Durham cancels new anaerobic digestion plant over soaring supply chain costs

As supply chain costs continue to balloon, Durham Region officials have pulled the plug on the procurement process to build a $200-million mixed waste pre-sort and anaerobic digestion (AD) facility.

New reports from staff indicated that the AD project would cost some $40 million more than originally planned at the start of the year, and $78.5 million more than the 2019 estimate for a facility that would have expanded what can be put in the green bin for area residents.

Anaerobic digestion is a natural process that uses microbes found in the environment to produce methane, which can be collected and used as a renewable natural gas.

“The combined effect of the rapid escalation in material, labour and shipping costs, coupled with the uncertainty of how these costs may continue to increase, have caused suppliers and subcontractors at every level to significantly increase their costs and projections of costs on larger and long-term capital projects like the AD Project,” stated a staff report that came before the committee of the whole in June.

The AD facility had been set to be located in Clarington, which has been described as an “unwilling host” that lobbied to have alternative sites selected and a full environmental assessment undertaken for the project. While the facility had proved controversial over its some four years in the making for the region, it was also a key part of the region’s plans to reduce its carbon footprint, produce renewable natural gas, and comply with anticipated legislation banning organics from landfills.

Regional officials note that they still need to come up with a long-term waste management strategy, now that the AD option for processing organics appears to be off the table. Staff noted that a new plan may take until 2023.

“The status quo will not adequately address the anticipated legislation, capacity needs and budgetary pressures on a go forward basis in the absence of the AD Project proceeding at this juncture,” states a staff report. “As such, staff will need to reassess the short-term solution while working towards a sustainable long-term integrated waste management system.”

Durham has agreed to pay the final two bidders $400,000 each for their proposal work on the AD Project, calling it a “demonstration of good faith for the efforts undertaken.”

Durham had narrowed down the prospective builders to three: Durham Renewable Resources Group (Maple Reinders PPP Ltd., AIM Group Capital Ltd., and EllisDon Capital Inc.), Durham Recovery Solutions (Sacyr Environmental USA LLC and Anaergia) and Durham Organics Processing Partners (Alberici Constructors Inc. and Acciona).