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Six bins? Infrastructure Victoria’s interim waste report

Waste Management Review speaks with Infrastructure Victoria about its recent waste report and potential recycling solutions for the state.

When the Meeting of Environment Ministers agreed to ban waste exports from 1 July 2020, the Victorian Government called for an urgent national funding plan.

Environment Minister Lily D’Ambrosio requested that the Federal Government provide infrastructure investment to ensure the “fast approaching ban” did not result in stockpiling.   

Given the current status of Victoria’s untouched half-billion-dollar Sustainability Fund, some industry observers questioned the appropriateness of Ms D’Ambrosio’s request.

That said, in light of the state’s resource recovery challenges, the environment minister’s concerns were not unfounded.

Stockpile anxiety is particularly pertinent to Victoria, with DELWP figures revealing more than 100 recycling facility fires occurred in the state over the past 10 years. The largest fire cost Victoria over $110 million.

The collapse of SKM Recycling is another factor, with the state’s infrastructure capacity called into question after 33 Victorian councils were forced to landfill their recycling.

Within this context of “crisis”, the state government asked Infrastructure Victoria (IV) to examine the sector through an infrastructure lens. The task: provide advice to government on how to best support changes to resource recovery in the state.

Following extensive community and industry consultation, IV released an evidence base report in October 2019. Final advice will be provided to government in April 2020.

Despite the report’s 36 pages, mainstream media almost universally ran with one “recommendation” following its release: introducing a six-bin kerbside system.

Victorian Government Opposition Leader Michael O’Brien even told ABC radio that despite liking many of IV’s suggestions, “six bins sounds a bit novel”.

According to Elissa McNamara, IV Resource Recovery & Recycling Advice Project Director, however, IV never suggested six bins.

What IV did highlight, she says, was a link between high-performing resource recovery jurisdictions and greater household separation.

“To be clear, this report doesn’t make any recommendations. We will be making recommendations in April.

“What we have put out is potential actions and early findings for government.”

COMMINGLED MESSAGES

The Victorian Government’s stated waste policy objectives include reducing waste to landfill and minimising the impact of waste disposal on human health and the environment.

Evidence from reports commissioned by IV, however, show waste sector outcomes are falling short of these objectives.

Identified problems include steadily increasing waste generation rates, inefficient recycling data, reliance on exports, waste stockpiling and illegal dumping.

Market concentration is another problem, Elissa says, with the closure of SKM Recycling highlighting an overreliance on one company to manage Victoria’s waste.

“In Victoria, SKM had roughly 50 per cent of the kerbside commingled market, and their business model was based on exporting and minimal importing. As a result, investment in reprocessing or selling to local markets in a way that adds value was quite limited,” Elissa says.

To arrive at these and other conclusions, IV examined resource recovery approaches in other jurisdictions, and investigated potential market design solutions, infrastructure gaps and new pathways for recyclable material.

“We conducted interjurisdictional scans to assess what our neighbours are doing, importantly South Australia and NSW, but also looked at high-performing jurisdictions overseas,” Elissa says.

High-performing jurisdictions include Wales, South Korea, Germany, the United Kingdom and the Netherlands.

“There were some common lessons for Victoria underpinned by one clear theme: a proactive government,” the report reads.

In all five cases, IV identified long-term commitment, coordination and collaboration, mandatory measures from government, complementary interventions across the value chain and a range of evolving policies.

In addition to interjurisdictional scans, Elissa says IV undertook extensive market analysis.

IV engaged the University of Melbourne’s Centre for Market Design to assess incentives influencing each market transaction.

This included the effect of regulatory settings and the role of price signals and applied market design principals.

The Centre for Market Design suggests that in the “decentralised waste economy”, major decisions and transaction points are spread across the waste lifecycle.

“In the context of the Victorian waste sector, observed outcomes are determined by the interplay between the legislative and regulatory environment, on the one hand, and the decentralised, self-interested decisions of producers, consumers and processors of waste, on the other hand,” the report reads.

“In decentralised economic systems, such as the waste economy, alignment problems are common because the motivation of businesses and households does not necessarily accord with those of government.”

BEYOND THE BIN

IV is considering the types of intervention that may be needed, Elissa says, and is conscious that further government and industry collaboration is required.

“Consideration of waste infrastructure investment needs to be undertaken in the context of policy settings across the waste chain that drive behaviour change and support the development of end markets for recycled materials,” the report reads.

Among a number of potential actions, IV suggests that initiatives to disincentivise the use of virgin materials have the potential to create stronger recyclate end markets.

“Government procurement at all levels, whether that’s Commonwealth, state or local, can choose to use their procurement power to look not just at the absolute bottom line in terms of cost, but also social and environmental outcomes,” Elissa says.

She adds that it’s the choice of individual governments to decide to what extent they want to use procurement to achieve environmental outcomes, noting other mechanisms are available.

“Governments could look at other levers like taxes or a ban on virgin material, but because of trade, any mechanism like that would need to be considered by the most appropriate level of government,” Elissa says.

She says that while Victoria could tax or ban virgin material, the state government would need to consider trade implications.

“It’s also about considering whether or not the environmental and social externalities associated with virgin material extraction are being appropriately priced relative to recycled material,” she says.

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Infrastructure Victoria releases interim waste report

Infrastructure Victoria has published its interim report to the Victorian Government on the infrastructure required to support a changing recycling and resource recovery sector.

According to Infrastructure Victoria CEO Michel Masson, Victoria’s total waste generation nearly doubled between 2000 and 2018, growing from 7.4 million tonnes to 13.4 millions tonnes each year. Mr Masson said stockpiling and illegal dumping are now significant concerns.

Despite this, Mr Masson said after a thorough investigation of the recycling and resource recovery sector, Infrastructure Victoria has identified exciting opportunities for investment, new processes and community action.

“To waste less and recycle more, governments, communities and businesses all need to play their parts. We have all learnt to use less water and power, now we have to apply the same principles to waste,” Mr Masson said.

The report specifically outlines that further investment in organic processing is needed to divert food and garden waste from landfill and reduce methane gas emissions.

“Infrastructure Victoria has identified the food and garden waste should go to more high quality composting facilities, which would need to be supported by a rollout of household organics collection services,” Mr Masson said.

Victoria’s current co-mingled system does not produce sufficiently clean streams to support end markets for recycled materials, according to the report.

“Greater separation of waste in homes and businesses can reduce contamination and improve the quality of our recycling,” the report reads.

“Infrastructure Victoria’s consumer research demonstrates 90 per cent of households surveyed are open to changing how they sort their waste.”

Report findings show best practice jurisdictions separate at least five types of material at the source, including organics, plastics, paper and card, glass and metals.

While multiple calls have been made to introduce a container deposit scheme in Victoria, the preliminary view of the report is that more analysis is needed on how to design an optimal scheme for Victoria.

The report also calls for improved commercial and industrial recycling standards.

“Incentives and price signals need to be examined to improve performance across the board, from manufacturers to retail,” the report reads.

Initiatives to disincentivise the use of virgin materials in production, or promote the procurement of products made from recycled materials, were also highlighted.

Proposed actions include:

Developing a clear, overarching policy framework including recycling targets and waste-to-energy.

Supporting councils to implement more consistent approaches to sorting and collecting waste, helping to reduce contamination in household recycling collection.

Better planning, locating and protecting waste management sites.

Working with the Commonwealth and other states to reduce packaging and single use plastics.

Increasing the use of recycled materials by eliminating barriers and updating government procurement guidelines.

Infrastructure Victoria will deliver its final report on recycling and resource recovery infrastructure in April 2020.

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Submissions sought for Victorian waste infrastructure

Infrastructure Victoria will provide advice to government on infrastructure required to support changes to recycling and resource recovery in Victoria.

Infrastructure Victoria is now seeking submissions from waste sector stakeholders.

Infrastructure Victoria Chief Executive Officer Michel Masson said the request comes at a time of significant change for the waste industry.

“Recent changes in the global market for recycled products mean there are flow-on impacts for how Victoria collects, sorts and exports waste,” Mr Masson said.

“With these changes come both challenges and opportunities, and we are pleased to be able to explore these as part of our advice to the government.”

Mr Masson said Infrastructure Victoria will undertake comprehensive engagement with community and stakeholders to develop the advice.

“Hearing from industry, local government and the community will be essential,” Mr Masson said.

“We will build on the substantial amount of work that already exists or is being progressed to support Victoria’s waste management, and will ensure our advice takes account of community attitudes and expectations.”

Mr Masson said advice will be based on projections of future waste streams and projected trends in population growth.

“In framing this advice, Infrastructure Victoria will also take note of specific implications for regional Victoria,” Mr Masson said.

Infrastructure Victoria is seeking advice on infrastructure required to:

— Develop Victoria’s re-processing sector for recycled material, particularly those that rely heavily on overseas markets.

— Better enable the use of products containing recycled materials in a variety of Victoria industries such as manufacturing, construction and agriculture.

— Support a waste to energy sector that priorities the extraction of recyclable material and recovers energy only from residual waste.

— Support organics recycling though front end infrastructure requirements and trade-off opportunities.

Infrastructure Victoria will deliver advice to government in April 2020. An interim report will be provided in October 2019.

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