Circular Supply Proposal · 12 min read · DOC 02 OF 06
What this document is
The commercial structure of one Circular Supply Agreement sized to the Capital Region’s displaced stream — the Beneficiation Fee, the Circular Royalty™, deployment phases, the statutory route, risk, and sequence.
Three things this document says
- Phase Initial (400 TPD) takes ~8% of the Capital Region’s displaced landfill stream; full build-out (1,200 TPD) takes ~69% and diverts nothing from capacity already incinerating.
- One CSA, no election: the counterparty pays a Beneficiation Fee in the $100–150/t range and receives a Circular Royalty™ from 13 months after the first fee payment, at zero capital.
- Korea’s Circular Resource certification is a statutory route Carbotura pursues; nothing here depends on it and no classification claim is made.
Looking for something else?
Carbotura · Circular Advantage Program · Circular Supply Proposal
Republic of Korea
Circular Supply Proposal — National Programme
A perpetual Circular Supply Agreement (CSA) — 30-year minimum term — sizes an Advanced Circular Manufacturing deployment to the Capital Region’s displaced landfill stream: 400 TPD at Phase Initial, 1,200 TPD at full build-out, at a Beneficiation Fee quoted in the $100–150/tonne range against a verified outsourced treatment cost of ~$149/tonne, with zero counterparty capital.
Sections:
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§0
What This Means for the Republic of Korea
Five points. (1) Carbotura offers to manufacture Circular Materials from the municipal residual that the landfill ban leaves with nowhere to go. (2) The counterparty commits feedstock under a Circular Supply Agreement (CSA) — ownership and liability transfer at collection or delivery — and pays a Beneficiation Fee (TMC Fee) in the $100–150/tonne range. (3) The counterparty receives a Circular Royalty™ from 13 months after the first fee payment, growing every year for the full term. (4) Deployment is phased 400 → 800 → 1,200 TPD in manufactured 100 TPD modules. (5) The decision window is before the Capital Region’s 27 planned incineration plants are committed.
This is an unsolicited Stage 1 proposal. No engagement is in place. Nothing in it is an offer, and every figure is indicative and subject to feedstock characterisation.
§1
Commercial Structure and Decision Window
§1.1 — One agreement
There is one CSA structure: the Feedstock Provider pays a Beneficiation Fee; Carbotura pays a Circular Royalty™. There is no election, no alternative consideration mechanism, and no capital call. Carbotura funds 100% of capital under Build-Own-Operate.
| Element | The Counterparty Commits | Carbotura Commits |
|---|---|---|
| Feedstock | Committed municipal residual under a Minimum Annual Feedstock Volume (MAFV), set at Term Sheet | Accept and convert 100% of committed tonnage |
| Beneficiation Fee (TMC Fee) | $100–150/tonne, set at Term Sheet against the verified FWDC; 2.5%/yr escalator | — |
| Circular Royalty™ | — | 120% of the current-year fee in Year 1, +1pp/yr uncapped, from 13 months after the first fee payment |
| Capital | None | 100% — design, manufacture, deployment, operation |
| Term | 30-year minimum, perpetual continuation thereafter | |
| Accounting | K-IFRS | K-IFRS project entity |
§1.2 — Decision window
Direct landfill of combustible municipal residual is closed in the Capital Region and closes nationally in 2030. 105 municipalities rely on external treatment; 96 have expansion plans, 12 are in construction, and 27 plants are planned in the Capital Region. Each plant that breaks ground commits its tonnage to combustion for decades. The window for a manufacturing route to be considered alongside that build-out is now.
§2
Deployment Architecture
The Capital Region’s displaced landfill volume is modelled at ~1,750 tonnes/day — the national 3,507 t/day displaced stream scaled by population share (~26M of ~51M). It is replaced with Sudokwon intake data at characterisation.
| Phase | TPD | Modules | Annual Feedstock (TPY) | % of displaced stream | Capital | Timing |
|---|---|---|---|---|---|---|
| Phase Initial | 400 | 4 | 146,000 | ~8% | Carbotura 100% | T0 assumed Q1 2027 |
| Phase Medium | 800 | 8 | 292,000 | ~17% | Carbotura 100% | Sequenced on Phase Initial performance |
| Phase Expanded | 1,200 | 12 | 438,000 | ~69% | Carbotura 100% | Sequenced on Phase Medium |
Table 2.1 — Deployment phasesModules are 100 TPD ACM Modular Production Units, manufactured and replicated under a Design for Manufacturability (DFM) model. Site type: CANDIDATE.
Full build-out consumes roughly 69% of a single displaced stream and requires no diversion from capacity already incinerating. Business-site (industrial) feedstock — a separate and larger stream — is UNVERIFIED and is not sized here.
§3
Economic Structure — Beneficiation Fee (TMC Fee)
§3.1 — FWDC planning basis
FWDC: ~US$149/tonne — VERIFIED.
Private-contractor municipal treatment KRW 192,196/t (US$142) plus the statutory disposal charge on incineration KRW 10,000/t (US$7) under the 2018 Framework Act on Resource Circulation. Source: KFEM survey via Eco-Business, reported 13 April 2026. USD/KRW 1,356.63 (3 Sep 2026). The survey does not state the year its cost figures describe; treated as current-year.
Private-contractor municipal treatment KRW 192,196/t (US$142) plus the statutory disposal charge on incineration KRW 10,000/t (US$7) under the 2018 Framework Act on Resource Circulation. Source: KFEM survey via Eco-Business, reported 13 April 2026. USD/KRW 1,356.63 (3 Sep 2026). The survey does not state the year its cost figures describe; treated as current-year.
§3.2 — The fee against the alternatives
| Route | Rate | Status |
|---|---|---|
| Public landfill | ~$60/t | CLOSED to direct disposal — Capital Region in force, nationally 2030 |
| Public incineration | ~$107/t (~$114 all-in) | Fee clears only at the lower end of the range |
| Private-contractor treatment | ~$142/t (~$149 all-in) | Fee at or below across its whole range · 105 municipalities outsource |
Table 3.2 — Where the offer is strongestThe Beneficiation Fee is quoted as a range and set at Term Sheet; a point figure is not offered to a counterparty.
| Phase | TPD | Annual Volume (TPY) | Fee basis | Annual Fee · Year 1 (at floor) |
|---|---|---|---|---|
| Phase Initial | 400 | 146,000 | $100–150/t | $14.60M |
| Phase Medium | 800 | 292,000 | $100–150/t | $29.20M |
| Phase Expanded | 1,200 | 438,000 | $100–150/t | $43.80M |
Table 3.3 — Annual Beneficiation Fee, Year 1Modelled at the floor of the range. Escalates 2.5%/yr. ESTIMATED on a VERIFIED FWDC.
§4
Circular Royalty™
Circular Royalty™ (Year n) = (120% + (n−1)pp) × that year’s Beneficiation Fee. The multiplier applies to the current-year escalated fee, not a frozen Year-1 fee, so the royalty compounds faster than the fee in dollar terms. Payments commence 13 months after Carbotura’s receipt of the first Beneficiation Fee payment and roll monthly on delivered tonnage. The royalty is Carbotura’s raw-material cost for the feedstock — the only feedstock cost — and it is a separate transaction from the fee.
| Parameter | Value | Basis |
|---|---|---|
| Year-1 royalty per tonne | $120–180 | 120% of the $100–150 fee range |
| Multiplier escalator | +1pp per year, uncapped | Contractual formula |
| Commencement | 13 months after first fee payment | Rolling monthly thereafter |
| 30-year gross royalty · Phase Initial | ~$874M | ESTIMATED · 146,000 t/y at the fee floor |
| 30-year gross royalty · Phase Medium | ~$1.75B | ESTIMATED · 292,000 t/y |
| 30-year gross royalty · Phase Expanded | ~$2.62B | ESTIMATED · 438,000 t/y |
Table 4.1 — Royalty parametersGross royalty over 30 payments. Shown independently of the Beneficiation Fee per the Separate Transaction Principle.
§4.1 — Exogenesis™ add-on (candidate)
The Sudokwon legacy landfill mass is carried as an Exogenesis™ candidate for a Legacy Remediation Royalty alongside the primary CSA. It is subject to characterisation and is not part of the base case.
§5
The Regulatory Route — a statute, not an argument
Korea is the one jurisdiction in this estate that carries a statutory end-of-waste route: the Circular Resource certification under the 2018 Framework Act on Resource Circulation. Elsewhere the argument has to be won against a statute drafted without Advanced Circular Manufacturing in mind.
Both parties commit to the Regulatory Predicate Transition — the pathway from waste-domain statutes onto manufacturing-predicate classification (KSIC manufacturing divisions, the Korean analogue of NAICS 31–33). Carbotura brings process evidence and prior regulatory-engagement experience; the Ministry brings standing. Confirmation is actively pursued. Nothing in this proposal is contingent on it, and interim bridging authorities may apply.
Two questions are open and are the first items for Korean counsel: whether the Circular Resource criteria accommodate a mixed residual stream, and the KSIC division mapping. No claim is made in this document about the classification of any facility, module or output stream.
§6
Risk Register
| Risk | Key Driver | Who Bears It | Mitigation | Residual Exposure |
|---|---|---|---|---|
| Circular Resource criteria vs mixed residual | Certification scope | Shared | Korean environmental counsel engaged at LOI/MOU; RPT commitment by both parties | Open — the regulatory thesis, resolves first |
| Business-site volumes unverified | Open-source data gap | Carbotura | First commissioned item at feedstock characterisation | Bounds the commercial route only; municipal route unaffected |
| FWDC year qualifier | Survey does not state cost year | Carbotura | Verify with KFEM; re-anchor at Term Sheet | Confidence, not direction |
| Capital Region volume MODELED | Population-share scaling | Carbotura | Replace with Sudokwon intake data at characterisation | Phase Initial is ~8% of the modelled stream — wide margin |
| Deployment delay | Site, permitting, manufacturing lead time | Carbotura | Manufactured modules; royalty commencement is delivery-triggered, not date-triggered | Low to counterparty — no capital at risk |
| Technology performance | Output recovery below design | Carbotura | Build-Own-Operate; Carbotura bears all operating risk | None to counterparty |
§7
Engagement Sequence
| Milestone | Indicative Timing | Notes |
|---|---|---|
| LOI / MOU | Earliest available | Non-binding as to volume and price. Opens the Joint Working Group and authorises feedstock characterisation, including business-site volumes. |
| Feedstock characterisation | 3–6 months from LOI/MOU | Sudokwon intake data, composition, business-site volumes, Circular Resource criteria review by counsel |
| Term Sheet | On characterisation | Fee set within $100–150/t against the verified FWDC; MAFV fixed; site selected |
| CSA execution (T0) | Assumed Q1 2027 for modelling | 30-year minimum term, perpetual continuation |
| Phase Initial COD | 12–18 months from T0 | 400 TPD; Beneficiation Fee on delivered tonnage; first royalty payment 13 months after the first fee payment |
§8
Three Canonical Principles
1 · Separate transactions. The Beneficiation Fee and the Circular Royalty™ are independent gross transactions with different payers. They are reported separately throughout this package and never netted.
2 · Single mass basis. The same physical mass is counted once in each of three dimensions — asset (CSA), revenue (CMOA), attributes (CEAA) — and never summed as three independent masses.
3 · Zero counterparty capital. Build-Own-Operate. Carbotura funds 100% of capital at every phase. The counterparty commits feedstock, not money.
App. A
Appendix A — Data Basis
- VERIFIED — national municipal volume 6.96 Mt/yr and its four-way split; displaced landfill stream 1.28 Mt/yr; FWDC ~$149/t; 105 municipalities reliant on external treatment; 96 expansion plans; 12 in construction; 27 Capital Region plants planned. Source: KFEM survey via Eco-Business, 13 April 2026.
- VERIFIED — Ministry of Climate, Energy and Environment renamed October 2025, absorbing the energy portfolio. USD/KRW 1,356.63 on 3 September 2026.
- MODELED — Capital Region displaced volume ~1,750 t/day, scaled by population share.
- ESTIMATED — Beneficiation Fee at the floor of the quoted range; royalty and lifetime figures on Carbotura standard parameters.
- UNVERIFIED — business-site (industrial) volumes and gate rates; Korean MSW composition.
App. B
Appendix B — Selective Glossary
Beneficiation Fee (TMC Fee)
Per-tonne fee paid by the Feedstock Provider to Carbotura for the manufacturing conversion service. Quoted at $100–150/t; set at Term Sheet; escalates 2.5%/yr.
Circular Royalty™
Per-tonne payment from Carbotura to the Feedstock Provider — 120% of the current-year fee in Year 1, +1pp/yr uncapped — commencing 13 months after the first fee payment. A separate transaction from the fee.
CSA — Circular Supply Agreement
The perpetual (30-year minimum) Build-Own-Operate agreement under which committed feedstock transfers to Carbotura.
FWDC — Fully Weighted Disposal Cost
The counterparty’s all-in cost of its current route: ~$149/t for outsourced treatment in Korea.
Circular Resource certification
Korea’s statutory end-of-waste route under the 2018 Framework Act on Resource Circulation. Pursued; not a condition.
MCEE
Ministry of Climate, Energy and Environment — the regulator, renamed October 2025.
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.