Contributed by Gavin Shapiro, who is a partner at Hones Lawyers and specialises in waste contracts, waste legislation, EPA investigations and prosecutions and operational issues.
For the past five years or so, we have been hearing a lot about the promise of Energy from Waste (EfW).
I myself have had countless meetings with parties interested in pursuing EfW in Australia, particularly new entrants from overseas. However, the actual uptake of projects in Australia has been slow – while there have been some good starts (for example in WA), and a few smaller-scale, niche or project-specific EfW projects commenced, there hasn’t yet been the large-scale uptake for municipal and commercial and industrial (C&I) waste that we have seen in overseas jurisdictions.
Admittedly, as an environmental lawyer, my perspective is limited, and necessarily heavily focussed on the regulatory side of things – so feel free to disagree or take what I say with a grain of salt. But the following is my perspective on why EfW has not yet achieved what it can in Australia, and what I believe needs to be done at a government and regulatory level to allow EfW projects to flourish.
The case for EfW
Firstly, the question is – just because EfW is available, do we need it? Is it necessarily a bad thing that EfW has yet not taken off at a large-scale? In my view, there is a clear case for EfW, for a few reasons:
• If done correctly, it presents a more environmentally-friendly option for disposal of waste than landfill, particularly in terms of carbon and methane emissions, as well as contamination and leachate,
• We are running out of landfill capacity in many metropolitan areas, particularly the Sydney metro, whereas EfW presents a more sustainable long-term solution,
• EfW can address the current issues we are facing in recycling and landfill (discussed below), and
• As I will also discuss below, EfW has the dual benefit of generating energy – something sorely needed.
We (and regulators) need to change our perspective on EfW
The first issue is where EfW sits on the waste hierarchy. It is typically placed just above disposal on the pyramid of options – with recycling and reuse above. As a result, EfW policies typically require separation and resource recovery to occur as mandatory steps before material can be used for EfW. That makes perfect sense, in theory – clearly, reuse and recycling are better solutions. But in practice, this can make large-scale EfW commercially unattractive. And, importantly, the current reality of a recycling crisis, where we are struggling to find end markets for some recycled material, is very different to the theory. We need to adjust our expectations to fit the current market. The next issue is our entire approach to EfW. As many people know, we talk all about EfW in the waste industry – at waste conferences, in Inside Waste, etc. Typically, it is state waste regulators that are responsible for EfW policies.
But we are also facing an energy crisis in Australia. The conflict between security of supply, desire to move to renewable energy, inconsistent Federal policy, and the economics involved have led to a situation where we face increasingly tenuous supply and skyrocketing energy prices.
Rarely, if ever, is EfW looked at as one of the potential solutions to our current energy crisis – but it should be. It presents a sustainable, renewable source of energy, in addition to all of the other benefits it provides as a waste solution.
Another issue is the difficulty in obtaining required planning approvals and licences for EfW projects. Typically, obtaining all approvals for a new waste facility in my home state of NSW takes between 18-24 months, if not longer – and if a Land and Environment Court appeal is required (which is often the case with waste projects – particularly controversial ones), you can add an extra 6-12 months. Coupled with the uncertainties involved, this makes investing in prospective large-scale EfW projects a risky proposition.
Overcoming the difficulties and uncertainties on the planning side of the equation is also a key part of making EfW work in Australia.
Procurement and policy
While joint organisations, Regional Organisations of Councils’ (ROCs) regional waste management groups do a great job of attempting to coordinate strategy and procurement. The reality is that there is little incentive for either individual councils, or the invisible hand of the market, to take a bet on large-scale, potentially risky EfW infrastructure. There is a “missing middle” where state governments can be doing more to drive the procurement and infrastructure coordination process.
Regulatory levers and Solutions
To make EfW work in Australia, it is clear that we will need a number of policy and legal responses, as well as consistency in government policy both Federally and at state levels (probably wishful thinking on my part).
Getting EfW off the ground at scale requires a whole-of-government approach – particularly since these issues are regulated by different bodies and different jurisdictions.
Some of the key reforms that will be needed include state EfW/waste policies that acknowledge the place of EfW in solving our current waste crisis, Federal and state energy policies and tariffs that encourage investment in EfW, and a more consistent and standardised legal environment – particularly between state and Federal jurisdictions. A far greater connection between infrastructure and needs analyses, and the actual procurement of infrastructure, as well as the planning system, is also needed to bring greater certainty.
On the carbon and renewables front, significantly greater incentives could be introduced for EfW, including developing further methodologies for EfW technologies, and making it eligible for the Emissions Reduction Fund. Greater energy-side incentives could be offered, as they are overseas. And, as part of the whole-of-government approach, the Federal carbon policy approach should be married to energy policy and waste policy for EfW both Federally and at state levels.
There has been a lot of talk around EfW. But now, the time has come for regulators to act to address our waste and energy crises, by killing two birds with one stone.