Mike Ritchie

Victoria boosted with Circular Economy Business Innovation Centre

Victoria now boasts a $7 million Circular Economy Business Innovation Centre with an initial focus on reducing food and organic waste. This work will build off Sustainability Victoria’s Love Food Hate Waste program that has helped reduce the 250,000 tonnes of edible food that is thrown away by households each year – enough to fill Melbourne’s Eureka Tower.

Minister for Energy, Environment and Climate Change Lily D’Ambrosio launched the Centre, stating that that it will fast-track Victoria’s recycling revolution. She said the Centre will work with a variety of businesses – from farms and cafes to factories and appliance shops – to streamline the way they operate, reduce waste, and improve efficiency.

“This new centre will spark innovation and help businesses to make sustainable changes and reduce waste.” “This will gather some of the best minds and research about recycling innovation, so that Victorian businesses can get the most out of their materials.”

Expert advice 

The centre will do research and offer expert advice and resources through a virtual hub, facilitate collaboration and events, and offer grants and support for businesses. To mark the launch of the centre, the first round of the $10 million Recycling Victoria Business Support Fund has opened. The fund will help businesses, industry groups and not-for-profit organisations to improve resource efficiency, reduce waste to landfill, increase recycling and reduce their operating costs.

Meanwhile, the first round of the $3 million Recycling Victoria Innovation Fund is also now available. This funding will support partnerships between businesses, industry groups, research institutions, community groups and charities to identify, develop and scale-up more environmentally sustainable opportunities and business models. The centre is part of Recycling Victoria – the Government’s action plan and investment of more than $300 million to transform the state’s recycling sector, create thousands of jobs and set Victoria up for a more sustainable future.

More WARR leaders question NSW budget

Last week WMRR CEO Gayle Sloan rebuked the State Government for failing to address key industry issues. Now the National Waste and Recycling Industry Council (NWRIC) has labelled the NSW State Budget as ‘short sighted’, with the real economic potential of the waste and resource recovery industry being bypassed for a reliance on landfill levies.

NWRIC CEO Rose Read said NSW may claim to be open for business but not when it comes to the economic potential of material and energy recovery from waste.

“The NSW Budget forward estimates show that for 2023-24 there’s an estimated $832 million in revenue being generated from landfill levies, a more than 10% increase on the $751 million projected in the 2020-21 budget. However, only $96 million has been allocated in 2020-21 or less than 13% of the levy collected to help local councils manage waste through the Waste Less, Recycle More program.

“This reliance on landfill levies and delay in finalising the 20-year waste strategy shows the NSW Government’s mind is not open to the economic potential that transitioning to a circular economy will deliver.

“There is nothing here that encourages industry to invest in new material and energy recovery facilities to divert recyclable and residual wastes from landfill that would substantially grow the State’s GDP, create more employment opportunities and greenhouse gas savings,” Read said.

Major opportunity for NSW

She added that according to NSW Circular, over the next 20 years waste generation in NSW is projected to grow from its current 21 million tonnes to over 31 million tonnes.

“The circular economy is a major commercial opportunity for NSW.  Modelling by the Centre for International Economics has estimated that even a 5 per cent improvement in resource recovery would add $1 billion to Australia’s GDP and $644 million to NSW’s GDP.

“There are three times as many jobs in recycling as there are in landfill, and if the NSW Government is focused on economic recovery post COVID it is obvious that growing the material and energy recovery industry will boost the economy as well as create jobs.”

Read said the budget also outlined an extension of the Waste Less Recycle More program which has not shifted recycling rates since 2016.

“This program has been extended for 2021-22, however it is clear that it has not achieved what it set out to do and that needs to be addressed.”

“Landfill space is running out in NSW and the writing is on the wall. The NSW Government would be best placed to urgently refocus its waste management strategy by putting in place the economic and policy frameworks that fast track the growth of the material and energy recovery sector as NSW transitions to a circular economy,”  Read said.

It was disappointing to see the recent NSW 2020 budget announcement. It is obvious to all across the waste management sector that NSW continues to be heavily reliant on waste levy revenue with $750 million projected to be collected in the year to June 2021. And in the year to June 2024 waste levy collections have been projected by Treasury to be $832 million. It is very easy to conclude that NSW is addicted to the revenue from the waste levy.

Anticipating 2021

Meanwhile, Waste Contractors & Recyclers Association of NSW executive director Tony Khoury told Inside Waste that The Minister for the Environment Matt Kean has often stated that his vision for NSW is to have a sustainable, reliable and affordable waste and recycling sector.

“In the view of WCRA, that will require the NSW Government to commit to re-investing a much greater percentage of waste levy funds to assist industry and local government. But as we don’t yet have a 20-year waste strategy, let’s all look forward to 2021 and next years’ NSW State Budget when it is our hope that funding will be made available for what we hope will be a well-thought out, suitably funded waste strategy that will make waste and recycling across NSW sustainable, reliable and affordable,” he said.

Inside Waste is waiting for a response from the Minister’s office.

Why WMMR thinks NSW government is hooked on levy not recovery

NSW Treasurer Dominic Perrottet appeared to say all the right things – the budget will look beyond the present crisis to lay the foundations for a prosperous post-pandemic future?

That’s forward thinking! The NSW government will make it easier to do business? About time! The budget puts job creation front and centre, unleashing targeted, temporary stimulus to kick-start our jobs recovery? That’s exciting and welcome news!

And then, you realise it’s silent on the waste and resource recovery sector, despite the bold claim of the Treasurer that, “this budget is the NSW government’s commitment to leave nothing in the tank.”

It is terribly disappointing to hear the Treasurer talk about a budget that is all about economic recovery and prosperity and then to see that it is silent on our essential industry, save for a laughable one-year extension of Waste Less Recycle More, while the government appears to be banking on a 10 per cent increase in waste levy revenue by 2024.

How is it that NSW believes it will be increasing landfilling when the rest of Australia, led by the Commonwealth, is clearly on a path towards improving material management, reducing disposal, increasing recovery and recycling, and creating valuable Australian jobs?

This possibly confirms what industry has long feared, that NSW really is a one trick state, which relies on the waste levy rather than policy when working with our essential sector. The NSW government needs to move ahead quickly and catch up with the rest of Australia, recognising both the value and complexity of our industry, in order that we do not lose more jobs and investment in NSW; we cannot rely on the levy alone to create investment in a period of policy uncertainty and lack of strategic direction.

Australia – save for NSW it seems – sees clearly that not only does our essential sector play a vital role in protecting human and environmental health, it is an economic and job multiplier, which is much-needed right here and right now.

Why is this government and its EPA so out of step with all other Australian governments and the WARR industry? The federal and other state/territory governments have realised the importance of investing and supporting a strong domestic remanufacturing industry, given the ability to create four times more jobs than landfilling or exporting.”

It really is time that the NSW government sees the WARR sector as an economic opportunity to be realised, not just a landfill levy cash cow to be milked.The Budget is just one more kick for our essential sector in NSW, which for the past three years has been operating in a policy holding pattern coupled with tremendous regulatory uncertainty, continuously told to wait for a new plan that is on its third attempt in three years, while the rest of Australia marches on investing in recovery and jobs.

This budget is disappointing as it sends the message that NSW remains closed for WARR business, instead of seizing the opportunity for our sector to play a key role in the economic recovery.

Gayle Sloan is the CEO of The Waste Management and Resource Recovery Association of Australia.

Planet Ark leads coffee capsule scheme with Nespresso and Woolworths Group

A consortium led by the Planet Ark Environmental Foundation to recycle coffee capsules is another beneficiary of the National Product Stewardship Investment Fund (NPSIF).

The funding will go towards the development of an industry-wide national product stewardship scheme for all coffee capsules available on the domestic market.  According to Planet Ark, the project is critical to raising recycling rates, reducing organic material in landfill and increasing access to collection points for a rapidly growing waste stream and already has the support of industry leaders including Vittoria, Kruger ANZ and Grinders Coffee.

Planet Ark CEO Paul Klymenko Ark said it will accelerate the expansion of an industry-led product stewardship scheme for coffee capsules.  “This will enable Australians to enjoy their home-made espresso, knowing the product’s end-of-life is being managed responsibly.”

Minister Evans noted that, “Australians love their coffee, and this new product stewardship scheme for coffee capsules will reduce waste going to landfill, lift recycling rates and help consumers make a practical, positive difference for the environment.”

To execute the program, Planet Ark will lead a consortium including Nespresso and Woolworths Group. Nespresso brings the invaluable experience of running its own coffee capsule recycling program in Australia for many years. Woolworths Group will work with the project partners to evaluate the feasibility of in-store capsule collection and subsequent transport to recycling facilities.

Nespresso General Manager Jean-Marc Dragoli said the company was keen to see coffee capsule recycling offered industry-wide.

“We have developed a robust program which has been collecting and recycling them in Australia for 10 years. We are keen to work with other manufacturers so that all consumers buying capsules will have access to recycling. This is why we partnered with Planet Ark’s consortium, to make this a reality.”

Woolworths 360, director Kozlovic added develop innovative solutions like the Coffee Pod recycling initiative would make sustainable choices easier for our customers. “We look forward to offering them a convenient place to drop off their used coffee pods, knowing they’ll be saved from landfill and have a second life in a new product. 

“We’re always looking for ways to support the development of a circular economy, whether it’s through smart initiatives like this one or our ongoing work to make our own packaging more recyclable.”

 

Landfill levies drive Australian recycling and resource recovery

I would be rich if I got a dollar for every time someone has told me that “landfill levies are blunt instruments”.

Many readers will know that I have been an advocate for market based solutions (including landfill levies) as the key driver of recycling in Australia.

Why?

Well little else has been shown to work for the bulk tonnages that we need to recover from waste. We currently recycle about 32 MT of the 54MT of waste that we generate.

All of that 32 MT is recovered now because it:

· Has economic value (think cardboard, steel, aluminium).

· It is subsidised by someone to have it recycled (think mixed kerbside recycling, commercial commingled containers); or

· It is cheaper to recycle it than to landfill it (think organics).

Try to think of a material stream that is recovered for reasons other than those above. Sure you might be able to think of some minor stream in a particular niche situation but does it deliver tonnes at scale?

Governments drive recycling. It is a highly regulated market. Targets drive government policy.

Once they have decided the strategic direction and speed (via Targets) governments have only 3 levers they can pull:

1. Market pricing (levies, cap and trade etc) to make recycling commercially viable.

2. Regulations (bans or mandated collections etc) to drive materials out of landfill; and

3. Education to try to motivate people to “do the right thing”.

Education works at the margins but it requires the systems to be in place. The systems for recycling are only put in place where options 1) or 2) are met. Someone has to be paid to set up the recycling system. To collect the material, sort it, wash and purify it and finally to return it to the productive economy. That costs money.

If companies or Councils can’t either make money or save money by recycling, by and large they won’t do it.

Yes, I hear some of you say there are those examples of companies voluntarily recycling stuff at a cost to themselves because they are ‘responsible’ or to obtain brand value etc. True, but in my experience these represent less than 5 per cent of businesses. Volunteerism will not get us to the 80 per cent diversion from landfill by 2030 target that has been agreed by all Governments as part of the National Waste Action Plan. Education will not drive the tonnes out of landfill.

Governments have to make the tough decisions to either price landfills fully (to cover all of their externality costs and scarcity value) via levies or cap and trade schemes, or ban waste materials to landfill (such as Europe has done for organics).

Recent work done by the MRA team proves the point.

The graph below shows the relationship between recycling rates across Australia and the magnitude of landfill levies.

It shows a very clear relationship.

Landfill levies clearly drive recycling. (So do bans but Governments have shown no appetite for regulating what can go to landfill).

The R2* shows that landfill levies explain over 70 per cent of the variability of the curve.

States with high landfill levies have high resource recovery rates.

States with low landfill levies have low recovery rates.

The logic is of course, very simple (blunt).

If a generator of waste has a binary decision to make “Do I landfill this or recycle it?” price makes a big difference. If it is cheaper to recycle it, they will. If it is cheaper to landfill it, they will.

Ask any waste contractor and they will tell you this is the fundamental law of waste management.

To get to 80 per cent diversion from landfill, we need to make the answer to that question simple and ever present.

We need to make recycling the default option rather than landfill. Today landfill is still cheaper than recycling for many waste streams and in most locations (particularly rural Australia).

Before you jump on me about the negative impacts of further levy increases I would make these points:

1. The increased landfill levies should be used to fund recycling;

2. They should be hypothecated as much as possible; and

3. They should offset other regressive taxes (e.g. payroll tax) where they are not hypothecated.

Nobody likes paying higher taxes but we also don’t need to. We need States to progressively raise landfill levies to signal their intentions to make recycling viable. We need them to hypothecate much of the increases (at least in the medium term) to supporting Council and commercial recycling activities and then we need them to reduce other taxes by the equivalent amount.

Landfill levies currently raise over $1.5b/year for State Governments. Further increases will send the right market signals but the revenue earned needs to be spent on recycling or at the very least offsetting other relevant taxes.

But it is important to point out that it is the magnitude of the levy (the market price) that does the heavy lifting in driving tonnes from landfill and into recycling, NOT the expenditure of the levy funds via grants. Grants and subsidies from levy funds are the cream on the pie but the real value of levies is in the price signal – making landfill gate fees more expensive than recycling. That drives the answer to the question “Could I be bothered recycling this, or not?”.

That is how we use the market to get to an 80 per cent diversion from landfill target.

Blunt yes but achievable and realistic. Nothing else will get us there either in time or at scale.

Simple. Market economics.

 

Mike Ritchie is the managing director of MRA Consulting.