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Recycling market review lays out export ban challenges

The export of some paper and cardboard packaging will be “necessary”, despite plans to ban the export of these materials within two-and-a-half years, a new report has indicated.

The newly released Recycling Market Situation Summary Review suggests that significant work is needed to create greater markets for paper and cardboard in Australia, along with greater markets for other materials proposed under Australia’s export bans.

The report, prepared on behalf of the federal government by Sustainable Resource Use, summarises the challenges and expected changes needed to successfully implement export bans for paper and cardboard, plastics, baled tyres, and glass.

It indicates that a lack of market security and sustainable pricing for recyclables are hindering local markets for these materials.

READ: Leaders call for urgent funding and market development to support export ban

The review comes after the Council of Australian Governments (COAG) agreed to ban the export of these waste materials. Subsequently, an export ban timetable was published in November 2019.

All waste glass exports are expected to cease by July this year, followed by mixed waste plastics by July 2021; all whole tyres including baled tyres by December 2021; and mixed paper and cardboard by June 2022.

Paper and cardboard accounts for more than half of the packaging in the Australian market, but markets for certain materials significantly hindered by a lack of demand and low prices.

The report highlights that kerbside collected mixed paper and paperboard continues to be “almost unsaleable” locally or through export in any significant volume and it has a current value of about $0 /tonne.

The report warns that unless secondary sorting of MRF mixed paper and paperboard (to multiple higher quality grades) meets the requirements of a local or international market, it will not find an end market.

More diligent sorting of paper and cardboard to specification could open up greater local markets at better prices, but the report suggests that exporting paper and cardboard is inevitable.

With Australia being a net importer of goods the “export of packaging to supplying country markets will be necessary”.

Certain materials, such as non-kerbside sourced newsprint and magazine grades continue to be purchased in the Australian market at prices as high as $250/tonne, however, there is a lack of sorting of these grades by Australian MRFs. This severely limits the supply and quality of available material, the report indicates.

Despite the challenges, there is a market for other materials such as post-consumer sorted white office paper or bleached kraft, which fetches as much as $350 /tonne. Pre-consumer volumes from printers and converters is highly sought after and premiums are still paid for what is a limited supply, according to the report.

Clearer picture of glass markets

With the ban on exporting glass coming into effect in mere months, the report outlines some work that needs to happen to achieve greater reprocessing onshore and it prompts government and other stakeholders to increase uptake of recycled materials to create greater onshore markets.

The report highlights that cullet use in Australian bottle production is about 407,000 tonnes or an estimated 32 per cent postconsumer recycled content in Australian bottles.

There are currently excessive losses of glass in collection and sorting of about 30-40 per cent.

While there is potential to collect and reprocess significantly more glass, there are several successful glass packaging manufacturing plants in capital cities – Adelaide, Melbourne, Sydney and Brisbane.

The largest producer is Owens Illinois which produces about 650,000 tonnes of glass packaging for a range of beverage and food applications. Other manufacturing plants are supplied with cullet from beneficiation plants operated by Visy Recycling, SKM and Polytrade at a total cullet usage of about 350,000 tonnes. Additionally, manufacturers Owens Illinois and Orora have committed to increased cullet usage through the five glass production facilities.

Other secondary materials for glass, such as using glass as a road base material, are growing, but they do not offer a high market price.

The review highlights that more effort could be made to recover glass from vehicles – as is the case in countries such as the Netherlands where all material from vehicle metal recyclers is required to be sent to a plant equipped to recover glass as well as plastics, rubber and textiles.

The review suggests that a model should be considered by the federal government and industry in Australia. It also highlights that the windscreen replacement industry should be tapped into as there is presently little recovery of window glass from either the automotive or building demolition sectors. 

Room for improvement in plastics

Plastics exported for reprocessing in 2017-18 was recorded at 54 per cent – more than double that of the figure in 2000 which was 26 per cent. Additionally, the local plastics recycling sector is now smaller than it was in 2005, according to the report.

While there continues to be strong local and export markets for clean baled PET that are collected and sorted to specification, with prices at $350–$400/t in April–June 2019, the market for mixed plastic packaging bales continues to sit at $0/t or less, the report highlights.

Because there is a lack of demand for mixed plastic packaging, it continues to be stored by MRF operators and reprocessors. Additionally, some MRF operators have overseas partners for polymer sorting, which makes them particularly exposed to import restrictions on mixed and contaminated materials, the report indicates.

The report suggests that there is an opportunity to build the market in Australia, if governments commit to using mixed plastic packaging, which can be reprocessed locally and used to create outdoor equipment and building materials.

The “need to dramatically increase local plastic reprocessing is seen as crucial”, according to the report. That expansion may need to be a 400 per cent increase in throughput and this in turn will require new market outlets for recycling plastic resin, both into packaging and other applications.

 A market for tyres  

The reprocessing of tyres has also been deemed a tough sell in Australia as the report highlights that economic recycling of tyres is difficult.

Transport costs, regulatory settings, infrastructure costs and the import of cheaper crumbed rubber product that can undercut the markets for locally produced recyclate all pose a threat to local markets.

In 2015-16, Australia generated 447,000 tonnes of end of life tyres – of which, 60-65 per cent were sent to landfill, dumped or illegally stockpiled.

However, local recycling of tyres has increased significantly over the years and have a high value. Local recycling doubled to 44,000 tonnes between 2013-14 and 2015-16.

The report suggests that short term solutions for increasing tyre recycling in Australia include road construction applications, rail construction as ballast stabilisation, and use in non-structural civil construction.

The Recycling Market Situation Summary Review report draws on various Australian reports and work from Envisage Works, Sustainable Resource Use, Helen Lewis Consulting, Industry Edge, Blue Environment, MRA Consulting Group