Chapter 7Waste export regulations and the Recycling Modernisation Fund

7.1As discussed earlier in this report, the first of the seven National Waste Policy Action Plan targets provides for the regulation of waste exports.

7.2This chapter provides explanatory material on waste export regulations and unpacks key issues and suggestions from submitters around how the export regulations are operating in practice. It then considers the impacts of the waste export regulations and their effectiveness in delivering a circular economy. Finally, it discusses the Recycling Modernisation Fund which was established to support the waste export regulations by expanding Australia’s capacity to sort, process and remanufacture certain materials.

7.3The next chapter presents the committee's views and recommendations, informed by the evidence received throughout the inquiry.

Exporting waste

7.4In 2022-23, around 5 per cent (3.62 million tonnes (Mt)) of the waste that Australia generated was exported internationally.[1] In July 2020, prior to waste export regulations coming into effect, Australia was exporting over 4.2 Mt of waste annually. Materials that became the subject of the regulations—waste plastic, paper, glass, and tyres—made up over 30 per cent (over 1 Mt) of this waste.[2]

7.5Beginning in 2017, several countries to which Australia exported its recyclable material introduced or tightened restrictions on certain imports, including China, Indonesia, India, Malaysia, and the Philippines.[3]

7.6At the time, there were concerns that continued export of Australia's waste could lead to inadvertent environmental and human health impacts. This is because countries receiving Australia's waste may have lower regulatory standards or overwhelmed recycling infrastructure, which could lead to undesirable impacts, such as burning of waste or leakage of waste into the environment.[4]

7.7Trends also suggested that exports of certain recyclable materials would no longer be cost-effective or permissible in future.[5]

7.8However, it was also pointed out to the committee that—especially during peak periods, such as the Christmas/summer period—exports were necessary to alleviate the burden on Australian facilities:

Most facilities have a fixed tonnage rate in which they can process the material once we are presented it for recycling. A lot of the time we need the relief valve; we need the ability to export those materials, because we can't stockpile them. The sites simply don't have the capacity. We need to move the material out as quickly as it comes in.[6]

Waste export regulations

7.9Beginning in 2020, Australia has regulated the export of various waste streams. These export regulations were agreed to by the former Council of Australian Governments (COAG) in August 2019.[7]

7.10COAG agreed that Australia should establish a 'timetable to ban the export' of plastic, paper, glass, and tyres, 'while building Australia's capacity to generate high-value recycled commodities and associated demands'.[8] The Department of Climate Change, Energy, the Environment and Water (DCCEEW) explained that to reach this position:

…there was a range of work that had been done in consultation between the Commonwealth and state and territory governments at the time, looking at opportunities to effectively respond to that situation with China Sword, and that this policy position was put to COAG and was agreed to by COAG.[9]

7.11However, in a response to a question on notice, DCCEEW later advised that it had been unable to locate any written record 'of a proposal to introduce a waste export ban prior to the 9 August 2019 meeting' of COAG. The department's understanding was 'that the proposal for a waste export ban was raised under other business and subsequently agreed at that meeting'.[10] The origin of the policy proposal for a waste export ban is still unclear to the committee. It was not recommended by any of the inquiries or reviews outlined in Chapter 2.

7.12Following the passage of the Recycling and Waste Reduction Act 2020 (RAWR Act), a staged approach of waste export regulations commenced for certain materials. This began with a ban on the export of waste glass from January 2021, followed by:

mixed plastics from 1 July 2021;

whole used tyres from 1 December 2021;

single resin or polymer plastics from 1 July 2022; and

mixed and unsorted paper and cardboard from 1 July 2024 (with licences required for the export of mixed paper and cardboard from 1 October 2024).[11]

7.13DCCEEW's website states that: 'by ensuring we only export properly processed waste glass, plastic, tyres and paper, we are preventing these materials from being dumped overseas, reducing harm to the environment and human health'.[12]

7.14Under the export regulations framework, exporters may only export waste if it meets the relevant requirements. That is, waste glass, plastic, tyres, and paper, may only be exported if it has been processed into a value-added material, which can be reused or remanufactured overseas.[13]

7.15Exporters also need to:

hold a waste export licence for the specific waste type; and

declare each consignment to DCCEEW as well as the Australian Border Force.[14]

7.16DCCEEW told the committee that the requirements for the most recent export ban, on paper and cardboard, were communicated to the industry in November 2023, with the draft rule released for consultation in early May 2024.[15] The rules concerning paper and cardboard have been in force since 1 July 2024, regulating the export of waste paper and cardboard from 1 October 2024.[16]

7.17Several submitters suggested delaying the implementation of the paper and cardboard export ban for various reasons. For example, the Australian Resources Recovery Council (ARRC; formerly the National Waste and Recycling Industry Council) argued that 'it is unreasonable to expect compliance with the new Rules within such a short time frame…including altering forward purchase contracts with trading partners, within the mandated time frame'.[17]

The inclusion of paper and cardboard

7.18DCCEEW confirmed that paper and cardboard were always intended to be included in the waste export regulations, despite some commentary suggesting the opposite. DCCEEW advised that the 'Decision Regulation Impact Statement: Phasing out exports of waste plastic, paper, glass and tyres' (Decision RIS), prepared for COAG in March 2020, contained the following:

The Decision RIS identified potential negative environmental impact from mixed and unsorted paper and cardboard exports including that it can contain contaminants such as plastic, which can be released into the environment if not carefully managed, and biohazards due to its absorbent nature.

The Decision RIS did establish that paper and cardboard sorted into one type and with low contamination levels represented a low risk to the environment and human health. The export of these materials is unregulated.[18]

7.19DCCEEW advised that 'clean' waste paper is waste paper and cardboard that is sorted into a single type, containing low levels of prohibited (non-fibre) material.[19]

7.20Since the Decision RIS of 2020, the government determined—based on advice from the department—to not regulate the export of 'clean streams of paper alone or cardboard alone'. DCCEEW advised the committee that there was 'very little evidence at the time of there being significant environmental harm caused by the export of those clean, separated streams. So those are not proposed to be regulated'.[20] The regulations as finalised reflect this position.

7.21Over the six financial years from 2017-18 to 2022-23, clean waste paper and cardboard exports represented a yearly average of 63 per cent of total waste paper and cardboard exports[21]—meaning nearly a third of paper and cardboard exports were considered mixed stream and subject to the waste export regulations.

Application processing times

7.22The committee was advised that the average time for licence decisions under the export regulations framework was six weeks, but that 'often they take longer, and in fact we often spend 10 or 11 weeks working with applicants to ensure that the appropriate information is available'.[22] DCCEEW advised it had a dedicated assessments team[23] which looked to engage early with licence applicants to help shorten the application period.[24] DCCEEW later provided a breakdown of the average time, in weeks, for each application type:

Source: DCCEEW, answers to questions on notice, IQ24-000098, 8 May 2024 (received 22 May 2024).

7.23There is no statutory timeframe in which DCCEEW must commence assessment of an application, nor is there a statutory timeframe to notify an applicant of a decision. Further, DCCEEW does not keep statistics about why applications may have been refused.[25]

7.24Since commencement of the scheme, to the period 31 March 2024, 16applications for waste export licences and exemptions had been refused by the minister or delegates (for lack of adherence to the RAWR Act or its rules, or lack of sufficient information), with 110 applications withdrawn by applicants.[26]

Export licensing fees

7.25In 2022, DCCEEW proposed ways to achieve cost recovery for the administration of the waste exports scheme.[27] Cost recovery for the administration of the waste exports scheme was expected to commence from 1July 2023, but was deferred until 1 July 2024.[28] Until then, these costs were funded by the federal government.[29]

7.26DCCEEW officials explained that as announced in the 2023-24 Budget, from 1July 2024 the cost-recovery arrangements would apply to all waste export licensing schemes, and to all applications, variations and exemptions.[30]

7.27Ms Lynch of DCCEEW advised that since the first export ban was implemented, the 'intention was for there to be cost recovery for this scheme' and the short deferral from 2023 to 2024 was 'in recognition of a range of factors, including that it was quite an ambitious time frame for introducing' the bans. The announcements around levies and cost recovery in 2024 were to 'provide some certainty to industry, after the delays or the deferral of that policy over the last few years'.[31]

7.28The chosen cost recovery model comprised of a flat fee across all waste streams, with different rates for the type of application: licence, exemption, variation or renewal.[32] The fees are outlined in Table 7.2, and were in place between 1July 2024 and 20 November 2024 (being the date the fee instrument was disallowed).

Source: DCCEEW, Regulation of Waste Exports: Cost Recovery, November 2022, p. 7.

7.29DCCEEW determined these figures by using 'actual costs incurred between 1January 2021 to 31 January 2022 from administering the program across glass, plastic and tyre waste streams'. DCCEEW continued that:

The average number of hours spent assessing a licence variation and providing a recommendation to the delegate was 38 hours, based on 16variations undertaken over this 12-month period. The time spent by the decision maker to consider whether to approve the application was not included in this figure.

This modelling focused on the number of hours dedicated to the assessment and did not capture the overall timeframe from the receipt of an application to when the licence variation was issued.[33]

Export licence variations

7.30DCCEEW explained how the licensing fees would apply in practice, saying that a change in circumstance did not necessarily constitute a variation:

Certain administrative changes like changing a business name—export agents, freight forwarders—is actually submitting a notification of change to the department. The fee is applied when it is a variation where we have to undertake an assessment, so it is a cost recovery that comes into play when we undertake those assessments. …where it is a variation, where it is a change to the licence that is significant, we then go through and work with applicant on that process.[34]

7.31The committee pressed the department to explain what would constitute a 'significant' variation and was told that it 'really depends on the licence and what is already specified on the licence' and that DCCEEW couldn't be 'completely clear' as the 'circumstances in each particular application can often be different'. Ms Kate Elliott of DCCEEW went on to explain that:

If there is something specified in the licence that needs to be changed and we have to reassess the circumstances in which that licence was issued then that would be subject to an assessment fee if it is dependent on a particular instrument and dependent on that particular licence. But we will be talking to applicants upfront on what those requirements are and navigate them through that process.

…If it is in the licence and it actually has a change that has an impact on the rules, then we have to redo the assessment. If it is a contact name which is also specified in the licence instrument then that is just a notice of change.[35]

7.32Mr McNee of DCCEEW confirmed that 'drawing a distinction between an administrative change and a substantive change that requires detailed assessment and therefore investment of assessment officers' time' is work that would be informed by the 'specific circumstances of a particular application'.[36]

Consideration of an export levy

7.33The costs of administering the RAWR Act that could not be directly linked to export licence applicants were proposed to be recovered through a levy of $3.98per tonne, to be paid upon export of each consignment.[37]

7.34DCCEEW advised that it had consulted on the levy—of nearly $4 per tonne of exports—in late 2022 and received 'strong feedback from industry that there would be perverse impacts of that arrangement'.[38]

7.35The Australian Government decided not to proceed with full cost recovery from 1 July 2024, as planned, but to proceed with the planned introduction of fees-for-service.[39] Inexplaining the decision not to proceed with the export levy, DCCEEW officials told the committee that:

…when we went out to test proposed cost recovery with industry [there] were a range of measures that would enable full cost recovery. That included an application fee, and variations on an application fee, plus a potential—or proposed—levy at that time. What has been decided by the government, and announced today [8 May 2024], is what will effectively be partial cost recovery. The costs of administering the scheme will continue to be subsidised by the government. The partial cost recovery will be charged to industry only, and that's the application fee.[40]

7.36Several submissions to this inquiry—which were received before the Australian Government's decision to abandon the levy—expressed a range of concerns about it.[41]

Disallowance of fee regulations

7.37In October 2024, the Senate disallowed the Recycling and Waste Reduction (Fees) Amendment (Export of Regulated Waste Material Fees and Other Measures) Rules 2024 (Waste Fee Rules).

7.38The Waste Fee Rules would have implemented cost recovery fees for applications, renewals, variations and exemption applications for export licenses related to the export of regulated waste glass, plastic, tyres, and paper and cardboard. This was intended to 'assist the Commonwealth to appropriately recover the costs of assessing applications relating to the export of regulated waste materials'.[42]

7.39There was considerable concern within the waste management and resource recovery industry about the licence fees, and the time taken for DCCEEW to consider licence applications. The evidence received by the committee played a key role in the disallowance of the Waste Fee Rules in the Senate. Notwithstanding that the rules have since been disallowed, some of the evidence received by the committee about the fees, and the processing times, is outlined below.

7.40The Australian Council of Recycling (ACOR), for example, noted that the minor adjustments to a licence might be 'incredibly costly' for smaller operators,[43] and that the licensing process was 'time-consuming' and 'has created delays in being able to deliver…product to market'.[44]

7.41The Waste Contractors and Recyclers Association of New South Wales (WCRA) contended that the regulations would 'result in local market failure and long-term market disruption, particularly concerning some plastics, paper and cardboard exports'. It also claimed the process for obtaining export exemptions under the regulations was 'unworkable, with unclear and cumbersome procedures that place significant strain on the industry and its trading partners'.[45]

7.42The Waste Management and Resource Recovery Association of Australia (WMRR), a national peak body for the waste and resource recovery industry, stated that they were opposed to the licensing and variation fees, and explained that the nature of the market meant that industry has to constantly search for and add new buyers, but 'that’s now going to cost you $13,400 every time you add a buyer'.[46]

7.43In discussing variation fees, Dr Kirkman of Veolia Australia and New Zealand (ANZ), a global water, energy and waste manager, argued that the industry would be paying 'tens of thousands of dollars more for no reason'. However, DrKirkman suggested that 'the application process, the time line, the delays, actually getting it processed' was 'more of an issue than the cost itself'.[47]

Issues raised with waste export regulations

7.44Several submitters criticised how waste exports were regulated and expressed their disagreement with the export bans. Some of these arguments are outlined below.

7.45Mr Rick Ralph of the ARRC told the committee that the bans were a response to a system that 'was never broken'. He continued that based on evidence collated by the ARRC, there was 'no need' for the:

…introduction of this unjustifiable and needless government regulatory disruption to our industry's trading market, particularly as it impacts our mixed paper and cardboard. The proposed rules of trade and setting of contamination limits will only apply to exporters and international trades…[48]

7.46Mr Ralph called for simplification of the system, transparency in reporting and for the government to 'let business get on with what it needs to do'.[49] He suggested an inter-governmental approach whereby waste export regulations were considered not just through an environmental lens via DCCEEW, but also via the Treasury and the Department of Industry, Science and Resources, to ensure business and economic perspectives were also considered.[50]

7.47Mr Mark Biddulph of Cleanaway suggested that 'a complete ban on exports or excessive regulation could result in a perverse outcome for recycling'. Pointing to the large and mature international market for paper and cardboard, MrBiddulph argued that:

…the licensing for exports should be an interim measure and rescinded when the Australian government is satisfied the market has self-regulated to adequate standards that include quality and supply chain management.[51]

7.48The WCRA argued that 'the government's characterisation of the industry as exporting "waste with contamination" is seen as a falsehood that undermines community confidence in recycling'.[52]

7.49The WMRR reflected that, while the goal had been to stop the export of waste, 'there was little understanding of existing imports, the lack of recycling infrastructure or onshore demand'.[53]In light of this, the WMRR called for the development of 'an integrated strategic infrastructure plan across Australia based on actual fates and flows'.[54]

7.50Several submitters from within the waste and recycling industry called for a fairer sharing of the burden of the waste exports scheme across the whole supply chain. For example, ACOR observed that 'Australia does not currently place specific environmental policy restrictions on importers of materials, including for tyres, plastics or paper and cardboard products', instead 'imposing the entire burden of cost recovery on one group of stakeholders at the “end-of-pipe” rather than at generation'.[55]

7.51On a similar note, Re.Group, a recycling and resource recovery company, explained that:

The export bans have created a number of unintended consequences and, specifically, serve to impose costs and obligations caused by the import of products from the global economy on the domestic recycling sector. I think this is an important point—the issue is arising from the materials being imported, not from the industry trying to export the excess material that we can't remanufacture domestically.[56]

7.52While supporting the overarching intent of the export bans, Mr David Singh, the Managing Director of Re.Group, noted that restrictions on exports can be problematic because of the lack of domestic recycling capacity in Australia. He observed that Australia is a 'net importer of products' and:

…with those products come packaging, and eventually those products reach the end of their life. There is not sufficient manufacturing capacity in Australia for all these materials… the massive additional amount of material simply doesn't have a home in the Australian economy at this time.[57]

7.53The Managing Director of Re.Group, Mr Garth Lamb, argued that Australia should be creating a price incentive at the other end of the supply chain, for imports—be it an application fee, a tax, a levy or similar. Mr Lamb argued that 'if we don't put that incentive at the right end of the market, it is going to be a disaster'.[58]

7.54Re.Group argued that:

…it seems reasonable to expect that the producers who supply the materials that become problematic waste should be obliged to fund their appropriate management…the Australian waste and recycling sector is carrying an unfair burden of regulation in connection with achieving the circular economy.[59]

7.55Re.Group suggested that a 'fairer, more rational, approach' would be to 'levy a smaller cost recovery charge across a much larger volume of imported goods, which in turn contributes to a levelling of the playing field so that local manufacturers can utilise local recycled content'.[60] Re.Group argued that Australia should ensure that 'the cost of recycling [is] borne by those who bring material into the system in excess of our domestic recycling capacity'.[61]

7.56The Law Council of Australia put forward its view that financial incentives could lead to innovation:

Seeking financial contributions from domestic manufacturers, importers and distributors of products from which exported waste is derived—such as glass, plastic (including processed engineered fuel), tyres and paper and cardboard…may lead to innovations in product design, durability, and reusability.[62]

Onerous licensing and exemption processes

7.57Some submitters raised concerns about the inefficient licensing and exemption processes associated with the waste export bans.

7.58For example, ACOR, a peak industry body for recycling in Australia, argued that licensing arrangements for the export of processed recycled material 'are not fit for purpose' as the process is 'unclear and inefficient'. In relation to plastics, ACOR explained that under the existing arrangements, 'any change to the export license, such as approving a new buyer, requires a variation to be submitted which can take up to six months to approve, by which time the buyer has generally moved on'.Additionally, the 'licensing system creates the need for ongoing variations, each sometimes subject to months-long delays'.[63]

7.59The WMRR advised that it had 'seen real examples of facilities making recycled pellets/flake having to lease separate premises to hold these whilst waiting for approval from the licensing regime'.[64] The WMRR expressed frustration that the virgin material equivalent would not be subject to any restrictions in Australia.[65]

7.60The ARRC also raised concerns about the 'unclear and cumbersome' process for obtaining exemptions under the export ban. The ARRC explained that exemptions 'can only be granted for a single type of waste material and for a maximum of 12 months' meaning that 'for businesses seeking to export multiple commodity types, multiple exemptions must be obtained' and that in cases where a buyer changes an order after an exemption has been granted, 'the exemption is no longer valid, and a new application must be submitted'. The ARRC argued that in a dynamic global market, the exemption process places significant strain on local industry and international trading partners and is 'commercially unfeasible'.[66]

7.61Similarly, the WMRR raised concerns about the 'extremely slow and cumbersome licensing and exemption process' arguing that it 'fails to keep abreast with the creation of sorted materials through MRFs [materials recovery facilities]…and fails to take into consideration licensing and stockpiling requirements that exist with state regulators'.[67]

7.62Likewise, the WCRA submitted that 'the process for obtaining export exemptions under the regulations is considered unworkable, with unclear and cumbersome procedures that place significant strain on the industry and its trading partners'.[68] The WCRA called for a review of the export exemption licence process and 'for a more efficient and effective governance framework'.[69]

7.63Veolia ANZ raised concerns about the cost burden, particularly on smaller entities, and also the protracted approval timeframes:

The costs are in the area of tens of thousands of dollars. There will be multiple applications. That will rack up. To be fair, for smaller operators it will be a bigger issue than it will for us in terms of straight cost. I'm more concerned about the timeline and the ability to get licences in place and to have the ability to export and not stockpile. With paper and card, there'll be a point where we just landfill it.[70]

7.64A Cleanaway representative presented an example of how the variation process did not work effectively in real-time:

I have placed cardboard in Singapore transit waiting for another buyer. Ican't wait for the government to charge $13,500 over a few months to make that decision; it needs to be done within 24 hours…it is completely uncommercial to have an amendment on your destination from a government regulatory perspective. It needs to be open right from the start.[71]

7.65ACOR suggested simplifying licensing arrangements by:

allowing processors and traders to be licensed to sell a product specification that is as broad as possible;

preapproving onshore processing facilities to reduce administration; and

disconnecting the buyer client and country from the export licence.[72]

Environmental impact of export regulations

7.66Several submitters from the waste and recycling industry cautioned that the export bans were having a perverse effect on the environment, due to insufficient domestic infrastructure capacity and lack of demand for domestic processing.

7.67Based on its experience with the plastic export ban, the Australia and New Zealand Recycling Platform (ANZRP), an e-waste manager, explained that, due to insufficient time given for the introduction of the regulations and required compliance from industry, 'significant quantities of sorted and separated e‑waste plastic were landfilled in Australia'.The ANZRP attributed this to the 'difficulty for some e‐waste recyclers to obtain a licence to export e-plastics' and 'the absence of proven and local capacity to adequately recycle this waste'. As a result, 'recyclers faced no options but to dispose of the plastic to landfill', and while 'numerous recyclers initially stockpiled the plastic, hoping for a local solution, they faced breaching state‐based regulations that govern volumes of waste that they can retain on their site(s)'.[73]

7.68Similarly, Veolia ANZ warned that the paper and cardboard export ban would produce worse environmental outcomes by creating stockpiling, landfilling and higher greenhouse emissions.[74] Veolia ANZ argued that the export regulations do not address the lack of Australian recycling processing capacity, 'so the ban merely drives packagers to lower-priced imported products'.[75]

7.69Re.Group argued that the restrictions, coupled with a lack of domestic capacity, would result in recyclables being stockpiled or going to landfill as 'both have been observed' through 'illegal tyre dumps and sheds filled with plastics pending suitable reprocessors'.[76] Re.Group argued that illegal dumping and stockpiling demonstrates 'that a restriction in itself is ineffective, unless a viable domestic outlet is created at the same time. Given lead times for processing facilities, the viable outlets need to be created years in advance of the restrictions being imposed'.[77]

7.70Re.Group further explained the impact of seasonality on waste generation:

Over the Christmas period, leading into December and definitely the first few weeks of January, we see a 20 to 25 per cent surge in the amount of material that is presented for recycling. Most facilities have a fixed tonnage rate in which they can process the material once we are presented it for recycling. A lot of the time we need the relief valve; we need the ability to export those materials, because we can't stockpile them. The sites simply don't have the capacity.[78]

The need for export regulations

7.71Some submitters argued that the waste export regulations were disruptive and unnecessary. For example, the ARRC argued that the export bans were never required and that the system was 'never broken', nor was it necessary to include paper and cardboard in the regulations. Mr Ralph of the ARRC continued that:

It was a political myth, promulgated by spin, that blindsided us when government made its rushed announcement for the need to interfere in what has always been an historically orderly and secondary commodity trading market. The government's own decision RIS [Regulatory Impact Statement] confirmed that it was not in the nation's best interests to include paper and cardboard in waste export bans, and that there was a genuine lack of evidence that our recyclables were, in fact, causing international environmental harm… We were blindsided by the Morrison government. We're not quite sure where it came from.[79]

7.72Likewise, the WCRA reflected that prior to the regulations, 'Australia actively participated in a global market for recovered materials', and that this:

…participation played a crucial role in the global circular economy. The disruption caused by government regulation of the commodities trading market has been profound, leading to a fundamental disruption of the nation's recycling system.[80]

7.73Tambo Waste gave similar evidence and pointed out that there was 'more cardboard and paper domestically' than Australia could handle. Therefore:

…we need to be able to keep the export market open to ensure that there is not surplus paper and cardboard, which will drive down prices locally and force excess paper and cardboard being taken to already overcrowded landfill facilities, and not contributing to the circular economy that we are all trying to achieve.[81]

7.74Veolia ANZ argued that the export ban 'doesn’t make sense', suggesting that similar bans would not be applied in other industries and questioning why the recycling industry was being targeted when 'trying to get on its feet'.[82] DrRichard Kirkman of Veolia ANZ explained:

The circular economy is the economy, and it's a global economy. We cannot possibly balance things. Even if there are more and more facilities built for paper recycling, you will never get an exact balance between what we're putting out of the system and what's built, because we're always incrementally increasing how much cardboard and paper we collect. We can't incrementally increase facilities; either there is one or there isn't one. So the principle doesn't work.[83]

We're in a similar situation to Cleanaway. We're a similar size, and we export about 150,000 tonnes of paper card every year. We were exporting plastic until the ban. Since that happened we've seen a degradation of the value of a tonne of plastic from…say it was $200 a tonne; it's now $100 a tonne. It's a huge loss of value through that ban. No-one has recouped that value anywhere.[84]

7.75Veolia ANZ argued that the ban is effectively 'a recycling tax' that will 'increase costs to households and businesses during a cost-of-living crisis'.[85]

7.76On a similar note, the Local Government Association of Queensland (LGAQ) advised that the 'current regulations under the RAWR Act 2020 are restrictive to a level that the number of lawful exporters operating out of regional Queensland is severely limited' resulting in councils being 'forced to pay above market rates to be able to remove stockpiles of these [waste tyres and plastics] materials'.[86]

7.77The committee also heard that 'without data, or adequate evaluation of the waste export ban, the effectiveness of this instrument meeting its aims cannot be assessed'.[87] Accordingly, the Australian Marine Conservation Society and WWF Australia argued that the Australian Government should 'publicly report on the effectiveness of the ban on mixed-plastics and the impact it has had domestically and internationally'.[88]

Reclassification of materials

7.78Several submitters called for remanufactured materials, subject to the export regulations, to be reclassified as commodities rather than waste.

7.79The ARRC suggested amending waste exports regulation 'to reflect it being a government regulation on "secondary commodity exports" and for it not to be referred to as "waste" in legislation'.[89] The ARRC also called for the 'export exemption licence process [to] be formally reviewed to reflect a more efficient and effective governance framework for trading secondary commodities'.[90]

7.80This was echoed by the WCRA, which recommended that the 'waste exports regulation be amended to reflect it as a government regulation on secondary commodity exports'.[91]

7.81Likewise, ACOR expressed frustration that the current approach treats manufactured materials as waste rather than a commodity, which adds 'cost and delay to the trade of recycled commodities and fundamentally undermin[es] investment in domestic recycling infrastructure'.[92]

Import conditions

7.82The committee heard that there were no restrictions on what could be imported into Australia, despite the extensive restrictions placed on Australian waste and resource exports.

7.83The ARRC gave evidence that Australia 'import[s] more than we actually produce and manufacture. Sixty per cent of all the plastics we use in this country are imported', therefore, Australia 'need[s] international markets…Circularity is international'.[93]

7.84Despite this, witnesses suggested the current import conditions created a 'very uneven playing field between virgin and imported materials and Australian recovered materials', and that this approach did not support a circular economy.[94]

7.85At a public hearing the ARRC explained that:

The recycling industry now has to recover this material, process it to a specification…put it into a resin, apply for a licence to a department that has no understanding of how to go forward and manage a regulation, and then it has to compete against an importer who has no such requirement to declare where the material came from, what he made it from and how much he's doing it… We're paying hundreds and hundreds of dollars above just to compete...[95]

7.86Mr David Singh of Re.Group also called it an uneven playing field, with recycled materials being imported into Australia from 'economies that have far lower costs'. Mr Singh called for incentives to use local recycled content, and more visibility on recycled content use.[96]

7.87To level the playing field, several stakeholders argued in favour of taxes, levies and other financial levers. For instance, Pact Group, an Australian-based plastic recycling, reuse and packaging manufacturing company, told the committee, 'we need eco-modulation that will advantage the domestic market'. Eco-modulation would require manufacturers or brand owners to pay a fee for placing packaging on the market, with lower fees for those who use local recycled content in their packaging.[97] Pact Group noted that the United Kingdom’s (UK) Plastic Packaging Tax is a form of eco-modulation that has triggered a swift increase in recycled content in packaging:

…the conversion of market at mass since they put that tax on product-on-shelf for use of recycled content has been phenomenal. The industry has turned very fast. It has addressed the concept of demand.[98]

7.88The Martogg Group, which supplies plastics raw materials and recycled polymers to Australian manufacturers of plastic products, similarly suggested that a Packaging Material Recycling Levy should apply to all packaging materials placed on market by both domestic producers and importers, with the goal of incentivising minimum recycled content levels.[99]

7.89At the same time, stakeholders cautioned that any taxes or levies would need to be carefully calibrated to avoid unintended consequences and maximise effectiveness. Pact Group pointed out that in the UK the unintended consequence of imposing a tax on products that don’t meet 30 per cent recycled content is that 'no-one puts a gram extra in [over 30 per cent], because that discharges the obligation'.[100] Further, Martogg Group critiqued the fact that the revenue raised by the UK’s Plastic Packaging Tax was not pledged back to the recycling industry, but rather 'went straight into consolidated revenue and it wasn’t necessarily as efficient as it possibly could be'.[101]

7.90Although the Australian Industry Group did not express a position on the specific method of a tax or levy on virgin plastics, it stated that:

…the right settings are probably going to be different in different contexts. Food packaging and products probably require different answers to highly-specialised products of the chemicals variety… We would be cautious about making bold declarations of what’s the right level and way to change the incentives structure. But the incentives structure does need to be changed because there is not a sustainable business model today in recovering most plastics.[102]

7.91The Circular Economy Ministerial Advisory Group have suggested that the Productivity Commission (PC) investigate potential economic and tax settings as part of the PC’s inquiry into Australia’s opportunities in the circular economy, as discussed in Chapter 3.[103]

Recycling Modernisation Fund

7.92The Recycling Modernisation Fund (RMF) was established in 2020 'to support industry to transition to the regulation of [waste] exports, by increasing Australia's onshore capacity to collect, reuse, recycle and recover waste materials affected by the regulations'.[104] The Australian Government is contributing up to $250 million towards new and upgraded recycling infrastructure through the RMF.[105] Total investment will 'leverage' over $1billion, with contributions from the states, territories and industry.[106]

7.93Australian Government funding is provided to the states and territories under the Federation Funding Agreement—Environment and the National Partnership on Recycling Infrastructure. Funding is provided via several RMF streams: the main RMF stream, the Plastics Technology stream, the National Paper Solution stream, and the Regional and Remote stream. Under the main RMF stream, the allocation of funding to projects is decided by state and territory governments, based on the gaps they identify in recycling capacity.[107]

7.94DCCEEW advised that as at 4 December 2024 there were 142 projects announced and proceeding under the RMF, 68 of which were in rural and remote areas.[108] The following table provides a breakdown of these projects and their funding:[109]

Source: DCCEEW, answers to questions on notice, IQ25-000002, 14 February 2025 (received 21 February 2025).

7.95Of the 142 projects, 106 are processing facilities (including 19 materials recovery facilities), 29 are remanufacturing facilities, and seven are trial projects.[110] The following table sets out the annual volumes of material expected to be processed by these projects:

Source: DCCEEW, answers to questions on notice, IQ25-000002, 14 February 2025 (received 21 February 2025).

Criticisms of the RMF

7.96The inquiry received several criticisms of the implementation of the RMF, including a lack of an overarching strategy to guide investment, insufficient analysis of infrastructure requirements and inadequate transparency of projects and outcomes. Some of these matters are discussed below.

7.97ACOR welcomed the funding available via the RMF, noting that 'targeted funding has been an important lever to enable the scale in recycling systems that are necessary'.[111] However, when asked about the efficacy of the RMF, Ms Toumbourou of ACOR suggested the original intent was to have infrastructure to support the export regulations, but:

Not all of the funding has been disbursed, and potentially the majority of that infrastructure has not yet been delivered. So we haven't seen that matching up of the processing capability, specifically, across all material streams, noting that they are sometimes quite diverse with the export regulation. In some material streams we have seen a more efficient pairing up.[112]

7.98The WMRR similarly argued that the RMF was 'not well implemented…the necessary supporting policies required did not all eventuate…nor was appropriate market development undertaken'.[113] The WMRR submitted that while 'RMF funding has assisted in some states to increase investment', it 'has not been sufficiently focused based on data and evidence of what is required where'.[114]

7.99The WMRR advised that it had received 'great support' from governments in relation to the RMF, seeing a 'billion dollars in investment being contracted with industry to develop facilities'. The WMRR continued, however, that it did not see:

…a matching of what was required with where it was required with that billion dollars. As of today [8 May 2024], we do not have any facilities which have been finished in WA [Western Australia], Queensland, NT [Northern Territory] or the ACT [Australian Capital Territory] from that RMF grant, which makes it really difficult for those states to process these materials.[115]

7.100Providing a regional perspective, the LGAQ submitted that interventions like the RMF had 'failed to provide the necessary infrastructure in…[certain] areas to provide a suitable alternative'. The LGAQ stated that:

This is not due to lack of interest of industry to settle in locations such as FarNorth Queensland, but due to the economics of the relatively small volumes of materials and the complete lack of local offtake markets for the end products.[116]

7.101According to Huhtamaki, there should be a focus on improving the coordination of investment under the RMF, towards the necessary goals:

…there was limited overarching policy framework to further co-ordinate this investment or the activities of state governments to achieve these goals. Instead it was largely industry driven at a state and territory level.[117]

7.102Several stakeholders made suggestions for broadening the scope of the RMF to 'include a wider range of waste streams and materials'.[118] For example, the ARRC and the Waste and Recycling Industry Association of Western Australia argued for RMF funding to be put towards 'local investment into all three waste streams, including liquid wastes',[119] while the Australian Food and Grocery Council suggested that the funding cover 'investment in advanced recycling'.[120]

Improve transparency in RMF outcomes

7.103To improve transparency, the ARRC called for the Australian National Audit Office to conduct an audit of the RMF, and the use of its funds to:

…identify the actual additional local remanufacturing capacity that has been generated and funded by the Australian taxpayer and to identify the number of projects that have been announced but not yet realised or that have been cancelled.[121]

7.104Similarly, the WCRA argued that 'there is a need for greater transparency and analysis of…[RMF] outcomes', calling for a 'value analysis of RMF investments to determine their overall range of materials and waste streams'.[122]

Footnotes

[1]Department of Climate Change, Energy, the Environment and Water (DCCEEW), National Waste and Resource Recovery Report 2024 (prepared by Blue Environment Pty Ltd), January 2025, p. xiv.

[2]DCCEEW, Submission 7, p. 3.

[3]DCCEEW, Consultation Regulation Impact Statement: Phasing out certain waste exports, December 2019, p. 4.

[4]DCCEEW, Consultation Regulation Impact Statement: Phasing out certain waste exports, December 2019, p. 14.

[5]DCCEEW, Consultation Regulation Impact Statement: Phasing out certain waste exports, December 2019, p. 4.

[6]Mr David Singh, Managing Director, Re.Group, Committee Hansard, 8 May 2024, p. 23.

[7]Throughout this inquiry and report, these measures were collectively referred to as the 'export bans'. Council of Australian Governments (COAG), COAG Meeting and Priorities, pp. 5 and 6. See also: DCCEEW, answer to question on notice, 8 May 2024 (received 31 May 2024), p. 2.

[8]Ms Kate Lynch, Division Head, Circular Economy Division, DCCEEW, Committee Hansard, 8 May 2024, p. 57.

[9]Ms Kate Lynch, Division Head, Circular Economy Division, DCCEEW, Committee Hansard, 8 May 2024, p. 57.

[10]DCCEEW, answers to questions taken on notice, IQ24-000095, 8 May 2024 (received 31 May 2024).

[11]DCCEEW, Waste exports,www.dcceew.gov.au/environment/protection/waste/exports (accessed 22 April 2024); The Hon Susan Ley, Former Minister for the Environment, House of Representatives Hansard, 27 August 2020, p. 5751; DCCEEW, Exports of waste paper and cardboard, www.dcceew.gov.au/environment/protection/waste/exports/paper-cardboard (accessed 17 September2024).

[12]DCCEEW, Waste exports (accessed 21 January 2025).

[13]Department of Agriculture, Water and the Environment, Cost Recovery Implementation Statement Waste Export Ban, p. 3.

[14]DCCEEW, Waste exports (accessed 21 January 2025).

[15]Ms Kate Lynch, Division Head, Circular Economy Division, DCCEEW, Committee Hansard, 8 May 2024, p. 57.

[16]The legislation is available at: www.legislation.gov.au/F2024L00491/asmade/text (accessed 17 February 2025).

[17]Australian Resources Recovery Council (ARRC), Submission 13, p. 8. At the time of submitting and presenting to the committee, the ARRC was known as the National Waste Recycling Industry Council (NWRIC). This report refers to the entity as the ARRC.

[18]DCCEEW, answers to questions taken on notice, IQ24-000096, 8 May 2024 (received 22 May 2024). See also: Department of Agriculture, Water and the Environment, Decision Regulation Impact Statement: Phasing out exports of waste plastic, paper, glass and tyres; Prepared for COAG consideration, March 2020.

[19]DCCEEW, answers to questions taken on notice, IQ24-000099, 8 May 2024 (received 22 May 2024).

[20]Ms Kate Lynch, Division Head, Circular Economy Division, DCCEEW, Committee Hansard, 8 May 2024, pp. 58 and 65.

[21]DCCEEW, answers to questions taken on notice, IQ24-000099, 8 May 2024 (received 22 May 2024).

[22]Mr Andrew McNee, Division Head, Environmental Permitting and Compliance Division, DCCEEW, Committee Hansard, 8 May 2024, p. 60.

[23]As of 8 May 2024, there were 17 staff in the Waste Export Assessment team: DCCEEW, answers to questions taken on notice, IQ24-000100, 8 May 2024 (received 22 May 2024).

[24]Mr Andrew McNee, Division Head, Environmental Permitting and Compliance Division, DCCEEW, Committee Hansard, 8 May 2024, pp. 60–61.

[25]DCCEEW, answers to written questions on notice, IQ24-000147, 21 August 2024 (received 5September 2024).

[26]DCCEEW, answers to questions taken on notice, IQ24-000101, 8 May 2024 (received 22 May 2024).

[27]Cost recovery involves government entities charging individuals or organisations some, or all, of the efficient costs of a government activity. DCCEEW, Regulation of Waste Exports: Cost Recovery, November 2022, p. 2.

[28]DCCEEW, Fees and charges to export regulated waste, 21November 2024, www.dcceew.gov.au/environment/protection/waste/exports/apply/fees-charges (accessed 24February 2025).

[29]DCCEEW, Cost Recovery Implementation Statement - Regulation of Waste Exports 2024-25, p. 9.

[30]Ms Kate Lynch, Division Head, Circular Economy Division, DCCEEW, Committee Hansard, 8 May 2024, p. 58.

[31]Ms Kate Lynch, Division Head, Circular Economy Division, DCCEEW, Committee Hansard, 8 May 2024, p. 58.

[32]DCCEEW, Cost Recovery Implementation Statement - Regulation of Waste Exports 2024-25, p. 11.

[33]DCCEEW, answers to questions taken on notice, IQ24-000097, 8 May 2024 (received 23 May 2024).

[34]Ms Kate Elliott, Branch Head, Wildlife, Waste and Environmental Permits, Environmental Permitting and Compliance Division, DCCEEW, Committee Hansard, 8 May 2024, p. 59.

[35]Mr Andrew McNee, Division Head and Ms Kate Elliott, Branch Head, Wildlife, Waste and Environmental Permits, Environmental Permitting and Compliance Division, DCCEEW, Committee Hansard, 8 May 2024, p. 59.

[36]Mr Andrew McNee, Division Head, Environmental Permitting and Compliance Division, DCCEEW, Committee Hansard, 8 May 2024, p. 60.

[37]DCCEEW, Regulation of Waste Exports: Cost Recovery, November 2022, p. 11.

[38]Ms Kate Lynch, Division Head, Circular Economy Division, DCCEEW, Committee Hansard, 8 May 2024, p. 58.

[39]DCCEEW, Cost Recovery Implementation Statement - Regulation of Waste Exports 2024-25, pp. 3 and 8. See also: Ms Kate Lynch, Division Head, Circular Economy Division, DCCEEW, Committee Hansard, 8 May 2024, p. 56.

[40]Ms Kate Lynch, Division Head, Circular Economy Division, DCCEEW, Committee Hansard, 8 May 2024, p. 56.

[41]See for example: Waste Contractors and Recyclers Association of New South Wales (WCRA), Submission 1, p. 4; Huhtamaki, Submission 3, p. 4; ARRC, Submission 13, pp. 3 and 8; Australian Council of Recycling (ACOR), Submission 40, p. 8; Waste Management and Resource Recovery Association of Australia (WMRR), Submission 41, p. 5.

[42]Recycling and Waste Reduction (Fees) Amendment (Export of Regulated Waste Material Fees and Other Measures) Rules 2024, Explanatory Statement, p. 2.

[43]Ms Suzanne Toumbourou, Chief Executive Officer (CEO), ACOR, Committee Hansard, 8 May 2024, p. 6.

[44]Ms Suzanne Toumbourou, CEO, ACOR, Committee Hansard, 8 May 2024, p. 3.

[45]WCRA, Submission 1, p. 3.

[46]Ms Gayle Sloan, CEO, WMRR, Committee Hansard, 8 May 2024, p. 37.

[47]Dr Richard Kirkman, CEO, Veolia Australia and New Zealand (ANZ), Committee Hansard, 8 May 2024, p. 52.

[48]Mr Rick Ralph, CEO, ARRC, Committee Hansard, 8 May 2024, p. 8.

[49]Mr Rick Ralph, CEO, ARRC, Committee Hansard, 8 May 2024, p. 11.

[50]Mr Rick Ralph, CEO, ARRC, Committee Hansard, 8 May 2024, p. 11.

[51]Mr Mark Biddulph, Head of Corporate Affairs, Cleanaway, Committee Hansard, 8 May 2024, p. 44.

[52]WCRA, Submission 1, p. 3.

[53]WMRR, Submission 41, p. 3.

[54]WMRR, Submission 41, p. 3.

[55]ACOR, Submission 40, p. 7.

[56]Mr David Singh, Managing Director, Re.Group, Committee Hansard, 8 May 2024, p. 22.

[57]Mr David Singh, Managing Director, Re.Group, Committee Hansard, 8 May 2024, p. 22.

[58]Mr Garth Lamb, Chief Development Officer, Re.Group, Committee Hansard, 8 May 2024, p. 29.

[59]Re.Group, Submission 49, p. 2.

[60]Re.Group, Submission 49, p. 2.

[61]Mr David Singh, Managing Director, Re.Group, Committee Hansard, 8 May 2024, p. 23.

[62]Law Council of Australia, Submission 39, p. 4.

[63]ACOR, Submission 40, p. 5.

[64]WMRR, Submission 41, p. 4.

[65]WMRR, Submission 41, p. 4.

[66]ARRC, Submission 13, pp. 7–8.

[67]WMRR, Submission 41, p. 4.

[68]WCRA, Submission 1, p. 3.

[69]WCRA, Submission 1, p. 4.

[70]Dr Richard Kirkman, Chief Executive Officer, Veolia ANZ, Committee Hansard, 8 May 2024, p.53.

[71]Mr Brian Dalitz, Head of Commodities, Cleanaway, Committee Hansard, 8 May 2024, p. 47.

[72]ACOR, Submission 40, p. 6.

[73]Australia New Zealand Recycling Platform, Submission 43, pp. 1–2.

[74]Veolia ANZ, Submission 14, p. 2.

[75]Veolia ANZ, Submission 14, p. 2.

[76]Re.Group, Submission 49, p. 2.

[77]Re.Group, Submission 49, p. 2.

[78]Mr David Singh, Managing Director, Re.Group, Committee Hansard, 8 May 2024, p. 23.

[79]Mr Rick Ralph, CEO, ARRC, Committee Hansard, 8 May 2024, pp. 8–9.

[80]WCRA, Submission 1, p. 3.

[81]Tambo Waste, Submission 38, p. 1.

[82]Dr Richard Kirkman, CEO, Veolia ANZ, Committee Hansard, 8 May 2024, p.51.

[83]Dr Richard Kirkman, CEO, Veolia ANZ, Committee Hansard, 8 May 2024, p.52.

[84]Dr Richard Kirkman, CEO, Veolia ANZ, Committee Hansard, 8 May 2024, p.52.

[85]Veolia ANZ, Submission 14, p. 2.

[86]Local Government Association of Queensland (LGAQ), Submission 25, p. 10.

[87]WWF Australia and Australian Marine Conservation Society (AMCS), Submission 68, p. 3.

[88]WWF Australia and AMCS, Submission 68, p. 3.

[89]ARRC, Submission 13, p. 3.

[90]ARRC, Submission 13, p. 3.

[91]WCRA, Submission 1, p. 4.

[92]ACOR, Submission 40, p. 5.

[93]Mr Rick Ralph, CEO, ARRC, Committee Hansard, 8 May 2024, p. 9.See also: Ms Kate Noble, Senior Manager—Oceans Policy, WWF Australia, Committee Hansard, 5 August 2024, pp. 19–20.

[94]Ms Suzanne Toumbourou, CEO, ACOR, Committee Hansard, 8 May 2024, p. 4.

[95]Mr Rick Ralph, CEO, ARRC, Committee Hansard, 8 May 2024, p. 9.

[96]Mr David Singh, Managing Director, Re.Group, Committee Hansard, 8 May 2024, p. 23. Recycled content regulation is discussed elsewhere in this report.

[97]Mr Andrew Smith, Executive Adviser, Circular Economy, PACT Group, Committee Hansard, 5 August 2024, pp. 53–54.

[98]Ms Siobhan McCrory, Executive General Manager, People and Culture, Sales, Marketing and Innovation, PACT Group, Committee Hansard, 5 August 2024, p. 54.

[99]Martogg Group of Companies, Submission 60, Attachment 1, p. 1; Mr David Finlayson, Group Commercial Manager, Martogg Group, Committee Hansard, 5 August 2024, pp. 9 and 12.

[100]Ms Siobhan McCrory, Executive General Manager, People and Culture, Sales, Marketing and Innovation, PACT Group, Committee Hansard, 5 August 2024, p. 57.

[101]Mr David Finlayson, Group Commercial Manager, Martogg Group, Committee Hansard, 5 August 2024, p. 9.

[102]Mr Tennant Reed, Director, Climate Change and Energy, Australian Industry Group, Committee Hansard, 5 August 2024, p. 51.

[103]Circular Economy Ministerial Advisory Group, Final Report: The Circular Advantage, December 2024, p. 21.

[104]DCCEEW, Submission 7, p. 3.

[105]The Australian Government committed $190 million over four years from 2020-21 to establish the Recycling Modernisation Fund (RMF): Commonwealth of Australia, Budget Measures: Budget Paper No. 2 2020-21, p. 209. A further $60.4 million was committed over four years from 2022-23: Commonwealth of Australia, Budget Measures: Budget Paper No. 2 2022-23, March 2022, p. 51.

[106]DCCEEW, Investing in Australia's waste and recycling infrastructure, 5 February 2025, www.dcceew.gov.au/environment/protection/waste/how-we-manage-waste/recycling-modernisation-fund (accessed 28 February 2025); DCCEEW, answers to written questions on notice, IQ24-000121, 15 July 2024 (received 26 July 2024).

[107]DCCEEW, Investing in Australia's waste and recycling infrastructure (accessed 7 June 2024).

[108]Ms Cathryn Geiger, Circular Economy Division, DCCEEW, Committee Hansard, 14 February 2025, p. 21; Circular Economy Division, DCCEEW, answers to question taken on notice (IQ25-000002), 14 February 2025 (received 21 February 2025).

[109]The funding amounts below are rounded to one decimal place.

[110]DCCEEW advised that: 'Processing includes sorting as well as processes further along the recycling chain such as pelletising of plastics and crumbing of tyres. Remanufacturing projects include those in which the main funded activity is remanufacturing processed waste into new products. Trial projects include projects that are looking at feasibility of scaling up a type of recycling activity and/or technology'; see Circular Economy Division, DCCEEW, answer to question taken on notice, IQ25-000002, 14 February 2025 (received 21 February 2025).

[111]Ms Suzanne Toumbourou, CEO, ACOR, Committee Hansard, 8 May 2024, p. 1.

[112]Ms Suzanne Toumbourou, CEO, ACOR, Committee Hansard, 8 May 2024, p. 3.

[113]WMRR, Submission 41, p. 3.

[114]WMRR, Submission 41, p. 5.

[115]Ms Gayle Sloan, CEO, WMRR, Committee Hansard, 8 May 2024, p. 36. At the time of writing, the RMF viewer shows that five RMF projects have been completed in the Northern Territory, and none in Western Australia, Queensland or the Australian Capital Territory: see DCCEEW, Investing in Australia’s waste and recycling infrastructure, 5 February 2025, www.dcceew.gov.au/environment/protection/waste/how-we-manage-waste/recycling-modernisation-fund (accessed 3 March 2025).

[116]LGAQ, Submission 25, p. 10.

[117]Huhtamaki, Submission 3, p. 2.

[118]WCRA, Submission 1, [p. 5].

[119]ARRC, Submission 13, p. 4; Waste and Recycling Industry Association of Western Australia, Submission 23, p. 2.

[120]Mrs Tanya Barden, CEO, Australian Food and Grocery Council, Committee Hansard, 5 August 2024, p. 33.

[121]ARRC, Submission 13, p. 3.

[122]WCRA, Submission 1, p. 4.