Liz Kasell on why REDcycle failed – the lessons learned

Liz Kasell REDcycle

When the news broke that soft plastics collection business REDcycle had been storing soft plastics it had been collecting from Coles and Woolworths, company founder Liz Kasell knew it wasn’t a good look. Starting from an inkling of an idea she had 10 years ago, the scheme had grown too big, too fast – exacerbated by the COVID-19 pandemic. 

The company recently went into liquidation despite Kasell and her team’s best efforts to make things right. So, what went wrong? To find out, you need to start at the beginning of the end – when the news broke in the mainstream media about soft plastic bales being stockpiled in warehouses throughout Victoria and New South Wales. 

It wasn’t that the bales of soft plastics had been found – after all there was no deliberate attempt to hide them – but the perception amplified by an over-excited media that inferred there were nefarious reasons for the stockpiling. While Kasell readily admits REDcycle could have done things differently, she has not stopped working to find, and help build, end-markets for the plastics and to negate the partisan narrative that had been in the public arena.

To understand how the warehouse situation unfolded, you must go back the best part of 24 months during COVID. Kasell describes it as a perfect storm in terms of the timeline and how things happened. 

COVID has been blamed for a lot of events and outcomes over the past three years – whether it be supply chain issues, supermarkets running out of stock, and a downturn in business for industries such as travel and hospitality. When it comes to the waste industry, there haven’t been too many knock-on effects, other than staffing shortages in some areas. With REDcycle, there was an opposite effect – too much feedstock.

“All of a sudden, all of our downstream capacity was affected,” Kasell said. “For five years, we knew for example, a bin would get filled once a day, every day. We knew that bin was going to get filled seven times a week and so we allocated that much space all the way through the pipeline. 

“Then, due to people staying at home all day through COVID, those bins were filling 12 times a day, or 15 times a day. If you multiply that by over a thousand locations, you realise the volumes I am talking about. 

“At the other end of the scheme were downstream processors and partners who were trying to scale up as quickly as they could, but there wasn’t the infrastructure available due to the supply chain problems caused by the pandemic. Parts were stuck on docks as shipping avenues dried up. It was complete paralysis. The only thing that wasn’t paralysed was consumer participation, which increased massively.”

Read more: Liz Kasell speaks

Added to all this was the lack of procurement by end markets such as local councils to the companies creating the end products being made from the recycled soft plastics. 

“Our processing partners told us, ‘council orders have been placed on hold because councils are diverting all those funds to other areas’,” Kasell said. “We were told by downstream partners like ‘We are sorry, can you hold deliveries? We’re not able to take what we committed to take. The new processing line that we ordered from Europe is delayed by nine months’.”

As mentioned, one of the issues that hasn’t been a good look for the organisation is the portrayal that it was surreptitiously stockpiling the plastics. Plastic continued to be delivered and recycled by processing partners, but there was more volume coming in than could be accepted at the time. It also turned out that several processing partners were concerned that as capacity was re-established post-pandemic, there would not be enough plastic feedstock available to supply new higher throughput lines. REDcycle was asked to provide confirmation it would be an ongoing supply partner and could provide the necessary feedstock. This gave Kasell confidence that as the country emerged out of COVID, the soft plastic recovery system would be back in balance and in a position to grow.   

Kasell expected the bales to be kept for a little while as end market demand began to free up once COVID had run its course. Then processor Close-the-Loop’s facility had a catastrophic fire and suddenly REDcycle’s most important recycling partner, was shut down for a minimum of 12 months. Call it overly optimistic or bullheaded, the one thing Kasell didn’t want was the stored plastic going to landfill. In a practical world, that is exactly what should have happened, said Kasell. However, the REDcycle team was working hard to make sure that didn’t happen. Even though REDcycle was under intense media scrutiny, as well as the watchful eye of the EPA, and the politicians who never miss an opportunity to make the most of a disaster, she was determined the plastic bales would processed into other products.

Kasell’s biggest enemy wasn’t the stored material, supermarkets, the media, government bodies, or even politicians. It was time. Again, she acknowledges that the stored plastic needed to be managed in compliant way. However, both the Victorian and NSW EPAs were under high-pressure scrutiny from both the public and their political masters to solve the problem as soon as possible. Then there was the recent revelation in a Sydney Morning Herald article that the company responsible for transporting the bales needed to be paid.

And it’s not as if REDcycle was not doing any forward planning. Kasell said that although there was very little redundancy built in, REDcycle had been running for many years and understood  the consumer participation would increase – just not at the overwhelming rate it did. It went from collecting approximately 1500 tonnes of soft plastics to more than 7500 tonnes in just over two years. This dramatic increase could not have been predicted by REDcycle or any other industry organisation. There is still an estimated 350,000 tonnes of consumer soft plastic being placed in the Australian market each year, so REDcycle’s volume represented a very small fraction. 

There is also an irony in the scheme falling over, because there is going to be a need for it, or a similar entity, in the near future, as acknowledged recently by the triarchy of supermarkets who are putting together their Roadmap to Restart – a supermarket-run soft plastics collection scheme. This is because there are companies that are going to need the feedstock to deliver outcomes such as turning the plastic back into oil to be reused in another capacity. And it won’t be a few thousand tonnes of feedstock that will be needed, but tens of thousands. Two companies already have either imported technology or about to commission plants that will be capable of processing the plastics – APR Plastics and Licella. The latter will have the capacity – initially – to process 70,000 tonnes of product and will scale up to 120,000 tonnes. Not only will these processes give a new use to a product that would have been landfilled, but it will reduce the need for virgin plastics. 

In June 2022, Inside Waste’s story, Softly Softly- the Troublesome Waste Stream of Soft Plastics, Replas then director, Mark Jacobsen is quoted that Replas processes about 3000 tonnes per year but has capacity for up to 10,000 with most of it coming from the aforementioned REDcycle Program. 

Statements like these gave REDcycle the confidence that the capacity and end market constraints were temporary and well on the way to being unblocked.  

 “We used to cop a lot of blame for not having more locations and not having more retailers on board,” said Kasell. “That was a big criticism of REDcycle before this happened – that our network wasn’t big enough. We’d have at least 30 emails and comments every week about why we didn’t have locations here and there, and why we weren’t bigger, and why we weren’t picking up more, why we didn’t have more bins? We only added a handful of trial locations over the past four years because we were trying to manage this system so carefully and responsibly.”

Another key to the scheme’s demise has been the lack of infrastructure and the lackadaisical approach by many in the industry to hit the reset button when it comes to soft plastics. As pointed out in Inside Waste’s February/March cover story written by sustainability consultant Justin Bonsey – “Two heartening trends to emerge from this somewhat histrionic media response and subsequent community outcry [over REDcycle’s stockpiling] have been an underlying devotion for soft plastic drop-off akin to that of a cultural institution, and that the rug of soft plastic complaisance has been pulled out from under us, leaving us squinting into the post-BAU glory of possibilities for a top-down strategically co-ordinated whole-of-value-chain approach. This has started to clear the way for bigger-picture thinking we desperately need to not just stop the bleeding but heal the wound”.

With that in mind, Kasell and her team have still been working hard to find a solution for the impasse. 

“We’ve been working nonstop since the program paused,” she said. “I have reached out to many organisations about solutions, and many have reached out to us as well. 

“This challenge has been a catalyst in a way; focusing much needed attention on this issue and connecting key stakeholders. REDcycle  is close to announcing an important downstream processing opportunity for the legacy and future feedstock. It’s an onshore solution with a new technology partner.

“Over a decade ago, REDcycle took on a waste stream that no one wanted to touch and created a recovery pipeline where one didn’t exist with the collaboration of community, retail partners, brand partners, and recycling partners, and we are proud of what we have achieved . 

How does Kasell feel about the supermarkets – Coles, Woolworths, and ALDI, who have recently put in place the aforementioned roadmap?  

“During the pandemic, the supermarkets had so many other pressing issues happening around them – staff shortages, keeping basics on the shelves, as well as supply chain disruptions,” she said. “It was a different time, and we thought we would emerge out of this together, but the downstream and processing capacity couldn’t keep up.”

And what about the relationship now?

“I would say we’re working together,” she said. “REDcycle developed the stock movement and management plan, and destinations for the material. The supermarkets have offered to support the management of, and responsibility for, the stock to help ensure this material is successfully recycled and we are very grateful for this. We’re working together to execute that plan. It’s quite complex from a logistics perspective. REDcycle and our team are absolutely committed to doing everything possible to see this material recycled. And I’m unwavering in my belief that can happen, we just need the planned onshore processing capacity to come online between next 5 to 12 months. And I’m confident that it’s coming. There has just been a significant infrastructure lag.”

While some might wallow in their plight, Kasell is far from finished in her fight against soft plastic waste. Is she disappointed? Yes. Has this been the toughest time of her life? Yes. Does she feel a victim of circumstance? To a certain degree. But she is still as passionate about making sure none of the stockpiled bales end up in landfill.

Even though the company is in liquidation, Kasell is still working on downstream solutions to make sure companies taking the stock. For example, SaveBoard, a company that has a processing facility located at Warragamba, southwest of Sydney, recently took in 20 tonnes of the stockpiled plastics. Not a lot, but it’s a start. And despite some reports, the various EPAs have been helpful in trying to make sure REDcycle is doing the right thing with regards to the excess plastics.

“I do want to say that EPA has been  working with us,” she said. “I know that the mainstream media doesn’t portray it that way, but the EPA have been very helpful and collaborative in terms of providing information that we need and giving us time to get things in order. 

“Also, one thing I need to correct is that no one was ordered to landfill anything. There were multiple options, including the successful reprocessing of the material and exporting with the correct licencing or exemptions. Onshore processing was the first priority, with landfill being the last resort if no other options were available. For me, my absolute commitment was to see this material recycled and that has not changed.”

Another point Kasell would make is that if the REDcycle program had been paused in the middle of the pandemic, the disruption would have been much greater. She says that in hindsight that’s probably what REDcycle should have done but the thought of thousands of tonnes of soft plastics going to landfill made her feel sick knowing that once there, it had little to no chance of ever becoming a resource. And even if it was able to be mined from landfill, the amount of energy needed to decontaminate it would make the exercise moot. 

As for the future, there are  many important learnings that will create a roadmap for better outcomes.

For example, Kasell is adamant that one of the critical elements for success is the need for soft plastic packaging to be designed so it is ready to be recycled – in other words ‘design for recycling’. Then there is the quality of the material.

“If we make sure that packaging entering the marketplace is of the highest quality for downstream processors, it will open up capacity, and in some cases, without needing to add infrastructure,” she said. “Organisations and processors that are already onshore will be able to utilise the post-consumer soft plastics stream as a feedstock where they can’t now because of the mixed laminate structure films, which are incredibly challenging to process.”

Kasell also thinks the work that APCO is doing transitioning the brand owners and the packaging producers to meet the new design guidelines is important. She said she knows it is a balancing act because packaging plays a role and it’s got to perform; preventing food waste for example, as well as keeping the product inside safe and protected. 

“That’s work that I loved being a part of, but I think it’s hidden in terms of how important it is, to create better recycling outcomes at the end by introducing highly recyclable materials at the beginning that still function in their primary purpose ,” she said. 

“The other part is the transition that leads to Australia’s extended producer responsibility. 

“We’ve done a significant amount of modelling. Our model wasn’t funded well enough to cope with this unpredicted increase we saw. But having said that, it’s about having the building blocks of product stewardship already there. I think those are two critical factors if we’re going to see success in the soft plastics value chain in Australia. Creating a robust system designed for recycling is critical. And a transition to a more robust producer responsibility model is also critical.”

As for her own personal future in the industry, Kasell is not going anywhere. For a mother who more or less fell into the industry, the past 10 years have shown her that this is her calling. REDcycle’s demise may be a bitter pill to swallow, but it hasn’t diminished her passion of keeping landfills free of plastic waste that can be utilised as a resource.

“This is my life’s work. I’m as passionate about it and even though I’m sad right now – you’re catching me during a tough time – I’m unwavering in my commitment,” she said. “I am also completely and totally humbled by the engagement on the part of the Australian community. They are responsible for powering this pipeline; REDcycle just gave them the opportunity.” 

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