Edinburgh City Council · Scotland · March 2026
Economic Impact Report
Advanced Circular Manufacturing · State A vs. State B Delta Analysis · Prepared by Carbotura, Inc. · Confidential
Accounting Standard: CIPFA (Chartered Institute of Public Finance and Accountancy)
At the planning-basis disposal cost, ACM deployment structurally eliminates Edinburgh's post-contract feedstock exposure, produces a per-tonne Circular Royalty™ receipt stream that exceeds the Beneficiation Fee from Year 2 (separate transactions), and grows the spread through steady state — with zero Council capex at any phase.
Sections
Inherited Data Flags
Confidence Classifications Carried Forward from Proposal — Plain English
- Beneficiation Fee base per tonne — data gap pending Term Sheet phase verification. All absolute £ values for Beneficiation Fee obligations and Circular Royalty™ receipts cannot be calculated until Waste Study verifies Edinburgh's confirmed disposal cost. Structural relationships are fully defined.
- Phase Initial blended FWDC (~£55–80/tonne) — estimated from publicly available benchmarks. Millerhill EfW contract gate fee commercially confidential. Individual stream contract costs not publicly disclosed.
- Phase Initial feedstock volumes (~34–48 TPD immediately accessible) — estimated. Formal Edinburgh-specific WasteDataFlow breakdown not retrieved.
- ERF disposal cost for contracted streams (~£95–115/tonne) — estimated. Millerhill EfW contract commercial terms not publicly disclosed.
- Biosolids and food/garden waste disposal costs — estimated. No public contract data available.
- Site — ABP Atlantic Site (Priority 1) — provisional. Subject to ABP commercial lease agreement.
- Deployment timeline — Carbotura standard deployment schedule. Calendar dates provisional pending Term Sheet phase verification.
§1 — Introduction and Decision Summary
§1.1 — What This Report Measures
This Economic Impact Report measures the delta between two defined states:
STATE A Without Carbotura: Edinburgh City Council continues its current manufacturing feedstock management system — contracted residual to FCC Environment (UK)'s Millerhill Recycling & Energy Recovery Centre (MRERC) operated by FCC Environment; non-contracted streams via composting, anaerobic digestion, land application, and Edinburgh City Council landfill; no successor infrastructure planned for post-Millerhill EfW contract expiry (~2040–41).
STATE B With Carbotura: Edinburgh City Council enters a 30-year Circular Supply Agreement with Carbotura, Inc. Phase Initial deploys a 100 TPD ACM facility processing non-contracted streams. Configuration C (2,000 TPD) absorbs contracted streams as Millerhill EfW contract approaches expiry. The Council pays a Beneficiation Fee; receives rolling monthly Circular Royalty™ from 13 months after corresponding Beneficiation Fee payment; at steady state, per-tonne Circular Royalty™ exceeds per-tonne Beneficiation Fee (separate transactions).
Neither state is re-diagnosed here. All State A values trace to the Waste Study. All State B values trace to the Proposal EIR Input Block. This report quantifies the difference.
§1.2 — Decision Summary Table
| Dimension | STATE A | STATE B | Delta | |
|---|---|---|---|---|
| Annual disposal obligation — Phase Initial volume | ~£[FWDC × ~330,000 tpy] — escalating | ~£[Beneficiation Fee × ~330,000 tpy] — structurally capped | Beneficiation Fee ≤ FWDC by formula; gross displacement ≥ £5/tonne by formula | |
| Post-Millerhill EfW contract feedstock destination | None confirmed | Phase Expanded CSA in place — structured | Structural gap eliminated | |
| Council capital obligation | £0 | £0 | Equal | |
| Circular Royalty™ receipt | £0 (no equivalent) | £0 Year 1; rolling from 13 months after corresponding Beneficiation Fee payment | +£[Royalty × ~330,000 tpy] from Year 2 | |
| Per-tonne fiscal flows (Council) | Full disposal cost | Year 1: Fee paid; Royalty $0 (pre-royalty). Year 2+: Royalty exceeds Fee per tonne (separate transactions); Steady state: Royalty > Fee | Royalty − Fee spread positive at steady state by design | |
| 30-year cost trajectory | Compounding escalation — ERF index-linked; landfill tax escalating; composting/AD escalating | Beneficiation Fee: 2.5%/yr (capped); Royalty exceeds TMC at steady state | TMC growth bounded; Royalty growth > TMC growth | |
| Key data gap | Beneficiation Fee base (£/tonne) — requires Waste Study FWDC verification | All absolute £ values pending | ||
| Cost of delay (per year) | State A disposal costs continue on Phase Initial volume + post-2040 buffer compresses by 1 year | Compounding and non-recoverable | ||
| Classification (RPT) | ACM permitted only under manufacturing NAICS (325180 / 325998 / 327992 / 331110 / 331314 / 331492 — six-code manufacturing set). Solid waste codes (562212 / 562213 / 562219 / 562920) are expressly excluded. Both parties commit to the RPT pathway; the endpoint is categorical — manufacturing classification across all permitting, licensing, and regulatory contexts. Interim bridging authorities may apply during the transition. Federal basis: RCRA §1004(27) · 40 CFR §261.2(e). | Standing condition · MR §3 | ||
Analysis Basis — the Circular Supply Agreement (CSA)
This Economic Impact Report models the Delta between State A (current disposal trajectory) and State B (the Carbotura Circular Supply Agreement). Carbotura offers a single commercial structure — Beneficiation Fee (TMC Fee) + Circular Royalty™, with no election. All delta calculations assume that structure: Edinburgh City Council pays the Beneficiation Fee; receives the Circular Royalty™ at 120%+ from 13 months after corresponding Beneficiation Fee payment. The Exogenesis™ Royalty Bonus (Regional Edinburgh landfill, YES-CONDITIONAL) is a CSA add-on that stacks alongside the Circular Royalty™ and is structurally available — see Proposal §1.5 and §4.1 for full commercial structure and cash-flow schedules.
§1.3 — Fiscal vs. Regional Economic Separation
Required declaration: Council fiscal effects (Beneficiation Fee obligations paid, Circular Royalty™ receipts — reported as separate transactions per the Separate Transaction Principle) and regional economic impact (jobs, economic contribution, manufactured product value) are categorically distinct. They have different accountability structures, different reporting standards, and different decision implications. They are presented separately throughout this report and must not be aggregated in any budget or financial statement.
§2 — State A Baseline
Source: Waste Study. All values from locked Assumption Registry or Waste Study. No new diagnosis.
§2.1 — State A Feedstock Volume and Disposition
| Stream | tpy | TPD | Current Route | Operator | Access Class. |
|---|---|---|---|---|---|
| Kerbside residual household | 14,832 | 40.6 | Millerhill Recycling & Energy Recovery Centre (MRERC) (Millerhill EfW contract) | FCC Environment (UK) | CONDITIONAL (~2040+) |
| HWRC residual | ~7,500 | ~20.5 | Millerhill Recycling & Energy Recovery Centre (MRERC) (Millerhill EfW contract) | Edinburgh City Council / FCC Environment | CONDITIONAL (~2040+) |
| Commercial / trade residual | ~8,000 | ~21.9 | Private ERF / landfill routes | Various | CONDITIONAL |
| Food waste (captured) | ~5,500 | ~15.1 | Composting / AD contractors | Various | IMMEDIATE |
| Garden waste | ~7,000 | ~19.2 | Composting contractors | Various | IMMEDIATE |
| Biosolids (Scottish Water) | ~2,500 | ~6.8 | Land application (BAS scheme) | Scottish Water | ACCESSIBLE |
| C&D residual / specialist | ~2,000 | ~5.5 | Edinburgh City Council landfill | Edinburgh City Council | ACCESSIBLE |
| Total | ~47,332 | ~129.7 | |||
§2.2 — State A Cost Structure
| Stream | Cost per Tonne | Annual Cost (~tpy)) | Source |
|---|---|---|---|
| Kerbside residual + HWRC (ERF, Millerhill EfW contract) | ~£95–115/tonne | ~£2.1–2.5M/yr (on ~22,332 tpy) | ESTIMATED |
| Commercial / trade residual | ~£80–100/tonne | ~£640K–800K/yr | ESTIMATED |
| Food waste (composting/AD) | ~£30–50/tonne | ~£165K–275K/yr | ESTIMATED |
| Garden waste (composting) | ~£25–45/tonne | ~£175K–315K/yr | ESTIMATED |
| Biosolids (land application) | ~£40–60/tonne | ~£100K–150K/yr | ESTIMATED |
| C&D + Edinburgh landfill + landfill tax | ~£80–100/tonne | ~£160K–200K/yr | ESTIMATED |
| Total State A annual cost (all streams) | ~£55–80/tonne blended (non-ERF) | ~£3.3–4.2M/yr | ESTIMATED |
§2.3 — State A Cost Trajectory: Three Compounding Mechanisms
Mechanism 1 — Millerhill EfW contract indexation: The FCC Environment/Millerhill EfW contract (October 2016, 25-year term) contains index-linked gate fee escalation. Edinburgh's share of ERF disposal costs escalates annually. The escalator is commercially confidential — the direction is structurally certain.
Mechanism 2 — UK landfill tax policy escalation: Landfill tax rose from £102.70/tonne (2024–25) to £126.15/tonne (2025–26) — a 21.6% single-year increase. Edinburgh's own landfill facility is subject to this rate for any material that cannot be diverted to ERF. Policy trajectory indicates continued escalation.
Mechanism 3 — Post-contract market exposure: The Millerhill EfW contract expires approximately 2040–41. Edinburgh currently has no confirmed successor. Post-2040 market rates for EfW gate fees — in a supply-constrained UK EfW market — are structurally likely to be higher than current contracted rates. This is not just cost escalation within the contract: it is open-market exposure at expiry.
§2.4 — State A Environmental and Structural Position
| Dimension | State A Condition |
|---|---|
| Carbon profile | ~14,832 tpy residual to ERF generates CO₂ via thermal conversion; composting and land application generate methane and N₂O; Edinburgh landfill generates methane |
| Recycling compliance | 70% target met 2024–25; wood recycling data quality caveat (gov.wales January 2026) may affect headline rate by ≥1 percentage point |
| Post-contract structural position | Unplanned. No confirmed successor disposal infrastructure for ~145 TPD after ~2040–41. |
| Regulatory exposure (biosolids) | SEPA/WICS regulatory pressure on Scottish Water; biosolids land application under pressure |
§3 — State B Deployment Baseline
Source: Proposal EIR Input Block only. No new values introduced.
§3.2 — Deployment Configuration
| Phase | TPD | Modules | Annual Feedstock | COD |
|---|---|---|---|---|
| Phase Initial | 100 | 1 ceil(100/100)=1 | ~330,000 tpy | Carbotura standard deployment schedule |
| Phase Medium | 100 additional | 1 additional | ~330,000 tpy incremental | Carbotura standard deployment schedule |
| Phase Expanded | 200 total | 2 ceil(200/100)=2 | ~73,000 tpy | ~2040+ (post-Millerhill EfW contract transition) |
§3.3 — State B Economic Terms
| Parameter | Value | Source |
|---|---|---|
| Beneficiation Fee base per tonne | Data Gap — Waste Study Data Gap | NULL |
| Beneficiation Fee annual escalator | 2.5% per year | Carbotura standard |
| Circular Royalty™ base | 120% of the current-year Beneficiation Fee per tonne | Carbotura standard |
| Circular Royalty™ annual escalator | +1 percentage point per year | Carbotura standard |
| Circular Royalty™ payment lag | 13 months | Carbotura standard |
| Payment basis | Rolling monthly — not annual batch | Carbotura standard |
| Council capital obligation | £0 | VERIFIED |
| Council operating liability | £0 | VERIFIED |
| CSA term | 30 years from Phase Initial COD | Carbotura standard |
§3.4 — Residual Obligations in State B
In State B, Edinburgh City Council retains its Millerhill EfW contract commitment for Phase Initial and Phase Medium periods. Approximately 22,332 tpy (~145 TPD) of contracted residual continues to flow to FCC Environment (UK)'s Millerhill Recycling & Energy Recovery Centre (MRERC) under existing Millerhill EfW contract terms, until the contract transitions or expires. Phase Expanded (~2040) absorbs these streams once contractually available. There is no conflict between State B Phase Initial/Medium and existing Millerhill EfW contract obligations.
§3.5 — Timeline Anchoring
| Anchor | Timing (Indicative) |
|---|---|
| Phase Initial COD | ~2030–31 (Carbotura standard schedule — provisional) |
| First Beneficiation Fee payment | Month 1 post-COD |
| First Circular Royalty™ payment | 13 months after corresponding Beneficiation Fee payment post-COD (~2031–32) |
| Millerhill EfW contract expiry | ~2040–41 |
| Phase Expanded COD | ~2040–42 |
§3.6 — Phase Delta Map
The Phase Delta Map illustrates the infrastructure transition between State A (current system) and State B (ACM deployment). State A facilities are shown in steel/grey; the Phase Initial ACM candidate site is shown in Emerald.
Phase Delta Map — requires Google Maps API key in config.js
State A — WTE/ERF
State A — Landfill
State A — WWTPs
State B — ACM Priority 1
State A — Current System
Millerhill Recycling & Energy Recovery Centre (MRERC) — FCC Environment (UK) · Millerhill EfW, Millerhill, Midlothian, Edinburgh · Millerhill EfW contracted route · ~2040 expiry
Edinburgh Landfill, Regional Edinburgh landfill · NCC-operated · Contingency and asbestos-category specialist
5× Edinburgh WWTPs — Scottish Water · Biosolids to land application under SEPA/WICS regulatory pressure
State B — With Carbotura
ACM Priority 1 — ABP Atlantic Site
Port of Edinburgh, South Dock · 74 acres · Phase Initial 100 TPD · Clean growth hub alignment · ~0.3 mi from Edinburgh landfill · Multimodal road/rail/marine access
Port of Edinburgh, South Dock · 74 acres · Phase Initial 100 TPD · Clean growth hub alignment · ~0.3 mi from Edinburgh landfill · Multimodal road/rail/marine access
§4 — Delta Analysis
§4.1 — Three Delta Components
The total delta between State A and State B has three components that must be evaluated separately:
- Gross Cost Displacement — reduction in annual disposal cost: Beneficiation Fee replaces State A costs. Per formula: Beneficiation Fee = MAX(Floor, MIN(Ceiling, FWDC − £5)). Gross displacement ≥ £5/tonne by formula.
- Circular Royalty™ Cash Flow — rolling monthly Royalty received from 13 months after corresponding Beneficiation Fee payment. An additional positive cash flow — not a reduction in the Beneficiation Fee. Compounds at +1 pp/year. At steady state, exceeds Beneficiation Fee per tonne.
- Residual Obligation — remaining State A disposal costs for streams not yet in ACM system (Millerhill EfW contracted streams during Phase Initial/Medium). Unchanged from State A until Phase Expanded.
Gross cost displacement and Circular Royalty™ cash flow are quantified separately. Both are independent financial effects of the CSA.
State A vs. State B — Annual Cost Structure by Phase (Indexed)
State A costs escalate via three compounding mechanisms. State B Beneficiation Fee is contractually capped at 2.5%/yr. The gross cost displacement gap widens structurally over 30 years.
Source: State A — Waste Study cost structure (all figures estimated); State B — Proposal EIR Input Block, Carbotura standard parameters · Indexed to Year 1 FWDC = 100 · March 2026
§4.1 — Phase-by-Phase Comparative Table
| Parameter | Phase Initial Year 1 | Phase Initial Year 2+ | Phase Expanded Steady State |
|---|---|---|---|
| ACM volume (tpy) | ~36,500 | ~36,500 | ~73,000 |
| State A cost for ACM volume | ~FWDC(PI) × 36,500 Est. | Escalating | Escalating — both mechanisms |
| Beneficiation Fee (State B) | T × 36,500 | T × 1.025 × 36,500 | T × (1.025ⁿ) × 73,000 |
| Gross displacement per tonne | ≥ £5/tonne by formula | ≥ £5/tonne + FWDC spread | Widening — FWDC escalates faster than TMC |
| Circular Royalty™ — Year 1 | £0 | ||
| Circular Royalty™ — from 13 months after corresponding Beneficiation Fee payment | 120% × T × 36,500 building monthly | 148%+ × T × 73,000 at Year 30 | |
| Royalty − Fee per tonne | −T (Beneficiation Fee paid; Royalty $0 (pre-royalty)) | Spread positive and widening | Royalty > Fee — maximum spread |
| Council capital obligation | £0 | £0 | £0 |
§4.3 — Pre-Royalty Period Separation (Required)
Year 1 and post-13 months after corresponding Beneficiation Fee payment periods have materially different fiscal characteristics. They must not be combined in any budget projection, annual accounts note, or financial briefing to elected members.
| Period | Edinburgh Pays | Edinburgh Receives | Royalty − Fee per tonne |
|---|---|---|---|
| Year 1 — Pre-RoyaltyCOD to Month 12 | Beneficiation Fee on ~330,000 tpy | £0 | Negative — Beneficiation Fee only |
| 13 months after corresponding Beneficiation Fee payment — Royalty Ramp13 months after corresponding Beneficiation Fee payment onward | Beneficiation Fee (2.5%/yr) | 120% × Month 1 TMC · rolling monthly · building | Improving toward positive |
| Steady State — Year 2+Year 2 onward | Beneficiation Fee (compounding) | Circular Royalty™ > Beneficiation Fee per tonne | Royalty exceeds Fee per tonne — by contractual design (separate transactions) |
| Year 30 — MaximumFull escalation | TMC × (1.025³⁰) | 148% of current TMC rate | Maximum Royalty − Fee spread (separate transactions) |
Circular Royalty™ payments begin 13 months after corresponding Beneficiation Fee payments and ramp to full run-rate on a rolling basis. This is not an annual switch-on event — each Beneficiation Fee payment generates a corresponding Circular Royalty™ payment 13 months later. At steady state, the Circular Royalty™ is designed to exceed the Beneficiation Fee on a per-tonne basis.
§4.4 — 30-Year Gross Cost Displacement (Structural, Indexed)
| Year | State A Cost Index (FWDC escalating) | Beneficiation Fee Index (2.5%/yr, fixed) | Gross Displacement Index |
|---|---|---|---|
| Year 1 | 100 | T (≤ FWDC − £5) | ≥ £5/tonne |
| Year 2 | ~103–106 | 102.5 | Widening |
| Year 5 | ~116–128 | 110.4 | Widening |
| Year 10 | ~135–160 | 128.0 | Widening significantly |
| Year 20 | ~182–256 | 171.6 | Wide |
| Year 30 | ~246–410 | 230.4 | Maximum |
Key Structural Finding
Because the Beneficiation Fee escalator (2.5%/yr) is contractually fixed and State A costs escalate via multiple compounding mechanisms (Millerhill EfW contract index + landfill tax policy + post-contract market), the gross cost displacement gap widens structurally over time. Edinburgh's relative fiscal advantage under State B grows every year of the 30-year CSA.
§4.5 — 30-Year Circular Royalty™ Structure (Indexed, T = Year 1 Beneficiation Fee)
| Year | Avoided Disposal (indexed) | TMC Rate (indexed) | TMC Paid (indexed) | Royalty Received (indexed) |
|---|---|---|---|---|
| Year 1 | 100.0 | 100.0 | −100.0 | |
| Year 2 | 102.5 | 102.5 | −102.5 | +120.0 |
| Year 5 | 110.4 | 110.4 | −110.4 | +132.5 |
| Year 10 | 128.0 | 128.0 | −128.0 | +155.9 |
| Year 20 | 171.6 | 171.6 | −171.6 | +232.0 |
| Year 30 | 230.4 | 230.4 | −230.4 | +340.7 |
Royalty figures are amounts received. The royalty is paid 13 months in arrears, so the figure shown for a year is earned on the previous year’s delivered tonnage.
All values indexed to Year 1 Beneficiation Fee = 100. Absolute £ values require Waste Study FWDC confirmation.
State B Fiscal Position — Three Gross Items, Years 1–20
State B converts disposal cost into Beneficiation Fee plus royalty income. All three items shown gross. Year 1 is cost-only; Year 2 onward royalty income exceeds Beneficiation Fee.
View:
Avoided Disposal
Beneficiation Fee Paid
Circular Royalty™
Source: Carbotura delta model · Planning-basis TMC ~$82/tonne (ESTIMATED) · 330,000 tpy Phase Initial · State B per Proposal EIR Input Block · March 2026
§5 — System-Level Impact
§5.1 — Employment Delta (Regional Effects) Cyflogaeth (Effeithiau Rhanbarthol)
Required declaration: Employment and economic contribution figures are regional economic effects — not Edinburgh City Council fiscal receipts. They do not appear in the Council's accounts and must not be recorded as such.
| Parameter | STATE A | STATE B Phase Initial | Delta (B vs A) |
|---|---|---|---|
| Direct FTE employment (manufacturing) | 0 | ~35 FTE | +35 FTE |
| Indirect and induced jobs (2.5× multiplier) | 0 | ~88 | +88 |
| Total employment impact | 0 | ~123 | +788 jobs (Configuration A total) |
| Annual economic contribution | £0 | ~£8–10M/yr | +~£8–10M/yr |
| Phase Expanded employment (200 TPD) | 0 | ~70 FTE direct · ~175 total | +~175 jobs |
All employment figures derived from Carbotura standard performance baseline (400 TPD, scaled to 100 TPD). Subject to independent assessment at Waste Study.
§5.2 — Environmental Delta Amgylcheddol
Required disclaimer: All State B environmental figures are designed-for metrics based on Carbotura's ACM platform at 100 TPD. They are not independently verified operational results for Edinburgh. Subject to confirmation at Waste Study.
| Parameter | STATE A | STATE B Phase Initial | Delta (B vs A) |
|---|---|---|---|
| CO₂e avoidance (per 100 TPD module) | 0 | Designed for ~40,000 tCO₂e/yr | +~40,000 tCO₂e/yr |
| Landfill diversion | 0 | ~330,000 tpy | +~330,000 tpy/yr |
| Water recovery | 0 | Designed for ~4,000 m³/yr | +~4,000 m³/yr |
| Post-2040 structural environmental position | Open-market exposure — no confirmed low-emission alternative | ACM in operation — manufacturing classification | Structural improvement |
§5.3 — PFAS Structural Delta Strwythurol PFAS
PFAS (per- and polyfluoroalkyl substances) represent an emerging regulatory risk in UK municipal feedstock management. Scotland and UK regulators are increasingly scrutinising PFAS in biosolids, food packaging residues, and composting/AD outputs. ACM's manufacturing process converts feedstock through elemental dissociation — manufactured outputs (graphene compounds, synthetic graphite, recovered minerals, net-positive ultrapure water) carry no PFAS liability by design. State A's composting, land application, and ERF routes all carry PFAS pass-through risk under tightening regulatory frameworks. The delta between State A and State B on PFAS structural liability is directionally positive under State B.
§5.4 — No-Fallback Analysis
If State B is not pursued, State A continues with three structural vulnerabilities that cannot be resolved by any action short of contracting a successor infrastructure arrangement:
- Post-Millerhill EfW contract exposure (hard): ~145 TPD of contracted residual feedstock has no confirmed successor destination after ~2040–41. Market rates in a constrained UK EfW environment will be higher than today's contracted rates. Edinburgh currently has no mitigation for this exposure.
- Landfill tax escalation (hard): UK landfill tax trajectory is upward. Edinburgh's own landfill facility is rate-exposed. Any ERF primary route failure triggers £126.15/tonne (2025–26) — a rate that will be higher still by 2040.
- Scottish Water biosolids pressure (structural): Five Edinburgh-area WWTPs generate ~2,500 tpy under SEPA/WICS regulatory pressure. Scottish Water's cost of disposal will increase — and its incentive to supply as ACM manufacturing feedstock grows commensurately.
§6 — Risk and Sensitivity
§6.1 — Risk Register (Delta Analysis Frame)
| Risk | Key Driver | A Exposure | B Exposure | Delta (B vs A) |
|---|---|---|---|---|
| FWDC lower than estimated | Confidential Millerhill EfW contract gate fee | No change | Beneficiation Fee adjusts; gross displacement narrows but positive floor preserved | State B still superior by formula |
| FWDC higher than estimated | True ERF cost > £115/tonne | State A higher | Beneficiation Fee ceiling caps State B cost; displacement widens | State B advantage larger |
| Millerhill EfW contract extension to 2045–46 | Partnership exercises 5-year option | No change | Phase Expanded deferred; Phases Initial/Medium unaffected | 5-year deferral on Phase Expanded only |
| Technology underperformance | ACM below 100 TPD design | N/A | Proportional reduction; residual directed to State A routes; no penalty on Council | Partial benefit; no Council financial risk |
| Timeline slippage | Planning or construction delay | No cost | State A disposal costs continue during delay; post-2040 buffer compressed | Cost of delay = continued State A costs during slip |
| PFAS regulatory tightening | UK/Scotland PFAS action on biosolids/composting | Increasing — biosolids and composting exposed | ACM elemental dissociation eliminates PFAS pass-through | Structural advantage State B |
| Edinburgh industrial rent growth | Edinburgh +20% industrial rent (Knight Frank 2025) | N/A | Priority 1 and 2 land cost risk — borne by Carbotura under BOO | Neutral for Council |
| Commercial separation non-compliance | Slower Scottish business compliance post April 2024 | Commercial stream higher than modelled | Phase Initial commercial stream lower | Manageable — food/garden/biosolids sufficient for Phase Initial |
| Scottish target escalation above 70% | Scottish Government post-2025 target | Fine exposure re-activates | ACM reduces residual volumes — supports compliance | State B structurally supportive |
| Royalty escalator policy change | Renegotiation at 30-year CSA renewal | N/A | First 30 years locked at execution — structural; renewal at Year 30 | Long-term stable; renewable at Year 30 |
§6.2 — Feedstock Variability ±20%
| Scenario | Phase Initial Volume | Beneficiation Fee Obligation | Gross Displacement | Royalty (Year 2+) |
|---|---|---|---|---|
| Base case | ~330,000 tpy | T × 36,500 | ≥ £5 × 36,500 | 120% × T × 36,500 |
| −20% (29,200 tpy) | 29,200 tpy | T × 29,200 | ≥ £5 × 29,200 | 120% × T × 29,200 |
| +20% (43,800 tpy) | 43,800 tpy | T × 43,800 | ≥ £5 × 43,800 | 120% × T × 43,800 |
Volume risk is symmetric. The per-tonne structural relationship is unchanged at any volume. Council financial exposure is bounded by actual delivered volume — no minimum volume penalty.
§6.3 — FWDC Sensitivity: Sign-Change Threshold
Finding — No Sign-Change Threshold Exists
The per-tonne Royalty − Fee margin is always positive from Year 2 onward, regardless of the absolute FWDC level — because the Beneficiation Fee formula includes a floor, and the Circular Royalty™ at Year 2 is 120% of the Beneficiation Fee by contractual definition (separate transactions). Year 1 is always pre-Royalty (Beneficiation Fee only; Royalty $0) — this is structural, not a sensitivity. There is no FWDC level at which State B is structurally inferior to State A over a multi-year horizon.
§6.4 — Royalty Escalator Sensitivity
| Scenario | Year 2 Royalty Rate | Year 10 Royalty Rate | Year 30 Royalty Rate | Royalty − Fee per tonne Year 30 (indexed) |
|---|---|---|---|---|
| Escalator 0 pp/yr (static) | 120% | 120% | 120% | +~90 |
| Escalator +1 pp/yr (contractual) | 120% | 128% | 148% | +~111 |
| Escalator +2 pp/yr (upside) | 120% | 136% | 168% | +~138 |
At zero escalation, the Royalty still exceeds the Beneficiation Fee every year from Year 2. The +1 pp/yr contractual escalator improves Edinburgh's 30-year position by ~23% over static. The contractual structure is conservatively modelled.
§6.5 — Timeline Slippage Sensitivity
| Delay Scenario | Cost of Delay | Post-2040 Buffer |
|---|---|---|
| No delay (Waste Study 2026) | £0 | ~8–9 years |
| 2-year delay (Waste Study 2028) | State A disposal costs on Phase Initial volume during 2-year slip | ~7–8 years |
| 5-year delay (Waste Study 2031) | State A disposal costs during 5-year slip | ~4–5 years |
| 8-year delay (Waste Study 2034) | State A disposal costs during 8-year slip | ~1–2 years — critical compression |
| >8-year delay | Phase Expanded infrastructure will not be in place by Millerhill EfW contract expiry | Open-market exposure risk — HIGH |
§7 — Decision Window Analysis
§7.1 — Binding Constraints
Constraint 1 — Millerhill EfW contract expiry (~2040–41): A fixed horizon. Edinburgh City Council has no control over this date — it was set by contract in October 2016. Phase Expanded infrastructure must be contracted, planned, and constructed before this date to avoid open-market exposure. Working backward from 2040, the Waste Study must be authorised no later than approximately 2032–33 for Phase Expanded to be operational by 2040.
Constraint 2 — ACM standard deployment schedule: From Waste Study authorisation to Phase Expanded COD is approximately 10–12 years. This is the technical minimum. Feasibility (9–12 months) + CSA negotiation (3–6 months) + Planning and permitting (12–18 months) + Construction (18–24 months) per phase.
§7.2 — Decision Window Table
| Action | Latest Date (preserves Phase Expanded pre-2040) | Current Status |
|---|---|---|
| Waste Study authorisation (recommended) | 2026–27 — maximises 8+ year buffer | Not yet initiated |
| Waste Study authorisation (hard latest) | ~2032–33 | Open — but buffer eroding |
| CSA execution | ~2033–34 (latest for Phase Expanded pre-2040) | Requires Waste Study completion |
| Phase Expanded COD (pre-Millerhill EfW contract expiry) | ~2040 (HARD) | Requires Waste Study no later than ~2032–33 |
§7.3 — Irreversibility Mechanism
Structural Irreversibility — Named Instrument
The specific irreversible mechanism is the Millerhill EfW contract Joint Committee Agreement (executed October 2016, lead authority Edinburgh City Council (CEC)). Under this agreement, Edinburgh City Council is committed to directing its contracted residual feedstock to FCC Environment (UK)'s Millerhill Recycling & Energy Recovery Centre (MRERC) through approximately 2040–41, with a five-year extension option. Edinburgh cannot unilaterally exit this commitment early without penalty. This means the window to develop ACM successor infrastructure for the contracted streams is fixed and not extendable. If Edinburgh City Council does not have a Phase Expanded ACM facility under contract by approximately 2038–39, it will face open-market EfW procurement at a time when UK EfW capacity is constrained and gate rates are structurally higher than current contracted rates. The Millerhill EfW contract agreement itself creates the decision urgency — not Carbotura.
§7.4 — Optionality Matrix
| Action | Options Preserved | Options Foreclosed |
|---|---|---|
| Authorise Waste Study (2026) | All phases open; full 8+ year planning buffer; competitive procurement possible | None |
| Defer to 2030 | Phase Initial/Medium still feasible; Phase Expanded compressed | Post-2040 buffer shrinks to ~4 years; Phase Expanded at risk |
| Defer to 2033 | Phase Initial only feasible pre-2040 | Open-market exposure on ~145 TPD during gap between contract expiry and Phase Expanded COD |
| Take no action | Millerhill EfW contract continues to ~2040–41 | Post-2040 destination unplanned; disposal cost escalation unmitigated; no Circular Royalty™ income |
§8 — Effects Summary
No new figures in this section. All values trace to preceding sections.
§8.1 — Fiscal Flows (Edinburgh City Council Accounts — CIPFA)
| Period | Beneficiation Fee Obligation | Circular Royalty™ Receipt | Royalty − Fee per tonne |
|---|---|---|---|
| Year 1 (pre-royalty) | T × ~330,000 tpy | £0 | Negative — Beneficiation Fee only |
| Year 2 onward (ramp) | T × 1.025 × ~36,500 | 1.20T × 36,500 building monthly from 13 months after corresponding Beneficiation Fee payment | Spread positive and widening (separate transactions) |
| Steady state (Year 10+) | T × (1.025¹⁰) × ~36,500 | 1.28T × ~36,500 (Year 10) | Royalty exceeds Fee — Royalty > Fee per tonne |
| Phase Expanded Year 30 | T × (1.025³⁰) × ~73,000 | 1.48T × ~73,000 | Maximum Royalty − Fee spread (separate transactions) |
Absolute £ values require Waste Study FWDC confirmation. Under CIPFA: Beneficiation Fee obligations = revenue account service costs; Circular Royalty™ receipts = revenue income, receivable from 13 months after corresponding Beneficiation Fee payment; capital obligation = nil (BOO structure).
§8.2 — Regional Economic Effects
Required disclaimer: The following effects are regional economic impacts. They are not Edinburgh City Council fiscal receipts and must not be recorded as such in the Council's accounts.
| Effect | STATE A | STATE B | Delta |
|---|---|---|---|
| Direct manufacturing FTE (Phase Initial) | 0 | ~35 | +35 |
| Total employment (Phase Initial) | 0 | ~123 | +788 jobs (Configuration A total) |
| Annual economic contribution | £0 | ~£8–10M/yr | +~£8–10M/yr |
| Total employment (Phase Expanded) | 0 | ~175 | +175 jobs |
§8.3 — Environmental Effects
| Effect | STATE A | STATE B | Delta |
|---|---|---|---|
| CO₂e avoidance (Phase Initial) | 0 | Designed for ~40,000 tCO₂e/yr | +~40,000 tCO₂e/yr |
| Landfill diversion | 0 | ~330,000 tpy | +~330,000 tpy |
| Post-2040 environmental position | Unplanned / open market | ACM in operation | Structural improvement |
§8.4 — Structural Effects
| Effect | STATE A | STATE B | Delta |
|---|---|---|---|
| Post-Millerhill EfW contract feedstock destination | None confirmed | Phase Expanded CSA in place | Structural gap eliminated |
| Disposal cost ceiling | None — open-ended escalation | Beneficiation Fee ceiling contractually fixed | Cost ceiling introduced |
| Council capital liability | £0 | £0 | Equal |
| Scottish Water biosolids route stability | Land application under pressure | ACM service agreement available | Improved |
§8.5 — Unresolved Data Gaps
| Data Gap | Impact on Delta Analysis | Resolution Pathway |
|---|---|---|
| Beneficiation Fee base per tonne | All absolute £ values for obligations and receipts cannot be calculated | Waste Study FWDC verification under NDA |
| Millerhill EfW contract gate fee (FCC Environment's Millerhill Recycling & Energy Recovery Centre (MRERC), Edinburgh's share) | State A ERF cost ESTIMATED — widens or narrows gross displacement | FOI to Edinburgh City Council or Lothians councils as applicable; or direct disclosure under Waste Study NDA |
| Edinburgh-specific WasteDataFlow breakdown | Feedstock volumes ESTIMATED — affects volume-weighted projections | Request from SEPA (Scottish Environment Protection Agency) / Edinburgh City Council waste finance team |
| Biosolids disposal cost (Scottish Water) | Biosolids stream cost ESTIMATED | Scottish Water direct engagement at Waste Study |
| Food and garden waste composting/AD contract costs | Stream costs ESTIMATED | Edinburgh City Council waste finance team |
Executive Implications
- The structural case for State B is complete and does not depend on the FWDC being verified. The Circular Royalty™ formula guarantees Edinburgh's per-tonne fiscal position improves from Year 2 regardless of the absolute Beneficiation Fee level — the Royalty is 120% of the Beneficiation Fee by contractual definition. The Waste Study establishes the scale, not whether the benefit exists.
- Edinburgh's most material risk is the post-2040 unplanned position, not disposal cost. The Millerhill EfW contract creates a hard deadline Edinburgh did not choose. ~145 TPD of contracted residual loses its disposal infrastructure in approximately 2040–41. This is the most material structural risk on Edinburgh City Council's waste management balance sheet and is not addressable by any action short of contracting a successor infrastructure arrangement.
- Each year of delay on the Waste Study compresses the post-2040 planning buffer by one year and increases exposure to open-market EfW rates. UK EfW capacity is supply-constrained and new facility planning is difficult. The market Edinburgh would face in 2041 without a successor arrangement is structurally more expensive than today's market. The cost of delay is compounding and non-recoverable.
- The Waste Study is the lowest-cost, highest-optionality action available. It confirms the numbers, does not commit the Council to the CSA, and preserves every subsequent option. Not authorising it is the only action that forecloses options.
Appendix A — Sources and Methodology
Sources
| Source | Role in Delta Analysis |
|---|---|
| Scottish Government — Local Authority Municipal Waste Management: April 2024 to March 2025 (January 2026) | State A recycling rate; Edinburgh target compliance status |
| WRAP Scotland — Scottish Government Collections Blueprint 2025 (Edinburgh case studies) | State A kerbside residual tonnage (14,832 tpy); waste composition; 25% reduction |
| SEPA Environmental Permit PPC/A/1136072 (FCC Environment (UK)) | State A primary ERF operator verification |
| letsrecycle.com — FCC Environment Edinburgh & Midlothian EfW contract (October 2016) | State A contract term, partners, operational date |
| Edinburgh City Council — Landfill Site Clarification (August 2018) | State A primary disposal route confirmation |
| Edinburgh City Council — Budget and Finance page | Population and household base data |
| ONS Mid-Year Population Estimates 2024 (gov.wales, 2025) | Edinburgh population 167,899; growth rate +1.7% |
| Scottish Water Communities website 2025 | State A biosolids operator; 5 Edinburgh WWTPs |
| SEPA/WICS — regulatory pressure on Scottish Water biosolids | State A biosolids regulatory pressure |
| UK Treasury — Spring Budget 2025 Landfill Tax | State A landfill tax £126.15/tonne (2025–26) |
| Edinburgh City Region — CEC-led City Deal investment opportunity; ABP October 2025 press release | State B Priority 1 site: ABP Atlantic, 74 acres |
| Knight Frank Scotland Logistics & Industrial Report, January 2026 | Edinburgh industrial market context; +20% rental growth |
| Carbotura standard performance baseline (400 TPD, scaled) | State B employment, economic impact, carbon metrics |
| Carbotura Circular Supply Agreement standard parameters | State B Beneficiation Fee formula, Circular Royalty™ formula, CSA term |
Methodology Notes
FWDC derivation: State A FWDC estimated from publicly available UK municipal EfW gate fee benchmarks, composting/AD contractor ranges, land application costs, and landfill tax. Waste Study will verify from Edinburgh City Council's contracted data under NDA.
Beneficiation Fee formula: MAX(Floor, MIN(Ceiling, FWDC − £5)). Floor and Ceiling are Carbotura standard parameters. Formula ensures Beneficiation Fee ≤ FWDC − £5 at any FWDC above the floor.
Phase sizing: Phase Initial = 100 TPD (ceil(100/100) = 1 module). Phase Expanded = 200 TPD (ceil(200/100) = 2 modules). Carbotura standard module architecture.
Royalty formula: Royalty(m+13) = TMC(m) × Royalty_Rate(m). Base: 120% Year 1 Beneficiation Fee. Escalator: +1 pp/year. Lag: 13 months. Rolling monthly basis.
Employment: 35 direct FTE per 100 TPD module. 2.5× multiplier for indirect and induced. Carbotura standard performance baseline. Subject to independent assessment at Waste Study.
Accounting standard: CIPFA. Beneficiation Fee obligations: revenue account service costs. Circular Royalty™ receipts: revenue income, receivable from 13 months after corresponding Beneficiation Fee payment. Capital obligation: nil under BOO structure.
Appendix B — Glossary Additions
Supplements the authoritative glossary in the Waste Study. Terms defined there are not repeated.
CIPFA
Chartered Institute of Public Finance and Accountancy. The accounting standard governing financial reporting for Edinburgh City Council. Beneficiation Fee obligations are revenue account service costs; Circular Royalty™ receipts are revenue income; capital obligation is nil under BOO structure.
Delta Model
The analytical framework of this Economic Impact Report. Measures the financial, employment, and environmental difference between State A (current system, Waste Study) and State B (ACM deployment, Proposal EIR Input Block).
Gross Cost Displacement
The annual reduction in Edinburgh City Council's manufacturing feedstock disposal costs resulting from Beneficiation Fee replacing State A disposal costs. Gross cost displacement per tonne = FWDC − Beneficiation Fee (minimum £5/tonne by formula, before any Royalty consideration).
Per-Tonne Fiscal Flows
Beneficiation Fee paid and Circular Royalty™ received are reported as separate transactions per the Separate Transaction Principle (MR §4.8) — never combined or netted. Year 1: Fee paid; Royalty $0 (pre-Royalty). Year 2 onward: per-tonne Royalty exceeds per-tonne Fee; spread widens at steady state. Reported under CIPFA accounting standards.
Pre-Royalty Period
Months 1–12 after Phase Initial COD. Edinburgh City Council pays the Beneficiation Fee on delivered volume; receives £0 Circular Royalty™. Twelve months in duration. Must be recognised in Year 1 budget planning.
Royalty Ramp Period
13 months after corresponding Beneficiation Fee payment onward after Phase Initial COD. Rolling monthly Circular Royalty™ payments begin at 120% of the corresponding Month 1 Beneficiation Fee and build as the royalty rate escalates monthly.
Steady-State Period
Approximately Year 2 onward. The Circular Royalty™ per tonne structurally exceeds the Beneficiation Fee per tonne — reported as separate transactions per the Separate Transaction Principle. The per-tonne Royalty − Fee margin is positive by contractual design.
State A
Edinburgh City Council's current manufacturing feedstock management system as defined by the Waste Study: Millerhill EfW contract/FCC Environment ERF for contracted residual; composting/AD for food and garden waste; land application for biosolids; Edinburgh City Council landfill for specialist and contingency streams.
State B
The ACM deployment condition as defined by the Proposal: 100 TPD Phase Initial; Circular Supply Agreement with Carbotura; Beneficiation Fee; Circular Royalty™ from 13 months after corresponding Beneficiation Fee payment; zero Council capex; Phase Expanded ~2040 absorbing contracted streams post-Millerhill EfW contract transition.
Appendix C — Evidence Chain
| Figure | Value | Public Source | Type | Confidence |
|---|---|---|---|---|
| Kerbside residual 14,832 tpy | 14,832 | WRAP Scotland 2025 | VERIFIED | High |
| Edinburgh recycling rate ≥70% (2024–25) | ≥70% | Scottish Government January 2026 | VERIFIED | High |
| Millerhill EfW contract 25-year term, ~2040–41 expiry | 25 years | letsrecycle.com October 2016 | VERIFIED | High |
| FCC Environment (UK) as Millerhill Recycling & Energy Recovery Centre (MRERC) operator | FCC Environment (UK) | SEPA Permit PPC/A/1136072 | VERIFIED | High |
| Landfill tax £126.15/tonne (2025–26) | £126.15/tonne | UK Treasury Spring Budget 2025 | VERIFIED | High |
| Phase Initial 100 TPD — 1 module | 100 TPD | Carbotura standard (ceil(100/100)=1) | Carbotura standard | High |
| Phase Expanded 200 TPD — 2 modules | 200 TPD | Carbotura standard (ceil(200/100)=2) | Carbotura standard | High |
| Direct FTE ~35 per 100 TPD | ~35 FTE | Carbotura standard performance baseline | Carbotura standard | Medium |
| Carbon avoidance ~40,000 tCO₂e/yr | ~40,000 | Carbotura standard platform | Carbotura standard | Medium |
| ABP Atlantic Site 74 acres | 74 acres | Edinburgh City Region; CEC land review October 2025 | VERIFIED | High |
| ERF disposal cost £95–115/tonne | £95–115 | UK municipal EfW benchmark — Millerhill EfW contract commercially confidential | ESTIMATED | Low |
| FWDC Phase Initial ~£55–80/tonne | £55–80 | Blended benchmark, non-contracted streams | ESTIMATED | Low |
| Edinburgh population +1.7%/yr | +1.7% | ONS mid-2024, gov.wales 2025 | VERIFIED | High |