EVERETT — Cedar Grove Composting will have to undergo the most thorough type of environmental study required if it wants to continue to pursue building an anaerobic digester to generate electricity, the city of Everett and the Puget Sound Clean Air Agency announced Wednesday.

The decision is a setback for the composting operation on Smith Island in Everett, the target of many odor complaints the past few years.

The city and Clean Air Agency noted in a joint statement that Cedar Grove had earlier submitted, and then withdrew, a plan to more than triple its capacity to produce finished compost to 620,000 tons per year. The company later scaled back its goals and said it was not planning a large increase.

Opponents, including the city of Marysville and the Tulalip Tribes, said the potential effect of the long-term plans should be studied as part of the current project.

In the end, officials with Everett and the Clean Air Agency agreed. In their statement, they determined that the digester plan is “part of a probable full build-out of the site; that the proposal will have significant environmental impacts; and that the impacts, including cumulative impacts, should be analyzed in a single environmental document.”

The letter was signed by Allan Giffen, city of Everett planning director, and Laurie Halvorson, compliance director for the Clean Air Agency.

Earlier, the city and Clean Air Agency said the project likely would not have major environmental effects. If that decision had stuck, the project likely could have quickly moved forward. The added studies will now take more time and money.

Cedar Grove officials had little to say about the decision.

“The company is reviewing the letter (from the city and Clean Air Agency) and considering its options,” spokesman Laird Harris said in an email.

Smith Island is located in the Snohomish River estuary. The 95,000-square-foot digester project also would have required that another 170,000 square feet of the island be paved and 6 acres of wetlands filled, though the company also planned to create more than 7 acres of new saltwater marsh and other improvements.

If Cedar Grove wants to proceed, the plan will have to undergo a thorough study of its effects on the air, including odor; wetlands; fisheries; water quality; noise and traffic, according to Everett and the Clean Air Agency.

Opponents of the project applauded the decision. Marysville paid attorneys about $100,000 to collect public documents to support their case that Cedar Grove had earlier been allowed to expand its operations, and generate more odors, with little environmental review. The city and the Tulalip Tribes submitted lengthy letters to Everett and the Clean Air Agency arguing for the full environmental study.

“We’re pleasantly surprised and really glad the agencies put their heads together and looked at the whole picture,” Marysville city administrator Gloria Hirashima said. “This is the appropriate review for a major waste management facility such as Cedar Grove’s.”

Mike Davis of Marysville, founder of the group Citizens for a Smell Free Snohomish County, praised Everett and the Clean Air Agency for the decision.

“This is the first substantial step I think that they’ve taken” to rein in the composting operation, he said. “If nothing else it will bring Cedar Grove to the table with a reasonable expectation of a solution.”

Cedar Grove collects yard and food waste from hauling companies and restaurants in Snohomish and King counties, grinds it, cures it and sells it for compost.

“We’re not anti-composting — it needs to be done in a way that doesn’t impact the environment and the residents around them,” Davis said.