On 1 November 2024, during the NSW Circular Economy Summit in Sydney, the Minister for environment Penny Sharpe and the CEO of the NSW EPA Tony Chappel in separate landmark speeches said “NSW has a waste crisis and we are here to fix it”… or words to that effect (my emphasis). Most in the audience breathed a sigh of relief that finally someone was listening and going to act upon repeated warnings that NSW is in trouble. Waste disposal options in Sydney are nearing critical shortage while the State has fallen behind in delivering on the National Waste Targets set in 2019.
For clarity the Targets for 2030 are:
- 80 per cent diversion from landfill;
- 50 per cent reduction in organics to landfill; and
- a 10 per cent reduction in per capita waste generation.
We are stuck at 60 per cent recycling, have no chance of achieving a 50 per cent reduction in organics to landfill (a massive greenhouse gas generator) and per capita waste generation has grown by 2 per cent since 2019, rather than fallen.
Achieving the targets on the other hand will lead to transformational job creation in the NSW recycling industry, greenhouse gas reductions and economic investment.
“Why the hold-up?” you might ask.
To achieve these targets, we need infrastructure for source segregation (bins and trucks), and to build sorting and processing facilities for mixed waste.
The Minister and CEO announced:
“As a State, we’re at a critical juncture. We must act now to ensure our infrastructure keeps pace with growing waste volumes, and to maximise recycling and recovery efforts. Through a mix of innovative projects, strategic investments, and collaboration, we can turn this challenge into an opportunity.”
Action on the infrastructure front has been a long time coming. At long last, there is movement after years of advocacy. It seems so obvious and politically popular.
But, why is building waste infrastructure in NSW so hard? It isn’t because of a lack of willingness by industry, or action by community groups, or advocates or financiers or the public.
Everyone thinks building infrastructure to improve recycling rates and to reduce landfilling is a good idea. The only downside is that you need to build it next door to someone. There is the rub. That is why it takes five years minimum to get a planning approval for any waste infrastructure of any scale – if you get one at all.
NSW has long adopted a laisse faire (proponent led) planning system, which works fine for shopping centres and home renovations, but is an abject failure for waste.
We centrally plan power stations, water treatment facilities, schools, parks, roads, electricity networks, hospitals etc but not waste infrastructure.
When it comes to waste infrastructure, we leave to proponents (industry or councils) to propose and defend against the whims of local ‘oppositionism’.
Worse still, in NSW we require a ‘social licence’ as one of the preconditions for planning approval.
When is a local community ever going to agree to a ‘social licence’ for an incinerator or a landfill or even for that matter, a 200,000t/yr resource recovery facility?
It is a laudable objective to obtain community support or ‘social licence’, but as a concept when applied to large (and therefore strategically important) waste infrastructure, it is a bit silly.
No-one in their right mind wants a landfill next door to them. Next door to someone else, no problem. Just not where it is proposed to go.
I cannot believe the number of times WMRR, ACOR, AORA and other associations, along with private companies, have made this point to Government Ministers, EPA leadership and to independent Government inquiries. It is a particularly unique problem to NSW.
It got so farcical that at one point I was told by a senior planner in the Dept of Planning that “we are not communist China Mike. We don’t centrally plan infrastructure”. What?
With the Minister’s announcement of the impending release of a NSW Infrastructure Plan, it seems we might finally see some measure of common sense and some strategic planning for waste.
It is worth pointing out that most other States have such plans and it is no surprise that lots of investment goes there instead of NSW. Capital is mobile. Jobs are created where facilities are built and operated.
SA has Green Industries to promote waste infrastructure. Victoria has Resource Victoria and a waste infrastructure investment prospectus to encourage investment. QLD has its EfW and investment programs.
In NSW, up to now, we have been leaving it to proponents to fight it out with residents, oppositional local governments and ultimately and often, the arbitration of the Land and Environment Court.
Importantly, those proposing and defending facilities are afforded almost no guidance from the State Government on whether such infrastructure is needed, wanted or necessary.
How much more productive would it be if the State Government just told us what the State needs and then industry and councils got on with building it.
It doesn’t mean that locals can’t object to a particular proposal but at least it will mean that project proposals are set within a broader strategic framework of need. Dumb proposals will still be rejected but proponents with good proposals will at least have the backing of the State’s needs assessment.
So, the announcement of an impending State Waste Infrastructure Plan by the Minister came like fresh air. Finally. The Government engaged Arcadis to help prepare the plan, but we have not seen it yet.
The sooner we release it to the public, to investors, proponents and operators the sooner NSW can get on with it.
To provide clarity on scale and to give a benchmark to review the Arcadis Plan, the MRA team pulled together our own version of a State Infrastructure Plan (see graphic on page 39).
I have provided an overview here to give readers some idea of the magnitude of the task and the absence of time.
To achieve the State targets, we need to divert an additional 5.7 MT per year in NSW by 2030. That equates to the a range of tonnages per waste stream (see below).
We even added in a new landfill
for Sydney (which has nothing to do with hitting the targets but is seen as an urgent priority).
Those 2,751 bits of different kit will mainly be built by the private sector and councils.
The three critical things the private sector and councils need from the State government are the plan, a financial incentive, and regulatory certainty that the rules will not change sometime in the future.
We turned to the existing s.88 landfill levy for the financial incentive. It raises $0.9B per year. The contribution required to facilitate the above investment is $1.3B once. A bit over a year’s worth of levy, once.
All up this would employ thousands of people and release an investment boon of at least $6B in private sector money. That is 5:1 investment. Driven by grants based on those levy funds. (I hear you say – that sounds like a very good deal. Let’s get on with it).
But of course, life is never that simple. We cannot just take $1.3B from Treasury (even if the s.88 levy was introduced for recycling purposes). Most of it is spent on schools, roads and hospitals etc.
So, we came up with an answer as to how to use the levy to fund this infrastructure without having to ask Treasury to reallocate existing levy funds, which we acknowledge is a historical sore point for many in our sector.
A $18/t real increase in the landfill levy over three years with those funds 100 per cent hypothecated to the infrastructure plan gets the funding moving.
That is three cappuccinos per house per year.
If Government wants to accelerate the program faster to achieve the 2030 targets, then it can borrow from the future known levy increases to fund grants now. That is what we suggested.
Of course, others make the valid case that we should just keep lifting the levy until the investment happens – that is, we should not depend on grants. Or governments could ban materials from landfill or require EPR, which would stimulate investment irrespective of the levy settings.
Or we could do all of them at that same time. And we should.
We handed the plan and funding model to the EPA. We hope that they take it seriously.
The EPA recently announced they will release the infrastructure plan over “the next period”, “in chapters”.
As long as it covers what investors and councils need, we shouldn’t care how they release it.
But Minister, please make it soon.
It is good for recycling, for jobs, for the regions and for the planet.
Mike Ritchie is the Managing Director, MRA Consulting Group