Recycling Victoria: a new economy? Part two

The Victorian Government’s Recycling Victoria strategy is the largest package of recycling reforms in the state’s history. Waste Management Review explores the policy.

This article is the second in a three part series: part two will explore the forthcoming CDS, waste as an essential service and the Recycling Victoria Infrastructure Fund. To read part one click here

In recent years, Victoria’s waste and resource recovery system has faced a number of setbacks, from fires at material recycling facilities and illegal stockpiling, to uneven policy regulations and the collapse of major processor SKM Recycling in 2019. Added to this is uncertainty amid COVID-19 ramifications.

The SKM collapse was particularly noteworthy, entering mainstream consciousness after 33 Victorian councils were forced to landfill their recycling: calling the state’s infrastructure capacity into question.

Fast forward just one year, and the state is in better shape, with the release of Victoria’s long-awaited circular economy policy Recycling Victoria: A New Economy presenting widespread opportunity for sector growth.

CASH FOR CANS

Before Recycling Victoria’s February release, Victoria, often touted as the ‘progressive’ state, was the only Australian jurisdiction without a container deposit scheme (CDS) in place or forthcoming.

The state government’s CDS hesitance has been an ongoing point of frustration for industry, with Ms D’Ambrosio telling delegates at VWMA’s August 2019 State Conference that the state government had no current plans to develop a CDS.

Additionally, despite an acknowledgement of demonstrated success in other jurisdictions, Infrastructure Victoria’s October 2019 interim waste report suggested more analysis was needed on how to design an optimal scheme for the state. That said, the times are changing, with Recycling Victoria committing to introduce a CDS by 2023.

Speaking with Waste Management Review in March, Trevor Evans, Assistant Waste Reduction and Environmental Management Minister, said the Victorian commitment means Australia is now fully covered by CDS.

“The next question is whether we can get those schemes operating as harmoniously as possible. We know a harmonised approach between the states and territories would lead to the very best outcomes for Australia,” he said.

While the National Waste and Recycling Industry Council (NWRIC) would prefer to see a national CDS, Rose Read, NWRIC CEO, says at minimum, Victoria should work with all other state and territory CDS’ to ensure performance criteria for community access, network distribution, collection and material recovery targets.

She adds that reporting set by governments should be consistent to ensure services can be delivered cost effectively by the industry to the beverage suppliers.

While Mark Smith, Victorian Waste Management Association (VWMA) Outgoing Executive Officer, says he is supportive of Victoria’s CDS announcement, he similarly stresses the need to select a model that puts community access, ease of use and accessibility first, and doesn’t put remote and regional communities at a disadvantage.

“I’m optimistic that government will appropriately consultant with all the key stakeholders about a CDS role out including the VWMA members. Our association is here to advocate for our members and I’d really encourage the teams working on CDS to engage with us, Victoria’s peak body representing the sector” he says.

“I’d encourage any of our members who are concerned about CDS in Victoria to reach out and voice those concerns directly with us, so we can consider them when engaging with the government in coming months.”

ESSENTIAL REGULATION

Recognising that major reforms are needed to lift the performance of Victoria’s recycling sector, the state government will establish a new dedicated Waste and Recycling Act to govern all aspects associated with waste and recycling services. And in effect, regulate waste as an essential service.

“This new Act will address current gaps by requiring improved data collection from waste and recycling organisations (including material recovery facilities) to provide transparency and accountability for what happens to our waste,” the strategy reads.

Nick Harford, Equilibrium Managing Director, says regulating waste as an essential service represents sensible reform. He notes that in 2019, the Essential Services Commission was asked by the state government to review the waste and resource recovery sector.

“They provided a confidential report to government last year, and obviously we don’t know what was in it. But they indicated at the time that they saw a limited availability of recycling markets and additional capacity constraints,” he says.

According to Nick, the Essential Services Commission also indicated that they wanted to explore contractual arrangements, barriers to market and community and business expectations.

“I think these are the sorts of things they will now examine, and given the nature of those things, I expect there will need to be some consultation with stakeholders, if not the broader Victorian community,” he says.

Nick notes that responsibilities are likely to change under the Act, highlighting that local government currently holds authority for MSW waste, with different systems and kerbside compositions across local government areas.

“I think government is signalling that these new powers may enable a state-wide approach. It may be outcomes focused, for instance, the state government sets its expectations and it’s up to local government or other authorities to achieve that. Or it could be a more mandated approach,” he says.

The state government will also establish a new waste authority in 2021, with the aim of better governing Victoria’s waste and recycling systems, and holding waste service providers to account. This will ensure, the strategy suggests, that recent recycling disruptions are not repeated.

In terms of how these changes will affect the private sector, Nick forecasts that it will lead to increased accountability.

“It’s flagged in the policy that greater data collection and reporting is expected. Which I assume is another driver for legislating as an essential service, because it gives the state power to demand reporting from the sector,” he says.

“That will potentially lead to more costs, but we’ll have to see how it pans out. Recycling companies have been getting better and better in terms of tracking and reporting their materials handling. So really, it’s just business as usual. I think the general principle is that an informed market is an efficient market.”

Nick highlights that if the Essential Services Commission informs the purchase of waste and recycling services in a more effective manner, it could lead to increased competition, and as such, more innovation, as companies look for opportunities and competitive advantages.

WASTE-TO-ENERGY CAP

In addition to essential services regulation, Nick highlights Recycling Victoria’s waste-to-energy (WtE) commitments as significant, albeit vague.

“This is an area where we as an industry need to see more detail, because the state government mentions giving priority to aerobic digestion as a technology, as well as putting a cap on the amount of material that can go to WtE via thermal technology,” he says.

Despite a recognition of the role WtE plays in a functioning resource recovery sector, the state government has placed a cap of one million tonnes a year on the amount of residual waste that can be used in thermal WtE facilities, until 2030.

“The cap will be implemented through new rules which will be given effect by legislation or regulations. The cap will include all thermal WtE facilities and apply to the quantity of waste they use as feedstocks,” the strategy reads.

In reference to the cap, Nick says he isn’t sure how it will play out.

“Does that include facilities that are already approved, even if they are not up and running? Australian Paper for example is already approved, which is 700,000 tonnes per annum of material earmarked for thermal processing. They haven’t secured that material yet, but it is on the drawing board,” he says.

According to Rose, applying a volume cap provides certainty to industry, and importantly, gives the community confidence that genuine recyclables won’t be used as feedstock.

“However, the NWRIC does not believe a cap of one million tonnes is appropriate, as currently there is over 4.2 million tonnes going to landfill, of which between 40 per cent to 50 per cent of this material would be considered eligible residual waste,” she says.

Under Recycling Victoria, the state government has also committed to supporting early entrants into Victoria’s WtE market, including facilities that use organic waste to make bioenergy or provide precinct-scale energy.

Investment support will include grant or loan funding, and investment facilitation to help proponents navigate regulatory and financial processes. The government will also fund research to develop safe end uses for residual products such as ash and digestate.

CAPACITY EXPANSION

The state government has allocated $100 million via the Recycling Victoria Infrastructure Fund to help local businesses establish and upgrade infrastructure to sort and reprocess recyclables for use in manufacturing. The fund will be administered by Sustainability Victoria (SV).

“The package includes $30 million in grants to make Victoria a leader in recycling innovation – creating new products from recycled materials like glass, plastic, organics, electronic waste, concrete, brick and rubber,” Premier Daniel Andrew said.

“The government will also provide $10 million in grants to help businesses improve resource efficiency, reduce waste and increase recycling in their daily operations – saving them time and money.”

Sustainability Victoria Chief Executive Officer Claire Ferres Miles

Claire Ferres Miles, SV Chief Executive Officer, says SV are proud to have played a significant role in developing the Recycling Victoria policy.

“Our work to transform the recycling sector is already underway – SV designed and recently launched $39.5 million in grants from the Recycling Victoria Infrastructure Fund to boost recycling capacity in Victoria,” she says.

“We look forward to supporting all Victorians as together we transition to a circular economy, and ensuring our community has a recycling system that can be relied on.”

According to Claire, widespread disruption to global recycling market has exposed the volatility of Victoria’s recycling system, and the need to invest in industry to increase resilience.

“The Recycling Victoria Infrastructure Fund is focussed initially on plastics and paper and cardboard reprocessing and glass beneficiation, as there are significant gaps for these materials,” she says.

Claire notes however that the exact processing gap for any material is not clear cut, with many variables.

“Using market intelligence and horizon scan activity, we are proactively working to be aware of how materials are moving through our economy and where government intervention is required,” she says.

“As an example of this, we used our e-waste material flow analysis to identify photovoltaic panels as an emerging waste issue. This data has supported us to develop a national stewardship approach to address this issue.”

In addition to the Infrastructure Fund, Recycling Victoria will see the expansion of the state government’s Investment Facilitation Service.

“SV’s Investment Facilitation Service is available to all Victorian-based resource recovery businesses, and since its inception in 2015, has engaged with over 400 resource recovery projects,” Claire says.

“The service promotes opportunities in the sector, supports business case development and coordinates the investor’s relationship across government.”

The service has also been a critical conduit through which industry concerns and needs informed Recycling Victoria’s development, Claire says. She adds that much of this feedback and insight is reflected in the policy.

“Over the coming months, SV will work closely with industry to define an enhanced role for this service that is high value and fit-for-purpose, for both current and emerging challenges, and opportunities to achieve investment attraction in Victoria,” Claire explains.

In addition to the paper and cardboard, plastic and glass materials fund, SV has opened grants for the Infrastructure Fund’s hazardous waste stream, with expressions of interest sought until 8 May.

“There is an estimated 15,000 – 29,000 tonnes per annum of liquid hazardous wastes containing recyclable solvent that needs to be managed in Victoria. Currently there is limited capacity to recycle these solvents,” Claire says.

“This funding will support the establishment of recycling infrastructure to viably increase the recycling of solvents for use in the Victorian economy.”

Of the Investment Fund, Jillian Riseley, Metropolitan Waste and Resource Recovery Group (MWRRG) Chief Executive Officer, says there is significant opportunity to improve infrastructure capacity across Victoria.

“It’s exciting as we look to the future and our role in facilitating the delivery of new recycling services contracts for councils,” she says.

Jillian adds that MWRRG is in the final stages of its review into the Metropolitan Waste and Resource Recovery Implementation Plan.

“It will make a range of recommendations for the waste and resource recovery sector to ensure we meet our future needs and objectives to reduce waste and increase resource recovery,” she says.

“In reviewing our Metropolitan Implementation Plan, we consulted with industry to understand the capacity and future needs of the sector to ensure we have the right infrastructure in place.”

MWRRG have ensured that the review recommendations align with the objectives of Recycling Victoria, the findings of Infrastructure Victoria’s report on the waste and resource recovery sector and the national waste policy, Jillian adds.

According to Duncan Lummis, ARCADIS Associate Technical Director, Recycling Victoria provides some long-awaited clarity and an outline route map to help steer Victoria away from its current over reliance on landfill and export markets for recyclables.

He adds that currently, multiple government agencies have either recently, or are in the process of, considering the scale of capacity gaps in Victoria’s reprocessing infrastructure.

“Sustainability Victoria’s updated 2018 Statewide Waste and Resource Recovery Infrastructure Plan identified significant gaps across the state. Notably, these included a lack of reprocessing facilities for organic and residual wastes across all regions in Victoria,” he says.

These gaps, Duncan adds, have the potential to become more significant in light of the new, ambitious landfill diversion and recovery targets.

In the medium term, he says, FOGO processing capacity needs to be increased significantly to manage the newly expanded household services.

“The scale of the gaps, by region and material type, would be clearer with the release of government studies, data and analysis used to support the development of the new policy,” Duncan says.

In terms of Recycling Victoria’s infrastructure funding commitments, Duncan says “time will tell” as to whether the new funding referenced in the policy is adequate.

“Key considerations will be the measurement of future landfill diversion and recovery performance against the policy’s targets, and the ability of future funding priorities to be refocused where required,” he says.

“Flexibility to change future funding priorities is needed to address underperforming areas and sectors. The revamped waste data system in Victoria should also be used to ensure that future funding is appropriately targeted.”

Duncan says the decision to initially focus on organic, plastic, paper, cardboard, glass, textiles and tyre processing is positive.

“In addition, for WtE solutions to process residuals, the indirect support provided through increases in the landfill levy is a game changer that should enable much needed alternatives to landfill to enter the Victorian market,” he explains.

Duncan adds that contaminated soil reprocessing solutions would also benefit from clear, longer term support mechanisms to encourage investment.

“This would help to address the emerging PFAS issues, partly resulting from Victoria’s Big Build agenda, which has resulted in large quantities of contaminated soils being stockpiled” he says.

Duncan expects that specific materials will continue to be prioritised until the trajectory of landfill diversion and recovery performance demonstrates that the new targets are likely to be achieved.

“Confidence in the achievement of the targets is needed, which will not only be gained through the provision of key financial packages, levy increases and regulatory changes, but crucially, will be demonstrated and evidenced through more robust and reliable data,” he says.

“Monitoring of performance against the targets should be ongoing and used to inform future revisions to the policy when required, to help ensure councils, communities, commerce, industry and the waste management sector are collectively kept on track to achieve the targets.”

THE INTERIM WASTE REPORT

Published in October 2019, Infrastructure Victoria’s (IV) interim waste report sought to examine the waste and resource recovery sector through an infrastructure lens.

Evidence from the report suggested Victoria was failing to meet its stated waste policy objectives, including reducing waste to landfill and minimising the impact of waste disposal on human health and the environment.

While two separate documents, Jonathan Spear, IV Deputy Chief Executive, says he is pleased to see an alignment between IV’s report and Recycling Victoria.

“There are lots of themes there and lots of policy directions that government took after this final policy set,” he says.

“It was really good to see, and really good collaboration with IV with industry and with local government and state government to achieve that.”

Following the report, IV was tasked with providing final advice to government, which Jonathan says they have recently delivered.

“The key part of our work was being quite detailed about what the infrastructure requirements are for recycling and resource recovery,” he says.

“What we think government will do is use that to inform the finer details of implementing its policy, especially around what sort of infrastructure investments are meant to be made by industry and local, state and commonwealth governments.”

Jonathan expects IV’s advice will publicly available in the coming months.

Next week’s instalment will explore the policy’s organics recovery targets, the Victorian Government’s Social Procurement Framework and efforts to support safe and effective high-risk and hazardous waste management. 

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New product stewardship scheme to launch

Environment Minister Sussan Ley says she intents to add child car seats the Product Stewardship Act Priority List, following the establishment of a new stewardship scheme for the product.

The new scheme will work to provide convenient solutions for old, unwanted and potentially unsafe child car seat disposal.

“More than 1,400,000 new child car seats are sold annually in Australia,” Ms Ley said.

“The Memorandum of Understanding signed today (13 November) sees car seat manufacturers, retailers and motoring associations coming together for the first time to adopt the SeatCare program, which makes it easy for parents and families to dispose of old and potentially dangerous child safety seats for recycling.”

The industry led scheme is being co-designed and built by sustainability and environmental management consultants Equilibrium.

According to an Equilibrium statement, there is currently no Australian program to support the take-back of old child car safety seats.

“Simultaneously, there is a growing public expectation that producers and retailers are well placed to demonstrate their corporate social and environmental responsibility in a very practical manner,” the statement reads.

“As a result, SeatCare is a timely solution that will address both safety and environmental objectives in a practical way.”

Based on the 10-year recommended maximum life span of child car safety seats, national birth-rates, estimated changeover rate of units per child and per family, trials have found that up to one million child car safety seats can potentially be captured and removed from the market per year.

Equilibrium ran a trial in 2017 throughout Queensland, NSW and Victoria, which according to the statement, successfully collected 1921 seats for recovery and recycling and diverted 10,342 kilograms of material including plastic and steel from landfill.

“It is estimated that over 200,000 child car seats are disposed of every year, with the majority being sent to landfill,” the statement reads.

“This is despite the fact that over 80 per cent of child car safety seats can be recycled once dismantled. A product with such a significant percentage of recyclable material should be considered a valuable resource that is wasted when sent to landfill.”

Equilibrium General Manager Damien Wigley said SeatCare will provide a unique community service that can improve road safety while also reducing waste to landfill.

“SeatCare is an excellent example of how manufacturers, auto associations, safety advocates and environmental specialists can create positive waste reduction programs that meet consumer expectations,” Mr Wigley said.

 “SeatCare demonstrates how voluntary approaches to product stewardship can be achieved in a timely and outcome-oriented way. Multi-stakeholder involvement from the outset is the key to such programs, as is equitable co-funding, transparency and environmental sound processes.”

Once established, SeatCare intends to progressively roll out collection sites in mid-2020, with an initial target of 25 locations.

“As the program expands, this number will grow and potentially could build to around 60 collection sites in both metropolitan and regional areas, and involve a number of accredited dismantling organisations and plastic and metal recyclers,” the statement reads.

SeatCare will accept:

Rear facing carriers

Forward facing seats

Booster seats

Car seat and carrier frames

Car seat and carrier strapping

Items that attach directly to the seat or carrier supported by the manufacturer

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Planning for national solar panel product stewardship underway

Research for a national product stewardship program for photovoltaic systems, which include solar panels, is underway.

Research for a national product stewardship program for photovoltaic systems, which include solar panels, is underway.

Sustainability Victoria has appointed product stewardship consultant Equilibrium to analyse and assess potential options for a national product stewardship to help manage end of life products.

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Photovoltaic (PV) panels and associated products and equipment have been identified as a rapidly growing e-waste stream in the future. For the project, “PV systems” have neem defined to include panels and PV system accessories such as inverter equipment and energy storage systems.

Equilibrium has opened an online survey to gather input and information form manufacturers, installers, project developers, the energy industry, and peak bodies.

The information gathered by the survey along with other evidence gathered will support the assessment of potential options.

Organisations and individuals interested in the project can complete the survey here.

Equilibrium release kerbside market assessment tool

Equilibrium has developed a tool with the Metropolitan Waste and Resource Recovery Group (MWRRG) to assist local councils and kerbside service operators to assess changes to contracts.

The methodology comes off the back of China’s National Sword policy, which has spurred on numerous contract renegotiations across Australia. It is intended to act as a guide that councils and others can use to suit their particular circumstances and requirements, rather than being prescriptive. It includes examples, instructions and indicative responses aiming to make it simple to use.

MWRRG developed the tool in consultation with councils, industry groups, materials recovery facility operators and other states.

MWRRG is using the system with Victorian Councils, and it has been widely circulated to all states, major recyclers and industry groups. The methodology assists parties involved in kerbside recycling arrangements to make informed decisions on ongoing arrangements based on principles of accountability, transparency and reasonableness when negotiating and agreeing to service arrangements.

It sets out the principles of kerbside recycling, considerations for assessing kerbside recycling service arrangements, commodity price indices, factors and calculations to inform financial considerations and monitoring and verification of agreements.

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Equilibrium Managing Director Nick Harford said the current issues surrounding contract stability have highlighted that the community wants and supports kerbside recycling. He said it is incumbent on the waste industry to ensure services are sustainable.

“The current situation with kerbside recycling has motivated an update of kerbside arrangements by some materials recovery facility (MRF) operators and collectors, as they have expressed concerns about meeting current contractual obligations. In Victoria, there is a requirement for councils to update arrangements with MRF operators in order to be able to access the state government financial support,” Mr Harford said.

The tool calculates the market commodity prices for materials such as mixed paper, paper grade, cardboard grade, mixed grade, PET plastic, HDPE plastic, aluminium, steel and glass. In addition, it shows the percentage of total materials in kerbside by weight and the average tonnes processed per annum. Operating expenditure is divided into labour, repair and maintenance, consumables, waste to landfill, rent, rates, interest, business insurance, legal compliance and reporting, systems accreditation and certification and a range of other key metrics.

Mr Harford said the figures included in the template method were based on current market intelligence and reported composition of materials in kerbside.

“Having said that however, the figures are indicative and as a guide only, it is intended that the method and tool is adapted to each individual circumstance and the numbers re-entered to reflect actual specific arrangements,” he said.

He said kerbside recycling is a relatively complex arrangement when all factors are considered and it is not homogeneous. Mr Harford noted that council contracts differ and companies use varying business and operational models.

“It is therefore necessary to assess a broad range of activities to determine whether the service being offered is adequate, the price is reasonable and the operation is sustainable. The risk assessment is a process to navigate what may or may not be a priority for a particular arrangement. The most significant risk factors depend on each circumstance.

“For some councils, security of downstream markets for commodities may be paramount, while for others it may be business contingency and insurance. The method and tool enables assessment of a wide range of risk factors.”

Mr Harford said general feedback has been positive and that the information is helping people work through reviewing and, where needed, updating kerbside arrangements.

“Equilibrium doesn’t present this is as being anything entirely novel as most people with a working knowledge of kerbside would be aware of these issues, but it is a way to bring more transparency and accountability to current considerations. The method and tool is being updated based on further feedback and to also account for other factors that some operators have requested – one being an ability to assess capital expenditure impacts on ongoing arrangements.”

MWRRG Chief Executive Officer Rob Millard said the organisation has shared the tool with other jurisdictions to inform and support a consistent approach to dealing with recycling challenges across the country.

To request a copy email info@equil.com.au or call + 61 3 9372 5356

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