An organics processing agreement works when it gives the city capacity it can rely on and the processor tonnage and revenue it can finance against, with clear rules for the things that will change: volumes, contamination, costs and the law. The terms that matter most are the term itself, tonnage bands and any put-or-pay commitment, the feedstock specification and rejected-load process, the rate adjustment method, compost offtake, reporting, and how force majeure and change in law are handled. This guide describes each from both sides. It is general information, not legal advice; each party should have its own counsel review any agreement.<\/p>\n
For the city or county, the agreement secures somewhere for collected organics to go, at a known rate, with the records the state requires. In California, SB 1383 capacity planning requires counties to report organic waste recycling capacity to CalRecycle, and capacity counts for a jurisdiction only when it is verifiably available, demonstrated by a contract, franchise agreement or other documentation. CalRecycle states that a facility permit is not an indication of capacity available (CalRecycle capacity planning<\/a>). As of October 2026, check the current text before drafting.<\/p>\n For the processor, the agreement is the evidence lenders, partners and investment committees look for: committed tons, a rate, and a term long enough to recover capital. Our guide to building the business case<\/a> shows how contract cover feeds the investment decision, and the break-even guide<\/a> shows how each term moves margin per ton.<\/p>\nThe term sheet at a glance<\/h2>\n