Recycling Victoria: a new economy? Part one

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 first in a three part series: part one will explore Victoria’s landfill levy increase and four-bin kerbside system. 

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.

Key highlights include a $100 million investment in the state’s recycling system to drive research and expand local processing and manufacturing and the introduction of a state-wide four bin kerbside system.

When announcing the policy, Victorian Premier Daniel Andrews said Recycling Victoria would help local businesses “give new life to old rubbish” and drive positive environmental outcomes for the state.

According to Rose Read, National Waste and Recycling Industry Council (NWRIC) CEO, the policy is a signal that government has listened to industry and the community.

“From cleaning up what goes into the bins, improving local processing capacity and remanufacturing and growing local market demand for recovered materials, through to more resources to stop illegal waste activities and a recognition that waste and recycling is an essential service, the state government is committed to addressing the basic systemic issues facing Victoria,” she says.

Mark Smith, Victorian Waste Management Association (VWMA) Outgoing Executive Officer, is similarly supportive, with the policy making headway into key areas VWMA has long advocated for.

“In particular, it’s promising to see Victoria commit to catching up with other states and territories on the container deposit scheme (CDS) front and making important investments into a level playing field by strengthening the EPA’s waste crime capabilities,” he says.

Mark is cautious about implementation however, suggesting Recycling Victoria does not allocate enough money to the private sector.

“We’ve seen VAGO report after VAGO report highlighting the deficiencies in government agencies to deliver waste and resource recovery programs. One way I think we can improve is by government seeing the private sector as a true partner for community engagement and education,” he says.

“It would be appropriate that we see quarterly reporting back to industry on the progress of this ambitious policy, as a way to hold government accountable for the delivery of the relevant actions”.

LOOKING TO THE LEVY

Under Recycling Victoria, the state’s landfill levy is set to almost double, jumping from $65.90 to $125.90 per tonne over three years. Recognising the challenges associated with the ‘tyranny of distance’, the strategy notes proportional increases will be reflected at regional landfills.

While the move prompted some mainstream media critique, with claims it would “hit ratepayers hip pockets”, industry reaction has been favourable.

Bingo Industries Managing Director Daniel Tartak, for example, suggests the increase will prompt technology investment and move Victoria towards international best practice diversion rates.

According to State Environment Minister Lily D’Ambrosio, the increase will help support recycling reforms and provide strong investment incentives. Furthermore, Ms D’Ambrosio highlights the increase as a mechanism to stop cross-border dumping, with Victoria’s levy historically lower than neighbouring states.

According to David Cocks, MRA Consulting Victoria Manager, harmonising Victoria’s levy with other jurisdictions is an essential move to help the state meet its resource recovery targets.

“The risk of significant impacts on our waste management system through the transportation of waste is absolutely critical. Plus, from the perspective of supporting investment in recycling, there is nothing like a good economic incentive, and the waste levy certainly supports that,” he says.

 “Additionally, when hypothecated, levies provide a significant opportunity for investment back into the sector to support higher order activities.”

While David says the strategy flags the role of hypothecation, the “sting in the tail” is that investment needs to come through.

“At the moment, circa $300 million has been foreshadowed as additional investment in the sector. But in three years time, the levy increase will produce an additional $240 million per annum – on top of what is already collected,” he says.

“Over the 10-year period of the strategy, these levy increases will realise $2 billion in additional revenue for the state. What is the proportional amount of this revenue to invest back into the sector? Is it 15 per cent or $300 million? I don’t think so.”

Rose says the increase is well overdue, highlighting that the NWRIC has consistently advocated for levy harmonisation to prevent inappropriate movement and disposal of waste.

“The proposed increase will reduce the gap in levy prices between states and encourage greater recovery of recyclable materials. It will also enable energy recovery from waste that can’t be recycled but does have a significant calorific value,” she says.

Furthermore, while Rose says staging the implementation over three years is sensible, NWRIC is recommending that the price increase be deferred for up to six months due to the impacts of COVID-19.

However, like David, Rose stresses the importance of hypothecation.

As highlighted in the NWRIC’s review of all state landfill levies last year, Victoria collected an estimated $215 million in levies in 2017-18, of which only $35 million or 16 per cent was invested back into local council, community and industry waste projects via the Sustainability Fund.

An estimated $104 million (50 per cent) was used to fund the Victorian EPA, Sustainability Victoria and Regional Waste Groups.

“In reviewing the Victorian state government budgets and financial reports, it is extremely difficult to get a clear view of where the levy funds are spent and what is achieved. As part of its landfill levy review, the NWRIC is calling on each state government to establish a separate trust fund and report annually on funds raised, spent and outcomes achieved,” Rose says.

“For too long these funds have been used to support other government activities outside the waste and resource recovery sector, rather than supporting better waste management practices and greater reuse of recycled materials.”

According to Mark, industry is supportive of the increase, under the caveat that the state government delivers the increase while monitoring compliance.

“In recent years we’ve seen government invest more money cleaning up illegal activity than what flows back to private operators who are the main employer and investor in the waste and resource recovery sector,” he says.

“It would be great to have more transparency on landfill levy collection and in particular distribution, including being transparent about what amount the government puts down compared to the private sector. Who gets what exactly shouldn’t be so hard to decipher. I think the NSW Government does this well, and it’s something Sustainability Victoria and DELWP could replicate.”

KERBSIDE REVAMP:

While the levy increase attracted much of the waste sector’s initial attention, scaling outward, it was the four bin kerbside roll-out that peaked major public interest.

The new system will include bins for combined food and garden organics (FOGO), glass, combined paper, plastic and metals, and residual waste. Additionally, all services and bins will be standardised, including lid colours, to simplify the system across councils.

Reforms will be implemented gradually, with the Victorian Government supporting the rollout of new glass bins and bin lids from 2021. According to the strategy, all Victorians will have a new glass bin or access to glass services by 2027. Mandatory rollout of FOGO recovery will commence in 2026-7, with all Victorians to have access by 2030.

“To support the reforms, the Victorian Government will review relevant existing guidelines, policies and regulation to make sure people living in diverse dwelling types, including multi-unit developments, have equitable access to best practice recycling,” the strategy reads.

Mark says while it’s great to see a commitment to standardising bins, the program should be brought forward.

“As I understand it, consistency across Victoria is unlikely to happen until 2025,” he says.

Furthermore, Mark says changes to the kerbside system should be well-funded and accompanied by a consistent public education campaign.

“I hope the agencies rolling out these reforms give the private sector the appropriate opportunities to inform and shape messaging, as the private sector has far more direct contact with the public then the state government does on this front,” he adds.

While the announcement might seem novel to the general public, it follows years of industry discussion over the viability of greater source separation. In the last two years for instance, Macedon Ranges Shire Council, Yarra City Council and Hobsons Bay have introduced and/or trialed four kerbside bins, to positive results.

Speaking with Waste Management Review in 2019, Chris Leivers, Yarra City Council Director City Works and Assets, said the council’s 2018 FOGO trial identified Yarra residents as willing to engage in new kerbside recycling systems. The trial was so successful, he said, that Yarra saw a 40 per cent increase in diversion from landfill, “with current FOGO contamination rates now averaging less than one per cent.”

A spokesperson for the Victorian Local Governance Association (VLGA) highlights the new system as a positive initial step to ensure better material separation.

“Cross contamination of resources is a barrier to effective resource recovery, and the separation of glass is an effective way to reduce that cross contamination,” the spokesperson says.

“We have also called for the standardisation of bin lid colours in the past, so it is great to see the government taking up our recommendation.”

Furthermore, the spokesperson says greater source separation will result in reduced overheads and operating costs for recyclers.

“Greater separation, and therefore less contamination, means recyclers don’t need to reject as much material, therefore getting a better return based on increased volume of material recovered. This will be beneficial for councils in terms of increased shared returns,” the spokesperson explains.

To support councils through the roll out, VLGA is calling on the state government to support community education and initiatives to increases FOGO diversion.

“We specifically asked the government to fund these initiatives through the landfill levy. We also asked the government to support councils through procurement of products made with recycled materials,” the spokesperson says.

While David shares similar sentiments, calling source separation the most cost-effective way to recover resources, he says the state government needs to show evidence that a fourth bin for glass is the right move.

“They haven’t demonstrated a successful business case for that. They may have done the work, but it hasn’t been put forth. There are numbers stated in the policy, but I would like to see where they’ve done that analysis,” he says.

“Perhaps the fourth bin should be for paper and card, especially considering that a future CDS will remove a lot of glass from the kerbside bin.”

Rose also cautions that Victoria’s fourth glass bin is out of step with other states and territories, “making it nationally inconsistent and confusing for the community at large.”

“The NWRIC believes the majority of glass containers would be better dealt with through a CDS, as is being done by other states and territories. However, the fourth bin does mean better separation at source,” she says.

To help industry processes these materials, Rose says the Victorian Government should align with the WA State-wide Guidelines for Kerbside Recycling.

“In the case of Victoria, only the following items should end up in the yellow lidded bin: plastic containers, paper and cardboard boxes flattened (no shredded paper), aluminium and steel containers. All education messages should be consistently applied by local governments across the state to reflect this,” she says.

“The messaging needs to be simple and clear, reinforcing the right behaviours both within households and businesses. Industry should also have the ability to reject bins and loads that do not meet these requirements.”

From a logistics standpoint, Jillian Riseley, Metropolitan Waste and Resource Recovery Group (MWRRG) Chief Executive Officer, says MWRRG will continue to work with councils to implement the changes to their services. She adds that each council is in a slightly different situation, from those with food waste recycling and a glass bin collection already in place, through to those with neither.

“We continue to engage with councils and work with them to map and deliver resource recovery and waste services for their communities. Specifically, we are collaborating with councils on their development of transition plans,” Jillian says.

“In March we hosted a workshop with council waste officers to help them outline a process for the development of transition plans. Our collaborative procurement, contract management, education, training and marketing and communications expertise will support councils throughout the transition.”

Jillian adds that Recycling Victoria is a once in a generation investment.

“It’s a fantastic opportunity for us to ensure we build a more sustainable, resilient sector with new jobs and opportunities for locally delivered resource recovery,” she says.

“Increased kerbside consistency and future state-wide education and behaviour change campaigns will reinforce the work councils already do to engage with their communities.”

Next week’s instalment will explore the forthcoming CDS, waste as an essential service and Victoria’s proposed waste-to-energy cap. We’ll also hear from Claire Ferres Miles, Chief Executive Officer, Sustainability Victoria. 

Related stories: 

X