Waste not, want not – the possibilities in recycling

By Claire Smith, Alice Brennan
09 Dec 2021
The Federal Government's Recycling Modernisation Fund presents new opportunities for waste recyclers who may be able to access additional funding to expand current recycling operations or develop new infrastructure.


In March 2020 Council of Australian Governments (COAG) agreed that the export of waste, including glass, plastic, tyres and paper, be regulated by the Federal Government. The Recycling and Waste Reduction Act 2020 creates a framework for reducing the impact of waste material on human and environmental health. This Act includes staged bans on different types of exports, for example, in July 2021, the Federal Government introduced a ban on the export of mixed plastic waste exports. The ban on waste exports has demonstrated the need to expand Australia's recycling infrastructure.

As part of the Federal Government's plan to address waste and achieve net-zero carbon emissions by 2050, the Government has pledged $190 million in investment in the "Recycling Modernisation Fund" (RMF), which includes the waste export ban and a proposal to divert 10 million tonnes of waste from landfill by 2030. Due to generate $600 million of recycling investment, the fund works on a co-funding model where funding is provided equally by the Federal Government, State Government and industry bodies in a 1:1:1 ratio. Funding is provided by the Federal Government through the National Partnership on Recycling Infrastructure. Individual State and Territory Governments will then assess gaps in reprocessing capacity and allocate funding to specific projects that address these gaps.

The creation of this fund is a key element of the National Waste Policy Action Plan, and has been developed in response to the COAG Waste Export Ban, impacting waste streams of unprocessed glass, mixed and single polymer plastics, tyres, and mixed paper and cardboard. The RMF will provide investment in new infrastructure to sort, process and remanufacture these key materials. A key target of the 2019 National Waste Policy Action Plan is to achieve, on average, 80% resource recovery rate of all waste streams following the waste hierarchy by 2030. This would ensure that an additional 15 million tonnes of material would be recovered every year.

As at 19 August 2021, there had been 45 projects which had received funding from the RMF. The majority of these were upgrades to existing recycling infrastructure to improve capacity. There are also trial projects seeking to incorporate recycled mixed plastics into construction materials such as sound abatement walls and industrial pails. Cleanaway, one of the network operators for the Return and Earn scheme, announced that it would build Australia's largest polyethylene recycling plant at an existing Cleanaway site in Victoria. Working in partnership with Pact Group, the facility will be operational by the end of 2022 and process up to 20,000 tonnes of kerbside-collected polyethylene recycled HDPE and polypropylene resin annually. The plant is primarily funded by a $3 million Recycling Modernisation Fund grant, jointly funded by the Federal and Victorian governments.

COP26 and the Circular Economy

There was significant discussion at the Sustainable Innovation Forum at COP26 on the two contrasting approaches of improving recycling to develop a circular economy, and reducing consumption to lower the level of waste products generated. Given the ban on different waste exports, discussion around these approaches is growing in Australia. Some circular supply chains require powerful, well-functioning collection schemes. Australia has been performing poorly, only recycling 16% of plastic recovered in 2020, according to a progress report released by the Australian Packaging Covenant Organisation (APCO).

Earlier this year the CSIRO released a report providing a circular economy roadmap for waste management in Australia. It sets out the six elements of a circular economy:

  1. Retain material through use and collection;
  2. Upscale and innovate recycling technologies;
  3. Innovate and collaborate in design and manufacture;
  4. Develop markets for secondary materials and the products that use them;
  5. Streamline nationally consistent governance; and
  6. Secure a national zero-waste culture.

The three broad stages of in the circular economy are design and manufacture, use and collection, and recycling. The report also identified the three primary enablers required to achieve a circular economy: consistent governance, market development and zero waste culture.

There are two broad streams of thinking on waste reduction – reducing waste generally by buying less (and adopting a repair and reuse model), and the repurposing of waste in a circular economy model. Discussions at COP26 illustrated the potential tension between these schools of thought, where business representatives advocated for better recycling to repurpose waste, and other stakeholders arguing that it would be more beneficial to reduce production and waste generation in the initial stages, such as product design.

Key takeaways for the future of recycling

While the Federal RMF focuses on filling the gaps in recycling and processing capacity for existing waste streams, a combination of approaches will be necessary if there is any hope of meeting the challenging National Waste Plan targets and achieving a circular economy. For example, most States and Territories have now banned particular single use plastics such as straws, cutlery and lightweight plastic bags and have introduced Container Deposit Schemes (also referred to as Return and Earn Schemes) for cans and bottles (noting that Tasmania and Victoria are expected to launch their schemes in late 2022 and 2023 respectively).

Producer responsibility also has an important role to play both at a Federal level through more co-regulatory and potentially mandatory schemes under the Recycling and Waste Reduction Act 2020 and also State- and Territory-based schemes. While ideally from a regulatory perspective, it would be preferable for national based schemes to encourage uniformity and consistency, the success of the Container Deposit Schemes have given States and Territories the impetus to go it alone to tackle producer responsibility of key problem waste streams as demonstrated by the recently passed Plastic Reduction and Circular Economy Act 2021

Get in touch

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.