What this document is
The commercial structure of one Circular Supply Agreement sized against the county-controlled stream, with the two payment flows set out separately and the condition precedent stated up front.
- Phase Initial takes 400 TPD — 146,000 tons a year — and reaches commercial operation 24 months after engagement authorisation. Phase Expanded at 1,800 TPD takes the county-controlled stream whole, inside a single building.
- One CSA, no elections: the County pays a Beneficiation Fee and receives a Circular Royalty™, as two independent gross transactions that are never netted.
- The agreement carries a condition precedent requiring an operating facility that meets our stated claims and standards. The County is not held to performance until it is satisfied.
Fairfax County
Circular Supply Proposal — Fairfax County
One Circular Supply Agreement — 30-year minimum, zero County capital, and a condition precedent that puts the proof obligation on us.
What this proposal is, in five points
- One agreement. A Circular Supply Agreement (CSA) between Fairfax County and Carbotura, 30-year minimum term, continuing perpetually unless a 24-month Non-Renewal Notice is served. There are no elections and no alternative structures to choose between.
- A condition precedent on an operating facility. The CSA requires an operating facility meeting our stated claims and standards. Until that is satisfied, the County is not held to performance. We have no plant in commercial operation today and have not asked anyone to proceed as though we do.
- Two payment flows, never netted. The County pays a Beneficiation Fee on delivered tonnage; Carbotura pays a Circular Royalty™ on the same tonnage. Independent transactions, reported separately and in full.
- Zero County capital. Carbotura finances, owns and operates at every phase, and carries all permitting and classification work at its own cost.
- Neither combustion nor burial. This is a manufacturing operation. No stack, no ash, no landfill.
The stream and the date
More than 650,000 tons a year passes through Fairfax County’s hands on its way to the I-95 Energy/Resource Recovery Facility in Lorton, owned and operated by Reworld Fairfax. The facility combusts the material to raise steam and generate electricity; the remaining ash is landfilled at the I-95 Landfill Complex on the same site.
County documents describe the current agreement running to 2031, with five-year extension options, the end date set by the expiry of the lease on the property the facility occupies.
That date comes from County documents of 2016 and 2022 and we have not re-confirmed it against a current contract or any later amendment. We state it as what those documents describe. If the position has changed, the correction is welcome and changes the timing of this conversation rather than its substance.
Siting — not yet identified
No candidate site has been identified or assessed. Siting is a Joint Working Group item and would follow authorisation, not precede it. Nothing in this package should be read as proposing the E/RRF parcel, the I-95 Landfill Complex or any other specific location.
What the requirement looks like: Phase Initial at 400 TPD needs a single industrial-zoned site of approximately 5–8 acres. Phase Expanded at 1,800 TPD — the county-controlled stream whole — needs roughly 20–30 acres with the process inside a single building; our per-building ceiling is 2,000 TPD, so the entire stream fits one building rather than a campus. Proximity to the point where the stream already aggregates is the dominant criterion.
The commercial structure
One structure. The County executes a Circular Supply Agreement and delivers its stream. Ownership of and liability for the material transfer to Carbotura on delivery. Carbotura does not purchase the material; the CSA transfers it, and Carbotura pays a royalty on what is delivered and processed.
| Element | Term |
|---|---|
| Agreement | Circular Supply Agreement (CSA), 30-year minimum |
| Continuation | Perpetual unless a 24-month Non-Renewal Notice is served |
| Condition precedent | An operating facility meeting Carbotura’s stated claims and standards. The County is not held to performance until satisfied. |
| Beneficiation Fee | $125/ton, escalating 2.5%/yr |
| Circular Royalty™ | 120% of the current-year Beneficiation Fee in Year 1 — $150/ton — then +1 percentage point per year, uncapped |
| Royalty commencement | 13 months after Carbotura’s receipt of the first Beneficiation Fee payment |
| County capital | None, at any phase |
| Regulatory work | Carbotura’s, at its own cost and risk. No commercial term is contingent on the outcome |
| Credit floor | BBB– / Baa3 |
The Beneficiation Fee and the Circular Royalty™ are independent transactions, reported separately and in full, and never netted. No table in this package carries a combined or net column.
Deployment phases
Deployment is modular, in 100 TPD units. Phase Initial is the Standard Deployment at 400 TPD. Phase Expanded at 1,800 TPD takes the county-controlled stream whole and sits just inside the per-building ceiling.
| Phase | TPD | Annual TPY | Share of county generation | Beneficiation Fee · Year 1 | Circular Royalty™ · Year 1 |
|---|---|---|---|---|---|
| Phase Initial | 400 | 146,000 | 12% | $18.25M | $21.90M |
| Phase Medium | 1,000 | 365,000 | 30% | $45.63M | $54.75M |
| Phase Expanded | 1,800 | 657,000 | 55% | $82.13M | $98.55M |
Beneficiation Fee at $125/ton. Share is of approximately 1.2 million tons generated countywide in 2023. Figures ILLUSTRATIVE.
Timeline
| Milestone | Indicative timing | Notes |
|---|---|---|
| LOI / MOU EXECUTION | Earliest available | Required to open all subsequent steps |
| Joint Working Group phase | ~9–12 months | Stream characterisation; siting; commercial terms scoped |
| Term Sheet phase | Following | Beneficiation Fee confirmed within the range; royalty formula locked |
| CSA negotiation and execution | Following | Subject to the operating-facility condition precedent |
| Phase Initial COD | 12–24 months from permit issuance | First feedstock delivered; Beneficiation Fee begins |
| E/RRF agreement and site lease end | 2031 | Per County documents of 2016 and 2022 |
| First Circular Royalty™ payment | 13 months after the first Beneficiation Fee payment |
The arithmetic that matters: a working phase plus a Term Sheet plus 12 to 24 months from permit issuance does not leave 2031 far away.
Regulatory path — ours to carry
Permitting and classification are Carbotura’s work, at our cost and our risk. We carry the applications, the technical demonstration and the classification argument in each jurisdiction we enter, and we run that sequence in parallel with the commercial phase rather than after it.
Our filing posture is consistent everywhere: material arrives as solid waste under current classification, is processed, and nothing leaves as residual waste, ash or sludge for disposal. We do not claim to receive no waste.
There is nothing in that process for the County to file, fund, defend or co-apply on, and no commercial term is contingent on its outcome. Manufacturing classification under NAICS 31–33 is what we assert and pursue; we hold no classification instrument today and nothing here depends on obtaining one.
The specific Virginia pathway — the applicable DEQ authorisations and any beneficial-use route — is work we would complete during the Joint Working Group phase. We have deliberately not cited Virginia rules or statutes in this package rather than cite them imprecisely.
What we are asking the County to do
One thing: authorise an LOI/MOU and open a Joint Working Group.
That is not a commitment to deploy, a procurement award, or an exclusivity grant. It opens a working phase in which the stream is characterised, a site is identified, the Virginia regulatory path is completed, and commercial terms are scoped — so that when the County reaches the 2031 decision, this option is specified rather than hypothetical.
The sequence from there is LOI/MOU execution → Term Sheet phase → CSA, with the operating-facility condition precedent sitting across it. Nothing binds either party before CSA execution.
Appendix A — Basis of presentation
All financial figures USD, ILLUSTRATIVE until Term Sheet execution. Generation, diversion and rate figures are VERIFIED from Fairfax County publications and budget documents. The FY2027 rate of $98/ton is VERIFIED from the County’s commercial disposal rates schedule; the $120/ton (2029) and $150/ton (2032) figures are the County’s own staff projections, not Carbotura’s.
The Beneficiation Fee is set at $125/ton and at $125/ton; it is the Beneficiation Fee for this engagement, set at $125/ton and escalating 2.5% a year. The Circular Royalty™ is computed as Mₙ × BFₙ, where Mₙ = 120% + (n−1) percentage points and BFₙ = $125 × 1.025^(n−1). Accounting standard: US GAAP / GASB.
Throughput uses the County’s own figure of more than 650,000 tons a year county-controlled. The facility operator publishes a higher throughput figure; we have not used it, because the county-controlled number is the one grounded in the County’s contract and is the material actually in question.
ESTIMATED: composition split, employment, site requirements. NOT IDENTIFIED: any candidate site. NOT CITED: Virginia regulatory provisions. Carbotura has no facility at or past Commercial Operation Date anywhere; the first-of-a-kind plant is in York County, Pennsylvania, targeted late 2027 to early 2028.
Appendix B — Definitions
- Advanced Circular Manufacturing (ACM)
- Industrial manufacturing that uses post-use material streams as feedstock, converting them into specification-grade manufactured commodities. A manufacturing operation, not a waste-management operation, and not combustion in any form.
- Circular Supply Agreement (CSA)
- The agreement under which ownership of and liability for the material transfer to Carbotura on delivery. The CSA transfers material; it is not a purchase.
- Beneficiation Fee
- The per-ton fee the Feedstock Provider pays for Total Material Conversion. Quoted range $125/ton, modelled here at $125/ton; escalates 2.5% a year.
- Circular Royalty™
- The per-ton royalty Carbotura pays the Feedstock Provider on delivered tonnage, beginning 13 months after Carbotura’s receipt of the first Beneficiation Fee payment. Year 1 is 120% of that year’s Beneficiation Fee, rising one percentage point a year, uncapped.
- Condition precedent
- An operating facility meeting Carbotura’s stated claims and standards. Until satisfied, the Feedstock Provider is not held to performance under the agreement.
- FWDC
- Fully-loaded cost of disposal — the counterparty’s own all-in cost of its current system.