2018-2019 State Budget promotes waste-to-energy projects in Queensland

By Kathryn Pacey, Olivia Back

05 Jul 2018

Local governments or private companies planning to undertake waste-to-energy projects in Queensland in the next three years should consider their eligibility for funding under the Program soon.

As announced in the 2018-2019 Budget, the Queensland Government has committed $100 million from its proposed new waste levy towards developing and fostering waste to energy projects throughout the State as part of its Resource Recovery Industry Development Program.

A new waste strategy for Queensland

In 2017, the Queensland Treasury Corporation ("QTC") published an independent report, entitled "Investigation into the Transport of Waste into Queensland".

The report found that Queensland's waste management framework – "Queensland Waste Avoidance and Resource Productivity Strategy (2014–2024)" – was failing to deliver opportunities for the resource recovery sector to flourish. Queensland scored the lowest recycling rates of all Australian jurisdictions and was the recipient of the largest quantities of interstate waste.

In response to the findings, the Queensland Government proposes to implement an improved waste management and resource recovery framework. This will include initiatives such as:

  • a ban on the supply of single-use lightweight plastic shopping bags from 1 July 2018;
  • a Container Deposit Scheme from 1 November 2018;
  • the (re)introduction of the waste levy; and
  • the promotion of waste-to-energy projects.

The waste levy

The Government says the waste levy "will be instrumental in changing waste management practices in the State".

From the first quarter of 2019, general waste dumped in landfill is expected to be levied at $70 per tonne, increasing by $5 increments to $90 by 2023. The levy rate will vary according to the type of waste, and broadly aligns with the Victorian and South Australian levies, as well as the decision of most Australian jurisdictions to impose a waste levy.

The levy is designed to provide an economic disincentive to waste disposal by reflecting external environmental costs of waste disposal and making waste avoidance, reduction and recycling more financially attractive than disposal to landfill. According to the Queensland Government, the levy will also encourage consideration of innovative waste management and waste-to-energy projects.

Waste-to-energy projects

Waste-to-energy projects involve the transformation of waste into energy through certain treatment processes. An example of a waste-to-energy project is a combustion plant which produces electricity out of waste products.

Over the next three years, it is proposed that surplus revenue from Queensland's waste levy will be distributed in grants of up to $5 million to local governments and private companies undertaking waste-to-energy projects.

According to the Government, these grants will aim to bolster the State's resource recovery sector by:

  • encouraging the construction of new facilities, infrastructure and machinery; and
  • supporting advanced feasibility studies for innovative resource recovery and waste management projects.

Adopting the European model: the future for Queensland waste

The Queensland Government says Queensland will be moving from a "linear waste economy" – where products predominantly end up in landfill – towards a "circular waste economy", which promotes keeping products and materials circulating within the economy through recycling, remanufacturing and sharing.

As part of the objective of reducing disposal to landfill, the following targets have been proposed:

  • 20% avoidable waste disposed of to landfill by 2030;
  • 10% avoidable waste disposed of to landfill by 2040; and
  • zero avoidable waste disposed of to landfill by 2050.

These targets will be driven by both increased resource recovery and recycling, and decreased per-capita generation.

Queensland's approach aligns with the European Union's position that the production of energy from
waste is a preferred method of rubbish disposal. In early 2017, the European Commission released guidance on the production of energy from waste, which stressed that waste-to-energy projects promote energy diversification and play a significant role in supporting a circular waste economy.

The Senate Environment Committee's "Never waste a crisis" Report

Like Queensland, the Commonwealth Government has also expressed an aspiration to transition away from a linear economy to a circular economy. On 26 June 2018, the final report, "Never waste a crisis: the waste and recycling industry in Australia," was handed down by the Senate Environment and Communications References Committee and specifically recommended that the Australian Government prioritise the establishment of a circular economy. The inquiry focused on "'issues related to landfill, markets for recycled waste and the role of the Australian Government in providing a coherent approach to the management of solid waste".

In relation to waste-to-energy projects, the Committee recommended that the Australian Government prioritise waste reduction and recycling above waste-to-energy, and seek a commitment through the Meeting of Environment Ministers of all levels of government to the waste hierarchy.

What this means for your business

The Resource Recovery Industry Development Program is not planned to open until later in 2018 and the process for applying for a grant is yet to be outlined. Despite this, any local governments or private companies planning to undertake waste-to-energy projects in Queensland in the next three years and wanting to utilise the funding under the Program should consider their eligibility and options soon.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.