Harmonisation avoids ‘perverse’ outcomes

Waste Management Review speaks to Alex Serpo, Policy Officer at the National Waste and Recycling Industry Council, about the harmonised government policy required to grow the waste and recycling industry.

Q. The National Waste and Recycling Industry Council (NWRIC) supports the establishment of a simple, integrated national system for the identification, classification, treatment, disposal and monitoring of waste items. Given individual differences in geography and interstate markets, how practical is it to harmonise all laws and regulations governing waste management?

A. Harmony is important where it avoids a perverse incentive or business cost for no benefit. The obvious example of a lack of harmonisation is Queensland’s lack of a landfill levy (with a policy now being laid out), which led to unnecessary waste transport to Queensland. In this instance, we have suggested levy portability – that means the levy follows the waste. It’s already in place inside NSW and WA. It could be used in south-east Queensland if a levy is applied only to a smaller geography. It’s a tool designed to solve problems.

Another example of disharmony is the different way the states track waste or license facilities. We congratulate the Heads of Environment Protection Authorities (HEPA) group which is currently working on harmony at the behest of Environment Ministers. Industry stands ready to assist.

A. Should there be a government body to assist the integration of standards such as data integration? Perhaps similar to what Transport Certification Australia does with telematics?

A. Data is important for transparency, investment and enforcement. The use of Global Positioning System tracking on trucks is a useful enforcement tool. In partnership with the Waste Contractors and Recyclers Association of NSW, the NWRIC supports the establishment of a national government database of waste and recycling service providers. This would protect and raise standards in landfill, recycling, processing and transport and give EPAs the power to enforce these standards.

Further, we support that all waste facilities, regardless of size, be EPA licensed. We’d like to see the Australian Bureau of Statistics Waste Accounts program restored.

Q. Do we need to develop a national definition of waste that is harmonised across the states and territories?

A. The definition of waste is largely focused on determining landfill levy liability and hazardous materials.

Remember it is “waste” to landfill which attracts a levy and therefore effective commercial operation requires certainty around this definition. This is particularly true in the construction and demolition (C&D) sector.

Consider the major case of Eclipse Resources vs the Minister in WA where a waste management company had its challenge against the state’s landfill levy dismissed by the High Court of Australia in 2017. This decision followed a 2016 order by the Supreme Court of Western Australia to pay more than $20 million in outstanding levies and penalties. A weak or contradictory definition of waste supports levy avoidance. An inappropriate definition of hazardous waste can result in material avoiding appropriate treatment. A clear, practical and enforced definition will promote investment.

Q, To what extent do planning regulations, development applications, environmental impact assessments and licensing rules need to align with one another in the states and territories? Do more strict policies in some states in any way impede growth in others?

A. The key issue here is protecting sites to process waste into a resource and landfill, as it is essential for the protection of public health. In Victoria, we’ve seen both high construction and demolition recyclers and organics composters shut down due to site encroachment. If we want resource recovery, we need protected resource recovery sites.

In this regard, we’re calling for all states to develop 10- and 30-year waste and recycling infrastructure plans. We’re pleased to see important work done by Victoria and more recently South Australia with its Waste Resource and Recovery Infrastructure Plan.

NSW has begun with its ‘infrastructure gap analysis’, (Waste and Resource Recovery Infrastructure Strategy 2017-21) but more work is needed. Tasmania needs any kind of statewide recycling and waste plan – we’d be happy to assist.

Q. Should infrastructure planning account for China’s policies such as National Sword? What work will NWRIC be doing in 2018 to stimulate infrastructure demand and demand for recyclable materials?

A. Right now, materials recovery facilities are under immense business pressure.

We have made suggestions for immediate, short, medium and long-term responses. In the immediate term, we welcome the $47 million package from the NSW Government and the $13 million package from the Victorian Government. Other states could follow. A focus on commercial recycling will be important. In the long term we need to develop fuel manufacture and energy recovery capacity – as well as greater domestic markets for recycled products.

Q. How does the Safeguard Mechanism hinder the regulation of landfills?

A. While the Emissions Reduction Fund allows the Federal Government to provide financial incentives for emissions reduction under carbon abatement contracts, there are programs within it which do not align with the waste industry.

The Safeguard Mechanism is one of these, as it regulates landfills by establishing emissions baselines.

The Safeguard Mechanism, which was open for public comment until March 2018, has sought views on the approach from transitioning landfill facilities away from historical baselines.

However, as a general principle, we believe landfills should be excluded from carbon taxes. Where landfill gas is additional to business as usual, then it should be eligible for Australian Carbon Credit Units. There are many reasons for this. The principle reasons are emissions from landfill are difficult to measure accurately and emissions are delayed.

Further, greenhouse control programs may even create perverse financial incentives, such as rewarding facilities which have landfill fires. For example, where there is a landfill fire, greenhouse emissions fall as burning biomass is carbon neutral, but clearly this isn’t a good outcome. Further, the imposition of carbon prices on landfills tends to distort the market, lifting prices at some facilities but not others – which can lead to additional waste transport. Conversely, the best outcome is more waste in fewer, higher quality facilities. Finally, greenhouse emissions from landfills are inaccurate to measure, meaning taxing them is problematic.

The existing landfill levy system adopted by most state and territory governments covers the environmental liability generated by landfills. It’s in place, well understood and in most cases effective. We support improving the environmental performance at landfills. The best way to do this is through programs which help to divert organics from landfill to agriculture and land rehabilitation.

Q. What are NWRIC’s policy priorities for 2018?

A. We have many areas of development, but our key priorities are to help to improve enforcement, improve planning, harmonise waste levies and protect recycling in the wake of China’s new import standards, which have reset the game in recycling.

In regard to enforcement, those who follow regulations must not be commercially undermined by those who don’t. Otherwise, nobody will invest to improve our systems. With planning, we’re asking for ‘resource recovery precincts’ where essential infrastructure can be built and protected from urban encroachment. Waste levies need to be flat across Australia and structured in a way which does not undermine recycling.

Q. Council believes that open and competitive markets are the key to furthering the nation’s waste and recycling capacity. What market incentives are holding the industry back and which ones should be more readily embraced?

A. The issue here is local government owning waste processing or collection businesses – or mandating that commercial waste collection is done by council. No commercial operators will go into business against local government.

Where there is a government monopoly, innovation will stagnate and large-scale recycling will be absent. The best outcome is a productive and close relationship between local government and industry – where everyone puts serving the public interest first.