Market shock response

Market shock response

Waste Management Review looks at the emergency planning provisions in place to prevent stockpiling following a recent EPA notice in Melbourne. 

Responding to incidents in the waste and resource recovery sector have over the past two years thrown up some challenges, with a number of high-profile fires and stockpiling events.

Balancing out the need to protect the human health of the general public while providing economic and environmental security for the waste sector, agencies have had to make some difficult decisions.  

In February, a major recycling company in Melbourne was issued with notices from EPA Victoria. The notices required it to stop accepting recyclable waste materials at sites in Maffra Street, Coolaroo and Gilbertson Road, Laverton North after allegedly failing to meet the requirements of the Waste Management Policy (Combustible Recyclable and Waste Materials).

EPA officers recently inspected both sites and saw large stockpiles of combustible recyclable waste materials from kerbside collections stored without appropriate separation distances between stockpiles, buildings or the premises boundary.

EPA CEO Dr Wilkinson said the waste stockpiles could pose a significant risk and challenge for firefighting agencies if ignited.

She said that EPA has determined that these stockpiles were in breach of the Waste Management Policy that has been in place since August 2017 following a major fire at the site.

EPA also determined that the company had not taken reasonable steps to manage and store combustible recyclable waste materials at these facilities in a manner that minimises the risks of harm to human health and the environment from fire.

She said that given the Waste Management Policy had been in place for almost 18 months, the company, and the recycling industry as a whole, had ample time to meet the requirements of the policy.

As a result of the decision, more than 20 councils in two states were locked out of their materials recovery facilities. A number of councils, including Port Phillip Council and Hume City Council, expressed frustration in online statements that they were forced to landfill recyclable waste. 

While some councils such as Glen Eira managed to arrange alternative recycling facilities, others were not in a position to do so. At the time of writing at the beginning March, the recycling service issued with the notice remained out of action.

The Victorian Waste Management Association (VWMA) in a statement said it supports EPA action against high-risk, non-compliant operators, but further government action is needed and ongoing conversation with industry is essential.

The VWMA said that what is of concern but has not yet been addressed is the contingency plan should the sector, and ultimately Victoria, not see the issues resolved promptly.

“The sector also needs confidence that other key facilities do not price-gouge or exploit the situation,” the VWMA’s statement read.

In the medium term, the VWMA is seeking answers to questions on why stockpiling is continuing across Victoria when there are mechanisms in place via government to support end markets. These include behaviour change programs and procurement standards to improve the standards of recyclate. 

It also asked about the role of the Victorian Government in supporting continued collection services to households and business during unavoidable interruptions to waste processing. The VWMA was also seeking answers to what systems and processes are in place to ensure the current scenario is not exploited by facilities still accepting recyclables for storage or processing.

Matt Genever, Director of Resource Recovery at Sustainability Victoria (SV), tells Waste Management Review he has been working with agencies such as EPA Victoria, the Department of Environment, Land, Water and Planning, SV and Metropolitan Waste and Resource Recovery Group on contingency planning. This includes examining of collaborative procurement options. 

“Some contingency efforts have managed to divert recyclables to other materials recovery facilities (MRFs) that have the capacity and capability to do that. Unfortunately, in the short term there has been some landfilling required and we would hope we would get to the end of that as quick as possible with other MRFs taking up the slack.”

Matt says that the Victorian Government’s focus is on stabilising the current market shock and preserving community health and safety, highlighting this was why the EPA made the decision they did.

While it’s too early to tell what effect this will have on the communities faith in recycling, Matt points to initial research conducted by SV after the initial China waste ban was established. The research showed that more than 80 per cent of Victorian’s believe that recycling is important.

He adds that more community engagement will likely be undertaken into the long term as part of the $37 million Recycling Industry Strategic Plan – an initial response to National Sword. He says $3 million of this will be directed towards a statewide education campaign. 

“We’re going to have to go back to basics with how we think about the campaign in the face of what’s happened with SKM rather than going out to the community with a message that just isn’t right,” he says. 

He says there is no quick-fix solution to the problems facing kerbside recycling and it could take years to work through all of the market and community implications. 

Matt hopes the Victorian Government’s planned circular economy policy will help position the community and business to understand the productive value of materials. 

He says SV’s focus will be on ensuring the industry has the infrastructure, end markets and secondary reprocessing capacity for the medium to long term.

“If we’re talking about a long-term solution, I think we’d all recognise that a bit more contingency or ‘slack’ in the system is really important so that if one of these large facilities goes offline there is contingency to take that up.”

Matt says the long-term solution is ultimately everybody understanding their role in the system, including households with better source separation and shared responsibilities across local government and MRF contracts.

“What contracts local government and MRFs go into is largely up to them, but certainly we would be encouraging councils in their long-term arrangements to be thinking about how to operate with better transparency, clarity and understanding about what’s being collected, how it’s being treated and where it’s going.”

Part of SV’s response is acknowledging governments have a role to play in supporting sustainable procurement.

“When we talk about secondary reprocessing or remanufacturing it’s that idea of value adding. You can’t just collect the material, bale it in a mixed bale and hope that somebody will take it off your hands. We know that the market simply won’t allow it anymore.”

“What we need is processes in place to turn things like mixed plastics into viable commodities like plastic pellets or flakes to be sold like any other commodity. It doesn’t matter whether that’s onshore or offshore, as long as it goes to end use.”

In the short term, SV is driving sustainable procurement such as its work in supporting testing and approvals on Integrated Recycling’s trial on a railway sleepers made entirely from recycled plastics. Likewise, the CityLink Tulla Widening saw Alex Fraser use more than 12 million glass bottles in their recycled roadbase.

Peter Murphy, Managing Director of Alex Fraser, says sending recyclables to landfill is not just an environmental issue, but a commercial one for councils, who have the power to change things.

“We work with municipalities who play an active role in the supply chain. These councils conduct good due diligence on how their recyclables are collected and processed. Most importantly, they’re active buyers of recycled materials from reputable suppliers, achieving better environmental outcomes and saving ratepayers substantial amounts of money,” he says

In the medium to long term, SV is categorising government spending around infrastructure and state supply contracts on common purchases such as paper and printers to ascertain opportunities for recycled product.

“Then it will be our role to work with relevant agencies and partners to support that,” Matt says.

He says SV is looking at it from both demand and supply sides.

“If government is going to start buying recycled products and materials in bulk, we need to make sure the supply side is there and the industry is able to scale up and provide good quality product at the volumes that might be required by government.

“The market is already there for things like glass and we know we’ve got companies like Alex Fraser and Downer that can provide glass sand products for road applications immediately.”

“But certainly plastics in particular will require a lag time between how government can drive demand but making sure then the supply side is there to create the types of products that might be used on an infrastructure network.”

He adds that the next tranche of funding will be coming out late March or early April to support infrastructure and market development investment.

As for commodity prices, Matt says these have fluctuated based on changes in demand with nations such as India and Vietnam. What is of some concern, he says, is the recent drop in paper prices, while plastics have mostly remained in line with market trends since the China bans came into effect. 

He hopes that as councils move into new contracts and as new end markets open up, the pressure from the system will be alleviated.

Mark Smith, Victorian Waste Management Association (VWMA) Executive Officer, says responding to issues surrounding the recent stockpiling event requires a multipronged approach from stakeholders across a range of industries, including manufacturing.  However the appropriate industry engagement is not where it needs to be. 

“The solution to how we solve these challenges requires a visionary approach that brings in a range of other sectors to talk about their role and how they can contribute to a solution.”

He says that the VWMA has been discussing with state government department agencies the collective role of industry, local government, state agencies and households when emergencies such as this and others play out.

“What’s this current crisis displays is the lacking of planning from the relevant organisations around what are our roles and what happens when different scenarios play out that would impact the waste and recycling sector? 

Mark says that state, territory and local governments need to look at setting minimum standards for procurement of recyclables in major purchases to support economies of scale.

He notes that the reasons for stockpiling are complicated, including contamination in the waste stream that can be caused by poor household source separation or issues at the collection and sorting end, thereby lowering the commodity value.  

“What tends to happen is people oversimplify the problem and point fingers. We all have a part to play in fixing this, and our higher order priority for recycling should be clean material streams. We generally don’t have clean product stockpiled, and as a result no end market.”

This article was published in the April edition of Waste Management Review.

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