Export ban exemptions

Despite the export ban commencing July 2020, the Federal Government could allow trade to continue under certain strict conditions. We speak to Trevor Evans, Assistant Waste Reduction and Environmental Management Minister.

In a speech to the first ever National Plastics Summit in Canberra, Prime Minister Scott Morrison pledged to match industry investment in recycling infrastructure dollar for dollar. With Australia’s recycling facilities “under severe strain”, the Prime Minister said government would allocate further funding in the May budget.

“We are working with state and territory governments to identify and unlock the critical upgrades that will lead to a step-change in their recycling capacity. And [we] will invest with governments and with industry on a 1-to-1-to-1 basis,” he said, according to a pre-released speech given to media.

The announcement came just three months ahead of the first round of export bans – with glass waste set to be banned by July 2020 – and serves as a sign that government has listened to industry calls for market intervention.

Since late 2019, the Federal Government has been undertaking extensive industry consultation, as required by COAG Regulation Impact Guidelines. As per the export ban Regulation Impact Statement (RIS), the aim of consultation is to determine the relative costs and benefits of regulatory and non-regulatory options under consideration.

Under proposed regulatory options, the ban’s implementation could take two forms: federal legislation or export restrictions. While federal legislation is conceptually straightforward, option two is more complex, with exports operating under permit systems and accreditation or supply chain assurance.

Exemptions to the ban could be considered, the RIS suggests, where continued export promotes circular economy principals, or materials have established industrial uses and end markets. Moreover, the RIS highlights materials originating from clean, well sorted steams, such as container deposit schemes or single source separation, as possible candidates for exemption.

While it could seem like a loophole to some, according to the RIS, allowing materials that meet certain standards to be exported reflects the variability of challenges facing each waste stream, as well as differences in infrastructure across states and territories.

According to Trevor Evans, Assistant Waste Reduction and Environmental Management Minister, material stream complexity, paired with an understanding of the challenges associated with broad policy decisions, has been a central focus of ban consultation.

“While we use the language of export bans, in essence, what we’re really interested in doing is allowing trade to continue if it meets certain strict criteria,” Trevor says.

“These aren’t clunky blanket bans; they are very targeted. The Federal Government is interested in the quality of material that might go offshore, and if certain quality conditions and eligibility criteria are met, operators may be granted permission via permits.”

While the exemption eligibility criteria is largely finalised, Trevor says discussion is still taking place around specific material definitions.

“The intention of government is to target these bans at mixed or contaminated streams, especially plastics. And that is actually quite a detailed conversation when it comes to individual polymer types, or different types of carboard, paper and pulp,” he says.

According to Trevor, under the restriction system, the Federal Government would have the ability to permit, audit and inspect all operators engaging in export. Once the ban is officially in force, he says policing responsibility will likely fall on the Federal Environment Department.

“Assuming the permitting process is indeed the model that’s followed, the exact drafting of the scheme would then be finalised inside parliament, and it’s likely that the Department of Environment could be in charge of that permitting process,” he says.

MATERIAL PRIORITIES

In January, the National Waste & Recycling Industry Council (NWRIC) called for a ban exemption for clean, high grade paper and cardboard.

Citing an export market worth more than $230 million annually, Rose Read, NWRIC CEO, said recycling services could fail without export capacity. Ms Read also noted that Australia does not currently have the capacity to locally remanufacture all the paper and cardboard it generates.

Ms Read’s comments reflect a common industry concern that material definitions are too broad, and that while banning some products, such as whole baled tyres, is appropriate, banning others, could be counterproductive.

When asked about these concerns, Trevor notes that significant refinements have been made to the definitions initially proposed at the November 2019 Meeting of Environment Ministers.

“The changes have been around paper and pulp, and really targeting the bans at where we believe the true issues and challenges lie, and not to get in the way of other export streams that are well sorted and pose no environmental threat,” he says.

At the next COAG meeting on 13 March, Trevor expects the government will announce final definition and timeframe decisions. He adds that details around how the government plans to co-invest in new facilities is also likely to be announced, a view already alluded to at the National Plastic Summit.

“There are very big challenges across some of these product streams, and one of the biggest is that in some areas, such as mixed paper and plastics, there aren’t many facilities or onshore capacity at the moment,” Trevor says.

“That’s the main reason the bans are staged in their implementation. The timeframes are tight mind you, but they’re deliberately tight because we want to bring the bans in as soon as we practically can.”

Responding to Sustainable Resource Use’s January Recycling Market Situation Summary Review, Trevor suggests that in some cases, Australia’s onshore reprocessing capacity will need to increase by “many multiples”.

The review, which suggests Australia may need a 400 per cent increase in plastic throughput to sustain domestic markets, highlights global markets for recyclable materials as volatile.

“One of the main motivations for the Federal Government being willing to co-invest and create better policy frameworks, is that we want to see a huge onshoring of recycling capacity,” Trevor says.

“We want to see that as soon as possible because of the great environmental and economic impacts and quite frankly, because it’s going to create jobs, especially in areas of Australia where we need them most, and that’s in regional cities and outer suburban areas.”

SHADOW BAN

Since the ban was announced, the appropriate level of government investment has been hotly debated. Multiple stakeholders, including Ms Read, have cautioned that in the absence of robust infrastructure investment, the regulatory measure is likely to fail.

Trevor’s Labor counterpart, Shadow Assistant Environment Minister Josh Wilson, shares similar sentiments, telling Waste Management Review that the Federal Government is not doing enough to deal with the reality Australia faces. It should be noted that Josh spoke to Waste Management Review prior to Mr Morrison’s plastic summit announcement.

“All the government has done so far is essentially put out a timetable, and it’s not clear at all how we’re going to meet that timetable,” he says.

“If you take mixed plastics, which we are supposed to stop exporting by the middle of next year, it’s very hard to see how that can be achieved when the level of plastic recycling and reprocessing is lower in Australia now than it was in 2005.”

In regard to infrastructure investment, Josh describes the Federal Government’s current approach as “hands off, help yourself.” The Australian Recycling Investment Fund, he adds, is insufficient, with new policy measures and resources needed to ensure the ban’s success.

“The Australian Recycling Investment Fund is not new or additional money, it’s $100 million dollars earmarked in the Clean Energy Finance envelope,” Josh says.

“The money was already being applied for recycling projects, and its loan funds, not direct funds. So, the idea that it’s direct funding that will change and improve the situation for infrastructure investment just isn’t true.”

When asked to respond to the Shadow Minister’s comments, Trevor notes that as part of the Federal Government’s plan to tackle plastic waste and halve food waste by 2030, the Recycling Investment Fund addresses broader issues than those of the ban.

The fund is designed to finance eligible large-scale commercial and industrial projects, typically requiring $10 million or more of Clean Energy Finance Corporation debt or equity capital. As opposed to general infrastructure investment, the Australian Recycling Investment Fund is focused on emerging technology.

“The Clean Energy Finance Corporation has existed for many years. Part of the reason why we’ve given them responsibility for administering the Recycling Investment Fund is their proven track record of making very sound business investment decisions in new facilities and new technologies,” Trevor says.

He adds that he expects the Australian Recycling Investment Fund to be entirely spent. Another concern for Josh is Australia’s tyranny of distance, and whether investment decisions will consider the needs of the entire country.

“I have portfolio responsibility for Australia as a whole in the waste space, but I am a Western Australian,” he says.

“If there’s additional reprocessing capacity located in the eastern states, what happens to a jurisdiction like Western Australia that would face the transport costs of taking our mixed plastics and other recyclables to those centres?”

Trevor explains that all the states and territories have been invited to approach the Federal Government with ideas and solutions.

“As you’d expect, each of the states are in a different position in terms of what their present offerings are. And each of them has natural views about the direction they’d like to take industry,” he says.

“We’ve received a lot of those proposals already and are going through the process of seeing where we can co-invest. But we’re also mindful that we need to have a national solution and will go through a common sense checking process to make sure there isn’t any duplications, or indeed any gaps.”

You can read the full article in the May edition of Waste Management Review.