Key challenges and opportunities for Australia's recycling effort
Evidence received during this inquiry indicates that there are
significant challenges facing the recycling industry, with a number of
witnesses calling it a crisis. However, stakeholders recognised that some of
these challenges might be a catalyst for change that would facilitate an
improved recycling sector in Australia.
The challenges arise from a number of factors including the regulatory
environment, changes in the international market for recyclable materials, a
weak domestic market for recycled products, and a lack of investment in
A key issue that arose during this inquiry was the Chinese Government's
decision to restrict imports of 24 types of solid waste, including various
plastics and unsorted mixed papers, and the setting of more stringent standards
for contamination levels. Up until this decision, the exportation of recycled
waste to China has been a low-cost option upon which many developed countries
have relied for managing recycling. The importation restrictions are
necessitating all Australian governments and the recycling industry to
reconsider existing approaches to how recycled waste is managed.
This chapter commences the report's discussion of the current state of
Australia's recycling industry by examining the lack of end-markets for
recyclable materials, market volatility, and the recent ban imposed by China on
the importation of many types of recyclable waste. Opportunities to improve how
recycled waste is managed are then discussed, with a key focus being evidence
from stakeholders advocating the need to move from a 'linear economy' where raw
materials are used to make a product that can be discarded, to a 'circular
economy' based on recycling.
Overview of current economic conditions
Overall, there is a trend in Australians generating less municipal waste
per person with a greater proportion of the waste being recycled.
Over the period 2006–07 to 2014–15, recycling (excluding fly ash) grew by 32
per cent. This growth rate of 1.6 per cent per year outstripped the average
annual population growth of 1.5 per cent.
As noted by Lake Macquarie City Council, it appears that Australians are more
likely to be enthusiastic recyclers than they are at seeking to avoid waste
generation—accordingly, the increasing amounts of material generated for
recycling is placing the recycling industry under pressure.
During this period of growth in recycling, practices in Australia's
recycling sector have been influenced by a lack of domestic markets for
recycled products, market volatility and the export of recycled waste.
Several submitters highlighted the lack of local demand for recyclable
materials. They explained that this has contributed to poor economic conditions
in the recycling industry and resulted in unsustainable practices, such as
stockpiling and export to overseas markets. For example, the Hunter Joint
Organisation of Councils, which represents ten councils in the Hunter/Central
Coast Waste Region of New South Wales, submitted that in its region, there is
'limited reprocessing infrastructure...for dry recyclables, with two MRF [material
recovery facilities] facilities taking materials from almost 1 million
residents'. As the local and regional markets for recycled materials are
'relatively immature', it advised that 'a large proportion of dry recyclables
are sent overseas for recycling'.
Similarly, Maitland City Council submitted that the 'markets for most
recyclables in Australia are unable to absorb the quantity of material
collected'. As a result, unstainable practices such as stockpiling and export
to overseas markets are occurring.
The NWRIC also submitted that it considers that the markets for glass, soft
plastic and end of life tyres 'are under stress...or have failed'.
The reliance on export to overseas markets, and in particular China, was
raised in evidence. It was noted that China has in the past provided a stable
market for Australian recyclable materials. Mr Tony Monaco, National Finance
and Administration Manager, Visy Recycling, explained:
The growth of China as a market over the last 20 years has
provided a large and steady outlet for the sale and re-use of recyclable
commodities. Australian kerbside recyclers have, to a greater or lesser extent,
relied on this outlet.
Mr Tony Khoury, Executive Director, Waste Contractors and Recyclers
Association of NSW (WCRA), also commented on the reliance on the Chinese market
and lack of local markets. Mr Khoury stated that 'for a number of years, our
members have expressed concern about both the reliance on exporting material to
China that has high contamination levels and the fact that there have been no
local markets for glass.
This lack of local demand is largely influenced by cost considerations.
For example, the South Australian Government highlighted the impact of
commodity prices for imported materials (both virgin and recovered) relative to
the prices for local recovered material on the domestic market for recycled
product. It submitted that where imported products can be purchased more
cheaply than products produced using locally recovered material, there is
likely to be a detrimental impact on local businesses.
Similarly, the financial viability of recycling depends on whether material
recovery facilities (MRFs) can obtain a better price than the cost of landfill.
Local Government NSW explained:
Kerbside recycling is processed at 48 material recovery
facilities (MRFs) across NSW. At these facilities, co-mingled recycling is
sorted into various products either to be processed on site or sent off site
for processing or re-use. Some of the sorted recycled material can be sold, and
in some cases the MRF will pay for another facility to process it. However, as
long as the MRFs receive a better price than the cost of landfill it is still
worthwhile for the MRF.
Ms Gayle Sloan, Chief Executive Officer, Waste Management Association of
Australia (WMAA), also argued that the lack of genuine progress of the national
waste strategy in the last eight years has hampered the creation of secondary
markets and a circular economy in Australia. If this had occurred, Australia 'would
not have the continued reliance we have, to an extent, on global trading
markets, such as China, for our commodities'.
It was emphasised that domestic markets for recycled products are
required for recycling efforts to be sustainable.
Local Government NSW emphasised that 'real and productive domestic recycled
product markets are desperately needed'.
The Local Government Association of Tasmania similarly explained that
'long term viable markets for collected recycling is crucial to the success of
recycling programs', and that the development of new markets would be required
as recycling programs are expanded.
The WMAA and Re.Group advised that the current lack of sustainable markets
might result in some recycling companies failing.
Market volatility is also an issue. The Australian Capital Territory
Government noted that recyclables are sold into global commodity markets and as
such, recovered steel and aluminium are affected by the price of virgin
material and recovered plastics are affected by the price of crude oil.
Market developments can have significant implications for the financial
viability and management of waste and recycling programs. The Hunter Joint
Organisation of Councils explained:
The eventual end markets and corresponding commodity prices
for materials dictate whether it is
practical and viable to collect the
materials for recycling or to landfill them. A
recent example relates to the drop in commodity prices for ferrous scrap
metals. Although these prices are now on the
rise again, councils in the region had to make strategic decisions as to whether to continue to collect metals for recycling
or to landfill them.
The Adelaide Hills Region Waste Management Authority also noted that
councils have struggled to recycle scrap metal in a cost effective manner since
scrap metal pricing has fallen.
Mr Tony Monaco, Visy Recycling, also commented on market volatility and noted
that there has been an 'overall decline in the commercial viability of
recycling and recyclable feedstock markets globally'. However, with China
banning the importation of certain recyclable plastic grades and mixed paper
from January 2018, the market is now changing rapidly. Mr Monaco concluded, 'export-facing
commodity sales are exposed to unavoidable volatility and financial risk'.
Changes to China's import policies
Existing challenges with lack of domestic markets have been exacerbated
by recent developments affecting the export of recycled waste.
As noted in Chapter 2, Australia exports recyclable material to over
100 countries with 4.23 mega
tonnes of recycled materials exported in 2016–17.
China has been a major destination for Australia's recycled waste, with around
1.3 million tonnes exported in 2016–17. This accounted for 4 per cent of
Australia's total recyclable waste, but included significant amounts of
recyclable plastics and recyclable paper (35 per cent and 30 per cent of
Over the last four years, China has implemented a series of strategies
to restrict the importation of certain types of recycled material. The aim of
these restrictions is to combat smuggling and illegal activities in relation to
the importation of recyclable and waste material into China, as well as
supporting the development of China's domestic recovery industry. Of particular
concern to the Chinese Government has been the adverse impacts of imported
contaminated waste on China's environment, and health of its population.
China implemented Operation Green Fence in February 2013. Green Fence sought
to enforce existing regulations limiting the amount of non-recyclable material in
imported bales particularly mixed paper and mixed rigid plastics scrap.
Substandard imports were shipped back to the exporter at the exporters'
In February 2017, China announced Operation National Sword. In
relation to imported recyclates, National Sword sought to tighten rules for
compliance with waste import regulations, including higher penalties for
In July 2017, China notified the World Trade Organisation (WTO) that it
planned to restrict imports of 24 types of solid waste, including various
plastics and unsorted mixed papers. An updated notification in November 2017
outlined China's intention of adopting a 0.5 per cent contamination limit on
waste imports for the previously announced 24 categories.
The new contamination thresholds came into force in January 2018.
More recently, China launched the new customs inspection program Blue
Sky 2018 to replace the National Sword initiative, further concentrating on
the 24 categories of solid waste added to the list of restricted imports
in 2017, including plastics waste, unsorted waste paper and waste textile
materials with a contaminant level of more than 0.5 per cent. Blue Sky will
operate to December 2018.
An industry in crisis—the effects
on the recycling sector in Australia
The consequences of China's waste import policies have been felt in
Australia with witnesses describing the recycling industry as being in crisis.
Mr Mark Venhoek, Suez, stated:
Their—virtual—import ban on recyclables is an issue that has
sent the industry into, what I would call, indeed, a crisis mode and is a clear
example of imperfections within our industry. Although the issue is not just an
Australian one—it's a global problem—it needs to be dealt with at a national
The two main affects identified in evidence are the impact of the
reduction in international prices for certain recyclable products and the
consequent flow on effects for the local recycling businesses and collection
services, and the increasing cost of processing material to meet Chinese regulatory
Witnesses also emphasised the need for urgent action noting that the
'crisis is happening now' and that Australia doesn't 'have three years to run
through a COAG process to come to a solution' to the issue.
Councillor Linda Scott, President, Local Government New South Wales, told the
committee that 'governments and industry, including recyclers, collectors,
manufacturers and the community need to work together to develop solutions to
the current recycling crisis'.
Ms Sloan, WMAA, was more cautious in describing the current operating
environment but nevertheless called for action. Ms Sloan stated that 'it's a
challenging time which creates opportunity but, if we don't act, it may become
Commodity prices and export opportunities
Exports to China must meet stringent contamination levels and as a
consequence, the international market is facing a glut of certain material with
a resultant reduction in prices. Mr Monaco addressed this issue and stated:
Coupled with increasing rates of recycling, globally and now
within China itself, this will most likely see a glut of recyclable materials
with no home, and prices will likely plummet due to supply-and-demand dynamics.
Thus, existing commercial arrangements will no longer be financially
Mr Tony Kane, Visy Recycling, similarly observed that the reverberations
of the bans are being felt in the industry internationally. He provided the
example of the significant quantities of fibre exported for recycling from the
United States and Europe—28 million tonnes—of which approximately six million
is mixed paper. The mixed paper now has no market in China and 'is going to
have to find a home somewhere else in Asia'.
Countries still accepting imports include Malaysia and Vietnam, albeit
at much lower prices. The South Australian Government commented that, in
relation to recycled plastics, exporters need to 'compete in a
"shrinking" global market for other export destinations'. However, these
countries are now buying the same material for less.
MRA Consulting provided an analysis of the impacts on commodity prices
in a report commissioned by the Australian Council of Recycling. The report
stated that the prices paid for Australia's recovered recyclables have crashed.
Mr Mike Richie, Director, MRA Consulting Group, commented that the price
of mixed paper 'dropped from its decade-long range of $200–250/tonne to between
$0–80/tonne' and 'mixed plastic has dropped from $250–350/tonne ($400–450 for
sorted PET and HDPE) to around $50/tonne'.
The reduction in prices is being felt by recyclers in Australia. The
Australian Sustainable Business Group (ASBG) commented:
While some recyclers will welcome a drop in their inputs,
those collecting recyclate for export will find major problems with their
business model. These bans will likely lead to stockpiling, increased flows to
landfills and potentially illegal dumping activities.
The South Australian Government also provided evidence on the impacts on
plastics recyclers in that state. Recycled plastics were described as being
particularly vulnerable with export operators needing to charge operating fees
to cover handling and export (shipping) costs. Following the fall in prices
'some plastics recyclers are struggling to compete with landfill disposal
operators to receive the material. Due to these circumstances and plastics'
lightweight nature, some plastics can currently be disposed to landfill at a
cheaper rate than directing the material to a plastics recycler'.
It was noted that exporters could seek to reduce the contaminant level
of their materials to meet Chinese import standards. However, to do so will be require
MRFs to ensure that materials are sorted, separated and washed prior to export
The South Australian Government submitted that it will be difficult to
meet the standards with existing materials-recovery processes or without
incurring higher costs.
Infrastructure, such as optical, high-tier technology is available but requires
investment and increased manual processing is costly. Mr Stuart Garbutt,
Re.Group, commented that 'pre this ban probably 30 to 40 per cent of our
operating costs were labour whereas now 50 to 60 per cent of our operating
costs are labour'. However, Mr Garbutt went on to state that this is not
sustainable in the current market.
In the face of a limited local market for recycled materials, exporters
could seek other overseas markets. As noted above, while these markets exist,
the prices being received for commodities have fallen. In addition, witnesses
commented on concerns with industry standards in some countries. For example,
Mr Robert Kelman, Executive Officer, Australian Tyre Recyclers Association,
commented on the export of whole baled tyres to countries using dirty pyrolysis
Similarly, Mr Peter Shmigel, Chief Executive Officer, Australian Council of
Recycling, stated that materials will be exported to landfill in other markets,
which is not desirable, 'particularly when those landfills are not designed to
the same standards as ours, are not regulated in any particular way and have
people living on them'.
Mr Terry Van Iersel, Manager, Sales and Commodity Trading, SKM Recycling,
also commented that changes in China are 'just another step in what's been
happening for some time' and argued that 'it may even get tighter in China. But
certainly, over time, it will happen in other countries as well'.
Kerbside recycling sector
The impacts of the Chinese ban on importation of material are
particularly apparent in the kerbside recycling industry. Mr Tony Kane, Visy
Recycling, noted that most operators in the kerbside recycling industry have a
heavy reliance on exporting a large proportion of recyclable materials
recovered from kerbside recycling.
Mr Harford, Equilibrium, similarly commented that:
Previously, a material recovery facility in Australia could
largely have taken the material from kerbside recycling and exported the mixed
plastics load either directly to China or through another brokerage into China.
However, Mr Kane commented that the contamination level in kerbside
recycled material is higher than allowed under the new restrictions.
Given the lack of alternative markets, falling prices and increasing costs to reduce
the level of contamination, and the lack of domestic markets, evidence
indicated that the kerbside recycling is facing significant difficulties.
The Local Government Association of Queensland (LGAQ) provided the
committee with a range of outcomes from the loss of offshore markets combined
with the absence of local markets. These include financial impacts on existing
council kerbside recycling services that are already marginal or cost negative;
consideration of gate fee increases; stockpiling and/or landfilling of
recyclate over the short-to-medium term; and erosion of community confidence in
kerbside recycling schemes when landfilling of recyclate becomes more
widespread. The LGAQ added that in Queensland, councils are concerned that the
viability of kerbside recycling services is being threatened.
Queensland councils were also anticipating losses of revenue—$7 million
in the 2018–19 financial year. The LGAQ stated that it believed that the total
cost could be as high as $50 million per annum in Queensland once all of the
effects are fully known.
Similarly, other local government organisations noted that the ban will
have significant impacts on the ability of MRF operators to market sorted
recyclables. As a consequence, stockpiling, a reduction in the type of
materials acceptable in household recycling streams and more materials ending
up in landfill were seen as the likely outcomes.
Witnesses also commented that waste collection operators are seeking changes
to contractual arrangements with local councils. Mr Adrian Beresford-Wylie,
Chief Executive, Australian Local Government Association (ALGA) stated that 'there
clearly is concern and uncertainty from councils across the nation about the
likelihood of collectors and material recovery facilities refusing service' and
in some cases 'recycling contractors either have already begun to negotiate or
are seeking to renegotiate fees with councils'.
The South Australian Government similarly stated:
Local government organisations are continuing to meet their
kerbside collection obligations, but all of the material recovery facilities
that receive and process South Australia's kerbside recyclables are
experiencing considerable cost pressures due to current market conditions and
are seeking to renegotiate contractual arrangements with their councils.
One council which decided to send its recyclable materials to landfill
was Ipswich City Council, Queensland. The Council noted that its decision in April
2018 was the direct result of its failure to reach an agreement with the
successful tenderer for its collection services. It argued that being 'in the
market in a tender process at the point in time China's Sword policy occurred'
was a primary factor in this outcome.
Councillor Linda Scott, President, Local Government NSW, added that
these pending contract negotiations, have the potential to have significant
financial implications for councils.
The committee heard evidence that not all kerbside services are under
pressure. The Australian Capital Territory Government, for example, indicated
that the effect of the bans on its services were 'very manageable' as kerbside
collection in the Australian Capital Territory represents 3.5 per cent of
the total waste in the territory.
There have also been few effects in the Northern Territory. The City of
Brisbane also commented that very little of its recyclables are sent offshore: its
recycling contractor, Visy, currently has beneficial markets in Australia for
over 80 per cent of its recyclable materials; glass is sent to local
processors; and, glass fines are used in the Brisbane's asphalt production.
However, the committee heard that as a result of the ban, some councils
are in a 'crisis situation'.
The LGAQ also stated that the impacts are being felt more in regional and
Submitters noted that another significant impact of China's policy
change has been the management of increasing stockpiles of recyclable
materials. Mr Robert Ferguson, Senior Advisor, Environmental and Public Health,
LGAQ, commented that councils are concerned with the unprecedented stockpiling
that they are currently undertaken. Mr Ferguson noted that a number of councils
do not have a lot of capacity to stockpile.
Stockpiling also represents an environmental hazard and significantly increases
the risk of fires.
State Governments have responded to the emerging situation with funding
for short-term support: Victoria provided $13 million, and New South Wales
provided $47 million.
Australian Government response
The Department of the Environment and Energy (the department) provided
the committee with an overview of the work undertaken following the announcement
of the changes to China's import policies. Mr Bruce Edwards, the department,
commented that discussions had taken place with the Department of Foreign
Affairs and Trade (DFAT). The department also undertook discussions with the
Department of Industry, Innovation and Science and Austrade to explore the
potential for Australia to access different markets for recycled material.
The Australian Government also undertook a number of 'diplomatic
interactions between Australian officials and Chinese officials' to clarify the
when the bans would take effect and the nature and extent of them. The
department also met with European counterparts.
In addition, the department sought advice from state and territory governments
on the impact of the bans. This process was described by the department as one
of 'discovery' which recognised that effects were different for each state and
territory and also between local government jurisdictions. Mr Edwards also
noted that the states and territories had sought advice from industry
In March 2018, the department conducted a workshop with stakeholders to
discuss a range of issues including whether the domestic market for recyclables
has the capacity to manage the material unable to be exported to China.
The situation in the waste management sector was considered at the Meeting
of Environment Ministers on 27 April 2018. Following the meeting, the
environment ministers released an agreed statement on the need to 'set a
sustainable path for Australia's waste' following import restrictions announced
by China. Ministers agreed to a number of commitments, which are outlined
A commitment to reduce the amount of waste generated and to make
it easier for products to be recycled. Ministers endorsed a target of 100 per
cent of Australian packaging being recyclable, compostable or reusable by 2025
or earlier. Governments would work with the Australian Packaging Covenant
Organisation to deliver this target.
Encourage waste reduction strategies through greater consumer
awareness, education and industry leadership.
Increase Australia's recycling capacity by developing increased
Increase the demand for recycled products. Ministers agreed to
advocate for increased use of recycled materials in the goods procured by
government, and to collaborate on creating new markets for recycled materials.
Explore opportunities to develop waste-to-energy and
waste-to-biofuels projects, whilst recognising the reduction, reuse and
recycling of waste as a priority. This will occur with the support of the Clean
Energy Finance Corporation and the Australian Renewable Energy Agency.
Update the 2009 Waste Strategy to include circular economy
The Ministers also agreed to a number of other measures including:
fast-tracking the development of new product stewardship schemes
for photovoltaic solar panels and batteries;
making a commitment to halving Australia's food waste by 2050
through the alignment of community education efforts and encouragement of the
composting of residual food waste; and
making a commitment to complete the voluntary phase out of
microbeads initiated in 2016. Currently 94 per cent of cosmetic and personal
care products are microbead free and Ministers committed to eliminating the
final 6 per cent, and examining options to expand the phase out to other
Further discussions were foreshadowed with ministers agreeing to re-convene
by teleconference in mid-June 2018 to discuss progress on recycling, and to
meet in late 2018 to 'further progress delivery of the commitments' made in the
27 April 2018 agreement.
The recent changes in the international market provide an opportunity
for industry and government to improve the way recycled material is managed in
Australia. Witnesses advocated for investment in infrastructure and
technologies, and the development of a circular economy with sustainable
domestic markets. Mr Van Iersel, SKM Recycling told the committee:
Recent regulatory changes in China do pose some challenges
but we believe this represents a major opportunity for our business and the
industry, more broadly.
Similarly, Mr Venhoek, SUEZ, told the committee that the changes bring:
...significant opportunities to stimulate the domestic market
on the reuse of recyclables and to create jobs in both recycling and
manufacturing, which will, in turn, bring economic benefits to the Australian
economy and make us, once again, less dependent on having other countries
treating our waste.
It was argued that the regulatory changes in China are simply 'another
step in what's been happening for some time' and that similar regulation is
likely to be seen in other countries such as Vietnam and Thailand in the
As such, the industry must respond by investing in the 'areas of
infrastructure, improvement and innovation'. This includes investment to
improve sorting and reprocessing infrastructure to meet international
regulatory requirements and to better supply domestic markets.
Domestic market and circular
In response to the lack of domestic markets for recycled content and the
crisis caused by China's National Sword policy, multiple submitters argued that
recycling in Australia needs to transition away from being export-focused to an
industry that supports waste being processed and reused to make new products
Submitters stated that the most effective way to transition away from an
export-focused industry was by the establishment of a circular economy in
Australia. A circular economy is an alternative model to the traditional
linear economy which is based on 'take, make, use and dispose'. It is a self-sustaining
system founded on the principle of keeping material resources in use, or
'circulating' for as long as possible. It is designed to extract the
maximum value from resources while in use, then recover and regenerate products
Mr Max Spedding, Chief Executive Officer, National Waste and Recycling
Council (NWRIC), noted the current rate of growth in waste production and
If waste continues to grow at 4½ per cent per annum, which is
currently what it's doing, and rises from the current 55 million tonnes, by
2040 Australians will generate 138 million tonnes of solid waste. Assuming that
recycling, the national diversion, continues at 75 per cent, our recycling
capacity we will need to increase by 400 per cent by 2040, which is an enormous
Mr Spedding, NWRIC, argued that this situation can only be remedied
through the alignment of 'waste management planning, regulations and
procurement practices to quickly transition the sector to a circular economy'.
Mr Spedding noted that a circular economy would focus waste management on the
recovery of materials rather than landfill and that 'an early transition to a
sustainable circular economy is required to meet the challenges of increased
The committee heard that circular economies are implemented in other
jurisdictions, and that there are both environmental and economic benefits of
transitioning to such a system. Ms Sloan, WMAA, told the committee that:
I submit that Australia's being left behind the rest of the
developed world in transitioning to the circular economy and using waste
commodities as a resource, with the effective closure of China as a market for
Australia's commodities, it's vital that the Australian government works with
industries to create a circular economy in Australia and develop onshore local
manufacturing. The added benefit beyond the environmental good of moving to a
circular economy is increased job creation. Studies have found repeatedly that,
for every one job involved in landfill and 10,000 tonnes of waste, over four
are created by resource recovery.
A number of suggestions were made to encourage domestic markets
including mandating the use of recycled product in manufacturing, and the
provision of government funding. For example, Mr Spedding, NWRIC, suggested
that landfill levies could be used to stimulate the creation of domestic
markets for recycled material. As noted in Chapter 4, Mr Spedding also suggested
that landfill levies should be used to provide low-interest loans to the
recycling industry, modelled on the Clean Energy Finance Corporation's
addition, the NWRIC supported the use of the Emissions Reduction Fund (ERF) to
support greenhouse gas reduction initiatives, land for gas recycling and
Mr Mark Venhoek, SUEZ Australia and New Zealand advocated for the
Australian Government to mandate the use of recycled material in producing new
products. Mr Venhoek stated that currently, the manufacturing industry is
hesitant to invest in the use of recycled material but that if it became
mandatory then 'those investments will automatically come'.
Mr Venhoek told the committee that in other countries, government policy
has required that infrastructure be created to support the pre-treatment,
treatment and re-manufacture of recycled material. Mr Venhoek explained:
In Germany, for instance,
there is a semi-government organisation that developed the dual system, or the
green dot system. While they were tendering for the collection and processing
of all materials, they said: 'Everything needs to be processed within our
country boundaries. We are not there to have any kind of materials leaving our
country and being treated in India or in China or anywhere else in the world.'
Mr Venhoek noted that as a result, Germany's dependency on exporting
recyclates outside of Germany has now dropped to almost zero.
Invest in infrastructure and new
It was argued that investment in the infrastructure required to deliver
high quality recyclable products will ensure access to international markets.
Further, investment in infrastructure is required to develop Australia's
For example, Mr Van Iersel highlighted that SKM Recycling has invested
heavily in order to produce higher grade recyclable material and therefore has
a strong and ongoing market for its products. Mr Van Iersel stated 'those who
invest in the infrastructure needed to deliver higher quality recyclable products
should have little difficulty in being able to access a strong market'.
Mr Shmigel, Australian Council of Recycling, told the committee that
investment in infrastructure is 'valuable', particularly in relation sorting
and reprocessing. Mr Shmigel noted that Australia has a mature reprocessing
capacity for paper, fibre, and metals.
However, Mr Stuart Garbutt, Re.Group, observed that a lot of older MRFs are
producing mixed paper. Internationally, MRFs are designed to take one
individual component of mixed paper. Investment is needed to enable Australian
MRFs to separate the components—newspaper, magazines and pamphlets and
cardboard. Mr Garbutt concluded that this investment will value add and ensure
sustainability. Similarly, rather than producing general mixed plastic, four
to five main plastic groups could be separated.
The level of investment required to develop new facilities is however, significant.
Mr Garbutt stated that:
A brand-new 10,000 to 15,000
tonne MRF is $5 million to $6 million; the 100,000 to 200,000 tonne MRFs are
$25 million to $30 million. I believe the one in Melbourne is reported to be
somewhere in the vicinity of $40 million to $50 million. I would dare say that
these newer MRFs probably don't need as much capital as some of these older
regional MRFs. You would be probably looking at packages of $1 million to $2
million in regional areas, $3 million to $5 million in the cities.
Mr Garbutt, Re.Group also noted that unless the industry can ensure a
financial return, investment in upgrading infrastructure will not occur.
Mr Garbutt stated:
Fundamentally, no-one is going to spend money in this
industry unless we can get a return on that capital. If that material is going
to be exiting the stream then it doesn't seem to make commercial sense to
invest in it to try and recover it.
It was suggested that government assistance should be provided to
industry operators to support the upgrading of infrastructure to ensure the
delivery of recyclable products that meet market expectations. Mr Van Iersel,
SKM Recycling, stated:
We suggest that further investigation is needed into which
types of recyclable material some operators are finding it difficult to sell,
and the extent to which that issue may be related to their processing methods
and the quality of their end product, rather than broader trends in commodity
The need for investment in innovative technological solutions to deal
with waste and recycling was also raised by a number of submitters. For
example, Mr Max Spedding, NWRIC, told the committee that there is a need
to plan and invest in recycling in Australia. Mr Spedding highlighted the work
being undertaken in Victoria to process soft plastics. Mr Spedding stated:
There is a small company in Geelong called GT Recycling that
got a grant from Sustainability Victoria. They got a further grant from the
Packaging Covenant's council, and they had Deakin University do some genuine
R&D. They've now got a facility in Geelong processing 1,500 types of soft
plastics and producing a pallet. They're value-adding to this waste product,
and that pallet is now being used for agricultural plastic manufacturing in
Australia. Here's a situation where you've got a problem product on the market,
which is soft plastics. If you were sending it to China, you would have to be
worried that it's not going to go to China in the future. Here's a local
solution: with a bit of R&D and some grant funding, they've now got a
facility and I think they're employing 15 people.
Mr Spedding, NWRIC, also suggested that collected landfill levies should
be used to support sustainable recycling initiatives through low-interest loans
being made available to industry for the development of 'value-added'
The University of New South Wales (UNSW) submitted that the Australian
Government should move beyond the current approach of 'reducing, re-using and
recycling' and 'embrace the concept of "reforming" waste to create
new products and valuable resources'. It highlighted the work of the UNSW Centre
for Sustainable Materials Research and Technology (SMaRT) which has developed
world-leading microfactory technology to transform different types of waste
into reformed products with commercial returns. This includes:
dirty glass into engineered stone products;
e-waste into valuable alloys and metals and 3D filament;
fabrics into construction industry materials;
wood into new wood products;
coffee capsules, tyres and other types of waste into carbon for
the use in the steel industry; and
waste fishing nets into glasses frames.
UNSW submitted that microfactory technologies provide a range of
benefits including requiring a less intensive level of recycling sorting, and
the ability to process a wide range of mixed and complex wastes. It also
described microfactories as 'economic game-changers' providing new employment
opportunities, revitalising Australia's manufacturing sector, and creating new
export opportunities for products created through microfactory technology.
Navigation: Previous Page | Contents | Next Page