CEO Report - Published in Inside Waste December - January 19 Issue.
Environment Ministers will meet for the second time this year on 7 December, following the first 2018 Meeting of Environment Ministers (MEM) in April, which was in part a response to the import restrictions driven by China’s National Sword Policy and the effects this policy has had across the Australian waste and resource recovery (WARR) industry. Key decisions derived from the April MEM include:
- Reducing waste generation, endorsing a target of 100% of Australian packaging being recyclable, compostable or reusable by 2025, and developing targets for recycled content in packaging.
- Increasing Australia’s domestic recycling capacity.
- Increasing the demand for recycled products.
- Exploring opportunities to advance waste-to-energy and waste-to-biofuels.
- Updating the 2009 Waste Strategy by year end, which will include circular economy principles.
It is time to take stock and examine what has been achieved since these decisions were announced. Now, seven (7) months may not seem like a long time, however in that time we have seen further markets close (Malaysia, Indonesia, Vietnam) and if you are an operator under continued financial stress, seven (7) months could make or break you.
Following the April MEM, we have had three (3) states step in with varying degrees of financial assistance for industry (councils and operators). This should be expected considering almost all states (except Queensland and Tasmania) have access to significant waste levy income each year. On the eastern seaboard, Victoria has approximately $600 million in waste levy reserves in the Sustainability Fund and NSW raises more than $700 million per annum from the waste levy. There is certainly no lack of funds that can be reinvested into our essential industry.
Funding helps but as we know, the money goes a much longer way with Government support and leadership, as well as appropriate policy levers.
Victoria has arguably been the most active and earnest in supporting the industry post-China, with two (2) relief packages announced to support the recycling industry, valued at a total of $37 million. The Victorian Government has also gone above and beyond all others states by announcing it would take a leadership role in creating market demand for recycled products.
Government announced a $12.4 million support package comprising $2 million of additional expenditure, $5 million additional funding for a loan scheme, together with targeted funding from the Green Industries SA budget. The Government has also offered grants for recycling infrastructure.
NEW SOUTH WALES
At first glance, New South Wales’ eye-watering $47 million recycling support package was heralded as the spark of hope industry needed. However, on closer inspection, the bulk of this package that was funded via the Waste Less, Recycle More initiative and therefore the waste levy, was not new, making it very difficult for stakeholders, including local government, to utilise the funds as they were already committed to other activities. Some of the criteria proposed by the NSW EPA also made it challenging for industry to apply to these grants. On the plus side, efforts are being made by the NSW Government to stimulate demand for recycled content through the intergovernmental agency working groups that have been established, though no tangible increase in demand or facilities have developed… Yet.
Unlike its neighbours, Queensland did not provide any financial support to industry however the Queensland Government has embarked on the development of a waste management strategy underpinned by a waste disposal levy to increase recycling and recovery and create new jobs. The State will re-introduce a $70/tonne landfill levy in March 2019. There are also strong attempts to use policy levers (levy discounts and exemptions) to incentivise the use of recycled material and make it cost competitive with virgin material. However, little has been done to establish new markets and Government has not taken the lead in the procurement of recycled material. There are grants available for resource recovery operations in Queensland although no monies have been allocated to assist in 2018. This is troubling as Queensland rolled out its Container Refund Scheme on 1 November, which will likely impact the cost and revenue models of the State’s MRFs – as we have seen most recently in NSW.
The Western Australian Government set up a Waste Taskforce in direct response to the China National Sword. As part of this announcement, the State Government urged all local councils to begin the utilisation of a three (3)-bin system - red for general waste, yellow for recyclables and green for organic waste - over the coming years to reduce contamination. While this taskforce is a step in the right direction, we are yet to see any tangible results from it or any funding for industry. In October, the WA Waste Authority released its draft Waste Strategy to 2030, which comprises a comprehensive and detailed roadmap towards the State’s shared vision of becoming a sustainable, low-waste, circular economy.
Following the MEM in April, Australia now has a new Federal Environment Minister, Melissa Price, who in October reiterated to media MEM’s commitment to explore waste to energy as part of the solution to the impacts of China’s National Sword, which is troubling (EfW is not a solution to recycling). The Commonwealth has also backed the Australian Recycling Label and endorsed the National Packaging Targets developed by the Australian Packaging Covenant Organisation (APCO), which has to date, failed to incorporate industry feedback in the development of these targets. To the Commonwealth’s credit, there has been significant coordination in reviewing the National Waste Policy, with the Department of Environment bringing together industry players and States during the review process.
The updated Policy will now go before Environment Ministers on 7 December. The Commonwealth can play a key role – one that goes beyond the development of the National Waste Policy. WMAA is supportive of the Federal Government maximising the levers it has, including taxation and importation powers, to maintain a strong, sustainable waste and resource recovery industry.
AHEAD OF MEM 2
There may be movement across Australia, with some states doing better than others, but the consensus is, progress is still taking way too long. It is evident that there are funds available in almost all States to assist with developing secondary manufacturing infrastructure, however the only way that this will really happen is if there is government leadership around mandating recycled content in Australia now, not later.
Voluntary schemes like the Used Packaging NEPM, under the auspices APCO, are not working. We have 1.6million tonnes of packaging waste in Australia, which needs to be used as an input back into packaging. Barriers to using recycled content in civil infrastructure must be identified and removed, and Government must lead in this field and prefer and purchase recycled material. A tax on virgin material should also be imposed as it is overseas. MEM must show strong leadership on this issue. Ministers have, since April, dealt directly with operators and councils that are under stress and we have a chance to create jobs and investment in Australia at a time when manufacturing is declining. Ministers have the opportunity to be leaders of today, not procrastinators – leaders of tomorrow and we are urging them to act and not just talk in December.
Chief Executive Officer
Waste Management Association of Australia