New York City's fledgling composting program has hit a major snag.

The nearly two-year-old pilot project takes food scraps from about a dozen neighborhoods and 400 schools as part of an effort to reduce waste. But the facility that processed most of that organic material was shut down last month, forcing the city to send the bulk of what's picked up to landfills.

The problem stems from the highly-contaminated nature of New York City's organic waste, known in the composting industry as "feedstock."  Most composting companies are small operations that take feedstock that's relatively easy to break down, like rotting fruits and vegetables, leaves, and grass clippings.

But the Peninsula Composting Group's facility in Wilmington, Del., was more aggressive. It took that stuff and more, including discarded eggs and dead chicks from hatcheries, manure-filled animal bedding, and decaying meat and bones. The $20 million, 27-acre facility also took material that was highly contaminated with plain old garbage, using magnets to pull out metals and employees to pick out plastics and other non-organic stuff. 

In October, Delaware's Department of Natural Resources and Environmental Control refused to renew Peninsula's permit. That decision followed a public hearing that drew 200 people. Most in attendance testified against Peninsula, describing odors that were so awful they induced nausea and prevented children from playing outdoors.  

"They were saying it smelled bad, and adamant about that," said Bill Miller, an environmental program manager at the state agency.

By the state's account, Peninsula was overwhelmed. Regulators found equipment that was not working. Non-compostable residue pulled from the food and yard waste, such as plastics, metal, and plain old trash, were piled up on site above approved levels. There were standing pools of leachate, the cloudy, smelly, liquid that often trails garbage trucks. There were fires.

Peninsula's closure is a big blow to New York City. The Department of Sanitation had relied upon Peninsula's leniency, because the city's composting waste stream right now is filled with a lot of contaminants, especially plastics. Deputy Sanitation Commissioner Bridget Anderson, who oversees the composting initiative, said the department allowed people to use plastic liners in the brown bins they set at their curbsides to get them to give the program a try.

"We're stuck right now in this place where we're trying to encourage the front end behavior and also figure out how to manage the processing side," she said.  "So there's a little bit of a chicken-and-egg issue."

She said the city is looking at ways to reduce contamination, especially in the schools. Some ideas include switching to cardboard lunch trays, reducing food packaging, and buying compostable utensils made of cornstarch instead of plastic. But those procurement changes will come slowly. In the meantime, Anderson said, the Sanitation Department is leaning on several other smaller compost processors in Dutchess County and in Connecticut to take the gunk that was going to Peninsula.

"But it is true that some of this material is too contaminated to go to these other facilities," she concedes.

And that means it will go to landfills.