executes a Circular Supply Agreement and delivers its stream. Ownership of and liability for the material transfer to Carbotura on delivery. Carbotura does not purchase the material; the CSA transfers it, and Carbotura pays a royalty on what is delivered and processed.
| Element | Term |
|---|---|
| Agreement | Circular Supply Agreement (CSA), 30-year minimum |
| Continuation | Perpetual unless a 24-month Non-Renewal Notice is served |
| Condition precedent | An operating facility meeting Carbotura’s stated claims and standards. The City is not held to performance until satisfied. |
| Beneficiation Fee | $100/ton, escalating 2.5%/yr |
| Circular Royalty™ | 120% of the current-year Beneficiation Fee in Year 1 — $120/ton — then +1 percentage point per year, uncapped |
| Royalty commencement | 13 months after Carbotura’s receipt of the first Beneficiation Fee payment |
| City capital | None, at any phase |
| Regulatory work | Carbotura’s, at its own cost and risk. No commercial term is contingent on the outcome |
| Credit floor | BBB– / Baa3 |
| Joinder | Other municipalities and commercial haulers may join the City’s CSA as additional Feedstock Providers, subject to the City’s consent. The City decides who joins and when, and holds priority on availability and capacity over all joined tonnage; the remaining terms that apply to joined tonnage are settled in the CSA |
The Beneficiation Fee and the Circular Royalty™ are independent transactions, reported separately and in full, and never netted. No table in this package carries a combined or net column.
Deployment phases
Deployment is modular, in 100 TPD units. Phase Initial is 1,000 TPD — ten modules in one building — taking roughly three-fifths of the city-collected stream and leaving existing arrangements to carry the balance.
Phase Medium and Phase Expanded go past what the City collects. The city-collected stream is about 1,650 TPD. Beyond that, feedstock comes from the privately contracted commercial streams, and from neighbouring municipalities, that the City does not direct. The CSA provides for exactly this: other municipalities and commercial haulers may join the City’s agreement as additional Feedstock Providers, on the City’s consent. The City decides who joins, and when, and holds priority on availability and capacity — its own tonnage is served first, and joined tonnage takes what remains. Those two phases are sized against the roughly 1.5 million tons disposed citywide each year; they are reached through the City’s agreement rather than around it, and they are shown so the City can see where a first phase leads, not as a request.
| Phase | TPD | Annual TPY | Share of stream | Beneficiation Fee · Year 1 | Circular Royalty™ · Year 1 |
|---|---|---|---|---|---|
| Phase Initial | 1,000 | 365,000 | 61% of city-collected | $36.50M | $43.80M |
| Phase Medium | 2,000 | 730,000 | 49% of citywide | $73.00M | $87.60M |
| Phase Expanded | 4,000 | 1,460,000 | 97% of citywide | $146.00M | $175.20M |
Set at $100/ton. Phase Initial share is of the 600,000 tpy city-collected stream; Phase Medium and Expanded shares are of the ~1.5 million tpy disposed citywide, most of which the City does not direct; those phases are reached by joinder to the City’s CSA, on the City’s consent and behind the City’s priority on capacity. Figures ILLUSTRATIVE.
Timeline — and why we are not pretending it is urgent
The City’s new disposal awards run from January 2027 for four years, with a three-year renewal option. The next genuine opening is therefore 2031, possibly 2034. We are not suggesting otherwise, and we are not asking the City to disturb a procurement in progress.
| Milestone | Indicative timing | Notes |
|---|---|---|
| LOI / MOU EXECUTION | Earliest available | Required to open all subsequent steps |
| Joint Working Group phase | ~9–12 months | Stream characterisation; siting; commercial terms scoped |
| Term Sheet phase | Following | Beneficiation Fee confirmed; royalty formula locked |
| CSA negotiation and execution | Following | Subject to the operating-facility condition precedent |
| First Pennsylvania facility COD | Late 2027 to early 2028 | Operating data available in this state, before any decision here |
| Phase Initial COD | 12–24 months from permit issuance | First feedstock delivered; Beneficiation Fee begins |
| Next disposal decision | 2031, option to 2034 | Per the new awards |
The sequence matters more than the dates. The first Pennsylvania facility reaches commercial operation well before Philadelphia has to decide anything, which means this proposal can be evaluated against an operating plant rather than against a document.
Regulatory path — already running in this state
Permitting and classification are Carbotura’s work, at our cost and our risk. There is nothing in that process for the City to file, fund, defend or co-apply on, and no commercial term is contingent on its outcome.
What is different about Pennsylvania is that the work is already under way. Carbotura is already in permitting in Pennsylvania for its first deployment, with the same state regulator, rather than beginning a jurisdiction from scratch. A second Pennsylvania community benefits from groundwork that is already laid.
Our filing posture is consistent: material arrives as solid waste under current classification, is processed, and nothing leaves as residual waste, ash or sludge for disposal. We do not claim to receive no waste. Manufacturing classification under NAICS 31–33 is what we assert and pursue; we hold no classification instrument today and nothing here depends on obtaining one.
What we are asking the City to do
One thing: authorise an LOI/MOU and open a Joint Working Group.
That is not a commitment to deploy, a procurement award, an exclusivity grant, or any interference with contracts now before Council. It opens a working phase in which the stream is characterised, siting is explored with the communities that would host it, and commercial terms are scoped — so that when the City next decides where its residual goes, this option is specified rather than hypothetical.
The sequence from there is LOI/MOU execution → Term Sheet phase → CSA, with the operating-facility condition precedent across it. Nothing binds either party before CSA execution.
Appendix A — Basis of presentation
All financial figures USD, ILLUSTRATIVE until Term Sheet execution. Tonnage and diversion figures are VERIFIED from City publications and published reporting. The $72/ton trash rate is VERIFIED as PROPOSED under the new awards and requires Council approval; it is not an executed rate. Published figures for the City’s current rate conflict ($65/ton and approximately $81/ton both appear) and no single current rate is asserted.
The Beneficiation Fee is set at $100/ton. The Circular Royalty™ is computed as Mₙ × BFₙ, where Mₙ = 120% + (n−1) percentage points and BFₙ = $100 × 1.025^(n−1). Accounting standard: US GAAP / GASB.
No per-ton cost saving is claimed anywhere in this package. At $100/ton the City pays $28 more per ton than under its proposed awards. The City’s return is the Circular Royalty™, the absence of capital and permitting obligations, and the destination itself.
ESTIMATED: composition split, employment, site requirements, population. NOT IDENTIFIED: any candidate site. CONFLICTING AND NOT ASSERTED: tonnage to waste-to-energy; the City’s current per-ton rate. Carbotura has no facility at or past Commercial Operation Date anywhere; the first is in Pennsylvania, under construction, targeted late 2027 to early 2028.
Appendix B — Definitions
- Advanced Circular Manufacturing (ACM)
- Industrial manufacturing that uses post-use material streams as feedstock, converting them into specification-grade manufactured commodities. A manufacturing operation, not a waste-management operation, and not combustion in any form.
- Circular Supply Agreement (CSA)
- The agreement under which ownership of and liability for the material transfer to Carbotura on delivery. The CSA transfers material; it is not a purchase.
- Beneficiation Fee
- The per-ton fee the Feedstock Provider pays for Total Material Conversion. Set at $100/ton, escalating 2.5% a year.
- Circular Royalty™
- The per-ton royalty Carbotura pays the Feedstock Provider on delivered tonnage, beginning 13 months after Carbotura’s receipt of the first Beneficiation Fee payment. Year 1 is 120% of that year’s Beneficiation Fee, rising one percentage point a year, uncapped.
- Condition precedent
- An operating facility meeting Carbotura’s stated claims and standards. Until satisfied, the Feedstock Provider is not held to performance under the agreement.