Crisis to opportunity: transforming our waste into a business for good

15 Jun 2020

Chief Executive Officer of Infrastructure Victoria Michel Masson says the wakeup call provided by China’s waste import ban provides a golden opportunity to reinvent our recycling and resource recovery industry – and create vital jobs for regional Victoria.

Victoria produces more than 14 million tonnes of waste each year. We could meet state targets to recycle up to 90% of our waste by focusing on six priority materials – plastics, paper and cardboard, glass, organics, tyres, and e-waste.

Victoria produces more than 14 million tonnes of waste each year. We could meet state targets to recycle up to 90% of our waste by focusing on six priority materials – plastics, paper and cardboard, glass, organics, tyres, and e-waste.

Reduce, reuse, recycle. It’s a well-worn mantra that has helped make Australians some of the best household recyclers in the world. But as Victorians quickly learned when fire closed one of our largest recycling plants in 2017, not all of our recycling was ending up as new product or being sold on commodity markets. Much of it was being exported to China.

When the Chinese Government banned solid waste imports in January 2018, stockpiling and illegal dumping rates grew – and Victoria’s waste industry suddenly found itself in crisis.Beyond the slogans and headlines, dedicated policymakers have been framing our collective approach to waste to move towards a circular economy: a focus on minimising and eventually eliminating ‘residual’ or non-recyclable waste, and maximising existing resources.Waste is not a term we will hear in the circular economy. Everything is a resource with inherent value.No more waste exportsLast year, the Council of Australian Governments (COAG) committed to a national goal of an average 80 per cent recovery rate across all waste streams by 2030. They also mandated waste export bans, which begin rolling out from January 1st 2021.Ministers also agreed to support measures to significantly increase the use of recycled content by governments and industry – ensuring there is an end market for the products being created.This is a significant change from our historic practices and represents a turning point for Australia in how we deal with our waste and recover material value.It will now require sustained investment to ensure that our local processing infrastructure is up to the task.Advice provided to the Victorian Government by Infrastructure Victoria last month estimated that the state could transform its resource recovery and recycling sector to recover up to 90 per cent of our waste with $1 billion in private sector and government investment by 2039.Infrastructure Victoria’s advice maps out 13 recommendations to guide the state towards a circular economy. Many of these recommendations have relevance beyond Victoria’s borders.If delivered by government in partnership with industry and the community, these actions will help Victoria achieve a range of outcomes that have a circular economy at their heart (see Figure 1).They also highlight the significant opportunity for regional Victoria to attract resource recovery jobs and investment in the post-COVID period, and the critical need for continued collaboration at all levels of government.
Figure 1: Recycling and resource recovery infrastructure outcomes. Source: Infrastructure Victoria, Advice on Recycling and Resource Recovery Infrastructure, April 2020.

Figure 1: Recycling and resource recovery infrastructure outcomes. Source: Infrastructure Victoria, Advice on Recycling and Resource Recovery Infrastructure, April 2020.

Towards a circular economy

Like many governments in Australia and around the world, a considerable amount of work is already underway in the Victorian Government to support a move to a circular economy. Shifting to a more circular economy will grow our economy, increase jobs, and reduce our impact on the environment.In late February, the Victorian Government announced a $300 million commitment to help drive transformation of the state’s recycling sector through its Recycling Victoria policy. This unprecedented single investment sent a clear signal to consumers and the market that the opportunity to increase what we recover and recycle is just waiting to be realised.It includes $30 million to help fund research for new products made from recycled materials, a $28 million Recycling Victoria Infrastructure Fund, and $11 million for infrastructure to improve the recycling of solvents. New requirements for using recycled products, such as plastics and glass in major road and rail construction projects, will also be built into contracts under the Recycled First initiative.Infrastructure Victoria’s recommendations build on this commitment by calling for investments in recycling and resource recovery infrastructure focused on six priority materials: plastics, paper, cardboard, glass, organics, tyres and e-waste.If Victoria is to meet the COAG targets and repurpose its waste, it will need an additional 3.1 million tonnes of processing capacity by 2039.To meet this need, Infrastructure Victoria has identified 87 new or upgraded facilities at an estimated cost of $1 billion. This substantial investment will generate at least 5,000 new jobs, as well as dozens of new products for use across industries including agriculture, construction and manufacturing.The resources we already collect in Victoria, if processed to a high quality and able to attract a higher market value, could generate $1.2 billion every year. This value would increase as recovery rates – and collection standards – are lifted.In good news for many areas doing it tough, of the 87 recommended new or upgraded facilities, 52 are proposed for regional Victoria.A growing role for organicsAnother key opportunity will be to increase the diversion of organic waste from landfill, including collecting more food and garden waste from both households and businesses.At present, there are still 21 local governments, two in metropolitan Melbourne and 19 in regional Victoria, which don’t collect organic waste at all. A higher number of councils collect only garden waste with no collection of food waste.This represents a huge opportunity to capture additional materials from these areas, which is why we recommended the Victorian Government support councils to increase (or commence) the kerbside collection of household organic waste.One-third of food waste generated in Victoria is estimated to come from households, with the remainder being generated by commercial and industrial users. Ramping up organic waste collection across the board will boost the current recovery rate for organics, currently at 42.3 per cent, and reduce harmful methane gases being generated in landfill.Food makes up around one-third of Victoria’s household waste, and around two-thirds of this is avoidable. Victorians on average waste $39 worth of food and drink every week – that’s more than $2,000 each per year, or about $4 billion across Victoria.Our community research found that nine of every 10 Victorians would be happy to change how their household sorts waste. This is important because, without informed and active participation from the community, the resource recovery challenges posed by contamination become much greater.We recommend a substantial focus on support and funding to programs that promote waste minimisation (like Sustainability Victoria’s ‘Love Food, Hate Waste’ campaign) to help reduce the amount of food waste entering the system in the first place.By partnering with local governments, the Victorian Government can make it easier for households to minimise and sort waste, reducing contamination and improving the quality of recycling. Ongoing, statewide and locally tailored behaviour change programs can harness community goodwill and convert it to action. The time is also right to standardise collection bin colours to reduce confusion.

A major opportunity for Victoria’s regions

While Infrastructure Victoria’s recommendations are statewide, the opportunity for regional Victoria to take the lion’s share of new recycling and waste jobs and investment is clear.To identify potential locations for new or upgraded infrastructure, we considered a range of factors including predicted waste generation and reprocessing capacity by material type.Regional Victoria already has proven plastics reprocessing capability, and there is potential for further organics processing – including open windrow composting and in-vessel composting. There are also opportunities for glass sand processing in regional Victoria to produce products for use locally in roads and infrastructure.We heard from regional and rural councils, and industry, about the challenges and opportunities they face.With high transportation costs identified as a barrier to improving recycling and resource recovery, we also considered proximity to end markets, such as agriculture or other industries, and pre-existing hubs, when recommending potential locations for new infrastructure (see Figure 2).Considering both the distance from the waste producers and the distance to the users of recycled products, the facilities we’ve recommended would reduce transport costs, in turn helping to maximise their economic viability.
Figure 2: Indicative location of existing and required recovery and reprocessing infrastructure. Source: Infrastructure Victoria, Advice on Recycling and Resource Recovery Infrastructure, April 2020.

Figure 2: Indicative location of existing and required recovery and reprocessing infrastructure. Source: Infrastructure Victoria, Advice on Recycling and Resource Recovery Infrastructure, April 2020.

 Clarifying roles and critical cross-government collaboration

Infrastructure Victoria’s recommendations recognise that cooperation and collaboration between local, state and federal governments is vital if national targets for recycling and resource recovery are to be met.Providing greater clarity about who does what when it comes to waste and recycling could also assist both state and local governments. The Victorian Government has already announced the creation of a new body in its Recycling Victoria policy, which could be the opportunity to provide this clarity.Currently, statewide reporting is neither clear, nor published publicly. Different councils provide different services to households, local government responsibilities are not enshrined in legislation, and the market for waste services is dominated by a small number of big private players.Implementing minimum service level requirements for local governments and providing funding support to help councils achieve those standards, would help support a more consistent approach to recycling across the state.The Australian Government also has a significant role to play in encouraging producers to take greater responsibility for the products they create when they reach the end of their life. Factoring in responsibility for the costs of disposing of waste from goods and services is largely the remit of the Australian Government through the Product Stewardship Act 2011.States could collaborate with the Federal Government to expand the line-up of product stewardship schemes. There are currently seven schemes in place – but none are mandatory, and levels of participation vary.Extended Producer Responsibility schemes are in use internationally and have proven particularly effective in managing hard-to-recycle products and reducing problematic materials. Expanding to new product types and reinforcing the existing schemes could see Australia follow suit.


Lessons for Victoria from Wales

Since it gained waste management powers from the UK in 1999, the Welsh Government has taken a proactive stance to improve its recycling and resource recovery performance. The Government has used a broad range of policy tools including mandatory performance targets, fines, incentives and financing to get to its current position.Local authorities are subject to mandatory reporting on waste collection, including the end destination for materials, and fines can be applied for inaccurate data reporting. The Government has taken a collaborative approach to working with the authorities to help them meet their recycling and reporting requirements, providing both funding and practical support.The first step was a target to reach 40 per cent of municipal solid waste (MSW) recycling by 2009-10, followed by a more ambitious target of 100 per cent recycling by 2050. Local authorities that fail to meet their recycling targets can be fined £200 per tonne. Wales’ recycling and resource recovery performance has improved dramatically since the targets were introduced. The introduction of a Collections Blueprint has also promoted a consistent approach to MSW collections across local authorities, with both practical and funding support available.While Wales still faces challenges with undeveloped end markets for some materials including plastics, the lessons for Victoria on how to work collaboratively across jurisdictions are clear.

Benefits for all Victorians

Infrastructure Victoria’s advice is the culmination of 12 months of comprehensive evidence gathering and development, as well as significant stakeholder and community engagement across the state. If actioned, the 13 recommendations developed will firmly put Victoria on the path towards a circular economy, with benefits for all Victorians.While these recommendations were designed in a Victorian context, there is common ground for governments at all levels across Australia. Challenges such as the growth in waste generation, lack of adequate processing infrastructure, hefty transport costs, and fragmented end markets for recycled products are all universal.As export bans loom, we will continue to share the proposals and lessons learned from our work with a number of states and territories. With the right settings and investment in place, Victoria and the nation can meet the expanding need for resource recovery and processing.The role for governments is clear: work collaboratively, put the right frameworks in place, and encourage investment – particularly in our regions. It’s an opportunity that none of us can afford to waste.

Michel Masson is the Chief Executive Officer of Infrastructure Victoria.