Carbotura · Circular Advantage Program · Stage 1 Proposal
Phoenix, Arizona
Circular Advantage Proposal
The 30-year CSA is a royalty-producing asset that replaces a waste liability on the City's books.
The relationship structure. Under the CSA, the City of Phoenix becomes the manufacturing feedstock supplier to the Carbotura ACM facility; Carbotura is the manufacturer that material stream transfers to under the CSA. This is a supply arrangement, not a service contract — routing decisions belong to Council, not to a procurement office.
Deployment target
2,000
TPD · Phase Expanded
Beneficiation Fee (base)
$100
per ton · 2.5%/yr escalator STD
Circular Royalty™ (Y2+)
+$17.50
City capex required
$0
BOO structure · zero construction risk
Authority Commitment Qualification
Eight Commitments · One Engagement
Four items are required. One item is subject to Waste Characterization Study. Three optional items signal Public Authority materials offtake under the CMOA.
4 REQUIRED · ALL ELECTED
1 SUBJECT TO STUDY (Exogenesis™)
3 OPTIONAL · 0 ELECTED
01REQUIRED
Commit feedstock
All designated waste streams legally assigned to Carbotura via CSA · disposal liability removed from Authority balance sheet.
Phoenix: ~2,000 TPD addressable MSW; Phase Initial 400 TPD / 146,000 TPY
02REQUIRED
Commit land
Manufacturing Site deed transferred to Carbotura · registered title · two independent instruments.
AZ: deed via Maricopa County Recorder (Arizona ARS §33)
03REQUIRED
Commit tax abatements
Local strategic investor instrument · qualifying tax relief · condition precedent to CSA execution.
AZ: City of Phoenix strategic investor agreement / state enterprise zone instruments
04REQUIRED
Receive royalty stream
Circular Royalty™ · paid by Carbotura TO the Authority · never combined with Fee.
Separate transactions per MR §4.8 · US GAAP / GASB · ~$17.52M/yr (Opt A Yr 2) or ~$14.6M/yr (Opt B Yr 2)
05OPTIONAL · SUBJECT TO STUDY
Exogenesis™ landfill mining (option)
Exogenesis™ Programme · APS · fully electric fleet · $50/ton royalty TO the Authority · land restored. Subject to Waste Characterization Study and mutual agreement — structured option for discussion.
27th Avenue Landfill, Phoenix AZ — closed 2004 · legacy mining candidate · City of Phoenix asset · Waste Characterization Study required
Sections
Section 0
What This Means
Circular Royalty™
OUTFLOW ↑
Fee: $100/ton Yr 1 · +2.5%/yr · ~$14.6M/yr (146,000 tpy)
Fee: $100/ton Yr 1 · +2.5%/yr · ~$14.6M/yr (146,000 tpy)
INFLOW ↓
Circular Royalty™: 120% from Month 13 · +1pp/yr
~$17.52M/yr Year 2 → ~$43.1M/yr Year 30
Circular Royalty™: 120% from Month 13 · +1pp/yr
~$17.52M/yr Year 2 → ~$43.1M/yr Year 30
OUTFLOW ↑
$0 Fee · site deed at signing (Maricopa County Recorder)
$0 Fee · site deed at signing (Maricopa County Recorder)
INFLOW ↓
Exogenesis™ Royalty · Subject to Study
27th Ave Landfill, Phoenix AZ
IF ELECTED ↑
Landfill deeded at signing (if study confirms)
Closed 2004 · legacy mining candidate
Landfill deeded at signing (if study confirms)
Closed 2004 · legacy mining candidate
IF ELECTED ↓
$50/ton Exogenesis™ Royalty · ~$3.65M/yr from Year 6
Subject to Waste Characterization Study
$50/ton Exogenesis™ Royalty · ~$3.65M/yr from Year 6
Subject to Waste Characterization Study
One Circular Supply Agreement. City of Phoenix executes the CSA. The Exogenesis™ Royalty add-on (27th Avenue Landfill) is a structured option for discussion — activation requires Waste Characterization Study and mutual agreement. All streams reported as separate transactions per MR §4.8.
- The offer. Carbotura proposes a 30-year Circular Supply Agreement (CSA) under a Build-Own-Operate (BOO) structure. Carbotura finances, builds, owns, and operates the ACM facility. The City of Phoenix delivers manufacturing feedstock and pays a Beneficiation Fee per ton delivered. No City capital is required. No construction debt falls on the City's balance sheet. No operating liability transfers to the City.
- What Phoenix commits. Phoenix commits to delivering a defined volume of manufacturing feedstock — initially 400 TPD from the IMMEDIATE-access residential stream — to the ACM facility under the CSA for 30 years. The sole financial obligation is the Beneficiation Fee of $100/ton (base), escalating at 2.5% per year. No other commitment.
- What Phoenix receives. Beginning in Month 13 after the first feedstock delivery, Phoenix receives a Circular Royalty™ — a cash payment set at 120% of the current-year Beneficiation Fee per ton for the corresponding prior-month deliveries. The royalty rate escalates +1 percentage point per year.
- Structural transformation. The CSA converts Phoenix's current open-ended cost exposure — an estimated $105/ton FWDC with no fiscal ceiling — into a fixed, capped Beneficiation Fee structure with a contractually defined cash return that grows every year for 30 years.
- Decision window. The April 2026 City Council rate direction locks a multi-year rate escalation path. Authorizing a Joint Working Group phase before that decision preserves all structural alternatives. Missing the window does not foreclose the CSA — but it requires negotiating against an already-embedded rate structure, reducing the fiscal differential at contract signing.
Section 1
Commercial Structure and Decision Window
Regulatory Predicate Transition (RPT)
Carbotura’s commitment to this engagement is conditional on the Advanced Circular Manufacturing facility receiving and maintaining manufacturing facility classification — NAICS 325180, 325998, 327992, 331110, 331314, or 331492 — for all permitting, licensing, and regulatory purposes. Microwave Catalytic Reforming operates in an anoxic, oxygen-free, sub-atmospheric environment; it is mechanistically incompatible with combustion and is not a solid waste treatment process. The federal classification basis is RCRA §1004(27) / 40 CFR §261.2(e). Should any authority apply NAICS 562213 or 562219 solid waste classification to the ACM facility or its feedstock intake streams, both parties commit to the RPT pathway; interim bridging authorities may apply during the transition. Both parties commit to the RPT pathway; interim bridging authorities may apply during the transition.
Regulatory basis: RCRA §1004(27) · 40 CFR §261.2(e) · 40 CFR §260.43
§1.1 — CSA Structure
The Circular Supply Agreement (CSA) is a long-term bilateral contract between the City of Phoenix (feedstock supplier) and Carbotura (ACM facility owner-operator). Core terms:
| Term | Structure | Classification |
|---|---|---|
| Contract duration | 30 years from first feedstock delivery | STD |
| Facility ownership | Carbotura — BOO structure. City holds no ownership stake. | STD |
| City capital requirement | $0. Zero capex obligation. | STD |
| City's sole financial obligation | Beneficiation Fee per ton of feedstock delivered | STD |
| Beneficiation Fee base | $100/ton | MOD — derived from FWDC EST |
| Beneficiation Fee escalator | 2.5% per year compounding | STD |
| Circular Royalty™ base rate | 120% of that year's Beneficiation Fee per ton | STD |
| Circular Royalty™ escalator | +1 percentage point per year | STD |
| Circular Royalty™ payment lag | 13 months after corresponding Beneficiation Fee payment | STD |
| Technology performance risk | Carbotura (BOO) | STD |
| Construction completion risk | Carbotura (BOO) | STD |
| Residual stream risk | Carbotura — ACM produces no residual requiring landfill | STD |
§1.2 — Decision Window
Decision Window — April 2026
Phoenix City Council is scheduled to receive staff direction on the solid waste rate adjustment in April 2026. The proposed rate takes effect July 1, 2026. A Joint Working Group phase — the next step in the Carbotura engagement — requires approximately 90 days (T0 to T0+3 months) before a CSA term sheet can be presented. To influence the April 2026 Council decision with a structural alternative, authorization of the Joint Working Group phase must occur no later than January 2026 for completion before the April deadline — or, alternatively, the Joint Working Group phase can proceed in parallel with rate implementation, with the CSA presented as a structural alternative to the embedded escalation path.
Section 2
Deployment Architecture
§2.1 — Phase Configuration
| Phase | TPD | Modules | Annual Feedstock (TPY) | % of Addressable | COD (from T0) | Source Type |
|---|---|---|---|---|---|---|
| Phase Initial | 400 | 4 | 146,000 | 18% | T0 + 24 months | STD schedule |
| Phase Medium | 1,000 | 10 | 365,000 | 45% | T0 + 42 months | STD schedule |
| Phase Expanded | 2,000 | 20 | 730,000 | 91% | T0 + 60 months | STD schedule |
Module math: each module = 100 TPD. Phase Initial: ⌈400/100⌉ = 4 modules. Phase Medium: ⌈1,000/100⌉ = 10 modules. Phase Expanded: ⌈2,000/100⌉ = 20 modules. Timeline per Carbotura standard deployment schedule — no project-specific T0 confirmed.
§2.2 — BOO Capital Structure
Zero City Capex
Under the BOO structure, Carbotura bears 100% of construction cost, technology procurement, site development, and operating capital. The City of Phoenix incurs no construction debt, no capital equipment obligation, and no residual environmental liability from ACM facility operations. Phoenix's balance sheet exposure under this agreement is limited to the Beneficiation Fee obligation — a per-ton operating cost — which is offset by the Circular Royalty™ cash flow beginning in Month 13.
| Phase | Total CapEx (Carbotura) | City Capex | City Balance Sheet Impact |
|---|---|---|---|
| Phase Initial (400 TPD / 4 modules) | $247.5M | $0 | None — BOO structure |
| Phase Medium (10 modules cumulative) | $592.5M | $0 | None — BOO structure |
| Phase Expanded (20 modules cumulative) | $1,167.5M | $0 | None — BOO structure |
CapEx per Carbotura standard parameters: first 100 TPD module = $75M; each additional 100 TPD module = $57.5M (mid-point of $55–$60M range).
§2.3 — Feedstock Stream Coverage by Phase
| Stream | Phase Initial | Phase Medium | Phase Expanded | Access Status |
|---|---|---|---|---|
| Residential & Commercial MSW (post-MRF) | ✓ Primary | ✓ | ✓ | IMMEDIATE |
| Organic / Green Waste | ✓ | ✓ | CONDITIONAL | |
| Commercial & C&I Residuals | ✓ | ✓ | CONDITIONAL | |
| Biosolids — Dewatered Cake (SROG) | ✓ | CONDITIONAL | ||
| Automotive Shredder Residue (ASR) | ✓ | CONDITIONAL |
§1.5 — CSA Structure
At CSA execution, the City of Phoenix The Exogenesis™ Royalty (27th Avenue Landfill, Phoenix AZ — closed 2004) is a structured option for discussion — activation requires Waste Characterization Study, qualifying asset confirmation, and mutual agreement.
Exogenesis™ Royalty — 27th Avenue Landfill, Phoenix AZ (Subject to Study)
The 27th Avenue Landfill closed in 2004 and is a City of Phoenix-owned legacy asset. Its closed status makes it a strong Exogenesis™ candidate — post-closure care obligations are already on the City's balance sheet and would transfer to Carbotura at CSA execution if the option is elected after study confirmation.
§2.4 — Site Candidate Analysis
The following three candidate zones represent the priority ACM facility siting opportunities within the Phoenix metro, based on zoning, industrial land availability, proximity to the primary feedstock convergence point (27th Avenue Transfer Station), and infrastructure alignment. All sites are provisional — pending Joint Working Group phase confirmation. PROVISIONAL
Priority 1 Finding — West Phoenix Industrial Corridor
The West Phoenix Industrial Corridor (P1) is the lead candidate due to its co-location with the 27th Avenue Transfer Station and MRF — Phoenix's primary south-city feedstock hub handling 27th Avenue transfer operations. Industrial-zoned land within the corridor is available under City of Phoenix authority, eliminates all haul cost between the transfer station and the ACM facility, and is less than 1 mile from the existing compost facility. This site eliminates the SR-85 long-haul cost entirely and is operationally adjacent to the highest-volume IMMEDIATE-access feedstock stream.
Site candidates are provisional pending Joint Working Group phase confirmation. Land authority verified via phoenix.gov/pdd and City of Buckeye Planning. Driving distances estimated via Google Maps. All classifications per Carbotura standard site methodology, March 2026. PROVISIONAL
| Priority | Zone | Acreage | Zoning | Land Authority | Co-location Advantage | Key Consideration |
|---|---|---|---|---|---|---|
| P1 | West Phoenix Industrial Corridor | 25–40 ac | A-2/IND-2 | City of Phoenix | Adjacent to 27th Ave TS/MRF; zero haul | Parcel availability to confirm |
| P2 | SR-85 Corridor Industrial | 40–80 ac | Buckeye Industrial | City of Buckeye / private | Co-sited with SR-85 Landfill; large footprint | 28 mi from primary feedstock hub |
| P3 | Phoenix Resource Innovation Campus | 15–25 ac | Special-use | City of Phoenix (PWD) | On-campus — highest integration | Footprint limits Phase Expanded scale |
§2.5 — Finding: Phase Initial Feedstock Sufficiency
Phase Initial Feedstock Confirmed from IMMEDIATE Stream
Phase Initial (400 TPD) requires 146,000 TPY of manufacturing feedstock. The IMMEDIATE-access residential and commercial MSW stream alone delivers 1,400 TPD (511,000 TPY) — 3.5× the Phase Initial requirement — without any third-party contract negotiation, commercial hauler outreach, or intergovernmental agreement. Phase Initial feedstock sufficiency is confirmed from city-owned streams under existing municipal authority.
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ACM Site Candidates — Phoenix
P1
West Phoenix Industrial Corridor
Acreage~25–40 acres (industrial parcels available)
ZoningA-2 General Industrial / IND-2
Land authorityCity of Phoenix (primarily); some private industrial
Co-locationDirectly adjacent to 27th Ave Transfer Station & MRF; 0.3 mi to compost facility; Salt River rail spur access
To 27th Ave TS<0.5 miles — zero haul
To N. Gateway TS~27 miles (I-17 N)
To 91st Ave WWTP~8 miles (W. Lower Buckeye Rd)
To SA Recycling~1.2 miles (S. 19th Ave)
ConsiderationSubject to Joint Working Group phase confirming parcel availability; some parcels in active industrial use
Planning & Development ↗
Zoning Map ↗
P2
SR-85 Corridor Industrial Zone
Acreage~40–80 acres (large-format industrial land)
ZoningBuckeye Industrial; A-1 / IND-1 classifications
Land authorityCity of Buckeye / Maricopa County; private industrial
Co-locationAdjacent to existing SR-85 Landfill (City of Phoenix); proximity to Southwest Regional Landfill (Republic Services)
To 27th Ave TS~28 miles (I-10 W)
To N. Gateway TS~55 miles (I-17 / I-10)
To 91st Ave WWTP~18 miles (SR-85 N)
To SA Recycling~29 miles (I-10 E)
ConsiderationLonger haul from transfer stations reduces logistics advantage; strong case for Phase Expanded co-siting with SR-85 operations
Buckeye Planning ↗
Maricopa County ↗
P3
Phoenix Resource Innovation Campus
Acreage~15–25 acres (campus-integrated model)
ZoningMixed industrial / special-use; city land use agreement required
Land authorityCity of Phoenix — Public Works campus land
Co-locationOn or adjacent to 27th Ave complex (transfer station, MRF, compost); highest integration density
To 27th Ave TS<0.1 miles — on campus
To N. Gateway TS~27 miles (I-17 N)
To 91st Ave WWTP~8 miles (W. Lower Buckeye Rd)
To SA Recycling~1.5 miles (S. 19th Ave)
ConsiderationMost integrated site; campus footprint may constrain Phase Expanded scale; requires City Council land-use authorization
Phoenix PDD ↗
Zoning Map ↗
P1 Priority
P2 Priority
P3 Priority
Feedstock ref
Section 3
Economic Structure — Beneficiation Fee
§3.1 — FWDC Planning Basis
The Beneficiation Fee is derived from Phoenix's Feedstock-Weighted Disposal Cost (FWDC) — the full-system per-ton cost of current disposal. Phoenix's FWDC is estimated at $105/ton ESTIMATED on a modeled basis. The FWDC incorporates the verified $55/ton transfer station gate rate plus modeled components for haul, landfill operations amortization, environmental monitoring (five closed landfills including the 19th Avenue Superfund site), and administration.
Planning Basis Disclosure
FWDC of $105/ton is a modeled estimate — not derived from a contracted disposal rate. The $55/ton gate rate is VERIFIED; all other components are ESTIMATED from public budget data and standard parameters. A Joint Working Group phase will produce a VERIFIED FWDC through detailed cost allocation analysis. All fiscal projections in this document carry ESTIMATED classification and reflect the modeled basis.
§3.2 — Beneficiation Fee Formula
// Beneficiation Fee Formula — Carbotura standard parameters
// MAX enforces the floor ($100 minimum); MIN enforces the ceiling ($150 maximum)
TMC_Fee = MAX($100 floor, MIN($150 ceiling, FWDC − $5))
// Applied to Phoenix:
FWDC = $105/ton // ESTIMATED / MODELED
Step 1 = FWDC − $5 = $100/ton
Step 2 = MIN($150 ceiling, $100) = $100 // $100 is below ceiling — passes through
Step 3 = MAX($100 floor, $100) = $100/ton // at floor exactly
TMC_Fee = $100/ton
// Escalator: 2.5% per year compounding — Carbotura standard parameters
// MAX enforces the floor ($100 minimum); MIN enforces the ceiling ($150 maximum)
TMC_Fee = MAX($100 floor, MIN($150 ceiling, FWDC − $5))
// Applied to Phoenix:
FWDC = $105/ton // ESTIMATED / MODELED
Step 1 = FWDC − $5 = $100/ton
Step 2 = MIN($150 ceiling, $100) = $100 // $100 is below ceiling — passes through
Step 3 = MAX($100 floor, $100) = $100/ton // at floor exactly
TMC_Fee = $100/ton
// Escalator: 2.5% per year compounding — Carbotura standard parameters
§3.3 — Annual Beneficiation Fee Obligation by Phase
| Phase | TPY | Beneficiation Fee Y1 | Annual Obligation Y1 | Annual Obligation Y5 | Annual Obligation Y10 |
|---|---|---|---|---|---|
| Phase Initial | 146,000 | $100/ton | $14.60M | $16.10M | $18.35M |
| Phase Medium | 365,000 | $100/ton | $36.50M | $40.25M | $45.88M |
| Phase Expanded | 730,000 | $100/ton | $73.00M | $80.50M | $91.76M |
Year 5 = Y1 × (1.025)⁴ = ×1.1038. Year 10 = Y1 × (1.025)⁹ = ×1.2489. All figures ESTIMATED on modeled FWDC basis.
Section 4
Circular Royalty™
§4.0 — Circular Royalty™
Standard CSA: City of Phoenix pays a per-ton Beneficiation Fee; Carbotura pays Circular Royalty™ at 120% of the corresponding Fee, +1pp/yr, from Month 13. Separate transactions, never netted.
Gross cost displacement and Circular Royalty™ cash flow are quantified separately.
§4.0.1 — Contractual Definition
// Circular Royalty™ Formula — Carbotura standard parameters
Royalty(m+13) = TMC(m) × Royalty_Rate(m)
// Where:
// m = month of Beneficiation Fee payment
// m+13 = corresponding Circular Royalty™ payment month (13-month lag)
// Rate(m) = 120% Year 1 base; escalates +1pp/year compounding
// Circular Royalty™ payments begin 13 months after corresponding Beneficiation Fee payments
// and ramp to full run-rate on a rolling basis.
Royalty(m+13) = TMC(m) × Royalty_Rate(m)
// Where:
// m = month of Beneficiation Fee payment
// m+13 = corresponding Circular Royalty™ payment month (13-month lag)
// Rate(m) = 120% Year 1 base; escalates +1pp/year compounding
// Circular Royalty™ payments begin 13 months after corresponding Beneficiation Fee payments
// and ramp to full run-rate on a rolling basis.
§4.0.2 — Parameter Table
| Parameter | Value | Classification |
|---|---|---|
| Royalty base rate (Year 1) | 120% of the current-year Beneficiation Fee per ton | STD |
| Beneficiation Fee escalator | 2.5% per year compounding | STD |
| Royalty rate escalator | +1 percentage point per year | STD |
| Effective royalty growth | ≈3.5% per year (combined escalators) | Derived |
| Payment lag | 13 months after corresponding Beneficiation Fee payment | STD |
| Royalty basis | Rolling monthly — not annual batch | STD |
| CSA term | 30 years | STD |
§4.0.3 — Fiscal Period Distinction (MANDATORY)
| Period | Timing | City Pays | City Receives |
|---|---|---|---|
| Pre-royalty | Months 1–12 (after first delivery) | $100/ton Beneficiation Fee | $0 Circular Royalty™ |
| Royalty ramp | Month 13 to ~Month 24 | ~$102.50/ton Beneficiation Fee (Y2) | Rolling royalty begins at $120/ton on Y1 TMC |
| Steady-state | Year 2 onward | Escalating Beneficiation Fee | Circular Royalty™ exceeds Beneficiation Fee per ton by design |
Three Canonical Royalty Statements
(1) Gross cost displacement and Circular Royalty™ cash flow are quantified separately. (2) At steady state, the Circular Royalty™ is designed to exceed the Beneficiation Fee on a per-ton basis. (3) Circular Royalty™ payments begin 13 months after corresponding Beneficiation Fee payments and ramp to full run-rate on a rolling basis.
§4.0.4 — Year-by-Year Cash Flow (Phase Initial — 146,000 TPY)
| Year | Avoided Disposal/ton | TMC Rate/ton | TMC Paid/ton | Royalty Rate | Royalty/ton | Annual Avoided | Annual TMC | Annual Royalty |
|---|---|---|---|---|---|---|---|---|
| Y1 | $105.00 | $100.00 | −$100.00 | $0 | $15.33M | −$14.60M | $0 | |
| Y2 | $107.62 | $102.50 | −$102.50 | 120% | $120.00 | $15.71M | −$14.97M | +$17.52M |
| Y5 | $115.90 | $110.38 | −$110.38 | 123% | $135.79 | $16.92M | −$16.12M | +$19.83M |
| Y10 | $131.13 | $125.60 | −$125.60 | 128% | $160.77 | $19.14M | −$18.34M | +$23.47M |
| Y20 | $167.86 | $162.59 | −$162.59 | 138% | $224.37 | $24.51M | −$23.74M | +$32.76M |
| Y30 | $210.34 | $210.34 | −$210.34 | 148% | $311.30 | $30.71M | −$30.71M | +$45.45M |
Phase Initial basis: 146,000 TPY. Beneficiation Fee escalates 2.5%/yr. Royalty rate = 120% + 1pp per year applied to corresponding prior-month Beneficiation Fee. Y2 royalty reflects 13-month lag (Y1 TMC × 120%). Pre-royalty period = 13 months. All figures ESTIMATED. ESTIMATED
Royalty vs. Beneficiation Fee — Crossover Visualization
Avoided disposal cost
Beneficiation Fee paid
Circular Royalty™ received
TitleFiscal Position — Three Gross Items, Years 1–20
InsightRoyalty income exceeds Beneficiation Fee from Year 2. Avoided disposal cost is present from Year 1. All figures are gross — not pre-netted.
SourceCarbotura Circular Advantage modeling · Registry values ESTIMATED
§4.0.5 — Annual Circular Royalty™ by Phase (Steady-State Year 2)
| Phase | TPY | Royalty Y2 (per ton) | Annual Royalty Y2 | Annual Beneficiation Fee Y2 |
|---|---|---|---|---|
| Phase Initial | 146,000 | $120.00 | +$17.52M | −$14.97M |
| Phase Medium | 365,000 | $120.00 | +$43.80M | −$37.41M |
| Phase Expanded | 730,000 | $120.00 | +$87.60M | −$74.83M |
Year 2 royalty = 120% × Y1 Beneficiation Fee of $100/ton = $120/ton. Year 2 Beneficiation Fee = $100 × 1.025 = $102.50/ton. Annual figures = per-ton × TPY. All ESTIMATED. ESTIMATED
§4.1 — Exogenesis™ Royalty add-on (Subject to Waste Characterization Study)
Structured Option — Not a Commitment
Exogenesis™ becomes a CSA element only after: (1) Waste Characterization Study; (2) qualifying asset confirmation; (3) mutual agreement. The 27th Avenue Landfill (closed 2004) is a City-owned legacy asset — its closed status eliminates active waste intake complexity, making it well-suited for Exogenesis™ study.
Potential additive royalty stream. If elected: City of Phoenix deeds 27th Avenue Landfill to Carbotura at CSA execution. All post-closure care, leachate, methane, and ADEQ compliance obligations transfer at CSA execution (GASB 49 liability extinguishment).
| Year (post-COD) | Rate $/ton | Annual (~73,000 tpy indicative) |
|---|---|---|
| 1–5 | $0 | |
| 6 | $50.00 | +$3,650,000 (indicative) |
| 10 | $52.02 | +$3,797,460 |
| 30 | $63.49 | +$4,634,770 |
| 30-yr indicative (if elected) | ~$103M | |
All values INDICATIVE. Subject to Waste Characterization Study. Stacks on the CSA — never netted (MR §4.8). Post-closure liability extinguishment is independent of and additional to the Exogenesis™ Royalty cash flow.
Section 5
Risk Register
| Risk | Key Driver | Who Bears It | Mitigation | Residual Exposure |
|---|---|---|---|---|
| FWDC verification | Modeled FWDC may differ from audited full-system cost | Shared — affects Beneficiation Fee basis | Joint Working Group phase produces VERIFIED FWDC | Beneficiation Fee could adjust up or down within $100–$150 floor/ceiling range |
| Technology performance | ACM throughput and Circular Materials yield variance | Carbotura (BOO) | Performance guarantees in CSA; proven module design | City fiscal position protected — Beneficiation Fee obligation is independent of facility performance |
| Timeline slippage | Permitting, site acquisition, procurement delays | Carbotura (construction); City (permitting support) | Carbotura standard deployment schedule includes contingency; Phase Initial 24-month COD | Delay does not affect City's fiscal structure — CSA obligations begin at first delivery |
| Third-party contract constraints | CONDITIONAL streams require private hauler or SROG negotiation | Shared — negotiation complexity is joint | Phase Initial uses IMMEDIATE streams only; CONDITIONAL streams addressed in later phases | Phase Initial proceeds regardless of CONDITIONAL stream outcomes |
| Competitive procurement | Another operator offers a competing proposal before CSA signing | City of Phoenix — delay increases competition risk | Early Joint Working Group phase authorization preserves exclusivity window | April 2026 rate decision may reduce leverage if CSA not contracted first |
| PFAS regulatory escalation | Federal biosolids PFAS limits tighten, increasing land-application cost for SROG biosolids | City / SROG — existing program liability | ACM eliminates PFAS at processing temperatures; CSA can include biosolids stream from Phase Expanded | Regulatory escalation strengthens ACM case — reduces residual exposure over time |
| SR-85 Landfill capacity | Remaining life not publicly disclosed; could be under 20 years | City of Phoenix — sole reliance on single facility | ACM reduces dependence on SR-85; Phase Expanded eliminates 730,000 TPY from SR-85 | If SR-85 closure is within 15 years, City requires a contracted alternative regardless of ACM deployment |
Section 6
Deployment Timeline
| Milestone | Timing | Notes |
|---|---|---|
| Joint Working Group phase authorization | T0 | City Council authorization required to initiate; 90-day study |
| Joint Working Group phase completion | T0 + 3 months | Produces VERIFIED FWDC, confirmed site, CSA term sheet |
| CSA execution | T0 + 4–6 months | Dependent on Council approval and legal review |
| Phase Initial construction start | T0 + 6 months | Subject to site permitting |
| Phase Initial COD (first feedstock delivery) | T0 + 24 months | Carbotura standard deployment schedule |
| First Circular Royalty™ payment | T0 + 37 months | 13 months after Phase Initial COD |
| Phase Medium full operations | T0 + 42 months | 1,000 TPD — additional stream access required |
| Phase Expanded full operations | T0 + 60 months | 2,000 TPD — all five streams contributing |
| ⚠ Phoenix rate direction deadline | April 2026 | City Council direction on multi-year solid waste rate adjustment. Joint Working Group phase authorization before this date enables structural alternative. |
| ⚠ Rate effective date | July 1, 2026 | Proposed residential rate increase takes effect if approved April 2026 |
All deployment milestones per Carbotura standard deployment schedule. Project-specific T0 not yet confirmed — contingent on Joint Working Group phase authorization. External deadlines (April 2026 rate direction; July 1, 2026 rate effective date) are VERIFIED from Phoenix City Council documentation, February 2026.
Section 7
Community Value Stack
§7.1 — City of Phoenix Fiscal Effects
| Effect | Phase Initial | Phase Expanded | Classification |
|---|---|---|---|
| Annual Circular Royalty™ receipt (Y2) | +$17.52M | +$87.60M | EST |
| Annual Beneficiation Fee obligation (Y2) | −$14.97M | −$74.83M | EST |
| Annual Beneficiation Fee (Y1 — pre-royalty) | −$14.60M | −$73.00M | EST |
| Gross cost displacement vs. SR-85 haul (modeled $105/ton − $100/ton × TPY) | +$0.73M/yr | +$3.65M/yr | EST |
| Solid Waste Fund structural pressure (eliminated feedstock) | 146,000 TPY removed from SR-85 cost | 730,000 TPY removed | EST |
| Lifetime Circular Royalty™ (30 yr, gross) EST | ~$874M | ~$4.37B | EST |
Gross cost displacement and Circular Royalty™ cash flow are quantified separately. Lifetime royalty is modeled over 30 years with compounding escalators — ESTIMATED. At steady state, the Circular Royalty™ is designed to exceed the Beneficiation Fee on a per-ton basis.
§7.2 — Regional Economic Effects
| Effect | Phase Initial | Phase Medium | Phase Expanded |
|---|---|---|---|
| Direct FTE employment | ~100 | ~250 | ~500 |
| Indirect jobs (supply chain) | ~300 | ~750 | ~1,500 |
| Annual economic impact | $32M+ | $80M+ | $160M+ |
| Annual carbon impact (tCO₂e) | −555,000 to −572,000 | −1,388,000 to −1,428,000 | −2,777,000 to −2,857,000 |
| Energy output (MWh/yr) | ~313,000 | ~782,000 | ~1,564,000 |
| Water recovery (gal/yr) | ~31.8M | ~79.4M | ~158.8M |
| Diversion rate improvement | +8 to +10 pp | +20 to +24 pp | +40+ pp (toward Zero Waste 2050) |
Employment and economic impact scaled from Carbotura standard 400 TPD baseline parameters. Carbon, energy, and water figures are ranges consistent with the ACM process at stated throughputs. All ESTIMATED. ESTIMATED
Section 8
Why This Works in Phoenix
- Volume alignment. Phoenix generates an estimated 2,200 TPD of addressable manufacturing feedstock — sufficient for Phase Expanded (2,000 TPD / 20 modules) with 200 TPD of addressable volume in reserve. The IMMEDIATE stream alone (1,400 TPD) is more than three times the Phase Initial deployment, confirming that scale is not a constraint at any phase.
- Infrastructure alignment. The Priority 1 site (West Phoenix Industrial Corridor) is directly adjacent to the 27th Avenue Transfer Station and MRF — the city's primary south-city feedstock hub. Co-location eliminates the 30–55 mile SR-85 haul entirely for the IMMEDIATE stream and places the ACM facility within 1.5 miles of SA Recycling's primary ASR yard and 8 miles from the 91st Avenue WWTP. No logistics investment is required — the infrastructure convergence already exists.
- Contract timing alignment. Phoenix's April 2026 rate direction deadline creates a concrete, named Council authorization window. The Joint Working Group phase can be completed in 90 days (T0 to T0+3 months). Authorizing the Joint Working Group phase before the April 2026 rate direction positions the CSA as a structural alternative to a multi-year rate escalation that would otherwise embed without a competing instrument.
- Policy alignment. Phoenix's Climate Action Plan and Zero Waste 2050 goal require diversion to increase from 33.3% to 50% by 2030 and to 100% by 2050. ACM Phase Expanded delivers an estimated 40+ percentage-point diversion improvement — closing the 2030 gap and establishing the structural foundation for 2050. No alternative technology in Phoenix's current capital program can deliver this outcome at this scale.
- Regulatory driver — PFAS biosolids. The EPA's National Primary Drinking Water Regulation for PFAS (finalized April 2024) and emerging PFAS Superfund designations create escalating cost exposure for SROG's Class A biosolids land application program. ACM eliminates PFAS compounds at operating temperatures exceeding 1,200°C — a complete elemental elimination, not a concentration or transfer. The biosolids stream (150 TPD from the 91st Avenue WWTP) has an independently motivated regulatory case for ACM redirection, strengthening the Expanded Phase economics.
- Economics specificity — Phoenix verified cost data. The Beneficiation Fee of $100/ton is derived from Phoenix's verified $55/ton transfer station gate rate plus modeled full-system cost components. This is not a generic placeholder — it traces directly to Phoenix's public rate schedule and City Council-reported fund shortfall data. The $5/ton gap between the FWDC ($105/ton) and the Beneficiation Fee ($100/ton) represents Phoenix's structural cost advantage under the CSA even before the Circular Royalty™ is received.
Appendix A
Data Basis
| Figure | Value | Public Source | Type |
|---|---|---|---|
| Transfer station gate rate | $55.00/ton | City of Phoenix Public Works — Transfer Station rate schedule, phoenix.gov | VER |
| FWDC (full system) | $105/ton | Modeled: gate rate (VER) + haul + operations + enviro monitoring + admin (EST) | MOD |
| Beneficiation Fee base | $100/ton | Derived from FWDC per Carbotura standard formula | MOD |
| Solid Waste Fund shortfall | Up to $20.8M FY2024-25 | Phoenix City Council Policy Session Report, February 10, 2026, Item 2 | VER |
| Rate direction deadline | April 2026 | Phoenix City Council Policy Session Report, February 10, 2026 | VER |
| Rate effective date | July 1, 2026 | Phoenix City Council Policy Session Report, February 10, 2026 | VER |
| Waste diversion rate | 33.3% FY2024-25 | Phoenix Solid Waste Financial Status and Rate Update, February 2026 | VER |
| Beneficiation Fee escalator | 2.5%/yr | Carbotura standard parameters | STD |
| Royalty base rate | 120% | Carbotura standard parameters | STD |
| Royalty escalator | +1pp/yr | Carbotura standard parameters | STD |
| CapEx (first module) | $75M / 100 TPD | Carbotura standard parameters | STD |
| CapEx (additional modules) | $57.5M / 100 TPD | Carbotura standard parameters (mid-point $55–$60M) | STD |
| Employment metrics | ~100 FTE / 400 TPD Phase Initial | Carbotura standard 400 TPD baseline parameters, scaled | EST |
Appendix B
Selective Glossary
- BOO (Build-Own-Operate)
- A project delivery structure in which Carbotura finances, constructs, owns, and operates the ACM facility for the full CSA term. The community bears no capital cost, no construction liability, and no operating risk. The community's sole contractual obligation is the Beneficiation Fee per ton of feedstock delivered.
- Circular Supply Agreement (CSA)
- The 30-year contractual instrument between the City of Phoenix (feedstock supplier) and Carbotura (ACM facility owner-operator). The CSA defines feedstock delivery obligations, Beneficiation Fee payment terms, Circular Royalty™ payment terms, and all material rights of both parties. The CSA is not a disposal contract — it is a manufacturing arrangements contract.
- Circular Royalty™
- Cash paid by Carbotura to Phoenix: Royalty(m+13) = TMC(m) × Royalty_Rate(m). Base rate 120% of that year's Beneficiation Fee, escalating +1pp/year. Payments begin 13 months after corresponding Beneficiation Fee payments. At steady state, the Circular Royalty™ per ton exceeds the Beneficiation Fee per ton by design.
- FWDC (Feedstock-Weighted Disposal Cost)
- Phoenix's full-system per-ton cost of current feedstock disposition: $105/ton modeled. Incorporates gate rate ($55/ton verified), haul, landfill operations, environmental monitoring, and administration. The Beneficiation Fee is derived from FWDC: MAX($100, MIN($150, FWDC − $5)). Status: ESTIMATED / MODELED for Phoenix.
- Gross Cost Displacement
- The reduction in disposal system cost attributable to redirecting feedstock to ACM: (FWDC − TMC Fee) × TPY. For Phoenix: ($105 − $100) × 146,000 = $730,000/year at Phase Initial.
- Pre-Royalty Period
- The 13-month period from first feedstock delivery during which Phoenix pays the Beneficiation Fee but receives no Circular Royalty™ cash flow. This is not a risk period — it is a structural feature of the rolling 13-month lag.
- Beneficiation Fee
- The Beneficiation Fee paid by Phoenix to Carbotura per ton of feedstock delivered. Base: $100/ton, escalating 2.5%/year. The Beneficiation Fee replaces the disposal gate rate ($55/ton) in the current system — it reflects the price of manufacturing access, not disposal.