Waste bans need revisiting: Veolia CEO

veolia waste bans

As an export ban on paper and cardboard waste looms, Richard Kirkman, Chief Executive Officer of Veolia Australia and New Zealand, asks if it’s time for a rethink.

The Federal Government has pulled many levers in response to the China Sword Policy and its restrictions on foreign waste. 

Australia’s National Waste Policy Action Plan was intended to reduce waste generation and increase resource recovery as the country transitions to a circular economy. 

Export bans on waste tyres, glass and plastics have been phased in since 2021. From 1 July 2024, new regulations will mean only paper and cardboard that is processed or sorted to specific requirements can be exported.

Richard Kirkman, the Chief Executive Officer of Veolia Australia and New Zealand, says while he applauds the government’s bold policies, the paper and cardboard regulations will put financial pressure on legitimate operations. 

He’s calling for flexibility to allow existing export arrangements to ethical, legal, and responsible outlets to continue.

“There is no need to backtrack, but there’s no shame in pivoting in the best interest of the country,” Richard says.

“This country has happily traded paper and cardboard for decades. Instead of implementing a blanket ban, we need finely tuned regulations and specifications to make sure this delivers desired results.

“There’s still work to do to strike the balance between promoting domestic processing and supporting an optimum level of international trade.”

The fallout

veolia waste bans
Richard Kirkman on site at one of Veolia’s resource recovery facilities.

Richard says Veolia supports regulations that ensure high-quality recycling commodities end up in the hands of manufacturers, not in landfills. He acknowledges that through the bans the Federal Government intended to boost local manufacturing and reduce environmental impacts. But a lack of domestic processing capacity, uncertainty around ban specifications, and visibility on long-term plans amid changing regulations has posed industry-wide challenges.

Veolia has been proactive, securing agreements ahead of the plastic ban and supporting traders in obtaining exemptions. It also upgraded some existing facilities with automation and sought strategic partnerships so its existing customer base was not affected. It also invested in a glass processing facility in New South Wales.

Richard says Veolia has adapted its business model as far as it can to pivot and continue growing. 

The industry as a whole has always been on the front foot, seeking a solution, investing and warning of the unintended consequences while wrestling with the uncertainty of final export specifications. However, the impact of bans are being felt by local authorities, with recycling rates declining. 

Averages vary across the country, but Richard says the plastic bans resulted in periods of no sales or price drops of up to 80 to 90 per cent for certain polymers when local processors recognised they were no longer competing on the international market. 

“Bans are not a good way to create elastic demand which ensures best price point for local authorities who are bearing the cost of recycling other peoples’ waste,” Richard says.

“This is proven across the globe where these commercially driven moves have taken place. Most countries have maintained buoyancy in the market to protect the taxpayers.”

Lessons learned

He foresees similar problems with the cardboard and paper bans. The lack of existing paper mills in regions such as Western Australia, coupled with ongoing uncertainties around the ban’s specifications, have been challenges in meeting the requirements from day one. 

Building new processing plants and obtaining exemptions takes time. Limited infrastructure to handle the waste effectively means possible stockpiling and there’s only so long you can hold on to a stockpile before it goes to landfill.

“When a ban creates mass stockpiling and less likelihood of high-quality commodities being recycled, you have to wonder if it’s had the intended impact,” Richard says. “We think the obvious flaw in an export ban on paper and cardboard is that it’s impossible to fix the available outlets to the arisings, so there will always be either too much or too little capacity.

“We don’t know any other resource sector being constrained in this way. It doesn’t work economically.”

He says Australia should be proud of its local processing capacity, but also its high-quality recycling commodity exports – it’s a $4 billion industry that supports landfill diversion and a circular economy. 

It’s also an opportunity to recover more by enabling exports where it makes sense.

“Waste is both a pressing global issue, but global trade of recycling commodities is also Australia’s opportunity,” Richard says. 

“We firmly believe trade is essential to secure end markets for recycling commodities and to keep prices competitive.”

New opportunities

Veolia waste bans
Veolia’s dog-botics have been trained to collect littered waste. Richard Kirkman put them through their paces.

He says positive conversation between industry and government is critical and the way forward to finding the right balance between local and offshore processing capacity to deliver a circular economy. 

He adds that it’s time to set a clear path and direction as a nation – one that benefits Australia and not just one sector. 

To achieve ecological transformation and realise the circular economy it can create; consumers, producers and industry need to work together. Richard says that means recyclability can’t continue to be a voluntary consideration for manufacturers. 

When designers create products, they prioritise factors such as material choice, desirability, functionality, and cost, especially in the low-value packaging sector. Right now, manufacturing single-use products is cheaper than recyclable products and manufacturing with virgin materials is cheaper than with recycled content. 

Following a meeting of national environment ministers in June, Minister for the Environment and Water, Tanya Plibersek, announced mandatory packaging design standards and targets, including for recycled content and to address the use of harmful chemicals in food packaging.

Richard says the mandatory packaging rules are an opportunity to create a level playing field for best practise waste outcomes. But packaging rules alone won’t drive the change needed to meet waste targets. A strong market signal is required, and Veolia proposes a ‘Pay-As-You-Buy scheme’. 

A Pay-As-You-Buy scheme incentivises the supply chain to design for recyclability, including using recycled content, and ensures producers pay their fair share of waste and resource recovery costs. 

When this cost is incorporated into the purchase price of materials, higher levies can be placed on items that are difficult to recycle, incentivising recyclability.

Veolia has committed to several big projects within Australia that incentivise recycling, landfill diversion and ecological transformation in line with supporting the Federal Government to meet National Waste Plan targets.

The projects also introduce technology and solutions to Australia that have been proven to support a country’s move up the waste hierarchy and towards a circular economy. 

Energy recovery facilities might be new to Australia, but they have been widely used overseas for more than 30 years. Veolia operates 65 energy recovery facilities around the world. These facilities reduce the use of fossil fuels, cut emissions of greenhouse gases, and reduce dependence on landfill.

Veolia currently has a proposal for an Advanced Energy Recovery Centre at Woodlawn, New South Wales before the NSW Department of Planning. If approved, the centre would produce up to 30 megawatts of electrical energy from about 380,000 tonnes of residual waste each year.

“Veolia is always bringing the best solutions from around the world to Australia, including in energy-from-waste and anaerobic digestion,” Richard says.

“We support everything the federal and state governments are trying to achieve – they all have the right ambition. 

“We would like to think we can help with our international perspective on what works, what creates wealth and is fair across the supply chain.”

The way forward

Richard says Veolia’s strategy so far has set the company up for future success, despite tough market conditions.

He sees a big opportunity for Veolia to lead the charge and to bring together the right people – across government and industry – but also to develop the required infrastructure to achieve the goals set and provide skills and training needed for the circular economy.

Every day, more than 6000 Veolia employees in Australia and New Zealand collect waste, recover materials and energy, remediate the land and water, treat pollution, and produce clean drinking water. 

Richard says Veolia’s purpose is a special one, and it wants to support governments to create long-term solutions and pathways that enable communities to live healthy, well and quality lives, in balance with the environment. 

This means creating a positive impact on climate, biodiversity, and communities.

“Everyone needs to do more – from consumers and their behaviour to governments on streamlined policies, to industry and manufacturers – we all have a role to play, and we are prepared to play ours,” Richard says.

“I think steps are being taken to move forward, bit by bit. There’s a renewed focus on resource recovery and greater government collaboration with industry so Australia can incrementally get closer to where it needs to get.” 

For more information, visit: www.veolia.com/anz

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