Leveraging the opportunities

The Queensland Government has announced it will update its waste policy and introduce a landfill levy, but what policy changes are needed to drive progress? Toli Papadopoulos reports.

In 2014, the Queensland Government developed its Waste Avoidance and Resource Productivity Strategy. The strategy set targets for improving resource recovery and recycling rates and reducing waste to landfill, with a plan to report on progress every three years. But the strategy was never widely taken into account, as there were no substantive action plans to realise its lofty goals. The situation was obfuscated by a change of government – which left the plan sitting in limbo for a few years.

THE OLD PLAN

The original strategy sets objectives for waste avoidaince and minimisation, reuse, recovery and improved recycling and management, treatment and disposal. It provided a snapshot of Queensland’s strengths and achievements as of 2014, including 784,000 tonnes of construction and demolition (C&D) recovered, one million tonnes of organic waste recycled and 84 per cent household access to kerbside recycling.

It set targets to achieve by 2024 such as reducing general waste by 1.8 tonnes per person per year, 55 per cent of commercial and industrial waste recycled, up from 42 per cent in 2012-13, reducing waste to landfill by 15 per cent, down from 4,675,000 tonnes and setting individual measures for problem or priority wastes.

The strategy said that within a year of its release, the Queensland Government would assess how many industries and sectors have developed action plans in order to review the effectiveness of this voluntary approach. It was required under Chapter 2 of the Waste Reduction and Recycling Act 2011 to be regularly reviewed through public consultation, including within two years of commencement and at three-year intervals.

A Queensland Government Action Plan was due for release in 2015 which would detail the government’s short to medium term waste reduction actions and priorities and flag the development of actions over the long term. But in an unprecedented occurrence, the one-term Liberal National Party was wiped out in January 2015 and replaced by the Australian Labor Party – led by Annastacia Palaszczuk under a minority government. With the Newman Government having just repealed the landfill levy in its own term of government, no decisions were made by the Palaszczuk Government to publicly release a new waste strategy or introduce a landfill levy. That is, until after Queensland Government election in November 2017, where Labor was returned to government with a majority of two seats.

According to Rick Ralph, Chief Executive Officer of industry association – Waste, Recycling Industry Association of Queensland (WRIQ), the original strategy was rolled out in haste.

“The document was rushed at the end of the LNP Government term. It was never fully completed and never adopted by anyone,” Rick says.

Dr Georgina Davis, Founder of consultancy firm The Waste to Opportunity Enterprise and Adjunct at the Australian Rivers Institute, Griffith University, says that the biggest issue was the fact that the development of industry action plans were not mandated and there were no legally binding targets. As a result, the waste and recycling industry was the only one to develop a plan out of a range of other sectors invited to contribute, including retail, mining and tourism. Georgina was part of the Regulatory Working Group and Rick was a member of the Steering Committee which collaborated on the original Queensland Waste Strategy.

“We had a set of aspirational targets where we wanted to go, but there was no roadmap to achieving this,” Georgina says.

“At the time, we were also not confident about some of the data analysis and baseline data we had here in Queensland.”

A NEW WAY FORWARD

Georgina Davis.

In March this year, the Queensland Government announced it was working on a comprehensive waste strategy which Ms Palaszczuk said would set the direction of waste management in the state – providing clarity and certainty for investment and business planning. This announcement came with a plan to introduce a landfill levy – which would stop Queensland from becoming a “dumping ground” for interstate waste – as waste from interstate sources increased by 61 per cent in 2016-17, according to the 2017 Recycling and Waste in Queensland report. It is not yet known what the cost of the levy will be.

In New South Wales, the metropolitan levy is $138.20 a tonne and the regional levy is $79.60. This has resulted in thousands of tonnes of waste being carted to Queensland, which, in some cases, has been sent to landfill. The Queensland Government responded to this issue with a three-month independent investigation into waste transportation in the state by Justice Peter Lyons QC that sought to understand the financial, economic and regulatory drivers giving rise to the problem. The final report was due by the end of 2017, but was not publicly released until March this year as the government was in caretaker mode.

“Following the findings and recommendations from Justice Lyons’ report, my government is developing a comprehensive waste and recycling strategy that will stem the tide of incoming interstate waste and set the direction for sustainable waste management in Queensland,” Ms Palaszczuk said in March.

“We will also establish a Stakeholder Advisory Group, with representatives from industry, to help develop Queensland’s waste management framework.” Ms Palaszczuk said the results of public consultation and feedback from the Stakeholder Advisory Group would inform the specifics of the levy arrangements. The Advisory Group, which comprises representatives from the Local Government Association of Queensland, the Australian Council of Recycling, WRIQ and others, will provide strategic advice to inform the new waste strategy. It will report to government by mid year.

According to Queensland Treasury Corporation’s Interim report: Economic opportunities for Queensland’s waste industry, which was publicly released in March and completed in July 2017, 10,000 tonnes of waste is going to landfill in the state/region. Data derived from the 2016 Australian National Waste Report shows Queensland’s waste recovery rate of 48 per cent is the second lowest of the eight states and territories. In 2016-17, 45 per cent of headline waste was recovered (9.8 million tonnes), with a 7.1 per cent increase on the previous year – greater than Queensland’s population growth of 1.3 per cent. The interim report shows that to reach the national average recovery rate of 61 per cent, Queensland needs to recover an additional 1.5 million tonnes of waste – a 34 per cent increase.

The interim report acknowledges the foundational element with any high recovery rate is a landfill levy which sends a market signal to reduce waste generation and increase recovery and support reinvestment in the sector. The report focuses on highlighting the current performance of industry, while pledging to look at the outcomes of other jurisdictions and the key instruments (market-based and regulatory) adopted in jurisdictions with higher recovery rates.

It also wants to identify the drivers of any difference in investment and employment by looking at different regulations and policy settings and identify any possible barriers to investment. Acknowledged by the 2016 National Waste Report is the low cost of disposal to landfill, a lack of source-separated infrastructure and limited infrastructure for mixed wastes.

Successful jurisdictions are adaptive to changes in behaviour and unintended consequences, it notes, arguing that some European jurisdictions are removing landfill levies as positive waste management practices are seen as entrenched.

ANOTHER LANDFILL LEVY

Georgina says that while it will be up to Queensland treasury to model an effective landfill levy, any taxation needs to be designed appropriately to account for unintended consequences.

“My concern is that an ill thought-out landfill tax may further incentivise waste to energy solutions in the short term with inadequate consideration of other technologies,” she says.

“I am not against energy from waste – I believe that it is viable for particular waste streams and at appropriate scale, but these factors need careful consideration not to impact other material recovery solutions. If we are not careful, increasing thermal recovery can stifle innovation in alternative technologies.”

In terms of structuring a waste policy, Georgina says that targets can help drive outcomes within a policy, but suggests a target based on carbon emitted would be a smarter way of measuring progress, as opposed to the industry standard of volume and weight diverted from landfill.

“If we looked at carbon as a metric as opposed to simply percentage volume recovered by weight, it may make sense from an environmental point of view to bury larger amounts of currently non-recyclable soft plastics in landfill,” she says. She adds that it may act as a carbon sink and store the materials for possible treatment at a later date – assuming the technology is available or raw material market prices increase. She says this may be more environmentally sound and economically viable than transporting them long distances and incinerating the materials.

“We are facing complex and challenging issues going forward. One policy or regulatory tool alone will not fix the problem.”

Georgina supports a greater focus on domestic re-manufacturing to give certainty to individuals wanting to establish recycling businesses in Queensland and those already operating. According to Georgina, the response to China’s National Sword, a ban on contaminant imports of more than 0.5 per cent, has been to store materials in the hope of a downturn or to meet Chinese product specifications. She sees this as a short-term solution and in advocating for local manufacturing, believes rising electricity costs need to be addressed.

“We need to be putting pressure on governments (state and federal) to address the rising cost of electricity. Our sorting facilities and technologies depend on it as do our ability to access viable domestic markets with our products (recyclate),” she says, adding that considering a suite of policy tools in the waste strategy will ensure secondary resource markets become independent of volatile commodity prices – a particular challenge for Queensland as a smaller market, but nevertheless requiring innovation.

“We could legislate, through the road-building and other infrastructure agencies of state and local government, for a minimum proportion/amount of recycled glass in aggregate and road-building materials as an example.”

Rick says that strategically, WRIQ is trying to work with government to get the right policy and regulatory settings for the state. He says industry requires specific actions, including what its expectations are and how to meet its waste and recycling targets.

“We need to provide some security as far as procurement and generating a greater take-up and reuse by state, federal and local government in all their projects in recycling content,” he says.

Queensland has a population of 4.7 million – but three million live in its south-east, which covers only 1.3 per cent of the state. Therefore its large size, which is more than double that of NSW, combined with a sprawling population in decentralised coastal communities or vast areas of low-population regional areas, creates logistical challenges for managing waste.

Rick says that the bulk of the population is effectively down the east coast in provincial cities, but these cities are typically four hours apart. He says the waste and recycling dynamics in Queensland are fundamentally different to NSW, Queensland, Victoria or even South Australia.

Georgina says the tyranny of distance is a common industry issue, but the opportunities lie in being smarter about how waste is managed, such as replacing long-distance transport with more optimal solutions, which could be, for example – carbon storage of sorted materials in landfill.

While a landfill levy is slated in Queensland, Rick notes gate fees are already relatively high in some parts of the state.

“Everyone says Queensland has the cheapest landfills. That may be true in south-east Queensland, but you go north to the sunshine coast and gate fees of $120/$130 and above are the norm,” Rick says.

“The irony of the situation is local governments still don’t understand that there needs to be an equitable recycling market. There is a great disparity with what the household will pay for the cost of waste and what the industry pays.

“People can still get rid of a trailer load of rubbish for like $7.50, but a truck or commercial ute load taking waste to a transfer station has to pay $130 a tonne.”

Debate also surrounds the categories that the levy applies to, which Waste Contractors and Recyclers Association of NSW Executive Director Tony Khoury in March argued should apply to all categories of waste, including municipal, commercial/industrial and construction/demolition waste. Tony also noted if a Queensland waste levy is to be truly effective, it should at least be the equivalent of the NSW Regional waste levy, currently $79.60 per tonne. In Queensland’s interstate waste investigation, Justice Lyons recommended a general levy on all waste disposed of at landfill in Queensland, which the report says is supported by the Queensland Government.

The bulk of Queensland’s population is in the east coast in provincial cities that are hours apart, creating logistical challenges for waste.

Rick says some areas in Queensland are running out of landfill space, while others have more void space but suffer distance issues.

He says a policy framework that supports industry confidence and waste infrastructure is important now more than ever, particularly as Queensland waste company Austin BMI proposed a development application for a new landfill at Ipswich, which has been met with some community opposition. The proposal would see a former disused coal mine at New Chum converted into a new landfill and waste transfer station.

The landfill would initially process 650,000 tonnes of C&D waste each year, rising to more than a million tonnes a year over the 18 to 20-year life of the site.

Ipswich City Council is the assessment agency for the BMI Group’s application. In early April, close to the time of publication, Planning Minister Cameron Dick issued a notice to Ipswich City Council advising of an intention to make a Temporary Local Planning Instrument to suspend part of their Planning Scheme, affecting new or expanded waste facilities in the Swanbank and New Chum industrial area and taking effect for two years.

C&D waste volume has increased by 59 per cent since FY2008 – which is suspected in the interim report to come from interstate.

The decision comes as landfill sites close and are rationalised across the state. The state government’s interim report indicates that since council amalgamations in 2008, 87 landfill sites have been closed, are in the process of closing or been converted to a transfer station.

Rick says a major issue in Queensland is that the business environment at present is not conducive to supporting further resource recovery or necessary landfill infrastructure.

“If we can’t get a C&D landfill licence, what chance do we have of getting other critical projects up, including waste to energy?

“BMI’s proposal is nowhere near as big as a couple of the licenced facilities. It is to handle C&D waste to Queensland and yet it is classified as a ‘megadump’. The conversation should be about the importance of, and the role of, landfill.”

Rick notes the commentary surrounding the proposal has been highly emotive rather than focusing on the benefits the facility would bring.

“With the community attention and the political attention, it’s going to be very difficult to get anything licenced. Certainly in south-east Queensland, unless you’re willing to spend hundreds of thousands of dollars with the Planning and Environment Court. If you wanted to turn on new assets today, it would take you three to five years,” he says.

“State government is going to let the judicial process take hold, but it’s going to be subject to appeals and amendments.”

Rick believes while introducing a landfill levy could be a viable solution for the state going forward, the government first needs to establish the policy and strategic framework first, adding that the lessons of the past cannot afford to be repeated.

“A waste levy in its own right will not create jobs without the confidence that investments can proceed. The strategy must have clear objectives of what we want to achieve and how we want to get there.”

The interim report also acknowledges levies form part of a broader solution to improve resource recovery, noting the highest performers of resource recovery have been the ACT and SA – with levies of $10-26 a tonne and $77 a tonne respectively.

“The whole conversation about interstate waste has completely overshadowed the opportunity for Queensland. We’ve lost focus on that conversation – waste has always come north to Queensland from the border down to Coffs Harbour. At the same time, waste has been sent south for incineration, but hopefully common sense will prevail once we agree on the new policy framework. I think in the fullness of time, things will settle down.”

Rick notes that the levy is not paid by the industry, but ultimately is passed through to waste generators and then by industry usually ends up into state general revenue coffers.

“We have to be confident in its design that anything that is actually used as an economic instrument supports the industry and it doesn’t just become a general revenue,” he says, adding that there has to be a bi-partisan approach to waste policy in the parliament.

“Otherwise, where is the certainty? One party will come in and make one decision and another will overturn it – that is counterintuitive to what we want to do. It’s happened before and must not be repeated this time around.”

Craig Johnstone, Local Government Association of Queensland spokesperson, said at the time of publication it was still developing the details of its stance on the government’s plans to introduce a waste levy.

“Our general position is that any waste levy should not apply to household waste kerb collections and that in our talks with the government to date, we have been emphasising that it should be looking at how it can move towards ensuring a zero-waste future for Queensland,” they said.

The Queensland state opposition did not respond to questions by Waste Management Review.

The government was unable to comment on specific questions regarding the landfill levy structure, as it is subject to discussion by the Stakeholder Advisory Group. We asked them if the waste levy would include a regional and metropolitan price and if it would apply to all categories of waste, including municipal, commercial and industrial and construction and demolition waste. The government remained tight-lipped on the question of why it took them an entire term to establish a new waste strategy and plan for a waste levy.

This article was published in the May issue of Waste Management Review. More information on the landfill levy can be found here.