Advanced Circular Manufacturing deployment across San Diego County’s four subregion clusters converts a narrowing disposal infrastructure into a 30-year manufacturing asset — eliminating landfill dependency for up to 2,000 tons per day while generating a Circular Royalty™ that exceeds the Beneficiation Fee from Year 2 onward. Carbotura offers a single commercial structure: the Circular Supply Agreement (CSA) — Beneficiation Fee (TMC Fee) plus Circular Royalty™.
What this document is
The transaction instrument. This document presents the Build-Own-Operate structure, three capacity configurations, the Circular Supply Agreement framework, the Beneficiation Fee schedule, and the 30-year Circular Royalty™ model. Numbers here are the basis for the EIR’s State B analysis.
- Carbotura deploys, owns, and operates the ACM facility network at no capital cost to the county — the BOO model eliminates the public financing burden entirely.
- Three configurations — 500, 1,000, or 2,000 TPD — are available at LOI/MOU execution; phased expansion is built into the agreement without requiring renegotiation.
Carbotura Qualification
Carbotura, Inc. is the developer, owner, and operator of Advanced Circular Manufacturing facilities under a Build-Own-Operate model. Carbotura holds the full project equity position through facility-specific Special Purpose Vehicles, deploys institutional financing against the Circular Supply Agreement as the primary revenue instrument, and assumes operational performance risk for the full CSA term.
The ACM platform converts manufacturing feedstock — municipal solid waste and related material streams — into manufacturing-grade materials through defined conversion processes. The specific configuration is determined collaboratively during the deployment planning period. Facilities operate at near-zero external energy draw; conversion process outputs power the facility’s own energy requirements.
Deployment Configuration Options
Three deployment configurations are available. All configurations use the distributed 500-ton-per-day facility model, positioning ACM capacity within each primary feedstock-generating subregion. The county selects its preferred configuration at LOI/MOU execution; the CSA includes phased expansion provisions permitting scale-up without renegotiation. All financial figures below are illustrative — ESTIMATED — based on the locked Beneficiation Fee of $100/ton.
All financial figures ESTIMATED · BF $100/ton (VERIFIED — Architect directive) · Royalty = 120% × BFₙ (Release 28 canonical formula) · 2.5%/yr BF escalation · 30-yr minimum CSA term only — CSA continues perpetually absent Non-Renewal Notice. is a differential between two independently reported gross transactions — the Beneficiation Fee and the Circular Royalty™ — and is not a netted position.
Executive Implications — §0
- The distributed model addresses San Diego County’s 4,526 square-mile geographic extent by positioning ACM capacity within each primary feedstock-generating subregion, materially reducing average haul distances and per-ton logistics costs.
- Configuration selection does not foreclose scale-up. The CSA includes expansion provisions; a county selecting Configuration A may transition to B or C via Joint Working Group amendment without renegotiating foundational agreement terms.
Circular Supply Agreement Structure
§1.1 Agreement Framework
§1.0 — Regulatory Predicate Transition (RPT)
Regulatory Predicate Transition — both parties commit to the dewaste pathway
Advanced Circular Manufacturing is a manufacturing process, not a waste-management activity. Microwave Catalytic Reforming operates in an anoxic, oxygen-free, sub-atmospheric environment — mechanistically incompatible with combustion or biological degradation. ACM does not fit within the waste domain and does not operate under waste-domain statutes.
100% elemental recycling of the municipal material stream — the core programme outcome — requires a coordinated regulatory shift: from legacy disposal-predicate statutes onto manufacturing-predicate classifications. Interchangeable framing: the dewaste pathway. Manufacturing NAICS 325180 · 325998 · 327992 · 331110 · 331314 · 331492 (US 6-code ACM set) plus EPA RCRA §1004(27) / 40 CFR §261.2(e) exclusion pathway.
Both parties commit to the RPT pathway. Carbotura brings process-classification evidence + regulatory engagement expertise; the counterparty brings standing to engage the local regulator + political mandate for the transition. Endpoint is categorical: manufacturing classification across all permitting.
The Circular Supply Agreement (CSA) is a long-form commercial agreement between San Diego County and Carbotura, Inc. governing ACM facility deployment, manufacturing feedstock delivery, Beneficiation Fee (TMC Fee) obligations, and Circular Royalty™ payments. Minimum term is 30 years from Phase Initial Commercial Operations Date. In the absence of a formally served Non-Renewal Notice (earliest Year 28, 24-month notice period), the CSA continues perpetually.
§1.2 Beneficiation Fee Mechanics
The Beneficiation Fee — also referenced as the Total Material Conversion Fee (TMC Fee) — is the per-ton payment made by San Diego County to Carbotura for the receipt and conversion of manufacturing feedstock. It is the counterparty’s primary financial obligation under the CSA and Carbotura’s primary revenue instrument for project financing.
| Parameter | Value | Status |
|---|---|---|
| Beneficiation Fee — Year 1 base | $100.00/ton | VERIFIED |
| Annual escalation | 2.5%/yr compounding from COD anniversary | LOCKED |
| Beneficiation Fee — Year 2 | $102.50/ton | ESTIMATED |
| Beneficiation Fee — Year 10 | $128.01/ton | ESTIMATED |
| Beneficiation Fee — Year 30 | $209.76/ton | ESTIMATED |
§1.3 Gross Cost Displacement
At $100/ton, the Beneficiation Fee (TMC Fee) is at or below the verified FY2026 disposal cost at Miramar Landfill ($102–108/ton). Against the planning-basis Fully Weighted Disposal Cost of $125/ton, the Beneficiation Fee represents an immediate gross cost displacement of approximately $25/ton. This displacement is the first of two independent fiscal benefits; the Circular Royalty™ is the second.
§1.5 CSA Commercial Structure
Carbotura offers a single commercial structure: the Circular Supply Agreement (CSA). At LOI/MOU execution, San Diego County commits to the CSA — Beneficiation Fee (TMC Fee) plus Circular Royalty™. There is no choice of structure to make.
Financial model in §3–§4 presents CSA mechanics. The Exogenesis™™ Royalty add-on stacks alongside the Circular Royalty™.
Executive Implications — §1
- The CSA preserves county site ownership and delivers long-term royalty value via the uncapped Circular Royalty™ multiplier.
Deployment Model and Site Opportunity
§2.1 Build-Own-Operate Model
Carbotura finances, designs, constructs, owns, and operates all ACM facilities through the full CSA term. County obligations are limited to: (a) designating manufacturing feedstock delivery under the agreed per-ton schedule, (b) paying the Beneficiation Fee per ton received, and (c) cooperating with the permitting process during the Deployment Planning Period. No county capital expenditure, bonding, or operational staffing commitment is required.
§2.2 Distributed Facility Network
San Diego County’s 4,526 square-mile extent makes distributed ACM siting the structurally superior model. A single centralized facility would impose hauler distances of 50–80 miles for outlying jurisdictions, materially increasing per-ton logistics cost. Four 500-ton-per-day facilities across the county’s four primary subregions eliminate this constraint.
§2.4 Site Candidate Analysis
Four candidate zone clusters are identified for Phase Expanded (Configuration C) deployment. Zones P1 and P2 are sufficient for Configuration B; P1 alone for Configuration A. All sites are provisional pending Joint Working Group site investigation.
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Site Opportunity Map · San Diego County ACM Distributed Network · All sites PROVISIONAL pending JWG · July 2026
Executive Implications — §2
- P1 (South County / Otay Mesa) is the highest-priority initial site: proximity to Republic Services Otay Landfill feedstock, Otay Mesa industrial zoning, and SR-905/Port of Entry logistics infrastructure create a uniquely strong co-location advantage for Phase Initial deployment.
- P4 (Kearny Mesa / Miramar) is positioned to absorb Miramar Landfill feedstock ahead of the ~2031 closure, transitioning a landfill-bound stream to ACM manufacturing with no hauler route disruption.
Beneficiation Fee — Annual Schedule
The Beneficiation Fee (TMC Fee) is an independent gross cost item — never netted against the Circular Royalty™. The table below presents the per-ton rate and annual gross obligation by configuration for selected years.
| Year | BF Rate ($/ton) | Config A 500 TPD ($M) | Config B 1,000 TPD ($M) | Config C 2,000 TPD ($M) |
|---|---|---|---|---|
| Year 1 | $100.00 | $18.25 | $36.50 | $73.00 |
| Year 2 | $102.50 | $18.71 | $37.41 | $74.83 |
| Year 5 | $110.38 | $20.15 | $40.31 | $80.62 |
| Year 10 | $128.01 | $23.36 | $46.72 | $93.45 |
| Year 15 | $148.45 | $27.09 | $54.18 | $108.35 |
| Year 20 | $172.22 | $31.43 | $62.86 | $125.72 |
| Year 30 | $209.76 | $38.28 | $76.56 | $153.12 |
| 30-yr Gross Total | — | ~$735M | ~$1.47B | ~$2.94B |
All ESTIMATED · BF₀ = $100/ton (VERIFIED) · 2.5%/yr compounding · 365 days/yr · Separate Transaction Principle applies — Circular Royalty™ modeled independently in §4.
Circular Royalty™ — 30-Year Financial Model
Canonical Circular Royalty™ Principles (required in Proposal, EIR, and Brief):
“Gross cost displacement and Circular Royalty™ cash flow are quantified separately. Both are independent financial effects of the CSA.”
“At steady state, the Circular Royalty™ is designed to exceed the Beneficiation Fee on a per-ton basis.”
“Circular Royalty™ payments begin 13 months after corresponding Beneficiation Fee payments and ramp to full run-rate on a rolling basis.”
§4.1 Authoritative Formula (Release 28 — Canonical)
| Element | Formula / Value |
|---|---|
| Year 1 per-ton Circular Royalty™ | 120% × BF₀ = 120% × $100 = $120.00/ton |
| Year n per-ton (n ≥ 2) | [120% × BF₀] × 1.01^(n−2) = $120.00 × 1.01^(n−2) |
| Multiplier base | BF₀ = $100/ton (Year 1 CSA Exhibit C) — NEVER current-year escalated BF |
| Royalty timing | 13 months after Carbotura’s receipt of corresponding Beneficiation Fee payment |
| Royalty rate escalation | +1 percentage point/year, uncapped. Y1 = 120%; Y31 = 150%; continues. |
§4.2 Fiscal Period Distinction — Mandatory
| Period | Timing | Fiscal Position |
|---|---|---|
| Pre-Royalty Period | Months 1–12 after Phase Initial corresponding feedstock delivery | County pays Beneficiation Fee ($100/ton); receives $0 Circular Royalty™. Two independent gross flows, reported separately. Designed pre-royalty period. |
| Royalty Ramp | 13 months after corresponding Beneficiation Fee payment through ~Month 24 | — |
| Steady State | Year 2 onward through CSA term | Circular Royalty™ exceeds Beneficiation Fee per ton by design. |
§4.3 30-Year Royalty Schedule (Config C · 2,000 TPD illustrative)
| Year | BF Rate ($/ton) | Royalty/ton | Annual Royalty $M | Annual BF $M |
|---|---|---|---|---|
| Pre-royalty (Yr 1) | $100.00 | $0.00 | $0.00 | $73.00 |
| Year 1 (ramp start) | $100.00 | $120.00 | $87.60 | $73.00 |
| Year 2 | $102.50 | $121.20 | $88.48 | $74.83 |
| Year 5 | $110.38 | $124.85 | $91.14 | $80.62 |
| Year 10 | $128.01 | $130.90 | $95.56 | $93.45 |
| Year 15 | $148.45 | $137.18 | $100.14 | $108.35 |
| Year 20 | $172.22 | $143.72 | $104.91 | $125.72 |
| Year 25 | $199.67 | $150.53 | $109.89 | $145.82 |
| Year 30 | $209.76 | $157.61 | $115.06 | $153.12 |
| 30-yr Cumulative | — | — | ~$1,088M | ~$2,944M |
All figures ILLUSTRATIVE · Formula: Yr 1 = 120% × BFₙ; Yr n ≥ 2 = [120% × BFₙ] × 1.01^(n−2) · BF₀ = $100/ton (Release 28 canonical formula) · 365 days/yr · Not contractual commitments.
Executive Implications — §4
- The pre-royalty period (Months 1–13) is a designed feature of the CSA structure, not a deficit. Decision-makers should budget for this period as a known, bounded cost item — not an open-ended exposure.
- The Separate Transaction Principle requires both the Beneficiation Fee and Circular Royalty™ to appear as gross independent figures in all analyses.
Community Impact and Economic Profile
| Impact Category | Config A 500 TPD | Config B 1,000 TPD | Config C 2,000 TPD | Status |
|---|---|---|---|---|
| Direct manufacturing employment (FTE) | ~125 | ~250 | ~500 | ESTIMATED |
| Indirect and induced jobs | ~375 | ~750 | ~1,500 | ESTIMATED |
| Annual economic impact | ~$40M+ | ~$80M+ | ~$160M+ | ESTIMATED |
| Carbon avoidance (tCO₂e/year) | ~285,000 | ~570,000 | ~1,140,000 | ESTIMATED |
| Equivalent vehicles removed | ~62,000 | ~124,000 | ~247,000 | ESTIMATED |
| Water recovery (gal/day) | ~55,000 | ~110,000 | ~220,000 | ESTIMATED |
| Near-zero external energy draw | ACM facility powered by conversion process outputs | LOCKED | ||
| NAICS (manufacturing) | 325180, 325998, 327992, 331110, 331314, 331492 | LOCKED | ||
| NAICS (expressly excluded) | 562212, 562213, 562219, 562920 | LOCKED | ||
All impact figures ESTIMATED — scaled from Carbotura standard parameters per Master Rules §8.
Deployment Phasing and Timeline
All phase timelines are expressed relative to Time-Zero (T0), corresponding to LOI/MOU execution. T0 has not been set; the schedule below reflects the Carbotura standard deployment schedule.
Executive Implications — §6
- Miramar Landfill closure (~2031) is approximately 60 months from mid-2026. LOI/MOU execution in Q3 2026 would place Phase Initial COD at Q3 2028 — providing ~3 years of ACM operational capacity ahead of the Miramar closure. Any delay to T0 compresses this buffer.
- The Non-Renewal Notice window opens in Year 28 of the CSA. Given a 2028 COD, the earliest possible exit is 2056. The decision window is now — not after the closure event creates emergency procurement conditions.
Data Basis
- Beneficiation Fee base rate — $100/ton
- VERIFIED. Architect directive. Locked CSA Exhibit C Year 1 rate for this engagement.
- BF escalation — 2.5%/yr compounding
- LOCKED. Carbotura standard CSA parameter from COD anniversary.
- Circular Royalty™ formula (Release 28 canonical)
- LOCKED. Yr 1: 120% × BFₙ. Yr n ≥ 2: [120% × BFₙ] × 1.01^(n−2). Multiplier applies to BFₙ (current-year escalated Beneficiation Fee) per Corpus Release 28.
- Royalty timing
- LOCKED. 13 months after Carbotura’s receipt of corresponding Beneficiation Fee payment (CSA Art. 1.5).
- FWDC — $125/ton
- ESTIMATED. Modeled from verified Miramar FY2026 gate rate ($102–108/ton) plus estimated Republic Services private rates (~$101/ton) plus transport overhead (~$20/ton).
- Employment and economic impact
- ESTIMATED. Scaled from Carbotura standard parameters per Master Rules §8. Subject to JWG verification.
- Site zone classifications (P1–P4)
- PROVISIONAL. Identified from publicly available zoning databases and satellite imagery. Specific parcel selection pending JWG site investigation.
- Phase timeline
- PROVISIONAL. Carbotura standard deployment schedule. T0 pending LOI/MOU execution.
Selective Glossary
- Beneficiation Fee (TMC Fee)
- Per-ton fee paid by San Diego County to Carbotura for receipt and conversion of manufacturing feedstock. Also referenced as the Total Material Conversion Fee. Base $100/ton; escalates 2.5%/yr from COD anniversary.
- Build-Own-Operate (BOO)
- Carbotura’s deployment model. Carbotura finances, constructs, owns, and operates all ACM facilities through the full CSA term. No public capital required.
- Circular Royalty™
- Per-ton royalty paid by Carbotura to San Diego County beginning 13 months after corresponding Beneficiation Fee payments. Separate from the Beneficiation Fee — never netted. Formula: Yr 1 = 120% × BFₙ; Yr n ≥ 2 = [120% × BFₙ] × 1.01^(n−2).
- Circular Supply Agreement (CSA)
- Long-form commercial agreement governing ACM deployment, feedstock delivery, Beneficiation Fee, and Circular Royalty™. Minimum 30 years from COD; perpetual continuation absent Non-Renewal Notice.
- Exogenesis™™ Royalty
- CSA add-on royalty that stacks alongside the Circular Royalty™. Applicable to landfill legacy mass remediation. Base $50/ton; +1%/yr escalation.
- Circular Supply Agreement (CSA)
- Carbotura’s single commercial structure: county pays Beneficiation Fee, receives Circular Royalty™. County retains site ownership under ground lease. Royalty timing: 13 months after first BF payment receipt.
- Time-Zero (T0)
- Reference date for all deployment timeline calculations. Corresponds to LOI/MOU execution.