Waste Management In Action

Changing the direction of government funding

WRIQ- waste levies

From industrial fires, illegal waste storage and contamination, a complicated regulatory environment and market failures pose the question of when and how landfill levies should be used.

While government funding can assist industry in purchasing technology to improve the quantity and quality of secondary materials, the most effective way governments can grow markets is through regulation and preferential procurement of secondary resources,” Rose Read, National Waste and Recycling Industry Council (NWRIC) CEO, says.

It’s no secret that grants and landfill levies are highly beneficial for state governments. Mark Smith, Waste Recycling Industry Association Queensland (WRIQ) CEO, says there is plenty of discussion in the policy space that argues the benefit of government funding.

“Since 2018 there has been a dramatic increase in government intervention in the sector in particular issuing grants,” Smith says.

“But are grants what we need? We’re seeing a shifting discussion in the public about the role of waste management and recycling, but I’d argue that grants aren’t always what we need to address the challenges we are facing.”

Smith notes that opportunities could exist with state and federal governments such as tax rebates, streamlined licensing fees, low interest loans and market development through subsides for end products and procurement.

Read highlights the Product Stewardship for Oil Scheme, which has made recovered oils more market competitive through a funded rebate system.

“As a result, industry quickly invested in building oil processing facilities when the regulated scheme was introduced in 2000,” she says.

Smith agrees that state government grants and levies have an important place in sector development.

“The levy is critical. Grants have an important role in the sector and we want it working the best it possibly can,” he says.

Similarly, state governments introducing container deposit schemes have not only cleaned up the environment, but are enabling better sorting at the source.

In turn, better quality secondary materials are being produced to meet growing market demand and investment in secondary processing facilities for glass and plastics.

Read adds that state government plastic bag bans have reduced contamination in the recycling chain as well as reduced plastic litter.

Funding usually has a focus on specific development, which is why many of NWRIC and its state affiliate members undergo tedious application processes that the government reviews at their discretion.

This can be a challenging process, and with limited successful applicants, industry is calling for greater investment.

Read says there are three areas where greater investment is required.

First, cleaning up what is being collected in kerbside bins by either disincentivising or banning the use of virgin materials that cannot be easily recycled or composted such as EPS and PVC in packaging.

Incentivising the use of secondary materials in packaging, products and construction through rebates and mandated recycled content targets.

And supporting the development of secondary materials specifications and educating and training engineers, designers, and farmers on how to design in and use secondary materials.

Read also highlights that while Australia needs to increase its recycling capacity and deliver greater volumes of quality secondary materials, the ability to do this is constrained by the quality of material that is received by the resource recovery industry and the lack of demand from the manufacturing, building and construction and agriculture sectors to use secondary materials.

Read recommends that setting up a loan process similar to the Clean Energy Finance Corporation that provides loans or equity into small scale projects, less than $1 million, would be highly beneficial for the sector.

Peter Olah, National Executive Officer of Australian Organics Recycling Association, agrees that some programs are better than others and a review is necessary to re-evaluate successful waste reduction and recycling outcomes.

“Generally, distribution of state government grants are disconnected from higher level strategic objectives. They are often seen as rewarding the capacity to write strong grant applications, rather than the highest and best outcome,” Olah says.

He notes that grants can create market anomalies by supporting non-commercial activities at the expense of profitability in others, and believes there is little demonstrable link to furthering the growth of waste reduction and recycling in totality.

“State government grants are sometimes not linked to end user needs and demand, the industry sees them as political,” Olah says.

He adds that the state government’s role in market intervention should support the growth of organics recycling towards national and state objectives for waste reduction, recycling and carbon, where market options are not viable.

“Ultimately, I think market intervention should support the provision of organics recycled products to end user markets in agriculture where the greatest benefit is possible, but the user may not be able to pay the market price.”

WRIQ is currently carrying out a national study on levy collection and grant spend. Contact: mark.smith@wriq.com.au for more information or click here

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