Circular Economy Part 1: Australia, the leader or the laggard in the race to reduce waste?

Over the past five years, Australia has intensified its efforts to drive the transition towards a circular economy. This Insight is the first of a two-part series on Australia’s circular economy. In this first instalment, we consider the various policies in place throughout Australia. In the next piece, we examine more closely the regulatory gaps that exist in the current waste laws and how they impede the pathway to circularity.

At a federal, state and territory level, governments have made significant progress in creating policies that solidify their circular economy aspirations. Together, these policies make us a potential world leader in the race to reduce waste. However, regulatory gaps, insufficient infrastructure and relatively immature policies mean Australia is lagging behind nations in Europe and Asia.

National Waste Agenda

In 2018, following China’s ban on recycled waste imports, the Federal Government set itself the ambitious goal of transitioning away from a ‘linear’ waste economy, a ‘take, make and dispose’ economy in which waste is sent to landfill, towards a ‘circular' economy where waste is seen as a resource to be recycled, reused and remanufactured. The framework for achieving this goal was presented in the National Waste Policy: Less waste, more resources (National Waste Policy).

Reflecting the global movement towards applying circular economy principles, the National Waste Policy sets out five principles to underpin the transition to a circular economy:

1. avoiding waste through improved product design, making reuse and repair more efficient;
   
   
2. improving resource recovery and the processes for recycling;
   
   
3. increasing the use of and demand for recycled materials;
   
   
4. managing material flows to benefit human health, the environment and the economy; and
   
   
5. improving information to support innovation and guide investment.

Armed with these principles, the Australian Government, together with state and territory governments and the Australian Local Government Association, developed the National Waste Policy: Action Plan 2019 (National Action Plan). The Plan established seven national waste targets including:

• banning the export of waste plastic, paper, glass and tyres;
  
  
• reducing total waste generated in Australia by 10% per person by 2030;
  
  
• achieving an average recovery rate of 80% from all waste streams by 2030;
  
  
• significantly increasing the use of recycled content by governments and industry;
  
  
• phasing out problematic and unnecessary plastics by 2025;
  
  
• halving the amount of organic waste sent to landfill by 2030; and
  
  
• making comprehensive, economy-wide and timely data publicly available to support better consumer, investment and policy decisions.

National progress

Australia’s progress toward its national waste targets has been marked by a suite of initiatives, which combined are intended to deliver the comprehensive change necessary to transition to a circular economy. The commencement of this transition began in earnest in December 2020 with the passing of the Recycling and Waste Reduction Act 2020 (Cth) to facilitate the ban on the export of unprocessed waste plastic, paper, glass and tyres. 

Since then, the Federal Government has introduced a number of initiatives to support Australia’s transformation into a circular economy, including the:

• $190 million Recycling Modernisation Fund, which will leverage over $600 million of recycling infrastructure investment from state and territory governments and industry;
  
  
• $20 million National Product Stewardship Investment Fund designed to increase the number of industry-led product stewardship schemes in Australia; and
  
  
• $100 million Australian Recycling Investment Fund to support large-scale projects which use clean energy technologies to recycle waste plastics, paper, glass and tyres.

While recycling infrastructure funding was broadly welcomed by the waste sector, industry bodies including the National Waste and Recycling Industry Council (NWRIC) have been vocal about the need for further action to be taken upstream to support the whole-of-lifecycle transformation contemplated by the National Action Plan. These actions include increased government regulation of plastic packaging, incentivising the use of recycled oil and phasing out composite packaging. 

The NWRIC has also expressed concern about the impact of the export bans due to the lack of “sufficient plastic processing capacity coming online… when the second phase of the waste plastic export ban is introduced” from July 2022. 

State and territory progress

On paper, Australian states and territories have committed to ambitious strategies and targets for waste avoidance and recovery, which, if realised, would result in many of the targets in the National Action Plan being met. However, despite some progress, it is still too early to confidently say whether the individual efforts of each state and territory will give rise to the vision of a circular economy that Australia has declared for itself. 

New South Wales

The NSW Government has implemented a number of policies and initiatives to support the transition to a circular economy including the NSW Waste and Sustainable Materials Strategy 2041: Stage 1: 2021–2027 and the accompanying NSW Plastics Action Plan. Together, they provide a roadmap to transition to a circular economy over the next 20 years, adopting several of the national waste targets.

The first milestone of the roadmap was achieved following the commencement of the Plastic Reduction and Circular Economy Act 2021 (NSW) which establishes a mechanism for phasing out the supply of unnecessary or problematic single use plastics. While NSW is the last of the Australian states and territories to bring into effect a ban on lightweight plastic bags, it appears to be taking significant steps to shed its status as a laggard, committing to spend $356 million over the next five years to implement its waste plans.   

However, despite its comprehensive policy repertoire and substantial funding commitment, experts warn that NSW is lagging behind in its recycling infrastructure, prompting concerns that waste plastic will be sent to landfill. 

Victoria

The Victorian Government has implemented significant legislative reform to bolster its goal of building a circular economy. In February 2020, the government introduced a 10-year action plan, Recycling Victoria: A new economy, setting four ambitious new targets to complement the National Action Plan:

• divert 80 per cent of waste from landfill by 2030;
  
  
• cut total waste generation by 15 per cent per capita by 2030;
  
  
• halve the volume of organic material going to landfill between 2020 and 2030; and
  
  
• ensure every Victorian household has access to food and garden organic waste recycling services or local composting by 2030.

Under the plan, the Victorian Government will invest more than $300 million to overhaul the existing recycling system. 

As a sign of its commitment toward a circular economy, the Victorian Government introduced the Circular Economy (Waste Reduction and Recycling) Act 2021 (Vic) to give effect to the targets outlined in the action plan. Crucially, this Act establishes a new dedicated government unit, known as Recycling Victoria, to oversee and provide strategic leadership for the waste and recycling sector. Recycling Victoria is expected to oversee the implementation of a container deposit scheme set to start in 2023. 

Further steps toward a circular economy are also anticipated with the creation of new waste to energy legislation in mid-2022 and the implementation of further bans on single-use plastic products such as straws, cutlery and crockery banned from 1 February 2023.

Queensland

In 2019, Queensland implemented its Waste Management and Resource Recovery Strategy, providing a strategic framework for achieving the objectives of the National Waste Policy. It sets the following targets for 2050: 

• 25% reduction in household waste;
  
  
• 90% recovery rate across all waste types; and
  
  
• 75% recycling rates across all waste types.

Critically, Queensland’s targeted recycling rate is only expected to reach 65% by 2030, falling short of the 80% recycling target for 2030 set out in the National Action Plan.   

This framework is underpinned by the waste disposal levy, which commenced on 1 July 2019 and covers approximately 90% of Queensland’s population. The levy is designed to incentivise local governments, businesses, industry and communities to reduce the volume of waste generated and increase the diversion of waste from landfills through recycling. The Queensland Government has also established a $1.1 billion Recycling and Jobs Fund to provide investment in a range of initiatives including recycling and remanufacturing facilities and processing infrastructure for organic waste. 

However, despite these efforts, Queensland is currently not on track to meet the either the state or national waste targets. According to a report by the Waste and Recycling Industry of Queensland, Untangling Queensland’s Waste Levy Conundrum, Queensland is lagging behind almost every other jurisdiction in Australia on several fronts, particularly in its progress toward meeting the national waste targets. 

Western Australia

In Western Australia, the Waste Avoidance and Resource Recovery Act 2007 (WA) requires the state to prepare a long term waste strategy which must be reviewed, and if necessary, revised, every five years. The most recent revision occurred in 2019 with the release of the Waste Avoidance and Resource Recovery Strategy 2030.  

The vision for the strategy is for Western Australia to become a sustainable, low-waste society and is supported by the Waste Avoidance and Resource Strategy Action Plan 2021-22 which sets a 20% reduction in waste per capita and 75% material recovery rate by 2030.

A key action is the Plan for Plastics, announced in 2021 which bans single-use plastics in a two stage approach. Stage 1, which came into effect on 1 January 2022 through the Environmental Protection Regulations Amendment (Prohibited Plastics and Balloons) Regulations 2021 (WA), bans single-use or disposable plastic items. Enforcement of Stage 1 regulations will start on 1 July 2022 for all items except for cups, which will start on 1 October 2022. Stage 2 will come into effect on 1 January 2023 and will ban further single-use or disposable plastic items.

The WA Government has also partnered with the Federal Government to invest $40 million in recycling projects through the Recycling Modernisation Fund. The funds will be distributed across eight new projects, which will increase WA’s annual plastic and tyre waste processing capacity by 140,000 tonnes. A further $15 million from the Recycling Modernisation Fund and $15 million from the State Government will go towards a new $86 million pulp mill for processing waste paper and cardboard, which will be operational before the export ban on mixed paper comes into effect on 1 July 2024.

Australian Capital Territory

In the context of waste management, the ACT is one of the best performers in the nation, boasting a resource recovery rate of 70%, second only to South Australia. Nevertheless, under the ACT Waste Management Strategy 2011-2025, the ACT Government has set itself the ambitious target of increasing the rate of resource recovery to over 90% by 2025, surpassing the national waste targets.  

The strategy is supported by the Waste Feasibility Study, which provides a roadmap of initiatives designed to achieve the 90% resource recovery target by 2025. A key recommendation of the study was the creation of a waste-to-energy policy, which was implemented by the ACT Government in 2020 under the ACT Waste-to-Energy Policy 2020-25. 

In comity with the rest of the nation, the ACT also introduced the Plastic Reduction Act 2021 (ACT), which bans the sale, supply or distribution of single-use plastic cutlery, plastic beverage stirrers and expanded polystyrene takeaway food and beverage containers.  A further ban on additional plastic items came into effect on 1 July 2022. 

South Australia

South Australia is a leader in many respects when it comes to waste. In 1977, it became the first state in Australia to introduce container deposit legislation and has successfully operated a container deposit scheme ever since. Again in 2020, it passed the first of its kind legislation in Australia, the Single-use and Other Plastic Products (Waste Avoidance) Act 2020, to prohibit certain plastic products including single-use straws, cutlery and polystyrene crockery.

South Australia also leads the nation when it comes to recycling and resource recovery, having reduced its waste to landfill by one-third since 2003 to achieve a recovery rate of over The state is now targeting zero avoidable waste to landfill by 2030 in accordance with its 5-year waste strategy titled Supporting the Circular Economy. The strategy makes the transition to a circular economy a priority, and includes targets such as a reduction in waste generation of 5 per cent per capita by 2025, and a 75 per cent, 90 per cent and 95 per cent diversion of municipal, commercial and industrial, and construction and demolition waste respectively.  

Northern Territory

In April 2022, the Northern Territory Government released Northern Territory Circular Economy Strategy 2022-2027 to kick start the Territory’s transition to a circular economy. As part of this strategy, the Northern Territory Government will consider the imposition of a waste levy framework to encourage recycling and recovery of waste, making it the last Australian jurisdiction to impose a waste levy (with the exception of Tasmania, which has plans to introduce a waste levy mid this year). 

According to the Waste Management & Resource Recovery Association of Australia, the Northern Territory currently has the lowest resource recovery rate in Australia, at only 19%. The implementation of a circular economy strategy, supported by a waste levy, is considered a necessary step to drive the structural change needed to achieve the targets under the National Action Plan. 

While the strategy is a step in the right direction, it falls short of implementing and identifying all of the mechanisms necessary to achieve the target of 80% diversion from landfill by 2030, set out in the National Waste Policy. According to a report prepared for the Australian Council of Recycling, the Northern Territory is currently the only Australian jurisdiction that has not implemented measurable targets for the reduction of waste, making evaluation and enforcement of the strategy exceedingly difficult. 

How are we tracking against the rest of the world?

A lack of international standards around the reporting of waste generation and recovery make it difficult to accurately track Australia’s global progress.  

However, in the National Waste Report 2020, select comparisons were made to Norway, Singapore, the UK and the US, each of which had readily comparable data. The results show that Australia is lagging, reporting the second highest waste generation rate per capita and the equal lowest recovery rate out of the five nations.

Australia’s status as a laggard can be attributed to three main factors: (1) regulatory gaps; (2) insufficient infrastructure; and (3) immature policies.

Regulatory gaps

The regulation of material from waste to non-waste constitutes a significant gap in the legislative regimes of Australian states and territories. This is because historically, the regulatory attitude toward waste has been “once a waste, always a waste”. As a result, the point of transition from “waste” to “non-waste” is not always clear.

For example, in NSW, the Protection of the Environment Operations Act 1997 specifically states that “a substance is not precluded from being waste for the purposes of this Act merely because it is or may be processed, recycled, re-used or recovered”. Similar problems are also built-in to the regulatory regimes of other jurisdictions throughout Australia, where many of the existing waste definitions automatically characterise material as waste without acknowledging its potential to be reprocessed, recycled and re-used.

To successfully transition to a circular economy, Australia must redress the uncertainty and confusion encountered by market operators who are responsible for turning waste into a resource. This means rethinking the productivity of waste and addressing the regulatory gaps that constrain resource recovery activities. This is explored in more detail in Part 2 of this series on waste.

Insufficient infrastructure capacity

The infrastructure gap is frequently cited as the biggest hurdle to achieving the national waste targets. For instance, Infrastructure Victoria has reported that there is insufficient infrastructure capacity across plastics, e-waste, organics, paper and cardboard to achieve the National Action Plan recovery rate of 80%.

At a national level, efforts are being made to improve the capacity of our recycling infrastructure, including a commitment by the Labor Government to invest $60 million into additional recycling infrastructure. Actions to expand infrastructure capacity are critical to ensuring that Australia has the necessary infrastructure to realise its circular economy targets.

Immature policies

The transition to a circular economy in Australia has gained momentum over recent years. However, despite this vigour, our policies are relatively immature by international standards. For example, the European Union introduced its Circular Economy Action Plan in 2014, five years before Australia implemented its National Action Plan.

In a 2018 report on Waste and recycling industry in Australia, it was acknowledged that “Australia is lagging far behind other jurisdictions” who had already developed policies and made substantial investments in infrastructure and technology to establish circular economies.

While the gap is steadily closing, the ongoing regulatory barriers and infrastructure issues demonstrate that there is still a way to go before Australia can declare itself a leader in the circular economy space.

Final remarks

If harnessed effectively, the prospect of a circular economy represents a future economic benefit of $210 billion and additional 17,000 jobs by 2047-48.[1]  However, to realise this potential governments of all levels need to play a stronger role in ensuring there are commercially viable onshore markets capable of facilitating a circular economy.

This requires targeted policies to address regulatory gaps, incentives for the use of recycled materials and additional infrastructure to support resource and recycling activities. Without effective coordination between government and industry, many of the strategies and policies, which have been agonised over by all levels of government, may become the very thing they set out to prevent: waste.