Hi, Thanks for the comment. So the design we have in mind does indeed feature a series of trays with screens to separate the larvae. I will put up some images of the design.
So to clarify, the insect process does not digest the recyclables. However if the food waste is delivered in retail packaging, there would be an initial manual step of separating the food and packaging as the food is deposited into the bioreactor. The packaging would then be collected and sent for recycling. However as all the packaging provided by the manufacturer would presumably be recyclable, then this would mean that 100% of that would be recycled in this proposal.
In the EU the use of insect products in animal feed is restricted, but is under review, and is likely to be relaxed in the near future. The European Food Safety agencies report on the risk profiles of various species of insects is here; http://onlinelibrary.wiley.com/doi/10.2903/j.efsa.2015.4257/epdf
There are a variety of studies listed which supplement animal and fish feed at different levels, ranging from 1.25% to 75% of the total. I quoted the 2% study because it seems a reasonably conservative level at which to introduce additives to food that we are going to eat. Reading it again, I am going to re-write that part of the idea to better match the results from the study, as "improves the health and vitality" seems a far fetched claim on reflection.
I will also add some detail to the proposal comparing the environmental impact of insect protein production versus the existing processes based on the information in those studies.