Biodegradable Waste in Compost Production: A Review of Its Economic Potential

Abstract

This study explores the economic benefits and challenges associated with biodegradable waste composting, highlighting its role in promoting sustainability through a circular economy framework. We reviewed the relevant literature and found 160 articles for this study, including the keywords “Biodegradable waste”, “Compost production”, and “Economic Potential”. Considering quality studies, we employed the PRISMA technique to conduct a comprehensive data synthesis and evaluate 89 articles for the final review. Our findings highlight that composting offers significant advantages, including waste reduction, cost savings in waste management, carbon credit, a source of nitrogen, job creation, and reduced reliance on synthetic fertilizers. Further, it supports environmental sustainability by improving soil health, mitigating greenhouse gas emissions, and reducing landfill use. However, challenges such as high upfront costs, quality control, and market competition with chemical fertilizers remain barriers to widespread adoption. The study extends the literature by emphasizing that the integration of composting into a circular economy can foster innovation, enhance local economies, and contribute to climate change mitigation. Furthermore, it offers a promising pathway for advancing sustainability. Future research should focus on improving composting technologies, optimizing their applications, and developing stronger policy frameworks to ensure the successful implementation of biodegradable waste composting practices.

1. Introduction

Biodegradable waste management is a critical component of sustainable development, given the rising global population and the corresponding increase in waste generation [1,2]. In response to Resolution 2/7 from the second session (UNEP/EA.2/RES.7) of the United Nations Environment Assembly and reaffirmed in Resolution 4/7 from its fourth session (UNEP/EA.4/RES.7), the Global Waste Management Outlook offers an updated assessment of global waste management [3]. According to the International Solid Waste Association, Global Waste Management Program [3], municipal solid waste generation is projected to increase from 2.1 billion tons in 2023 to 3.8 billion tons by 2050. In 2020, the global direct cost of waste management was estimated at USD 252 billion; however, when accounting for the hidden costs associated with pollution, adverse health effects, and climate change resulting from inadequate waste disposal practices, this figure rises to USD 361 billion. Biodegradable waste, which includes food scraps, agricultural residues, yard trimmings, and other organic matter, is a significant portion of municipal solid waste [4,5,6]. When disposed of improperly, this waste contributes to environmental degradation, including greenhouse gas emissions, pollution, and the occupation of valuable landfill space [7]. However, rather than being a burden, biodegradable waste represents a valuable nitrogen resource that, when processed correctly, can be transformed into nutrient-rich compost [8,9].

Composting offers a sustainable waste management solution that not only mitigates the negative environmental impacts of landfilling but also provides numerous economic benefits [10]. Converting biodegradable waste into compost is especially relevant in the current global context, where there is increasing demand for sustainable and organic farming practices [4,11,12]. Nitrogen-rich biodegradable waste improves soil structure, enhances water retention, and introduces beneficial micro-organisms to the soil, all of which promote healthier crop growth [13]. This practice provides a sustainable alternative to chemical fertilizers, aligning with eco-friendly agricultural practices [14]. With these benefits, composting can drive substantial economic gains across the waste management and agricultural sectors, providing an impetus for policymakers, industries, and local governments to invest in composting infrastructure.

From an economic perspective, composting biodegradable waste offers advantages [15,16] at multiple levels. Firstly, composting can lead to significant cost savings for municipalities by reducing the need for landfill space and the costs associated with waste collection and disposal [17]. For the agricultural sector, compost represents a cost-effective, sustainable substitute for chemical fertilizers, potentially lowering input costs for farmers [18,19]. Additionally, as composting initiatives expand, they create job opportunities in collection, processing, and distribution, stimulating local economies and supporting green job growth [20]. For instance, BioCycle [21] in Minnesota, the Minnesota Composting Council in 2014 has created approximately 700 jobs and contributed an estimated USD 148 million to the state’s economy. Additionally, the Institute for Local Self-Reliance reports that local compost use could support almost 1400 new full-time jobs in Maryland, paying wages ranging from USD 23 million to USD 57 million [22]. Moreover, in the Iowa Department of Natural Resources, diverting compostable materials from landfills could save nearly USD 100 million, and highlighting and diverting these materials could save nearly 1.5 million tons of landfill space, create over 19,000 jobs, and generate substantial revenue [23].

Furthermore, the production of compost from biodegradable waste has export potential, especially as the demand for organic agricultural products rises globally [24]. This presents an opportunity for countries, particularly those with abundant agricultural waste resources, to develop and promote compost as an export commodity [25]. Composting initiatives can also attract government grants, tax incentives, and other forms of funding geared toward sustainable waste management practices, which can help offset initial investment costs and improve profitability. Globally, over 1.3 billion tons of biodegradable waste is generated annually, with marked variations in how different regions manage this waste [26]. At the same time, countries face challenges due to insufficient infrastructure and large-scale agricultural production. Research on biodegradable waste exhibits a mixed approach, as progressive states make significant advances in this area while underdeveloped states lag due to inconsistent regulations and infrastructure. This global landscape underscores the need for tailored waste management strategies to address the diverse sources and quantities of biodegradable waste effectively.

This review examines the economic aspects of using biodegradable waste for compost production, including cost savings in waste management, potential revenue from carbon credits, nitrogen enrichment for soil fertility, reductions in agricultural input costs, job creation, and market opportunities. By analyzing these factors, this review aims to provide a comprehensive understanding of how composting biodegradable waste can contribute to both environmental sustainability and economic resilience, creating a robust foundation for circular economy models that maximize resource efficiency and minimize waste.

2. Methodology

This section describes the systematic approach adopted to examine the role of biodegradable waste in compost production. We used PRISMA, which helps to statistically synthesize, screen, and identify the relevant literature. Using certain keywords like “Biodegradable waste”, “Compost production”, and “Economic Potential”, we captured the multifaceted nature of our used variables. For visual representation, Figure 1 presents a word cloud and shows the overview of the reviewed literature. We extracted data from the reliable source Web of Science (WOS) database using Boolean operators for filtering. For the initial review, 160 articles were identified from 2000 to 2024. After screening and removing irrelevant studies, we selected 89 articles that were most relevant to our research objectives. Appendix A further presents the details of the selected articles for this study. Further, the PRISMA process flow chart is presented as illustrated in Figure 2.

3. Review of Biodegradable Waste

3.1. Types of Biodegradable Waste

Biodegradable waste refers to organic materials that can naturally decompose through the action of micro-organisms, such as bacteria and fungi, or other biological processes [27,28]. These materials break down into simpler organic or inorganic compounds, like carbon dioxide, water, methane, and mineral salts, within a relatively short time under natural conditions [29]. Biodegradable waste is primarily derived from plants, animals, or other organic sources and is often considered a renewable resource [30]. Key characteristics of biodegradable waste include its organic composition [31]—primarily made up of carbon and hydrogen [32]—its ability to decompose under suitable environmental conditions (such as moisture, temperature, and microbial activity) [33,34], and its renewability, as it can be cycled back into ecosystems, replenishing soil nutrients or serving as raw materials for energy production [11].

Biodegradable waste includes a wide variety of materials that, when managed effectively, can offer significant environmental and economic benefits. Through methods such as composting, anaerobic digestion, and other waste-to-resource technologies, biodegradable waste can be converted into valuable products like fertilizers, bioenergy, and soil conditioners, supporting a sustainable circular economy (Table 1).

Table 1. Classification of biodegradable waste based on its source and composition.

Waste		Material	Importance	References
Agricultural waste		Crop residues (e.g., wheat straw, rice husks), animal manure, spoiled grains, and unused parts of fruits and vegetables	Source of compostable material that can be converted into biogas or fertilizers	[35]
Food waste		Fruit and vegetable peels, leftover meals, coffee grounds, eggshells, and expired food products	High potential for composting and energy recovery via anaerobic digestion	[36]
Garden and yard waste		Grass clippings, leaves, tree branches, flowers, and weeds	Yard waste is commonly used in compost production due to its high carbon content and balancing nitrogen	[37]
Animal waste		Livestock manure, poultry litter, and pet waste	Animal waste is rich in nutrients and is often used as a natural fertilizer in agriculture	[38]
Paper and cardboard		Newspaper, cardboard boxes, office paper, and packaging materials	Waste paper can be composted or recycled into new paper products	[39]
Sewage and human waste		Sewage sludge, graywater, and biodegradable cleaning products	The proper treatment of human waste can produce biosolids for soil enrichment and biogas for energy production	[40]
Industrial biodegradable waste		Waste from food processing industries, organic by-products from breweries, and pulp from paper mills	Industrial biodegradable waste has significant potential for biogas production	[30]
Forestry waste		Wood chips, sawdust, tree bark, and stumps	Forestry waste is a common input for bioenergy production and soil amendments	[41]
Medical biodegradable waste		Cotton swabs, bandages, and biodegradable medical tools	Biodegradable medical waste can be composted under controlled conditions	[42]
Marine organic waste		Dead seaweed, fish processing waste, and discarded shellfish	Marine organic waste can be used for producing compost or as an input in biorefinery processes	[43]

Table 1. Classification of biodegradable waste based on its source and composition.

Waste		Material	Importance	References
Agricultural waste		Crop residues (e.g., wheat straw, rice husks), animal manure, spoiled grains, and unused parts of fruits and vegetables	Source of compostable material that can be converted into biogas or fertilizers	[35]
Food waste		Fruit and vegetable peels, leftover meals, coffee grounds, eggshells, and expired food products	High potential for composting and energy recovery via anaerobic digestion	[36]
Garden and yard waste		Grass clippings, leaves, tree branches, flowers, and weeds	Yard waste is commonly used in compost production due to its high carbon content and balancing nitrogen	[37]
Animal waste		Livestock manure, poultry litter, and pet waste	Animal waste is rich in nutrients and is often used as a natural fertilizer in agriculture	[38]
Paper and cardboard		Newspaper, cardboard boxes, office paper, and packaging materials	Waste paper can be composted or recycled into new paper products	[39]
Sewage and human waste		Sewage sludge, graywater, and biodegradable cleaning products	The proper treatment of human waste can produce biosolids for soil enrichment and biogas for energy production	[40]
Industrial biodegradable waste		Waste from food processing industries, organic by-products from breweries, and pulp from paper mills	Industrial biodegradable waste has significant potential for biogas production	[30]
Forestry waste		Wood chips, sawdust, tree bark, and stumps	Forestry waste is a common input for bioenergy production and soil amendments	[41]
Medical biodegradable waste		Cotton swabs, bandages, and biodegradable medical tools	Biodegradable medical waste can be composted under controlled conditions	[42]
Marine organic waste		Dead seaweed, fish processing waste, and discarded shellfish	Marine organic waste can be used for producing compost or as an input in biorefinery processes	[43]

3.2. Sources and Quantities of Biodegradable Waste Globally

Globally, the sources and quantities of biodegradable waste vary significantly based on economic activities, population density, and waste management practices, with notable examples from Asia, Europe, and the United States [24,44]. In Asia, where agricultural economies dominate, a substantial proportion of biodegradable waste comes from crop residues and food waste [45]. For example, India generates over 350 million tons of agricultural waste annually, including rice husks and wheat straw, much of which remains unmanaged or is burned, contributing to air pollution [46]. Urban areas like Delhi and Mumbai add to the burden, producing thousands of tons of food waste daily [47]. Similarly, China, as the largest agricultural producer, generates over 900 million tons of crop residues annually, with only a portion utilized for bioenergy and composting [48]. Countries like Japan and South Korea have advanced systems for managing food waste, with South Korea recycling over 95% of its 5 million tons of annual food waste into animal feed and compost through rigorous policies [49]. However, less developed systems in nations like Bangladesh and Indonesia face challenges in waste segregation and processing.

In Europe, the management of biodegradable waste is far more advanced due to stringent environmental policies and efficient waste management systems. Germany processes approximately 12 million tons of biodegradable waste annually through separate collection systems that enable composting and biogas production [50]. Italy also generates significant amounts of biodegradable waste, particularly food waste, which is effectively diverted to composting or redistribution through innovative municipal programs in cities like Milan [51]. France, producing about 10 million tons of food waste annually, has enforced regulations banning supermarkets from disposing of unsold food in landfills, redirecting waste to food banks and composting facilities [52]. In Eastern Europe, countries such as Poland are making strides toward better waste management, processing about 5 million tons of biodegradable waste annually, though rural areas still face challenges in implementing effective systems [53].

In the United States, biodegradable waste primarily originates from food waste and yard trimmings, which together constitute about 30% of municipal solid waste. According to the Environmental Protection Agency (EPA), the US generates approximately 63 million tons of food waste annually, but only a small fraction, around 4%, is composted [54]. However, progressive cities like San Francisco have implemented mandatory composting programs, achieving landfill diversion rates exceeding 80% [55]. Agricultural regions, particularly California, produce vast amounts of crop residues and animal manure, contributing to the state’s annual generation of over 100 million tons of agricultural waste. While California has leveraged this waste for bioenergy and compost, other regions in the Midwest still struggle to utilize large quantities of crop residues effectively [56]. Additionally, industrial food processing plants, breweries, and dairy farms across the US contribute significant amounts of biodegradable by-products, with ongoing efforts to convert these into bioenergy and compost.

4. Economic Benefits of Composting Biodegradable Waste

4.1. Cost Savings in Waste Disposal

The economic benefits of composting biodegradable waste are evident worldwide, as it significantly reduces landfill and incineration costs while promoting sustainability. In China, cities like Beijing and Shanghai have implemented large-scale composting initiatives to manage food and agricultural waste cost-effectively. Shanghai’s pilot projects divert food waste from households and restaurants, lowering landfill expenses, which in China range from USD 25–USD 40 per ton [57,58]. Similarly, Japan’s waste separation policies encourage biocomposting technologies, with cities like Kobe and Kitakyushu utilizing advanced fermentation methods to reduce waste disposal costs. Tokyo’s supermarket and school composting programs save millions of yen annually while supporting sustainable agriculture [59,60,61]. In San Francisco, composting diverts over 200,000 tons of organic waste annually, avoiding landfill tipping fees of USD 55 per ton and saving the city approximately USD 11 million per year [62,63].

European cities have also successfully integrated composting into their waste management systems. Milan, Italy, processes 130,000 tons of food waste annually, saving an estimated EUR 30 million in landfill costs, given the high tipping fees of EUR 70–EUR 120 per ton [64,65]. The compost generated reduces reliance on chemical fertilizers, benefiting agricultural producers. In India, decentralized composting in cities like Pune and Bangalore has lowered municipal waste management expenses. Pune’s SWaCH co-operative diverts organic waste to composting units, saving INR 5 crores (~USD 600,000) annually in landfill and transportation costs, while Bangalore’s neighborhood composting programs enhance community involvement in waste management [66,67,68].

South Korea’s pay-as-you-throw system incentivizes composting by charging households and businesses based on the weight of their food waste. This approach helps divert over 5 million tons of food waste annually, generating millions in landfill cost savings while producing compost that reduces fertilizer expenses in the agricultural sector [69,70]. Kenya’s composting initiatives, supported by international organizations, have lowered waste disposal costs and enhanced agricultural productivity [71]. The studies from different regions make composting a viable economic and environmental solution.

4.2. Revenue from Compost Sales

Revenue from compost sales depends on market demand, pricing strategies, and the quality of compost produced, which varies significantly across regions due to differing agricultural practices, waste management policies, and awareness about sustainable farming methods. Compost, as a natural fertilizer and soil conditioner, is increasingly valued in regions focusing on sustainable agriculture, organic farming, and environmental conservation.

In Europe, compost has a strong market, driven by regulations promoting organic waste recycling and the growing popularity of organic farming [72,73]. Germany, one of the leaders in compost production, processes approximately 12 million tons of organic waste annually [74]. The revenue supports municipalities, covering operating costs and sometimes turning a profit. For example, the city of Kassel, Germany, earns substantial revenue from compost sales, which is reinvested into expanding composting facilities and research [75].

The United States sees similar trends, particularly in states like California, where organic waste diversion is mandated by law. Compost prices range from USD 25 to USD 70 per cubic yard, depending on quality and nutrient content [76]. Large-scale composting companies like Recology in San Francisco generate millions in annual revenue by selling compost to vineyards, farms, and landscapers [77]. The state’s focus on reducing methane emissions from landfills further increases compost demand, making it a viable revenue source for waste management firms. Composting programs save municipalities money [78]. New York City spends over USD 336 million annually on trash removal, with much of it directed to landfills in neighboring states. Implementing a municipal composting program could potentially save the city up to USD 100 million each year. Middlebury College in Vermont reported saving USD 100,000 on landfill fees in 2011 by composting 90% of the food waste generated on campus [79]. Meanwhile, China is rapidly developing compost markets. Pilot projects in cities such as Shenzhen have shown that composting not only reduces landfill dependency but also creates a valuable agricultural product [80]. Farmers purchase compost at subsidized rates, supported by government incentives to promote sustainable farming practices. Similarly, Japan integrates composting with its stringent waste management policies, with high-grade compost fetching premium prices due to its use in organic farming and urban landscaping [81].

In India, the market for compost is growing, driven by government programs like the Swachh Bharat Mission, which encourages compost production from municipal solid waste. Compost prices range from INR3000 to INR 5000 per ton, with demand particularly high in regions with extensive agricultural activity [82,83]. Companies like Eco-Compost generate significant revenue by supplying compost to farmers and fertilizer companies [84]. However, the sale of compost offers a lucrative revenue stream while addressing waste management challenges. The pricing and demand depend on regional agricultural practices, the quality of compost, and governmental support. By aligning compost production with market demand and supporting policies, regions can optimize revenue generation while promoting sustainable practices.

4.3. Fertilizer Replacement Value

Composting biodegradable waste provides significant fertilizer replacement value, offering a sustainable and cost-effective alternative to synthetic fertilizers. Compost contains essential nutrients such as nitrogen, phosphorus, potassium, and micronutrients that are slowly released into the soil, improving soil fertility and supporting plant growth over time [85,86]. Unlike synthetic fertilizers, which can degrade soil health and lead to nutrient leaching, compost enhances soil structure, increases organic matter, and supports beneficial micro-organisms [87]. This slow-release nature of compost reduces the environmental impacts associated with synthetic fertilizers, such as nutrient runoff and groundwater contamination, while improving long-term soil health [88]. For farmers, composting also offers a cost-efficient solution by reducing reliance on expensive synthetic fertilizers. Organic waste, which is often low-cost or even free, can be composted locally, eliminating the need for costly external inputs and transportation of chemical fertilizers.

Several case studies worldwide illustrate the benefits of composting in replacing synthetic fertilizers and reducing agricultural costs. For example, in India, a project by the Indian Council of Agricultural Research (ICAR) demonstrated that rice farmers in Punjab reduced their need for synthetic fertilizers by 25–30% by using compost made from farm residues and animal waste. This substitution led to significant cost savings while improving soil structure, water retention, and overall fertility [89]. In Kenya, smallholder farmers in regions like Kisumu and Nakuru adopted composting, reducing fertilizer costs by up to 50% by using compost made from agricultural residues and manure. These farmers also saw higher-quality crops, which fetched better prices in the market [90].

In China, particularly in Shandong Province, a large-scale composting initiative was implemented to reduce reliance on synthetic fertilizers in rice and vegetable farming. Farmers in the region reported a 30–40% reduction in synthetic fertilizer use and transitioned to organic farming practices. The compost also improved soil health, increased crop yields, and reduced environmental pollution [91]. In Japan, the use of compost in rice and vegetable farming has been widespread, particularly in Nara Prefecture, where local farmers reduced synthetic fertilizer use by 25–35%. This led to lower production costs, improved soil structure, and enhanced microbial activity, benefiting long-term soil fertility [92]. Therefore, composting biodegradable waste not only reduces fertilizer costs but also contributes to environmental sustainability and long-term soil fertility.

4.4. Source of Nitrogen

Nitrogen plays a crucial role in fueling microbial activity and expediting decomposition [93]. Nitrogen-rich organic waste, such as food scraps, coffee grounds, and manure (more details are presented in Table 2), provides the necessary proteins and amino acids that support the growth of decomposing bacteria and fungi [38,94]. However, an imbalance in nitrogen levels can lead to undesirable outcomes, such as slow decomposition, excessive ammonia release, or foul odors [95]. To achieve optimal composting conditions, nitrogen must be carefully balanced with carbon-rich materials like dried leaves, straw, and sawdust [96]. The ideal carbon-to-nitrogen (C:N) ratio is around 25–30:1, ensuring a well-regulated breakdown process and maintaining the necessary heat for microbial efficiency [97].

Proper nitrogen retention strategies are essential for maximizing compost quality and efficiency. Aeration through regular turning prevents anaerobic conditions that could lead to nitrogen loss through ammonia volatilization [98]. Additionally, maintaining adequate moisture (about 50–60%) prevents the compost pile from becoming too dry, which could slow microbial activity, or too wet, which could lead to nutrient leaching [99]. The inclusion of nitrogen-rich additives such as manure or seaweed can further enhance compost quality by boosting microbial diversity and accelerating organic matter breakdown [100]. Covering the compost pile with carbon-rich materials or using biochar can also help trap nitrogen, reducing emissions and increasing soil nitrogen availability once applied [101].

By optimizing these composting techniques, nitrogen-rich biodegradable waste can be effectively transformed into nutrient-dense humus, leading to improved plant health and higher agricultural yields. Thus, utilizing nitrogen-rich biodegradable waste for composting is a sustainable and cost-effective strategy for promoting a circular green economy.

Table 2. Common nitrogen-rich biodegradable wastes, their nitrogen content, and benefits in composting.

Category	Examples	Nitrogen Content	Benefits of Composting	References
Food Scraps	Vegetable peels, fruit scraps, coffee grounds, tea leaves	Medium to High	Provides readily available nitrogen and enhances microbial activity	[102]
Grass and Yard Waste	Fresh grass clippings, green leaves, and garden trimmings	High	Decomposes quickly, boosts microbial diversity, and adds moisture	[99]
Manure	Cow, horse, chicken, rabbit manure	Very High	Rich in nitrogen and beneficial microbes; accelerates decomposition	[103]
Leguminous Plants	Alfalfa, clover, soybean residues	High	Improves nitrogen availability and balances C:N ratio	[104]
Seaweed and Aquatic Plants	Kelp, seaweed, algae	Medium to High	Provides trace minerals along with nitrogen	[105]
Protein-Based Waste	Eggshells, feathers, fish scraps	Medium	Slow-release nitrogen source, adds calcium and other minerals	[106]

Table 2. Common nitrogen-rich biodegradable wastes, their nitrogen content, and benefits in composting.

Category	Examples	Nitrogen Content	Benefits of Composting	References
Food Scraps	Vegetable peels, fruit scraps, coffee grounds, tea leaves	Medium to High	Provides readily available nitrogen and enhances microbial activity	[102]
Grass and Yard Waste	Fresh grass clippings, green leaves, and garden trimmings	High	Decomposes quickly, boosts microbial diversity, and adds moisture	[99]
Manure	Cow, horse, chicken, rabbit manure	Very High	Rich in nitrogen and beneficial microbes; accelerates decomposition	[103]
Leguminous Plants	Alfalfa, clover, soybean residues	High	Improves nitrogen availability and balances C:N ratio	[104]
Seaweed and Aquatic Plants	Kelp, seaweed, algae	Medium to High	Provides trace minerals along with nitrogen	[105]
Protein-Based Waste	Eggshells, feathers, fish scraps	Medium	Slow-release nitrogen source, adds calcium and other minerals	[106]

4.5. Carbon Credit Opportunities

Biodegradable waste presents significant opportunities for generating carbon credits, offering a sustainable and cost-effective way to mitigate greenhouse gas emissions [107]. When organic waste such as food scraps, yard waste, agricultural residues, and industrial organic waste decomposes in landfills, it produces methane, a potent greenhouse gas with a global warming potential many times greater than carbon dioxide [108,109]. However, by diverting this waste from landfills and processing it through methods like composting, anaerobic digestion, and waste-to-energy systems, methane emissions can be avoided or captured, generating carbon credits [110,111]. These credits are tradeable permits that allow companies or municipalities to offset their emissions and contribute to climate change mitigation. In composting, organic waste is converted into nutrient-rich soil and the methane that would have been released in a landfill is avoided [112], while anaerobic digestion captures methane and converts it into biogas for energy production [113]. In waste-to-energy systems, methane is captured and used to produce electricity, further reducing the need for fossil fuels [114]. Carbon sequestration also plays a role, particularly in composting, where carbon is stored in the form of stable organic matter, benefiting soil fertility and retaining CO2 over the long term [115,116].

Several real-world examples highlight the success of carbon credit generation through biodegradable waste management. In California, Bioenergy DevCo uses anaerobic digestion to process agricultural waste, such as dairy manure, capturing methane and converting it into biogas for energy production [117]. The methane captured in this process is used to generate renewable energy, reducing carbon emissions and generating carbon credits that are sold to companies seeking to offset their emissions. Similarly, New York City runs a composting program to divert organic waste from landfills, avoiding methane emissions and generating carbon credits that can be sold in voluntary carbon markets [118]. In Sweden, the Göteborg Energi Waste-to-Energy Plant processes organic waste, capturing methane for biogas and electricity production, reducing the need for fossil fuels, and generating carbon credits that contribute to the country’s climate goals [119]. In Brazil, the São Paulo Landfill Gas Capture Project captures methane from one of the largest landfills in the country, flaring or using the gas for energy production, generating carbon credits in the process [120]. These projects not only help reduce methane emissions but also provide financial incentives through the sale of carbon credits, supporting both environmental sustainability and economic development. As carbon credit markets continue to expand, biodegradable waste management presents a valuable opportunity for businesses and municipalities to reduce their carbon footprint while generating revenue through carbon credit sales.

5. Applications of Compost and Economic Impact

5.1. Agricultural Applications

The use of organic amendments such as compost, manure, biochar, and other soil conditioners has become essential for sustainable agriculture, replenishing essential nutrients like nitrogen, phosphorus, and potassium and increasing soil fertility [121,122]. Compost and decomposed manure serve as slow-release nutrient sources, promoting long-term soil fertility by fostering microbial activity and nutrient cycling [123,124]. Additionally, organic matter improves moisture retention, reducing irrigation needs, particularly in drought-prone regions [125]. By decreasing reliance on synthetic fertilizers, organic amendments lower production costs and mitigate environmental pollution, ensuring long-term sustainability [126].

Case studies worldwide demonstrate the effectiveness of organic amendments in improving soil fertility and increasing yields. In South Africa, combining manure and biochar in maize farming led to a 20% yield increase and a 30–40% rise in profitability by reducing fertilizer costs [127]. Similarly, Kenyan farmers practicing agroforestry saw a 30% yield increase in maize while significantly reducing water usage [128]. In Argentina, integrating biochar and compost into commercial farming resulted in a 20–25% rise in maize and soybean yields, while vineyards in France using compost and green manure observed a 10–15% increase in grape production [129,130].

A study conducted at an agroecological research site in Iowa comparing organic and conventional grain crop systems found that when compost was sourced on-farm, organic systems demonstrated significantly higher economic returns. However, the economic advantage diminished when compost had to be purchased at prices exceeding USD 20 per ton, highlighting the importance of on-farm compost production for cost-effectiveness in organic farming [131]. The case study part of the Defra/Waste and Resources Action Program (WRAP) “Digestates and composts in Agriculture (DC-Agri), Scotland [131]” project on the soil health advantages and financial benefits of using composts on conventional crop production evaluated the financial implications of using green compost in spring barley production. The study involved applying 17 tons per hectare of green compost and comparing the costs and benefits against traditional inorganic fertilizers. The partial budget analysis indicated that, after accounting for the financial value of the compost, its use was likely to be cost-effective, demonstrating potential savings for farmers. A horticultural operation under the control of the EPA, US [132], that incorporated compost into its soil management practices reported enhanced plant growth and yield quality. While specific financial figures were not disclosed, the overall improvement in crop performance and reduction in fertilizer costs contributed to better economic outcomes.

Further case studies highlight the economic and environmental benefits of organic amendments. In Mexico, compost and mulch applications restored degraded soils, boosting maize yields by 25–30% and cutting synthetic fertilizer use by 40% [133]. In Indonesia, biochar application improved soil fertility, leading to a 20–30% rise in rice yields while enhancing carbon sequestration [134]. Ethiopian farmers using manure saw a 30–40% increase in maize and wheat yields while reducing fertilizer dependency [135]. These examples illustrate how organic amendments improve productivity, reduce input costs, contribute to environmental benefits, such as improved soil structure, increased water retention, and carbon sequestration, and contribute to the sustainability of farming systems (Figure 3).

Moreover, the cost of compost ranging from USD 20 to USD 50 per ton, compared to manure (USD 10–USD 40 per ton), biochar (USD 300–USD 1200 per ton), and wet digestate prices range from EUR 0 to 8 per ton, while composted digestate can range from EUR 0 to 50 per ton, depending on factors like feedstock and nutrient content. Manure provides quick fertility benefits but it risks runoff, biochar improves water retention and increases crop yields by an average of 15% when combined with inorganic fertilizers, and digestate offers high nitrogen content but requires careful handling. Economically, compost yields USD 3–USD 5 in soil fertility benefits per dollar spent, making it an affordable option for long-term agricultural productivity [136,137,138].

However, the economic cost can vary based on many factors, such as location, scale, feedstock, and technological advancements. For example, a study was carried out in Jordan, analyzing sewage sludge composting in pilot reactors. Estimated capital and annual operating expenditures of the proposed composting facility were USD 1,529,243.45 and USD 2,832,491.21. The annual compost production is estimated at 12,000 tons, resulting in 66.6% compositing with an annual revenue of USD 4,062,059.25 [139]. The Tamil Nadu Agricultural University (TNAU) Agritech Portal provides average nutrient contents (N: 0.5%, P: 0.15%, and K: 0.5%) for farm compost, which can be indicative of windrow compost quality [140].

The “Feasibility and Cost Analysis of Composting Campus Dining Food Wastes” report indicates that in-vessel systems, such as those provided by Engineered Compost Systems (ECS), have low operating costs due to minimal labor and energy requirements. Compost produced through controlled in-vessel systems is generally of high quality, with the nutrient content varying based on the feedstock. While specific NPK values are not provided in the available sources, the controlled environment typically results in compost rich in essential nutrients [141]. Sherman [142] notes that compost contains essential plant macro- and micronutrients, including nitrogen (N), phosphorus (P), and potassium (K), which are mostly in slow-release, organic forms. While specific values for vermicompost are not provided, vermicomposting is known to enhance nutrient availability. The “Economic Analysis of Options for Managing Biodegradable Municipal Waste” report by the European Union suggests that anaerobic digestion facilities have capital costs that vary with scale and operational costs that can be offset by electricity sales estimated at approximately EUR 5–EUR 8 per ton [143]. Therefore, for precise planning and implementation, consulting detailed feasibility studies and current market analyses is needed.

5.2. Landscaping and Horticulture

The use of compost in landscaping and horticulture provides environmental, economic, and aesthetic benefits by enhancing soil health, reducing chemical fertilizer dependency, and improving urban green spaces [144]. Composting programs in cities like Portland and Singapore have successfully enriched park soils, lowering maintenance costs and supporting sustainable gardening [145,146]. Additionally, compost aids in stormwater management, carbon sequestration, and mitigating urban heat island effects. In Melbourne, composting enhances urban agriculture, while in Cuba, it reduces reliance on costly fertilizers, promoting local food production [147,148].

Composting also contributes to economic growth by creating jobs in waste management and compost production. Johannesburg converts organic waste into compost for city green spaces, improving soil quality while supporting local employment [149]. Community composting initiatives in New Zealand further promote self-sufficiency and environmental sustainability [150]. By diverting organic waste from landfills, composting reduces disposal and maintenance costs, generates high-quality soil amendments, and creates resilient landscapes that benefit public and private landscapes (Figure 4).

Globally, composting has proven to be an effective tool in both urban and rural settings. The Royal Parks of London have incorporated composting as part of their landscaping program, diverting organic waste from landfills and using compost to enrich park soils [151]. Similarly, Los Angeles has implemented a composting program that processes organic waste into compost, which is used in the city’s parks and public gardens. The program reduces maintenance costs, water usage, and the need for synthetic fertilizers while helping the city meet its waste diversion and sustainability goals [152]. The widespread adoption of composting in landscaping and horticulture supports sustainability goals, including waste reduction, carbon emission mitigation, and long-term urban resilience. By integrating composting into landscape management, municipalities can foster greener cities while promoting environmental stewardship and economic savings.

6. Economic Challenges and Barriers to Composting

6.1. Financial and Investment Barriers

Biodegradable waste composting provides significant environmental and economic benefits, yet its adoption faces financial and investment barriers, mainly due to high upfront costs, financing constraints, and operational expenses. Establishing composting facilities requires substantial capital for infrastructure such as composting bins, shredders, aeration systems, and anaerobic digesters, which can be prohibitive, particularly in developing regions. Securing financing is another challenge, as investors may hesitate due to uncertain returns and fluctuating compost demand [153,154]. While governments and international organizations offer financial support, these programs are often limited, and financial institutions may be reluctant to provide loans for composting initiatives.

According to USDA’s Composting and Food Waste Reduction Cooperative Agreements [155], the US Department of Agriculture offers co-operative agreements to assist local and municipal governments in developing and implementing strategies for composting and food waste reduction. These agreements focus on increasing access to compost for agricultural producers, improving soil quality, and promoting innovative waste management plans that divert food waste from landfills. The EPA, US, has enacted regulations to promote composting in several US states by implementing restrictions on landfill disposal of organic materials like yard trimmings and food waste, affecting both large and small waste generators [63]. Adams [156] introduced Legislation in October 2023 “Supporting Urban and Innovative Farming Act (H.R. 5915)”. This legislation seeks to enhance the USDA’s Office of Urban Agriculture and Innovative Production. It promotes food waste reduction by supporting urban agriculture initiatives, funding large-scale composting projects, and developing food waste-to-energy operations. In 2022, Colorado enacted the Producer Responsibility Program for State-wide Recycling Act (House Bill 22-1355) [157], establishing an extended producer responsibility (EPR) program for packaging and paper products. This legislation aims to enhance waste diversion and promote recycling and composting initiatives across the state. Australia has seen inconsistent compost market development due to competition and pricing concerns [158].

The major barrier in the implementation of the composting process is the long-term return on investment (ROI), as financial benefits from composting—such as soil enhancement, waste reduction, and carbon sequestration—often take years to materialize. Market instability for compost products further complicates financial sustainability, as inconsistent demand affects business profitability. In regions where organic waste is not properly separated, additional collection and transportation costs arise, increasing economic challenges. Even with government incentives, such as those in the European Union, where grants and support encourage composting investment, the high start-up costs and slow ROI remain deterrents [159]. Addressing these financial obstacles through targeted subsidies, compost market development, and increased awareness of compost benefits can improve the economic viability of composting, particularly in regions facing soil degradation and fertilizer shortages. Countries with surplus compost production can explore export opportunities, contributing to economic growth.

6.2. Quality Control and Standards

Quality control and standards are essential for ensuring that compost from biodegradable waste meets regulatory requirements and remains safe for agricultural and horticultural use. Proper quality management prevents contamination by pathogens, heavy metals, and harmful chemicals while ensuring that the compost retains essential nutrients [160]. Composting must be conducted under specific conditions, including maintaining temperatures of 55–65 °C to eliminate pathogens and weed seeds [161]. Postcomposting processes, such as curing and aging, further stabilize the compost, improving its texture and nutrient profile [162]. Various regions implement strict regulatory frameworks to maintain compost quality. The EU Fertilizing Products Regulation enforces limits on heavy metals and ensures nutrient balance [163], while the US Composting Council’s Seal of Testing Assurance (STA) program mandates independent testing to guarantee pathogen-free, high-quality compost [63]. The certification also helps build consumer confidence by ensuring that compost products are free from pathogens, weed seeds, and contaminants. Producers who participate in this program are required to submit regular test results from independent laboratories to verify compliance with the standards. Similarly, India’s Bureau of Indian Standards (BIS) outlines set standards to ensure the quality of compost, though enforcement challenges persist in some areas [164].

Maintaining high compost quality has significant economic and environmental implications. Substandard compost can result in reduced crop yields, environmental contamination, and decreased consumer trust [165]. Strict adherence to quality control standards ensures compost effectiveness as a soil amendment while preventing pollution risks, such as groundwater contamination from heavy metals. Furthermore, compliance with international standards, such as the European commission [166] sets strict limits for contaminants like heavy metals (such as lead, cadmium, and mercury) and ensures that the compost meets certain levels of organic matter and nutrient content, including nitrogen, phosphorus, and potassium. It will facilitate market expansion and consumer confidence in compost products. While challenges in enforcement and monitoring remain in some regions, continued investment in compost quality assurance can strengthen the global composting industry.

7. Case Studies and Examples of Composting Initiatives

7.1. Municipal Composting Programs, Examples from Different Countries

Municipal composting programs are essential in managing organic waste, reducing landfill dependency, and producing valuable compost for agricultural and horticultural applications. In East London, the initiative was taken in the City Soil Lab, which was established to convert food waste into nutrient-rich soil using fermentation composting [167]. Michelle Hammontree published an article in Miami Community News, “Pinecrest and Miccosukee Tribe Launch Ground-breaking Everglades Collaboration”, highlighting the Everglades Earth Cycle Project in Pinecrest, Florida, which is a collaborative initiative aimed at repurposing food scraps to enrich the soil of the Everglades and support local gardens. Funded by a USD 400,000 grant from the US Department of Agriculture (USDA), along with additional contributions from the Miami-Dade County Commissioner’s office and community partners, this project seeks to transform organic waste into nutrient-rich compost [168].

Countries like China, the United States, South Korea, Japan, and Germany have implemented successful municipal composting initiatives, each addressing unique challenges and showcasing the potential of composting to contribute to sustainability. In China, one of the most notable examples is Shanghai’s organic waste composting program, which began in the early 2000s [169]. This initiative focuses on waste source separation, composting, and utilizing the finished compost for urban landscaping and agriculture. Shanghai has expanded this program to other cities like Beijing and Shenzhen, overcoming challenges such as inconsistent waste segregation and logistical issues [170]. The success of this program has significantly reduced landfill use and methane emissions while providing sustainable alternatives to synthetic fertilizers. Further, San Francisco in the United States has set a global standard with its Zero Waste initiative supported by local legislation, which aims to divert 100% of the city’s waste from landfills by 2030. The city’s composting system processes over a million tons of organic waste annually, helping reduce greenhouse gas emissions and reliance on chemical fertilizers [171,172].

In South Korea, the Food Waste Recycling Program, launched in 2005, aims to reduce food waste through waste separation, with residents required to sort their food scraps. The collected food waste is composted or processed into animal feed and the resulting compost is used in agriculture and landscaping. South Korea has achieved a food waste recycling rate of over 95%, making it one of the most successful programs globally [173]. Moreover, Japan has implemented composting programs in cities like Tokyo, where organic waste is separated and sent to composting facilities to be processed into high-quality compost. The program focuses on public awareness and community engagement, encouraging residents to participate in waste sorting. Despite the high costs of collection and transportation, Tokyo’s composting initiative has contributed to reducing landfill usage and promoting sustainability through urban gardening and agriculture [174,175]. The Northern and Central Europe waste-to-compost system mandates the separation of organic waste, which is then processed and used in agriculture, landscaping, and forestry. These regions have high levels of public participation and strict environmental standards. Challenges such as waste segregation, logistical complexities, and public participation persist and contribute to waste management practices [176].

7.2. Private Sector and Community Initiatives

Private sector and community-led composting initiatives, often in the form of public–private partnerships or community-driven programs, foster environmental awareness and provide valuable compost for agricultural and landscaping uses. In the United Kingdom, The Real Junk Food Project (RJFP) rescues surplus food and operates community composting programs, particularly in urban areas. They work with residents, schools, and businesses to promote waste reduction and composting while providing workshops and resources for setting up local composting projects. RJFP’s community-driven initiatives, such as those in Leeds, not only reduce waste but also foster a sense of shared responsibility for the environment, contributing to local food production and sustainable urban development [177]. In Singapore, the government has created public–private partnerships to tackle food waste through initiatives like the National Environment Agency’s (NEA) Food Waste Recycling Program. The NEA collaborates with private companies like SembWaste to develop large-scale composting operations, converting food waste into organic fertilizers or biogas. This partnership helps reduce landfill waste while contributing to Singapore’s environmental sustainability goals [178].

Similarly, in Canada, the Green Business Fund has supported private sector composting initiatives, such as EarthCycle, by providing financial incentives to businesses that adopt sustainable composting practices. These initiatives, backed by government support, help companies like EarthCycle scale up operations and produce high-quality compost for agricultural use, promoting a circular economy and reducing reliance on synthetic fertilizers [179]. In Australia, the Composting Collective is a community-led initiative that works with local councils and private companies to provide households and businesses with composting bins and educational resources. This program helps reduce organic waste and engages communities in waste management efforts [15]. These private sector and community-led initiatives highlight the potential of collaboration between local governments, businesses, and residents to address waste management challenges and promote sustainability. Involving both private entities and local communities contributes to sustainable local economies, showcasing the power of co-operation in achieving environmental goals.

8. Future Perspectives

8.1. Emerging Technologies in Composting

The future of composting is being reshaped by emerging technologies designed to reduce costs, improve efficiency, and enhance the quality of compost produced. Advanced biodegradable waste-sorting technologies, including robotic sorting systems powered by artificial intelligence (AI) and near-infrared spectroscopy (NIR), are revolutionizing waste separation. These innovations help reduce contamination, improving the quality of compost produced. Optical sorting systems further enhance sorting efficiency by using lasers and cameras to separate organic waste from noncompostable materials [180]. Integrating anaerobic digestion with traditional composting is another promising development as it allows for the production of biogas alongside compost. This two-stage process maximizes waste diversion, reduces greenhouse gas emissions, and provides additional revenue from energy production [181,182].

Technological advances in composting, such as aerated static pile systems, in-vessel composting, and biochar-enhanced composting, have improved efficiency, reduced processing time, and enhanced compost quality [183]. Implementing the composting advance technologies following the Circular Economy Model tends to add cumulative net revenue of SAR 1626 to the national economy of the Kingdom of Saudi Arabia in 2030 and reduce 0.043–0.076 metric tons of CH₄ emission [184]. Technological advancements in thermophilic composting are also gaining traction, where high temperatures generated during the decomposition process accelerate organic matter breakdown and kill pathogens [185]. The use of solar thermal systems and heat exchangers in these high-temperature systems makes composting more energy-efficient, especially in colder climates [186]. Digital platforms and data analytics are playing an increasingly important role in optimizing composting operations. These tools allow composting facilities to monitor critical parameters remotely, improving operational efficiency and product quality [187]. Platforms that use blockchain technology are also being explored to track compost from production to end-use, ensuring transparency and quality control [188].

The contamination of compost by emerging organic pollutants (EOPs)—including antibiotics, endocrine disruptors, hormones, and microplastics—poses a significant limitation in waste composting [189]. These pollutants can persist in compost, disrupt soil microbial communities, accumulate in crops, and pose risks to human and environmental health [190]. Advanced treatment methods like thermophilic composting, biochar addition, and microbial degradation can help mitigate these risks but further research is needed to establish safe composting practices and regulatory guidelines.

Finally, innovations in microbial inoculants and biological additives are enhancing the composting process by accelerating the breakdown of organic materials. These additives improve the microbial balance, increase decomposition rates, and ensure a higher-quality end product.

8.2. Policy Recommendations

To ensure the long-term success and scalability of composting initiatives, governments must implement supportive policies that promote compost production and utilization. Financial incentives, such as tax breaks, grants, and low-interest loans, can reduce the initial investment costs for composting operations, benefiting private companies and farmers. Additionally, subsidizing compost for urban gardens and community projects can encourage widespread adoption. Clear regulatory frameworks are essential to maintain compost quality, prevent contamination, and standardize processing methods [12]. Policies mandating organic waste separation and extended producer responsibility programs can further enhance composting efficiency by promoting compostable packaging and minimizing waste contamination. Public–private partnerships can play a crucial role in developing infrastructure and extending composting access to rural and agricultural regions. Providing subsidies for compost use in farming, erosion control, and carbon sequestration can encourage sustainable agricultural practices while reducing greenhouse gas emissions. Governments can also incorporate composting into climate action plans and carbon credit schemes, incentivizing its role in environmental sustainability. Furthermore, fostering international collaboration and knowledge sharing, drawing insights from countries with successful composting systems like Germany and Sweden, can enhance global composting efforts [191].

8.3. Economic Potential of Circular Economy Integration

The integration of composting into a circular economy, particularly through a closed-loop system utilizing biodegradable waste, offers immense economic potential [192]. By shifting from the traditional “take, make, dispose” model to a regenerative approach, composting minimizes waste [193]. This system significantly cuts waste disposal costs for municipalities and businesses by diverting organic material from landfills, reducing tipping fees, and conserving valuable landfill space. The financial savings from streamlined waste management operations, combined with improved efficiency, underscore the economic advantages of adopting composting as a core component of sustainable practices.

Furthermore, composting within a circular economy fosters job creation and business growth. Composting facilities, organic waste collection services, and small-scale rural initiatives create employment opportunities while supporting local economies. As demand for compost increases, opportunities in production, packaging, and distribution emerge, driving economic expansion. Public–private partnerships further support large-scale composting infrastructure, creating sustainable models for managing organic waste. Government policies, such as subsidies, tax incentives, and carbon credit schemes, play a pivotal role in encouraging investment and participation in composting initiatives. By promoting organic waste separation, ensuring compost quality, and offering environmental incentives, governments can maximize the economic and environmental benefits of composting, driving widespread adoption of circular economy principles.

9. Conclusions

In conclusion, biodegradable waste composting offers significant economic benefits and plays a crucial role in promoting sustainability, i.e.,:

• The economic advantages are evident in areas such as waste reduction, cost savings in waste disposal, job creation, and reducing the need for expensive synthetic fertilizers.
• The integration of composting within a circular economy fosters innovation, supports local businesses, and contributes to environmental protection through reduced methane emissions and improved soil health. These benefits highlight composting’s potential to create a sustainable and regenerative waste management system that generates long-term economic and environmental returns.
• Despite the clear advantages, several challenges need to be addressed. The initial costs of setting up composting infrastructure, the need for quality control and standards, market competition with chemical fertilizers, and limited public awareness remain key barriers.
• Policy frameworks and regulatory standards must be strengthened to support widespread adoption and ensure the quality of compost produced.
• Research can explore innovative ways to enhance the efficiency of composting processes, optimize the use of compost in agriculture, and expand its applications across different sectors.
• Policymakers should implement financial incentives, educational initiatives, and stronger regulations to support composting infrastructure and market development. Collaborative efforts between governments, businesses, and communities will be essential to unlocking the full potential of biodegradable waste composting, driving sustainability, and fostering a more circular economy.