Chapter 5The need for stronger packaging reform
5.1Packaging waste remains a key issue in waste reduction and resource recovery, with the volume of packaging placed on the market each year in Australia increasing.
5.2Between 2017-18 and 2021-22, packaging quantities increased by approximately four per cent per annum, which was 'almost three times the rate of population growth over the same period'. Of the packaging placed on the market in 2021‑22, the overall recovery rate was approximately 56percent, mostly for the recycling of the following materials: glass; metals; paper and cardboard; plastics; and wood. The recovery rate for paper and cardboard was highest at 68 per cent, followed by glass at 63 per cent, with plastics remaining at a low recovery rate of 20 per cent.
5.3Packaging impacts on both environmental and human health. Evidence increasingly shows that human health is impacted by the commonly used chemicals and polymers in plastics. Studies have shown that both known toxic and unidentified chemicals can 'leach from various plastic products, including single-use plastic food packaging, cups and bowls, into the environment and into liquid or food that we then consume'.
5.4Australians have made clear that they want to see action on packaging. A recent survey found that 73 per cent of respondents 'demand new packaging laws that shift the costs of collecting and recycling packaging waste from taxpayers to producers'. In addition, the results showed that 88 per cent of respondents support the reinstatement of soft plastic collections, funded by packaging producers, and that the 'fast tracking of soft plastic collections is a top priority for Australians'.
5.5As will be noted in this chapter, there is also strong support from industry and environmental organisations for better packaging stewardship.
5.6Despite community and long-term industry support for change, Australia has repeatedly failed to meet the packaging reform targets set by the Australian Packaging Covenant Organisation (APCO). Australia will need to address increasing volumes of packaging in the market as it moves to a circular economy, better resource management and improved environmental outcomes.
5.7These matters are discussed in this chapter, which examines Australia's packaging framework, including the role of and outcomes achieved by APCO, before outlining current efforts towards packaging reforms, including mandatory regulatory schemes. The related issues surrounding the use and disposal of plastics are examined in the next chapter.
5.8This chapter also explains the Australian recycling and labelling standards, including the Australasian Recycling Label and ReMade in Australia. It then outlines calls for packaging regulation to include a mandated minimum amount of Australian recycled content, and the role of traceability frameworks in better tracking the use of various packaging material types and their volume of recycled content.
Packaging framework
5.9Since 1999, Australian businesses and governments have had a mandatory national co-regulatory framework for packaging. Under the framework, those businesses with an annual turnover of $5 million or more, and that produce or sell packaging or packaged products, are obliged to design more sustainable packaging to increase recycling and reduce litter. This includes plastic, glass, paper, cardboard, and metal packaging.
5.10The framework is made up of:
the Australian Packaging Covenant (the Covenant), which is an industry-led packaging product stewardship scheme administered by APCO that aims to reduce the negative environmental impacts of packaging; and
the National Environment Protection (Used Packaging Materials) Measure 2011 (NEPM), federal legislation which aims to ensure that businesses that choose not to become APCO members cannot gain commercial advantage over those organisations that are members. The NEPM requires businesses to make their packaging more sustainable.
5.11Consumer packaging is defined in the NEPM to mean all packaging products made of any material or combination of materials associated with consumer products. This includes the containment, protection, marketing or handling of these products, as well as packaging associated with distribution. Compliance and enforcement actions under the NEPM are the responsibility of participating jurisdictions, under their regulations.
5.12APCO clarified that consumer packaging includes primary, secondary or tertiary packaging (including plastic bags):
Primary packaging is the container directly containing the product.
Secondary packaging includes the materials used to contain single or multiple primary packed products.
Tertiary packaging includes materials used to distribute packaged and unpackaged products, including pallets, wrapping stretch film, shippers, shrink film, strapping, and cartons.
Australian Packaging Covenant
5.13The Covenant was established under the National Environment Protection Council Act 1994 and the NEPM to set out the shared responsibility for packaging between governments and business. Under the Covenant, brand owners in the packaging supply chain with an annual turnover of more than $5 million must meet their statutory obligations regarding packaging by:
being a signatory to the Covenant;
being part of an equivalent industry arrangement recognised by participating jurisdictions; or
complying with obligations under the NEPM.
5.14The Covenant, which is a compulsory, co-regulatory product stewardship framework, has two goals to support the reduction of environmental impacts of consumer packaging:
focusing on the supply chain for consumer packaging and looking at the design, use and sale of packaging and packaged products, and minimising waste associated with the generation and consumption of consumer packaging; and
preventing the impacts of fugitive packaging on the environment by capturing materials or waste before they enter the environment.
5.15The Covenant is managed and administered by APCO in consultation with the Commonwealth, state and territory governments. However, APCO noted there were limitations to the operation of the Covenant, particularly around enforcement:
A critical weakness of the co-regulatory framework is enforcement. APCO's members account for most of the packaging placed on the market in Australia, estimated at between 70% and 81% of all packaging in 2022-23. It is vital, however, that participation be increased to as close to 100% of packaging as possible.
5.16APCO went on to describe the issue of 'free-riding', whereby businesses gain an advantage by not participating in the co-regulatory environment, the 'activities of which are funded by their competitors and deliver industry and public benefit'. APCO further explained that:
Free-riding diminishes the Covenant by reducing the total resources upon which APCO can draw. If free-riding is not adequately addressed, it will erode the resolve of participating companies to contribute resources and even to continue their participation.
Historical packaging covenants
5.17Since introduction of the national co-regulatory framework and the first packaging covenant in 1999, the covenants have been subject to ongoing reviews and revision of their targets.
The First Covenant (2000 to 2005)
5.18The First Covenant was signed in 1999 and was a self-regulatory agreement between industries in the packaging chain and government. It had a lifespan of five years, and was 'not prescriptive', did not tell companies how to make or use packaging, and did not 'implement regulation requiring businesses' to take back any of their products from the waste stream.
5.19The First Covenant was criticised by the Institute for Sustainable Futures on behalf of the Nature Conservation Council of New South Wales (NSW), which found that the covenant had:
…no specific requirements for baseline data collection, coordination and standardised data collection and assumptions. Hence, there is no accurate, accessible and consistent measure of the trends in packaging waste generated and diversion from landfill…
The lack of a consistent, independently verified data set for the production, disposal and recycling of packaging waste is a major impediment to its management and minimisation. After four years of operation of the Covenant system, this is a major indictment of its efficacy and usefulness to meet its own goals, or any reasonable goals expected of a regulatory framework.
The Second Covenant (2005 to 2010)
5.20There was extensive review and revision of the First Covenant in 2004, in recognition at that early stage that the model needed to be 'significantly strengthened if it was to continue'. Revised Covenant Performance Goals were set for the period 15July 2005 to 30 June 2010 (the Second Covenant), as follows:
increase the amount of post-consumer packaging recycled to 65percent by 2010 (from 48 per cent in 2003);
increase the recycling rate of non-recyclable packaging to 25 per cent by 2010 (from 10 per cent in 2003); and
no new packaging to landfill (against 2003 baseline data).
5.21The 2010 Annual Report of the National Packaging Covenant found that there was an improvement in the overall recycling rate over this five-year period. It noted that while there was a reduction in the volume of packaging going to landfill (34.5 per cent), this target was 'an aspirational goal'.
The Third Covenant (2010 to 2015)
5.22The Third Covenant was endorsed in 2010 (for 2010 to 2015), 'supported by a five-year Strategic Plan that was reported against annually', along with goals for 'packaging design, recycling and product stewardship' and an increased focus on 'workplace and public place recycling and litter reduction programs'.
5.23The 2014-15 Annual Report of the Covenant shows that multiple targets in the Third Covenant were not met—including a failure to meet targets for the improved recycling rates for used packaging; buying products made from recycled packaging; and for the implementation of formal product stewardship schemes of Covenant signatories.
The Fourth Covenant (2015 to 2020)
5.24By 2016, consensus was reached on the Fourth Covenant, refocusing the 'goals to areas where industry could have the most influence, such as sustainable packaging design and supply chain collaboration'. It was at this stage that APCO was formed. In November 2016 it was determined that the governance arrangements around the Covenant would be modified:
…to achieve greater transparency and accountability in the delivery on the work of the Covenant and account for industry forming APCO, a company limited by guarantee registered under Australian Securities Investment Commission. Operational features of the Covenant were removed to improve efficiencies in delivery.
2025 National Packaging Targets
5.25In 2018, Australia established National Packaging Targets, to be achieved by 31December 2025, with delivery of the targets the responsibility of APCO in collaboration with industry, government and the packaging value chain. The targets apply to all packaging made, used and sold in Australia.
5.26The 2025 targets are as follows:
100 per cent of packaging being reusable, recyclable, or compostable;
70 per cent of plastic packaging being recycled or composted;
50 per cent average recycled content included in packaging (revised from 30percent in 2020); and
the phase out of problematic and unnecessary single-use plastic packaging.
5.27Halfway through the 2018 to 2025 period, APCO found that it was unlikely that the National Packaging Targets would be met by the end of 2025. APCO have stated that as it 'is clear that the Targets will not be fully met' by 2025, a 'revised target date will be established'. In the interim, the committee heard that:
…environment ministers advised APCO of their support for the targets remaining in place to guide industry activity and action towards the circular economy while packaging regulations were being reformed.
5.28The most recent data against the targets was released in December 2024, reflecting progress up to 2022-23. The data shows little or no progress and that the 2025 targets are not on track to be met. Table 6.1 shows progress against each of the four targets, since implementation in 2018.
Table 6.1Summary of the 2025 National Packaging Targets and progress to 2022-23
Source: APCO, Australian Packaging Consumption & Recovery Data 2022-23, December 2024, p. 10.
APCO's 2030 Strategic Plan
5.29APCO developed a 2030 Strategic Plan, which was finalised in August 2024, and was developed to reflect consultation with members and stakeholders between 2022 and 2024. The consultation and discussions identified that a 'business-as-usual approach will not deliver the required outcomes', and that a 'new approach is needed'. Four key issues were identified, as follows:
action throughout the value chain is crucial to deliver the National Packaging Targets and Goals of the Covenant;
critical economic gaps must be closed, including in design, collection, recovery and end-markets;
all brand owners must take on cost responsibility, on an equitable and efficient basis; and
APCO must strengthen its links across the system, 'ensure full participation and free-rider protection, streamline administration, and maintain clear accountability to members and governments'.
5.30Reflecting the above issues, APCO submitted that its 2030 Strategic Plan was 'broader and more ambitious' that the previous plan. The 2030 plan introduced two new major areas of activity, relating to the 'eco-modulation of APCO member fees', meaning that:
Each member’s fees will be determined based on the amount and type of packaging they place on the market
Fees payable for each material type will be determined based on the downstream cost of managing the material
For the first time, APCO’s member fee model will incentivise and reward packaging elimination and reduction, reuse, design for recovery and use of recycled content.
Using funds raised through eco-modulated fees, APCO will enter contracts with operators and producer responsibility organisations in the downstream system to procure collection, recycling and consumer education services that will support achievement of the National Packaging Targets and Goals of the Covenant.
5.31On the other hand, Mr Jeffrey Angel of the Total Environment Centre and the Boomerang Alliance challenged the notion that the 2030 Strategic Plan was more ambitious, stating:
The 2030 plan…supports a weakening of the current national targets, both extending to 2030 from 2025, which [APCO] admit we’re not going to get to, and having lower levels of achievement for recycled content, for example.
5.32The Chief Executive Officer (CEO) of APCO, Mr Chris Foley, argued that APCO 'haven’t lowered the ambition' but rather 'reset the trajectory around what we believe is achievable within the system, using the levers articulated in the strategy'.
5.33Mr Foley explained that APCO was confident it would be able to meet the targets set out in the 2030 Strategic Plan because the industry has reached a 'tipping point', post-COVID:
…businesses, our members, genuinely want a social licence to continue their business. Many of those are hugely reliant on packaging and accept that the game has to change. They've invested millions of dollars in resetting, and, although you'll say that some of the targets aren't being achieved, there are many—individual retailers like 7-Eleven and some of the big supermarkets and big brand owners—who have invested massive amounts of money…
5.34APCO noted the Australian Government was 'leading a process to reform the regulatory framework for packaging', which it welcomed, and noted that its Strategic Plan 'does not pre-empt or seek to influence any regulatory reform decision agreed by Environment Ministers, including with regard to APCO's role'. APCO continued that it:
…will remain closely engaged with governments to ensure that the Plan, including any and all elements of it, can be aligned as required as the reform process continues.
5.35On 17 March 2025, APCO joined several other major stakeholders in endorsing a mandatory national product stewardship scheme for packaging by 2026 (see further discussion below).
Packaging reform
Latest packaging reform developments
5.36The effectiveness of Australia's national co-regulatory framework for packaging was independently reviewed in 2021. The review found that significant reform was needed. As the Department of Climate Change, Energy, the Environment and Water (DCCEEW) noted, the co-regulatory arrangement established in 1999 is 'no longer fit-for-purpose and will not deliver a circular economy for packaging'.
5.37In 2022, Australia's environment ministers agreed to reform packaging regulation by 2025, with all packaging available in Australia to be designed to be recovered, reused, recycled, and reprocessed safely in line with circular economy principles.
5.38In 2023, environment ministers agreed to additional reform details, including to:
make industry responsible for the packaging they place on the market under a new regulatory scheme;
introduce mandatory packaging design obligations based on international best practice;
make the Australian Government the regulator which will:
require packaging to comply with a National Packaging Design Standard;
require minimum amounts of recycled content in packaging; and
prohibit harmful chemicals being used in packaging.
5.39DCCEEW stated that the work to reform national packaging regulation would:
…support industry's transition to more easily recyclable plastics by including mandatory design requirements so that packaging is designed to minimise waste and be recovered, reused, recycled and reprocessed safely in line with circular economy principles.
Design for Kerbside Recyclability Grading Framework
5.40In 2024, DCCEEW established an independent National Design Standard Working Group, which was to put recommendations to government to improve the 'recyclability and circularity of packaging in Australia'. In December 2024, the working group released its key recommendation, being the 'Design for Kerbside Recyclability Grading Framework', for DCCEEW-led consultation.
5.41The framework was developed using international best practice and sought to 'build on things like the APCO sustainable design guides and the international experience we're seeing in places like the European Union on better packaging design'. The framework 'provides flexibility to influence behaviour change', and shows how recyclable different packaging materials are, based on the availability of collection; sortation; recycling and reprocessing services; and end markets. Theframework:
…reflects recyclability through the kerbside system by assigning grades (A‑G) for each major material type: rigid and flexible plastics, fibre, metal and glass… The Framework also provides advice on how to improve design for recycling for each material type. It does not compare the relative merits between materials or recommend preferred materials.
5.42Mr Cameron Hutchison, a Branch Head from DCCEEW’s Circular Economy Division, stated that the framework sends:
…a really strong signal…that we will mandate rules around this but this is some general guidance about the direction you need to go in. So it's signalling to industry that we're on that journey.
5.43Mr Hutchison continued that if packaging regulations were to be 'embedded in mandatory rules, we want to make sure we're getting the settings right so we can effect the change that we want and we don't have perverse outcomes'. He further noted that the department intends to undertake:
…more targeted consultation on [the framework] to understand what some of the barriers in the Australian context are…to ensure that what we are working and presenting to our stakeholders is relevant to the Australian context so that it aligns with our collection systems and our recycling capacity.
5.44The development of the framework is 'one part of a larger national reform plan for managing packaging in Australia'. DCCEEW sought feedback on the framework by 18 April 2025, with further work being completed to test the framework, alongside the evaluation of 'additional packaging types and alternative collection pathways'.
New packaging regulatory scheme
5.45DCCEEW consulted on potential options for reform of Australia's packaging regulations, in October 2024, with further work needed in 2025 to 'evaluate additional packaging types and alternative collection pathways'.
5.46Preliminary outcomes from the October 2024 consultation, which received 426 responses, suggest that there is strong support for packaging reform. Over a third of respondents to the consultation (35 per cent) were from industry or business, expressing their support for:
Commonwealth regulation of packaging, particularly extended producer responsibility (EPR) schemes with either mandatory or co-regulatory arrangements—over 80 per cent of respondents preferred Commonwealth regulation of packaging and 65 per cent supported an EPR scheme with mandatory requirements;
EPR scheme revenue funds being reinvested into the packaging supply chain;
the proposed objective of reform: to reduce the environmental impacts of packaging by establishing an approach that supports the transition to, and maintenance of, a circular economy for packaging in Australia (with 95 per cent of respondents supporting this statement);
a national ban on certain problematic packaging inputs (e.g. carbon black, oxo-degradables, per- and polyfluoroalkyl substances (PFAS));
mandatory on-pack recyclability labelling obligations; and
nationally consistent approaches across related systems and initiatives such as kerbside recycling, container deposit schemes (CDS) and single-use plastic bans.
5.47Survey respondents also expressed support for mandatory national minimum recycled content thresholds and a financial mechanism which uses eco‑modulation to drive more sustainable packaging design.
5.48At a hearing in February 2025, DCCEEW officials provided an update on the reform work, advising they were working through the outcomes of the 2024 consultation with a view to providing advice to government on the most suitable model for packaging reform.
Australian recycling and labelling standards
5.49The Australasian Recycling Label (ARL) is a labelling system used in both Australia and New Zealand. It aims to provide consumers with 'easy-to-understand recycling information on packaging', and by reducing confusion, save time and reduce contamination in the recycling stream. The ARL provides instructions on packaging as to how each element can be recycled.
5.50APCO assumed responsibility for the administration of the ARL in 2018, including holding the exclusive licence for the label. Since 2022, APCO has owned and operated the label with the support of Planet Ark and PREP Design.
5.51The ARL labelling system is demonstrated in Figure 5.2:
Figure 5.2Australasian Recycling Label system
Source: ARL, About the Australasian Recycling Label (ARL) program (accessed 18 February 2025).
5.52Tetra Pak explained that the ARL communicates to consumers if a package can be recycled, however, this is based on whether councils collect the packaging in kerbside recycling bins and does not include access to CDS. This means that beverage cartons, for example, are labelled 'not recyclable' when they are recyclable through a CDS. Tetra Pak called for Australia to align its approach 'with the European model and include packaging collected through all methods, including CDS, to properly communicate to the community what materials are recyclable'.
ReMade in Australia
5.53In line with the Environment Minister's agreement in 2022 to move toward a circular economy by 2030, the Australian Government launched the 'ReMade in Australia' scheme (ReMade scheme), aimed at helping Australians to 'shop in a sustainable way' through improved labelling.
5.54DCCEEW consulted on the ReMade scheme in 2022 and 2023, with consultation feedback now 'being incorporated into the certification trade mark rules'.
5.55DCCEEW advised that the ReMade scheme would be applied to consumer products and will 'explicitly preference the use of recycled content in products and create a certified trade mark that can be used on products that are made in Australia with recycled material'. DCCEEW would 'provide further updates on the scheme in early 2025'. At the time of writing, further updates do not appear to have been made.
5.56In its submission, the Waste Management and Resource Recovery Association of Australia (WMRR) voiced some concerns with the ReMade scheme, arguing that:
Sustainable design actions [should] include incentives, guidelines and standards. Loosely a certification system has been proposed under ReMade in Australia which is actually a traceability scheme and does not address consumer confidence in products, only the certification.
The need for mandatory packaging regulations
5.57There was strong support for the introduction of mandatory packaging regulations, and for rules around packaging to mandate a recycled material component, using resources generated in Australia. Mandatory schemes would also help to provide investment confidence for companies implementing new, innovative and expanded packaging facilities.
5.58In a statement on 17 March 2025, a diverse range of major stakeholders including the Boomerang Alliance, WMRR, Australian Council of Recycling (ACOR), Soft Plastics Stewardship Australia and APCO made a 'breakthrough' joint statement, offering support for the introduction of 'a mandatory national Product Stewardship Scheme for Packaging by 2026 that applies targets and producer responsibility across the life cycle, including for soft plastics'. These stakeholders noted that they were waiting for the government to 'resolve key operating principles [for managing packaging waste and recycling] following on from the Commonwealth consultation report last year'.
5.59In releasing the statement, the Boomerang Alliance noted that the upcoming federal election would 'likely stall any progress on packaging reforms', leading the industry and environment groups to issue the statement. The Boomerang Alliance continued that while the scope and design of an EPR scheme would be subject to negotiation, 'these schemes when effectively implemented, work to reduce waste and increase recovery. They can be instrumental in establishing a circular economy system for packaging'.
Packaging design regulation
5.60The views put forward in the March 2025 statement were echoed by these industry groups in evidence to the committee, as detailed below.
5.61Ms Gayle Sloan, CEO of WMRR, expressed concern that when export regulations were first considered, a review of packaging systems was not conducted, despite packing being a key part of the supply chain. Ms Sloan argued that Australia now has 'more targets and no solutions':
We don't have design rules, we don't have regulation, but we continue to put intervention at the end of the chain and not the start. So we've got more costs coming into what's a fragile system, and we've got no consequence of putting poorly designed packaging on the market. A really strong example of that, which is really disappointing, is that you can still put packaging with PFAS openly on our market and there are no consequences for doing that. There are real challenges for us as a sector to manage this packaging, and it goes well beyond the recycling and recovery sector.
…Enforceable, mandatory rules with clear frameworks assist everyone in the supply chain. So APCO is doing its best, potentially, with what it has, but we need better.
5.62The WMRR also noted that 'there is no restriction on the design of products that can be placed on market in Australia', arguing there should be clear obligations placed on producers to share 'risk and cost for managing the lifecycle of products and their environmental impacts'. The WMRR expressed the hope that through 'the proposed packaging design rules we may see some of these challenges addressed'.
5.63ACOR similarly pointed to the dearth of existing regulation, saying:
…we are not managing, for example, what goes into the products that are put on market. We are not ensuring, for example, that they procure domestic recycled content, which is a priority given that it all ends up at waste at end of pipe, and we need to manage that waste and recover as much as possible.
5.64Tetra Pak reflected that the 'voluntary nature of the [packaging] Covenant, its narrow focus on recycling (as opposed to overall environmental outcomes such as greenhouse pollution reduction), as well as other key aspects of the Covenant arrangement negatively impact our industry's ability to improve'.
5.65The AMCS and WWF Australia argued that the Australian Government should 'implement policy and regulation that help to drive down consumption of all virgin materials (including but not limited to plastics)'. Ms Hamilton of the AMCS told the committee that Australia needed mandatory targets which:
…are strengthened and prioritises [sic] avoidance and reuse ahead of recycling and composting. Australia needs genuine policy and regulations that focus on reducing consumption of needless plastics and sets a clear pathway to support businesses to enact solutions at the scale needed to inflict real change.
5.66Visy argued that both the community and industry would benefit from 'clear rules on the recoverability and recyclability of packaging'. Visy pointed to the 2024 Recycling Behaviours Report, which showed that 'almost 30% of people say they find recycling confusing and almost 20% of people still believe that their recycling bin just goes to landfill'. Visy put forward suggestions for improvement, including that the rules:
…should be run by an independent organisation and not be subject to advocacy. The APCO guidelines should be revised to prevent non-recyclable packaging from receiving the Australasian Recycling Label (ARL). The ARL should then be mandatory on all packaging, indicating whether it is recyclable through kerbside recycling, CDS, return to store or landfill, and all other recycling labels should be banned.
5.67Re.Group, an Australian recycling and resource recovery company, observed that consumers are increasingly demanding more recycling, and expressed optimism that this was leading to genuine progress, including ‘brand owners asking for mandated targets and driving product redesign’ and greater engagement with APCO on product design.
5.68While the Australian Food and Grocery Council (AFGC) expressed support for national packaging design standards, it noted the 'significant capital investment required by food and grocery manufacturers to upgrade or install new packaging plants and equipment, in order to meet new design standards'. According to the AFGC, 'where new packaging formats are required, costs can exceed $100,000,000 per facility. In addition, food and grocery manufacturers are simultaneously facing additional costs of procuring recycled content and participation in product stewardship schemes'.
5.69The AFGC argued that, similar to support provided to the waste and recycling sector, food and grocery manufacturers should be supported by governments to make the required changes. Specifically, the AFGC called for adoption of 'tax incentives to support food and grocery manufacturers to make necessary changes to packaging capital equipment necessary to meet packaging design standards and improved environmental outcomes'.
5.70The AFGC further recommended that the government develop packaging design standards that consider the full lifecycle of products to mitigate unintended environmental and community impacts, such as food waste increase or food safety reduction.
5.71ACOR stated that the agreement between all Australian jurisdictions to focus on the regulation of packaging is 'a welcome step'—but warned such regulation needed to be 'delivered meaningfully' and have the right impact, for example by ensuring that 'the right collection infrastructure exists'.
5.72While supporting packaging design rules and minimum recycled content, MRAConsulting similarly made the point that 'recycled content is not enough to get to the recycling rates that we expect for packaging'. MRA Consulting suggested a 'broader suite of actions' are needed, including building the required infrastructure for sorting materials.
5.73However, Huhtamaki expressed some caution around the mandating of packaging regulations, noting the sector was very complex, and pointing out that in its experience:
…the diversity of capability and sophistication within the resource recovery sector is incredibly complex. As such the ability to develop packaging design regulations that allow recovery of packaging materials across Australia is incredibly difficult. Further to this the need for packaging to be food contact safe and the ability of the reprocessing industry to meet these demands makes it even more challenging.
Mandating recycled content
5.74Alongside mandated packaging regulations, submitters and witnesses recognised the importance in a circular economy of any mandated packaging regulation including a requirement to use recycled material, and Australian recyclate wherever possible.
5.75The CEO of APCO gave evidence that 'the concept of recycled content mandates is actually supported by most of our members and certainly the recycling system, because it does provide…certainty and clarity'.
5.76Cleanaway argued that to encourage more investment in domestic recycled content, consideration 'should be given to mandating Australian recycled content for new packaging made in Australia', and to 'mandating packaging design rules to enable recycling'.
5.77Visy argued that 'increasing the recycled content levels in packaging is essential to ensure durable end markets and the stability of the recycling industry'. Visy suggested this was a particularly significant issue for plastics:
Without a requirement for recycled content in plastic packaging, redemption rates and end markets will continue to fall short of community expectations... Any packaging reform should also offer clear rules, rather than guidelines, on the recoverability and recyclability of packaging.
5.78Visy offered its support for recycled content mandates, noting that 'the countries in the world that do recycling best all have extended producer responsibility and other types of schemes for packaging'. Visy was in favour of regulation over guidelines, saying that while 'guidelines can help, rules are better' as they are ultimately 'what moves the dial'.
5.79Mr Rick Ralph of the Australian Resources Recovery Council (ARRC), which represents more than 450 small, medium, national and global waste and recycling businesses in Australia, likewise called for mandating Australian recycled content into material, similar to the United Kingdom’s (UK) Plastic Packaging Tax.
5.80Mr David Finlayson of Martogg Group, a local manufacturer of food grade and non-food grade recycled polymers made from post and pre-consumer waste plastics, also called for Australian content to form a part of any mandatory packaging framework. Pointing to the failure of the APCO targets, Mr Finlayson argued that recycled content targets needed to mandated, and went on to say that:
Without Australian content being part of the mandatory approach to this issue, even if recycled content becomes mandatory we'll see imports replacing Australian-made product, which is really defeating the purpose of the whole circular economy initiative.
5.81Rino Recycling, the operator of a construction and demolition materials recycling facility in Brisbane, was supportive of a circular economy utilising more locally-sourced recycled materials, but noted that this was challenging due to the lower prices of virgin materials. It also argued that a key challenge to increasing offtake of locally sourced recycled materials is that 'engineering standards and project procurement regulations…continue to specify the use of virgin materials as opposed to recycled and recovered resources'. As a result, Rino Recycling called for mandating local recycled content requirements in government funded construction and infrastructure projects, and price support via, for example, tax incentives and production credits.
5.82In a similar vein, the AFGC pointed out that while many brands would like to use local recycled content, there are practical difficulties which mean that 'many brands have no option but to import recycled content':
…[using local recycled content] requires increased infrastructure to create post-consumer recycled content (PCR)... a significant challenge lies in procuring recycled content domestically, especially soft plastics, due to supply limitations from the lack of local collection and recycling.
5.83Accordingly, AFGC highlighted the need for investment in domestic recycling infrastructure coupled with the phased introduction of post-consumer recycled content targets.
A lack of local markets
5.84While supportive of Australian packaging being made onshore, using Australian recycled materials, submitters and witnesses expressed concerns over a lack of local markets and infrastructure, which were needed to process materials onshore.
5.85For example, Pact Group noted that 'the plastic recycling sector in Australia is still relatively young and must compete with imported materials…from the Asian region', while the Waste Contractors and Recyclers Association of NSW (WCRA) submitted that 'Australia…struggles to find end-user markets, especially in the face of cheap international imports'.
5.86The WMRR argued that 'Australia has consistently failed to value products and materials made from recycled materials' and that, to date, there has been a failure 'to place any emphasis on reducing demand for virgin material and increasing demand for recyclate'.
5.87Re.Group suggested that introducing disincentives to use virgin material, such as paperwork or financial penalties for using non-locally sourced materials, may help to change market behaviour. Re.Group advised:
When you can put material into the market, with no thought to the cost of recovering it at the end, no thought to the complexity of recovering it at the end, there is no incentive on you to put a more recyclable material into the market than a less recyclable material.
5.88Similarly, the ARRC explained that the 'domestic market for end-user recycled products is limited and competitive' and that the 'cost of processing these commodities domestically is significantly higher compared to internationally, which is reflected in the purchase price for these products'.
5.89The ARRC expressed frustration that there are no government restrictions on the 'importation of new or recycled tyres, glass, plastics, paper and cardboard materials to Australia' which then 'creates a situation where domestic producers struggle to find markets for their products as there is little incentive for buyers to purchase local over imported products'.
5.90The ARRC submitted that:
…as Australia's population grows, the only way to prevent more waste going to landfill will be urgent and concurrent increased investment in both processing infrastructure and developing of long-term end user markets across all recycled material streams.
5.91Minderoo suggested the 'inclusion of a market mechanism that incorporates external costs (environmental (including resource efficiency), climate change and human health) into the price of virgin plastic to help address the price difference between virgin and recycled plastic'.
Utilising government procurement rules
5.92Some submitters suggested amending government procurement rules to help drive demand for local recycled materials. For example, the Australia and New Zealand Recycling Platform, a not-for-profit which collects and recycles e-waste under the National Television and Computer Recycling Scheme, called for leveraging 'government purchasing power (across all tiers of government) to institute sustainable procurement and drive the circular economy'.
5.93Likewise, Ai Group acknowledged that 'federal agency purchasing decisions can drive circular economy transition', and that:
…procurement processes should be designed to deliver environmental and economic value. This includes considering whether the procurement need can be satisfied by…repair or refurbishment, as well as the inclusion of recycled content and lower embodied carbon products.
5.94Similarly, the AMCS and WWF Australia called for 'widespread and effective use of economic levers to drive innovation, reuse, recovery and recycling, including fiscal and procurement measures at the national level'.
Environmentally sustainable procurement policy
5.95The Australian Government implemented the first phase of its Environmentally Sustainable Procurement Policy from 1 July 2024, in recognition of its purchasing power in driving progress towards a circular economy. The policy applies 'climate, environment and circularity principles' to new approaches to market, for the procurement of construction services; furniture, fittings and equipment; information and communication technology goods; and textiles.
5.96In utilising the policy, government entities will be required to consider, among other things, whether:
the goods contain (or have used) recycled materials;
the product is durable, repairable, reusable and/or recyclable;
the goods are refurbished or existing goods are being reused;
the goods are recycled at the end of their useful life; and
the goods are returned to resource recovery through a take-back or end-of-life scheme.
5.97The first phase of the policy was implemented from 1 July 2024, with the second phase commencing 1 July 2025, as outlined below:
Figure 5.3Schedule for the Australian Government Environmentally Sustainable Procurement Policy (categories and thresholds)
Source: DCCEEW, Environmentally Sustainable Procurement Policy, July 2024, p. 9.
5.98In response to questions around whether any instructions had been issued to the department to increase the content of recycled material in government procurement practices, DCCEEW pointed to the ReMade scheme (discussed above). Regarding the procurement policy, DCCEEW acknowledged the key role Commonwealth procurement could play in environmental sustainability, observing that the federal government:
…has significant buying power. It was an election commitment by this government to implement this environmentally sustainable procurement policy to drive the use of recycled content. The buying power of the Commonwealth is estimated to be about $74.8 billion. That would be the amount that was contracted on goods and services during 2022-23.
5.99DCCEEW provided advice on how government entities are required to measure, report and benchmark the increased use of recycled content in government procurement under this policy:
Firstly, all departments, when they're procuring, will be asking suppliers to indicate different categories of information, for example whether they know if it's recycled content that's being used in products. They need to report that. We're very interested in knowing whether that's Australian recycled content, where that's able to be determined… We hope that by establishing a baseline and encouraging reporting that will flow through the system, and eventually we will be able to get better data on where the recycling itself comes out of Australia's recycling sector… The reporting sets a baseline which the government will then consider for future ambitions and targets.
5.100The ARRC acknowledged the development and implementation of the policy but noted that it does not contain any specific targets. The ARRC said the policy should mandate 'procurement that actually goes into federally funded roads or infrastructure' as well as 'establish some reporting mechanisms on an annual basis for each of the departments' to provide a breakdown of purchases.
5.101Similarly, the Waste, Recycling Industry Association of Queensland reflected that the procurement policy 'lacks a lot of detail and it lacks the practicalities'.
5.102The 2024 National Waste Policy Action Plan (2024 Action Plan) includes 'investment in infrastructure, procurement and funding support' as one of its three priority areas for governments to focus on, and explains that:
Opportunities exist to promote circular design of products (i.e. to design out waste, design for durability, reparability and recyclability, and encouraging innovation) through sustainable procurement. Increasing the amount of goods and infrastructure containing recycled materials, also supports our transition towards a circular economy and helps to grow the recycling and reprocessing industry.
5.103Commonwealth, state and territory governments are currently developing implementation plans to support the 2024 Action Plan.
5.104The committee makes observations and recommendations in Chapter 8, around government procurement and purchasing power.
A traceability framework
5.105Closely tied with the need for packaging reform is the ability to trace the content included in Australian packaging, including the volumes of recycled Australian material included in new packaging.
National Framework for Recycled Content Traceability
5.106In November 2023, environment ministers endorsed a national framework for recycled content traceability. The framework is a national guideline that aims to improve trust in recycled materials by guiding businesses to collect and share information about recycled materials.
5.107The framework aims to support Australia’s transition towards a circular economy, by providing high level guidance to industry to implement recycled content traceability in Australian supply chains. The framework is voluntary and available to businesses of all sizes in the supply chain, applies to all recycled materials and recycled content products in Australia, and allows businesses to select the best way to trace recycled materials for their needs.
5.108In implementing the framework, it was noted that—to move to a circular economy—Australia needs to use more recycled materials, but manufacturers need to be sure about 'its quality and where it comes from. It is often difficult to find this information in Australia', which in turn reduces demand and hampers verification of any claims made about recycled content.
5.109In October 2024, DCCEEW released an implementation guide to support businesses to participate in traceability in accordance with the framework. DCCEEW is also developing online tutorials for businesses and consulted in October and November 2024 on the focus areas for these tutorials.
The need for mandatory traceability
5.110A number of submitters and witnesses offered their support for traceability frameworks and making them mandatory, rather than voluntary.
5.111Mr Singh, the Managing Director of Re.Group, lent support for traceability, stating:
You see a lot of beverage containers at the moment that say, 'A hundred per cent recycled content.' Every time I look at that, I go, 'Where did the material come from?' It would be lovely to know how much of that is Australian recycled content as opposed to recycled content from somewhere that's not traced, not tracked and not overly auditable.
5.112Re.Group proposed a traceability model that starts with accountability for each tonne moving in and out of a recycling facility:
Then there's a record of where the material is going for it to be remanufactured, so you've got that traceability on a tonnage basis signed off on at both ends. Then the remanufacturer is accountable on a mass balance again, so every tonne in is accounted for as a tonne out. There's a register so you can follow that whole chain of custody all the way through, from material delivered to a recycling facility right through to pellets coming out of a PET [polyethylene terephthalate] facility that are going to a beverage company.
5.113ACOR argued that a traceability framework 'would ensure that genuine recycling outcomes are rewarded by being verified'. ACOR also stated that such a framework could help to improve data, as currently, 'we're not seeing good data on the difference between domestic recycled material and imported recycled material, noting that you could, most likely, procure recycled material offshore at a lower cost than what you might onshore'.
5.114While the AFGC welcomed the national framework, it expressed caution that the framework was proposed to be voluntary, and suggested that instead, 'a mandatory approach is critical to provide food and grocery manufacturers with the confidence needed to use quality recycled materials, thereby supporting the circular economy'. The AFGC submitted that:
Mandatory recycled content traceability in the recycling sector is essential to confirm the provenance of the material from collection/sortation and therefore validate that claimed recycled content sold to brand owners is actually recycled content. Put simply, without mandatory traceability at the beginning of the PCR supply chain (the recycling sector), it is effectively broken at the first link. Without traceability in the first link, it is redundant to mandate other sectors procure recycled content.
5.115Minderoo also offered its support for mandatory traceability requirements, saying mandatory recycled content would 'drive markets'. Minderoo continued that 'mandatory traceability would also support clean material cycles, avoiding safe chemicals which contaminate recycling'.
5.116In a similar vein, Martogg Group supported a 'national framework for recycled content traceability' and stated that the 'voluntary nature of these framework guidelines will limit their effectiveness'.
5.117Despite this support for mandatory traceability frameworks, the committee also heard from some submitters that such an approach was not necessary.
5.118The WMRR for example argued that complex traceability schemes were not needed. It instead argued that 'we need to require people to buy from licenced recyclers in Australia. We're a heavily regulated system—we have to have licences to receive waste and make this product. Buy from there'.
Calls to follow international examples
5.119Some submitters suggested that Australia follow the example of other countries which have legislation in place to minimise unnecessary plastic packaging, and to better encourage the use of locally-sourced recycled product.
5.120For example, the ARRC argued that:
…we need to actually mandate Australian recycling content into material. The UK have the Plastic Packaging Tax. To create that local pull, they actually applied a requirement that, if you use plastics in the country or you import plastics into the country and those materials cannot be verified to have 30 per cent recycled content in them, then you pay a contribution figure of about 200 and something dollars a tonne to the government. Now, that to me would be a very simple way of funding the recycling opportunity. You apply it at the front end and then use those moneys to promote local recycling.
5.121Ms Sloan of WMRR advised that it had been asking the government to examine various measures, including waste directives like recent packaging regulations implemented in the European Union (EU), and urged Australia to stop 'reinvent[ing] the wheel'. MsSloan explained that the EU system was:
…a comprehensive system that builds on the waste directives, which already place the generator obligation on packages, around how you manage at end of life, and your responsibilities and how they contribute financially to it, but goes further into PFAS and other design elements.
…
We actually just need to pick up a lot of that legislation, rather than continuing to develop our own. We seem to think that we have to develop our own every time...
5.122TOMRA, a sorting, collection and reverse-vending technology organisation, urged the Australian Government to align its future regulations to those of the EU, specifically, the packaging regulations that require, for example:
separate collection of at least 90 per cent per annum of single-use plastic bottles and metal beverage containers through CDS;
packaging that enters the market must be produced to contain nil or only a minimal amount of harmful substances;
all packaging put on the market must be recyclable;
packaging should be designed with recycling in mind;
packaging weight and volume must be reduced to the minimum required for functionality; and
every company or online seller that ships goods to a European country in which they do not have a branch must have a representative for EPR in each of these countries.
5.123TOMRA pointed out that many nations have 'progressive reusable packaging policies and targets to significantly minimise single use packaging waste generated by the takeaway sector'. For example, in Portugal, Netherlands, Denmark, Germany and Sweden, there are various approaches, such as: taxes on single use takeaway packaging; bans on on-site consumption of disposable packaging at workplaces, restaurants, and festivals; and requiring providers of takeaway drinks and food to offer alternative reusable packaging to customers.
5.124The Kew East Community Recycling Team summarised some of the approaches in various European countries, and pointed to Germany, France, the Netherlands, Belgium and Sweden as all countries which have strong packaging regulations and circular economy objectives.
5.125In line with the approach taken overseas, several submitters called for the introduction of penalties to incentivise producers to redesign their packaging to include more local product. For example, Pact Group identified that the 'UK and EU have implemented a plastic levy based on the % of recycled content used in packaging as a way of encouraging increased use of recycled materials in packaging and discouraging use of virgin resin'. Pact Group suggested that Australia follow suit and 'introduce a mechanism to ensure companies that place packaging on the Australian market comply with the minimum recycled content requirements'.
5.126Pact Group noted that the EU packaging regulation will require non-EU producers of recycled materials to meet EU standards, and that recycled content for plastic must meet EU environmental standards. Pact Group argued that Australia should establish a scheme where 'producers and brand owners pay a fee per tonne for packaging that contains less than the required percentage', and for revenue from this scheme to 'be reinvested to the Recycling Modernisation Fund'.
5.127In a similar vein, Reloop proposed 'modulated fees…[to] reflect the degree of ease or difficulty of recovering and/or recycling end of life packaging materials'. Reloop explained that in Europe, producers are charged a fee per tonne which is administrated by a central scheme coordinator under government legislation. The funds are then used to support collection and recycling programs.
5.128Likewise, MRA Consulting Group drew attention to Scotland’s packaging fees for producers who make packaging that cannot be reused or recycled.
5.129Tetra Pak commented on the EPR in Belgium, which:
…provides for fully industry funded collection, sorting and recycling, relieving the pressure of rates, as well as incentivising packaging design for recyclability and providing an incentive to consumers to purchase more recyclable packaging.