Economic Impact Report · 10 min read · DOC 03 OF 06
What this document is
The State A / State B economic model for the Capital Region worked example — what the counterparty pays, what it receives, and why the two are never presented as one number.
Three things this document says
- State A is incineration at ~$149/t, not landfill at ~$60/t — the ban changed the comparison, not the arithmetic.
- Phase Initial: ~$14.60M/yr in Beneficiation Fee at Year 1 (fee floor); ~$874M gross Circular Royalty™ over the 30-year term. Two lines, reported separately.
- Zero counterparty capital at every phase, and K-IFRS is the basis — the US municipal GASB 18 argument does not transfer and is not assumed.
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Carbotura · Circular Advantage Program · Economic Impact Report
Republic of Korea
Economic Impact Report
The counterfactual is not landfill — that route is closing. It is outsourced incineration at a verified ~$149/tonne, with 27 new plants planned in the Capital Region. Against that, a Circular Supply Agreement produces two independent gross flows over thirty years: a Beneficiation Fee the counterparty pays, and a Circular Royalty™ it receives. This report shows both, separately.
Sections:
Click any section header to expand or collapse · jumps from links open automatically
§1
Introduction and Decision Summary
| Element | State A (Current Trajectory) | State B (With Carbotura) |
|---|---|---|
| Destination for the displaced residual | Outsourced incineration; 27 plants planned in the Capital Region | Advanced Circular Manufacturing — Circular Materials |
| Counterparty cost per tonne | ~$149/t all-in VERIFIED | Beneficiation Fee $100–150/t (set at Term Sheet) |
| Payment received per tonne | None | Circular Royalty™ $120–180/t Year 1, +1pp/yr, from month 13 |
| Counterparty capital | Plant capital or long-term contract commitment | $0 — Build-Own-Operate |
| Accounting basis | K-IFRS | K-IFRS |
The fee and the royalty are two independent gross transactions with different payers. This report does not net them, and no “net position” appears anywhere in it.
§2
State A Baseline — Current Trajectory
§2.1 — The system
| Stream (national) | Mt/yr | Current Destination | Source |
|---|---|---|---|
| Public incineration | 4.40 | Municipal plants | KFEM via Eco-Business, Apr 2026 VERIFIED |
| Public landfill | 1.28 | Closed to direct disposal — Capital Region in force, national 2030 | KFEM VERIFIED |
| Private incineration | 0.84 | Contracted plants | KFEM VERIFIED |
| Private recycling | 0.44 | Contracted | KFEM VERIFIED |
§2.2 — Cost structure
| Cost Element | Rate | Annual (Phase Initial volume, 146,000 t) | Source |
|---|---|---|---|
| Private-contractor treatment | KRW 192,196/t · ~$142 | ~$20.7M | KFEM VERIFIED |
| Statutory disposal charge (incineration) | KRW 10,000/t · ~$7 | ~$1.0M | 2018 Framework Act VERIFIED |
| FWDC | ~$149/t | ~$21.8M | VERIFIED |
Table 2.2 — State A cost at Phase Initial volumeUSD/KRW 1,356.63. The source survey does not state the year its cost figures describe. Public incineration at ~$114/t all-in is the in-house alternative; 105 municipalities outsource instead.
§3
State B Deployment Baseline
| Phase | TPD | Modules | TPY | Counterparty Capital | Timing |
|---|---|---|---|---|---|
| Initial | 400 | 4 | 146,000 | $0 | T0 assumed Q1 2027; COD 12–18 months after |
| Medium | 800 | 8 | 292,000 | $0 | Sequenced |
| Expanded | 1,200 | 12 | 438,000 | $0 | Sequenced |
| Term | Value | Source |
|---|---|---|
| Beneficiation Fee | $100–150/t, 2.5%/yr | Proposal §3 |
| Circular Royalty™ | 120% of current-year fee, +1pp/yr, from month 13 | Proposal §4 |
| Term | 30-year minimum, perpetual | Proposal §1 |
| Capital structure | Build-Own-Operate, Carbotura 100% | Proposal §1 |
§4
The Two Gross Flows — Reported Separately
Separate Transaction Principle. The Beneficiation Fee is paid by the counterparty. The Circular Royalty™ is paid by Carbotura. They are independent gross transactions and are shown in separate tables. Presenting a single combined figure would misdescribe the structure.
§4.1 — Beneficiation Fee paid (at the fee floor)
| Year | Fee/t | Phase Initial (146,000 t) | Phase Medium (292,000 t) | Phase Expanded (438,000 t) |
|---|---|---|---|---|
| 1 | $100.00 | $14.60M | $29.20M | $43.80M |
| 5 | $110.38 | $16.12M | $32.23M | $48.35M |
| 10 | $124.89 | $18.23M | $36.47M | $54.70M |
| 20 | $159.87 | $23.34M | $46.68M | $70.02M |
| 30 | $204.64 | $29.88M | $59.75M | $89.63M |
Table 4.1 — Beneficiation Fee paid2.5%/yr escalation from a $100 floor. The quoted range is $100–150/t; figures scale linearly with the rate set at Term Sheet. ESTIMATED.
§4.2 — Circular Royalty™ received
| Year earned | Multiplier | Royalty/t | Phase Initial | Phase Medium | Phase Expanded |
|---|---|---|---|---|---|
| 1 | 120% | $120.00 | $17.52M | $35.04M | $52.56M |
| 5 | 124% | $136.87 | $19.98M | $39.97M | $59.95M |
| 10 | 129% | $161.11 | $23.52M | $47.04M | $70.57M |
| 20 | 139% | $222.22 | $32.44M | $64.89M | $97.33M |
| 30 | 149% | $304.91 | $44.52M | $89.03M | $133.55M |
| 30-year gross | ~$874M | ~$1.75B | ~$2.62B |
Table 4.2 — Circular Royalty™ receivedRoyalty (Year n) = (120% + (n−1)pp) × that year’s fee. Each year’s royalty is received 13 months in arrears, so the payment stream runs Years 2–31. ESTIMATED.
§5
System-Level Impact
| Metric | State A | State B | Source |
|---|---|---|---|
| Destination of 1.28 Mt/yr displaced residual | New incineration capacity | Circular Materials — ~100% converted, ~90% sold, ~10% internal | Engineering doctrine |
| Residual to landfill | Ash | Near-zero | Design target |
| Emissions | Combustion | Near-zero — primary elemental dissociation, not combustion | Design target |
| Energy sold | Some plants export power | None — energy is internal only; not waste-to-energy | Commercial canon |
| Employment | Plant operations | Permanent operating roles — headcount is a characterisation output, not modelled here | — |
An ACM module is not a competing incinerator and should not be permitted, tendered or compared as one. Korea is commissioning incineration because a disposal route is closing; this is a different kind of answer to the same problem.
§6
Risk and Sensitivity
| Scenario | Volume (TPD) | Annual Fee · Yr 1 ($M, at floor) | Annual Royalty · Yr 1 basis ($M) |
|---|---|---|---|
| Phase Initial only | 400 | 14.60 | 17.52 |
| Phase Medium | 800 | 29.20 | 35.04 |
| Phase Expanded | 1,200 | 43.80 | 52.56 |
| Fee at range ceiling, Phase Initial | 400 | 21.90 | 26.28 |
Table 6.1 — SensitivityBoth lines scale linearly with the fee rate set at Term Sheet. Two lines, separate.
The material uncertainties are on the input side, not the formula: business-site volumes (UNVERIFIED), the Capital Region displaced volume (MODELED), and Korean MSW composition (not in hand). Each is a commissioned item at characterisation.
§7
Decision Window Analysis
Finding
The Capital Region has 27 incineration plants planned. Each one that reaches financial close commits its tonnage to combustion for decades and removes it from the addressable stream. The window for a manufacturing route to be considered alongside that build-out is before those decisions, not after.
National landfill closure 2030 makes the same window national.
| Action | Before plants are committed | After |
|---|---|---|
| LOI/MOU and Joint Working Group | Manufacturing route considered alongside incineration capacity | Residual already contracted; addressable stream shrinks |
| Feedstock characterisation | Sudokwon intake data available for sizing | Same data, smaller uncommitted volume |
§8
Three Canonical Principles
1 · Separate transactions. Fee and royalty are independent gross transactions, reported separately, never netted.
2 · Single mass basis. One mass, counted once in each of asset, revenue and attribute dimensions.
3 · Zero counterparty capital. Build-Own-Operate; Carbotura funds 100%.
App. A
Appendix A — Sources and Methodology
- FWDC ~$149/t VERIFIED → KFEM survey via Eco-Business, 13 April 2026 (KRW 192,196/t treatment + KRW 10,000/t statutory charge); USD/KRW 1,356.63 (3 Sep 2026)
- National volumes VERIFIED → same survey: 6.96 Mt/yr; 4.40 / 1.28 / 0.84 / 0.44 split
- Capital Region volume MODELED → population share ~26M / ~51M
- Fee, royalty, lifetime figures ESTIMATED → Carbotura standard parameters at the fee floor
- Accounting → K-IFRS, per MR §28 jurisdiction-appropriate basis
App. B
Appendix B — Glossary Additions
State A / State B
State A = the current trajectory without ACM: outsourced incineration at the verified FWDC. State B = ACM deployment under the CSA.
K-IFRS
Korean International Financial Reporting Standards — the jurisdiction-appropriate basis for a Korean project entity. US GAAP is not the basis.
Gross royalty over 30 payments
The sum of 30 years of Circular Royalty™ earnings, received in Years 2–31 under the 13-month arrears.
Indicative reference only — not an offer. This is an unsolicited Stage 1 document prepared without a Korean engagement in place. Pricing is available under a Circular Supply Agreement (CSA) or a Circular Materials Offtake Agreement (CMOA) — contact Carbotura. Financial figures are modelled estimates on standard contract parameters and are subject to feedstock characterisation. The Beneficiation Fee is modelled at the floor of the quoted $100–150/tonne range; the range, not a point, is what is offered. Projections use K-IFRS as the jurisdiction-appropriate basis and convert at USD/KRW 1,356.63 (3 September 2026). Municipal disposal economics are VERIFIED from a named survey reported April 2026, which does not state the year its cost figures describe. Business-site (industrial) volumes and gate rates are UNVERIFIED and are the first commissioned item at characterisation. The Capital Region displaced volume (~1,750 t/day) is MODELED from national volume by population share. No claim is made about the classification of any facility, module or output stream. Korean-language copy is pending native review.