The major obstacles to organics sector growth are external to industry and within the control of one or more tiers of government, writes Peter Olah, AORA National Executive Officer.
Organic recycling is important for many reasons. Organics comprise about half of our national waste stream.
If we get organics recycling right, we have a good chance to meet our national and state objectives for waste reduction and recycling, landfill reduction and carbon reduction. If we don’t, we won’t.
For AORA, the national voice of the organics recycling industry, COVID-19 was a big opportunity.
It gave us the time and capacity to reposition AORA and the industry for a future with greater national collaboration and significant growth.
Many Waste Management Review readers will have read our industry contribution study last year.
Its key findings showed that in 2018-19 Australia produced 14.6 million tonnes of organic waste, of which 5.6 million tonnes went to landfill, 7.5 million tonnes were recycled and 1.5 million tonnes recovered as energy.
Australia’s overall organic recycling rate was 51.5 per cent. South Australia has the highest organics material recycling rate at 78.9 per cent and the Northern Territory the lowest rate at 19 per cent.
The industry provides 4845 jobs to Australian residents, paying over $366 million in wages and salaries.
The industry has a collective turnover above $2 billion, supply chain value over $1.9 billion and $724 million in industry direct value add to the economy each year.
The industry’s environmental contribution is just as significant. Greenhouse gas savings from organics recycling tops 3.8 million tonnes of CO2 annually.
And that’s just what the industry is already doing, there is even more good news sitting on the shelf. What if we stepped up our national recycling rate of organics to 95 per cent?
The results would be 4094 more jobs, $309 million more in wages and an extra $612 million in industry direct value add to the economy every year.
At the same time, we’d remove an additional 3.2 million tonnes of CO2 annually. And that’s without including the benefits of the industry’s products to agricultural productivity and soil quality.
To realise these enormous economic and environmental benefits we need only two factors: the right policy settings from governments, and industry capacity to take up the opportunities.
Of course, neither of these is a given, which is why we recently launched our second industry study.
The Capacity of the Australian Organics Recycling Industry report was launched to AORA members in February and is available on the AORA website.
It provides an independent and robust assessment of the industry’s ability to step up as an economic, employment and environmental provider of benefit.
To kick the work off, AORA conducted a national industry survey to establish baselines for the study on the industry’s existing and potential capacity.
Amongst the headline results was the predominance of two feedstock sources for the industry: councils (51.5 per cent) and commercial contracts (47.4 per cent).
The content of organic feedstock reflects this: garden organics (52.2 per cent), waste grease (14.8 per cent), timber (7.7 per cent), food organics (5.2 per cent) and other organics (15.3 per cent).
The industry’s major output products include composted soil conditioners (40.1 per cent), soil and soil blends (33.7 per cent), composted mulches (11.2 per cent) and pasteurised mulches (10.7 per cent). The two major end use markets are urban amenity (52.5 per cent) an intensive agriculture (26.2 per cent).
Industry satisfaction with its performance is strong, with 75 per cent of businesses indicating they are somewhat, mostly or very satisfied with their overall performance.
The performance of the industry, in line with recycling rates, varies greatly across different states and territories.
However, there remain significant obstacles to the growth of the industry in every jurisdiction.
The largest of these includes regulatory policy uncertainty, contamination of input material, government policy, business licensing and operating permits, development applications – time, cost and politicisation, government procurement failing to support organic recycling products and short council contract periods.
Internal issues such as access to technology, labour costs, logistics and access to finance are minor obstacles to growth. Businesses in the industry currently occupy 49.2 per cent of their operating sites on average.
If they were not constrained by obstacles, they would occupy 73.6 per cent of their operating sites.
The current industry can process an additional 51 per cent more organic materials given the physical capacity of their sites, if unconstrained by obstacles. Industry businesses on average would invest $9.3 million each over the next five years, if unconstrained by obstacles.
Put simply, the major obstacles to growth – the biggest roadblocks to achieving the economic and environmental benefits available – are external to the industry and within the control of one or more tiers of government.
The benefits on offer will not be realised without a much closer and more collaborative relationship between governments and the industry.
VISION 2030: HOW TO GET THERE
Our third foundational document will outline a 10-year strategy for the Australian organics recycling industry – a roadmap designed to take the industry from a solid existing base to recognition as a world leader in the recycling and reuse of organics waste streams, for its innovative and efficient processing into desirable products, and for the relevance, quality and economic and environmental value of these products.
At each of these stages, our industry is committed to delivering better results for our community. Importantly, Australian governments are significant players at each stage of the process.
Only a whole-of-government and industry commitment to a true, long-term partnership will deliver the significant benefits on offer.
This strategy will answer the two key questions: how do we get to 80 per cent recycling of organics by 2025 and 95 per cent by 2030? And how do we remove the obstacles?
I look forward to sharing the National Industry Strategy with you soon.