The David J. Joseph Company's Southeast auto shredder network generates an estimated 360 TPD of Automotive Shredder Residue — currently disposed at ADEM-permitted Alabama landfills at approximately $75/ton, with $0 returned. Every ton disposed is a permanent operational expense. Active disposal contracts govern this arrangement; their expiry dates are undisclosed. Understanding those expiry windows is the first deliverable of the Community Feasibility Study — and the clock on that window is running.
Today's disposal system costs Nucor and DJJ an estimated $10.95M/year at 400 TPD with no recovery mechanism. That figure does not account for RCRA Subtitle C reclassification — a regulatory event that could raise ASR disposal costs to $150–$250/ton if TCLP constituent thresholds are triggered by lead, cadmium, or PCB levels in the feedstock stream. The current system holds this exposure open indefinitely.
Carbotura offers a 30-year Build-Own-Operate Circular Offtake Agreement (COA): Nucor and DJJ deliver ASR at a TMC Fee of $150/ton. Carbotura finances, builds, and operates the ACM facility at Morgan County Industrial District, Decatur, Alabama — adjacent to the Nucor Steel Decatur campus — bearing all capital, construction, and operating risk. Beginning 13 months after Phase Initial commercial operations, Carbotura pays a Circular Royalty of $180/ton (120% of Year 1 TMC Fee), escalating +1 percentage point annually for the 30-year term. RCRA Subtitle C exposure is eliminated for the counterparty — ASR entering ACM is classified as manufacturing feedstock under NAICS 335991/325120/331410, not waste.
Phase Initial at 100 TPD can be operational at T0+24 months from Feasibility Study authorization. Phase Expanded at 400 TPD follows at T0+60 months. No confirmed T0 exists as of April 2026. Every quarter this decision is deferred is a quarter the royalty clock does not start.
| Parameter | Value | Source |
|---|---|---|
| Addressable ASR — Phase Initial | 100 TPD / 36,500 tpy | ESTIMATED DJJ captive streams — characterization required |
| Addressable ASR — Phase Expanded | 400 TPD / 146,000 tpy | ESTIMATED DJJ + third-party SE network |
| Current disposal cost (FWDC) | ~$75/ton all-in | ESTIMATED SE regional average · EREF 2024 |
| Current annual disposal cost (400 TPD) | ~$10,950,000/year | ESTIMATED $75 × 146,000 tpy · $0 returned |
| TMC Fee | $150.00/ton · 2.5%/yr escalator | AGREED Carbotura ceiling rate |
| Gross cost displacement (400 TPD) | $10,950,000/year avoided disposal | ESTIMATED $75/ton × 146,000 tpy |
| Circular Royalty — Year 1 | $0 · Pre-royalty period (Months 1–12) | Carbotura standard — rolling lagged structure |
| Royalty lag | 13 months after corresponding TMC payment · rolling monthly | Carbotura standard COA |
| Circular Royalty — Year 2 per ton | $180.00 (120% of Year 1 TMC) | Carbotura standard · locked formula |
| Net position vs. current system — Year 2+ | +$101.25/ton · +$14.8M/yr (400 TPD) | Derived: $26.25 surplus + $75 avoided disposal |
| Counterparty capital obligation | $0 — BOO structure | Carbotura standard · Carbotura-financed |
| RCRA reclassification exposure | Active in State A · $150–$250/ton potential | ESTIMATED RCRA §262.11; Okon Recycling 2025 |
| RCRA exposure under COA | Eliminated — manufacturing feedstock classification | Carbotura EPA RCRA Exclusion Petition · Feb 20, 2026 |
| First Royalty Payment | T0+37 months (13 months after Phase Initial COD) | Carbotura standard deployment schedule |
| Direct employment — Expanded | ~192 direct FTE · ~480 indirect jobs · Morgan County | ESTIMATED Carbotura standard multipliers |
| ACM facility location — Priority 1 | Morgan County Industrial District, Decatur AL | Adjacent to Nucor Steel Decatur LLC campus · PROVISIONAL |
The specific irreversibility instrument is the active ASR disposal contract. Once the expiry window passes without a transition decision, DJJ and Nucor enter a new disposal contracting cycle — typically 2–3 years — with no mechanism for early exit. The COA transition window closes at contract expiry and cannot be reopened without a new negotiation cycle with the disposal operator.
At 400 TPD, each quarter of Feasibility Study delay defers approximately $3.6M in Circular Royalty and sustains $2.74M in avoidable disposal costs — a combined quarterly drag of $6.3M versus the State B position. A one-year delay defers $26.3M in combined value against the Year 2+ position.
If RCRA reclassification is triggered during the delay period, disposal costs step-change to $150–$250/ton — retroactively validating the COA at ceiling TMC Fee in Year 1 and making every month of pre-COA disposal a pure unrecoverable expense at hazardous waste rates.
Forward-looking statements: All volume, cost, and financial figures are based on ESTIMATED inputs except where marked VERIFIED or AGREED. This brief is prepared for authorized recipients of a Stage 1 Carbotura engagement. Figures require verification through a Community Feasibility Study. This document does not constitute financial, legal, or investment advice. US GAAP.