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Queensland looks to revamp landfill levies

Queensland has taken a lot of criticism from various stakeholders due to its landfill levy system. When Campbell Newman was premier he scrapped landfill levies as part of his election promise. However, when Annastacia Palaszczuk was sworn in as premier she decided to reinstate the levy. This did little to appease critics who said they did little to dissuade people to divert waste from landfills.

In 2019-20, data reported by Queensland’s waste and resource recovery industry showed a 62 per cent decrease in interstate waste, from 1.188Mt in 2018-19 to 447,000 tonnes in 2019-20. Then there is the issue of the rebate provided to local councils for their calculated levy liability on municipal solid waste only. It has stayed at 105 per cent – 100 per cent to cover the dumping, while the 5 per cent covered the admin fees. Hardly ideal in encouraging waste disposal companies to reuse, recycle and repurpose, said critics. In 2019-20, commercial and industrial waste recovery increased to 52 per cent (from 49.8 per cent in 2018-19) and construction and demolition waste recovery increased to 75 per cent (from 58 per cent in 2018-19).

This year, the state has decided to revamp its levy system with a final review to completed on 30 June. However, will it make a difference? Will it encourage moving waste away from landfills? And exactly how much is it?

At a February webinar chaired by the Waste Recycling Industry Queensland CEO Dr Georgina Davis, Dylan Walker from the state’s Office of Resource Recovery outlined the new levy strategy and charges that will be in force from July 1, 2022.

Of note was the government has divided the existing levy zone into two new areas – regional and metro. The metro area will be made up of the 12 local government areas in South-East Queensland, including Noosa and Toowoomba, whose levy rate will increase by $10 a tonne a year for general waste until it reaches a ceiling of $145. Thereafter, the levy will increase by the rate of the Consumer Price Index.

In the regional area, made up of the remaining 27 local government areas in the current levy zone, the rate will increase by CPI every year, while the non-levy zone will not change. Walker said there were some queries as to why there is a difference in the annual increases for the two new areas, but that it was easily explained.

“South-East Queensland has the largest amount of waste that is disposed to landfill in Queensland,” he said. “It also comes with greater opportunity for recycling and resource recovery to be able to divert materials away from landfill.”

As for the change to CPI increases in later years for the metro area.

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“The main reason behind that turning point is based on the price differential between landfill disposal and resource recovery, particularly when applying it from a gate perspective,” he said. “For organics in particular, of note is that when reaching a general waste levy rate of $145 a tonne, certainly brings into play those higher order processing technologies.”

Walker also pointed out that the levy is meant to be a pricing mechanism to be able to encourage changes in behaviour and discourage disposal at landfill.

Annual Payments and Exemptions
Walker said that for the next financial year there will be a continuation of the existing arrangements and the existing payments to local government of 105 per cent, with changes starting to occur in 2023-24.

“When we get to 2023-24 we start to see a difference in annual payments that are being provided to local councils.

“There will a gradual taper of annual payments for each of the metro councils and seven of the regional councils – Cairns, Rockhampton, Mackay, Townsville, Gladstone, Bundaberg and Fraser.”

He said there is more specific work being done on the formula for calculating annual payments to be able to work more towards a baseline year of waste to do the calculations.

“Previously, the current annual payment formula, as prescribed, requires the use of MSW tonnages from two years before to be able to allow calculation for financial year,” he said.

“The reason behind that was the collection of levy data from landfills hadn’t commenced by the time the levy started on 1 July 2019, and we needed to use that annual survey data for the Recycling and waste in Queensland reports to complete the payments. Now that we have moved into quite a number of years of levy implementation, we can look at using MSW tonnages reported via the levy system.”

He said that in parallel to the regulatory changes to be able to give effect to the metro and the regional area, and for the levy rates, there is also the work that is happening in policy and legislation.

This was especially around the amendments required to be able to look at that annual payment formula and the way that will change in the lead-up to 2023-24. Then there is the change relating to clean earth disposal and the current waste levy exemption.

“The other thing to note from July 1, 2023, is around the decision to remove the exemption around clean earth disposal to landfill and make it leviable,” he said.

“We recognise from an Australian perspective that Queensland is the only jurisdiction in the country providing an exemption for this waste. As recently as 1 December 2021, South Australia had removed its exemption.

“It is also fair to say that removing the clean earth exemption can encourage greater upstream recovery or, at the bare minimum, greater diversion from landfill for appropriate uses.”

He said that clean earth is a resource, and that where possible, it should be utilised earlier in the supply chain and waste stream, with landfilling being the last option. He believes that the right type of levy will be the catalyst to drive change. Large sources of clean earth, such as infrastructure projects, are being provided time to consider alternative approaches to its management.

“There were conversations with the Department of Transport and Main Roads on potential impacts for them and in reaching the decision, but then there can be impacts on the broader land development and infrastructure industry,” he said. “The time frame out to July 1, 2023, provides that opportunity to look at alternative ways and mechanisms to recover clean earth and divert it away from landfills.”