Compost Manufacturing: North American Industry Classification System (NAICS) Update - START USING 325315

Back in 2020, the Census Bureau performed their triannual call for public comment and revisions in the NAIC's codes. Within the Census Bureau, there is a separate committee that reviews these requests called the Economic Classification Policy Committee (ECPC). The past NAICS designation for Composting Manufacturing was 325311-Nitrogenous Fertilizer Manufacturing. This old code did not account for all the feedstocks used in the compost manufacturing process and is related exclusively to the manufacturing of nitrogenous fertilizer materials and mixing ingredients into fertilizers. The old code did mention manufacturing from sewage or animal waste but fell short when the Corresponding Index Entries (CIE) excludes compost with reference to Fertilizers, Natural Organic (Except Compost), Manufacturing. The CIE makes it clear that this old code is for the manufacturing of nitrogenous fertilizers such as ammonia, nitric acid and urea. Another old NAICS code 325314-Fertilizer (Mixing Only) Manufacturing that has been used in the past is also confusing because mixing should not be coupled with the actual manufacturing of raw materials that are combined into fertilizer mixes. So, that designation code was not appropriate for Compost Manufacturing either because compost should not be categorized as a fertilizer and, in most cases, compost products are not registered as fertilizers. Also, because Compost Manufacturing does not have a standalone code, it has been difficult to gather specific industry economic data and statistics. These statistics are vital to a growing manufacturing industry in order to build infrastructure.

Request for New Designation:

In April of 2021, the USCC requested the ECPC to alter the classification definitions to include Compost Manufacturing as a new and distinct stand-alone code under Manufacturing. We proposed that multiple North American Product Classification System (NAPCS) codes be linked to capture all products and services that the industry provides. If the proposal was accepted, these designations would  provide both validation and recognition of the Composting Manufacturing Industry's contribution and relevance to the North American economy. 

Federal Register / Vol. 86, No. 125

In August of 2021, the USCC submitted a letter to the ECPC, during the comment period requesting that Compost Manufacturing be moved to the All Other Miscellaneous Manufacturing category, for obvious reasons. The letter contained a detailed description of the compost manufacturing process and the process of synthetic chemical fertilizer manufacturing, pointing out that nowhere in the process are chemicals use to make compost. The USDA and the Department of Commerce also requested that the ECPC create a new category titled Bio-Manufactured Products for products that are manufactured in their bio-based program. This would be a better and more suited category for Compost Manufacturing. Both of these requests were denied by the committee.

Federal Register / Vol. 86, No. 242 

The link below contains the latest update from the Office of Management and Budget (OMB), in cooperation with the Economic Classification Policy Committee (ECPC), published the ECPC recommendations for changes to NAICS for 2022 in the following notice in the Federal Register: 

North American Industry Classification System (NAICS) Updates for 2022; Update of Statistical Policy Directive No. 8, Standard Industrial Classification of Establishments; and Elimination of Statistical Policy Directive No. 9, Standard Industrial Classification of Enterprises (86 FR 35350-35365): https://www.census.gov/naics (under "Federal Register Notices") 

The old NAICS code is Fertilizer Mixing-325314 and the new code is Compost Manufacturing-325315. The good news is we now have our own separate title code, which means the Census Bureau will now track our economic data separately. The bad news is we are still in the category of Chemical Manufacturing.

Our gain is significant but we will need to continue to work with other bio-based products manufacturers and supporting organizations to prepare a better case in two years to be able to move Compost Manufacturing out of the chemical manufacturing umbrella and into a more appropriate category like Bio-Based Manufacturing. Having a more environmentally-friendly code could help our members in the areas of zoning, liability insurance, workman compensation insurance and funding from institutions.

Compost manufacturers should start using 325315 in all locations.