Most council decisions about organics processing are framed as risk decisions. That's understandable. A composting facility that smells, catches fire, breaches its licence or can't sell its product is a councillor's nightmare and a front-page story.
So the default answer is to hand the problem to someone else. Truck it to a private processor, sign a five-year contract, and let them carry the risk.
The trouble is that the risk doesn't go away. It gets priced, and the council pays for it. And some of it simply moves somewhere the council can no longer see it.
After 25 years on both sides of these contracts, as an operator, a general manager and now an adviser, I think the question councils should ask isn't "how do we avoid the risk?" It's "what are we paying to avoid it, and what are we giving up?"
Broadly, councils choose between three models:
1. Outsource the lot. Collect the material and deliver it to a private processor's facility, often a long way away.
2. Own the facility, contract the operator. Council holds the site, the approval and the asset; a contractor runs it under a performance contract.
3. Own and operate. Council runs the facility with its own people.
Each one shares out the risk differently. None of them gets rid of it.
When you outsource processing, you pay for four things, whether or not they appear on the invoice:
The processor's margin and risk premium. Fair enough; they're carrying the capital and the licence. But it's built into every tonne, for the life of the contract and every renewal after it.
Freight. Every truckload is a running cost exposed to fuel prices, driver shortages and distance. Councils that send material out of the region are paying to move water and wood chips up the highway, year after year.
Your position at renewal. This is the one that bites. Once you've closed your own options, you're a price taker. If there's only one licensed processor within reach, your next tender isn't really a competition. And that assumes your processor is still there at renewal. (More on that below. It's the biggest risk of the lot.)
Control of the product. Your residents separated that material in good faith. Once it leaves the gate, you have little say over how it's processed, what it becomes, how well it's made or where it ends up. A contract clause saying the product must meet AS4454 sounds reassuring, but on its own it tells you very little about what's actually being made.
None of this means outsourcing is wrong. For a small council with modest volumes and a good processor nearby, it can be the right answer. But it should be a decision made with the full cost in view, not the default.
The biggest risk in relying on a single processor isn't price. It's time.
Processors lose their licences, go out of business, get sold or change strategy. When that happens, councils often find out with months of notice, not years. But establishing a new composting site, whether it's council's own or a new third party's, typically takes 18 months to two years once you allow for finding a site, getting approvals and building it. If the capacity isn't already there, it can't be created in time. The fallback is landfill, at full levy, and the diversion figures go backwards.
The same is true in an emergency. A cyclone, flood or bushfire can generate months of green waste in a few days, at exactly the time roads are cut and the incumbent may be dealing with damage of its own. A council with nowhere to process that material ends up landfilling it or burning it.
That's why I believe every council should hold at least a nascent composting approval on a suitable site of its own, even if it outsources the day-to-day work. It doesn't need to be a full facility. An approved pad, a modest licensed capacity and basic operating systems ready to use mean that if the incumbent disappears, or disaster strikes, council can start processing quickly rather than waiting two years. It also gives council a credible alternative to put on the table at every renewal.
Think of it as insurance. The premium is modest. When you need the payout, it's very large.
1. What is the full 10-year cost of the status quo? Gate fees, freight and likely increases at renewal, not just this year's rate.
2. How many licensed processors could genuinely bid next time? If the honest answer is one or none, you don't have a market. You have a dependency.
3. What happens if your processor leaves, or a cyclone hits? If the honest answer is "landfill for two years", that's an unmanaged risk, not a transferred one.
Outsourcing isn't the only way to manage these risks. Next week I'll look at the other side of the ledger: what owning a facility really involves, why "council owns, contractor operates" is the model most councils overlook, and why the window to make that choice with grant support won't stay open for long.
If you found this useful, or it raised questions about your own council's arrangements, I'd be glad to hear from you. A conversation costs nothing and commits you to nothing. Often it's simply a sounding board. If your processing contract comes up for renewal in the next few years, now is a good time to look at the alternatives.
Email support@radiclecompost.com.au, or send me a message on LinkedIn.
Martin Tower is the founder of Radicle Compost, an independent, technology-agnostic organics recycling advisory. He has 25 years' experience in composting and organics processing across Eastern Australia.
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