compost facility / Anon_Wangkheeree, ShutterstockCalifornia’s recycling and organics processing infrastructure is getting an upgrade thanks to a recent budget agreement awaiting the governor’s signature.

AB 1613 calls for a portion of the money earned from cap-and-trade allowances to be spent on initiatives that help reduce greenhouse gas emissions. The legislation earmarks $40 million for CalRecycle to improve organics processing infrastructure and recycled content manufacturing.

The money will be distributed via grant programs.

Sixty percent of annual cap-and-trade proceeds is reserved for public transit, affordable housing and other programs per state law. AB 1613 allocates $900 million of the remaining funds and puts $462 million in a savings program.

The state’s cap-and-trade program sets limits, or caps, on greenhouse gas emissions. Industries are allowed a certain amount of emissions each year, and if they pollute less than the limit, they are allowed to trade or sell any remaining allowances. The State of California holds quarterly auctions from an allowance reserve.