NSW EPA gets serious about circular economy

Claire Smith, Alice Brennan
31 Mar 2022

The proposed changes recognise a shift towards viewing waste materials as potentially valuable commodities, rather than large volumes of material to be disposed of at the lowest possible cost.

The NSW EPA has commissioned an independent review of the existing resource recovery framework to facilitate the expansion of resource recovery operations in NSW to promote the circular economy.

What is the resource recovery framework?

The resource recovery framework is the policy, regulatory and compliance framework administered by the EPA and used to enable resource recovery of useful material from waste and promote the circular economy. The resource recovery framework is essential to achieving ambitious recovery targets set out in the National Waste Policy Action Plan 2019 which have been endorsed by the NSW government.

The core components of the framework include the:

  • definition of waste and the accompanying waste offences;
  • NSW waste levy settings (which is out of scope of the current review);
  • licensing framework and thresholds; and
  • resource recovery orders and exemptions.

The EPA has released an issues paper, seeking feedback on the framework as part of its independent review, led by former head of EPA Victoria, Professor Cathy Wilkinson. The independent review enacts commitments made in the NSW Government's Waste and Sustainable Materials Strategy 2041 to "review and optimise measures to facilitate feasibility and viability testing of innovative business models, technologies or processes for resource recovery".

What's included in the review?

The main focus of the review is the regime of resource recovery orders and exemptions that are key to providing a flexible framework which allows particular types of waste to be recovered and reused in specific, prescribed ways. Specifically, the independent review is seeking comments on:

  • how well the framework protects the environment and human health from the inappropriate use of waste;
  • how well the framework achieves beneficial resource recovery and facilitates circular economy outcomes, including pathways for innovation;
  • the EPA's ability to take appropriate regulatory action to protect the environment and human health under the framework;
  • the framework's transparency, clarity and enforceability; and
  • options to reform and strengthen the framework which proportionally balance the potential risks and benefits of resource recovery.

Key issues identified by stakeholders during a consultation process included:

  • the lack of certainty and transparency,
  • an uneven playing field and
  • the framework's inability to cope with new waste streams.

Other barriers to investment in resource recovery included the cost and time taken to process resource recovery exemption and orders, as well as onerous waste storage requirements.

One of the key issues identified during initial consultations with stakeholders was the need for a formal procedure to allow trials for either the use of recovered waste, or of processes that could recover waste as a resource. The issues paper notes that small scale trials are allowed in other jurisdictions, such as Victoria.

Another crucial change suggested by industry stakeholders is the change of classification of waste. In NSW, there is currently a very broad definition of waste in the Protection of the Environment Operations Act that was considered in the long-running case of EPA v Grafil. If included in the framework, these "end of waste" provisions would allow waste to stop being classified as waste, and instead be regulated as a resource as they currently are in Queensland.

A further issue raised was the need for confidence and consistency within the resource recovery framework. Although the EPA has the power to revoke recovery orders and exemptions, stakeholders identified that this process lacks transparency and could undermine confidence, leading to reduced investment, potential job loss, and a lower level of resource recovery.

It is important to note that the review does not cover general waste management strategy measures (including the waste levy regime), nor does it examine the State's energy-from-waste framework. Ultimately, the EPA is seeking feedback on 11 focus questions across four different areas, including environment and human health protection, resource recovery and the circular economy outcomes, the administration of the resource recovery framework, and the enforceability of the resource recovery framework.

Why the existing resource recovery framework needs change

The NSW Government's Waste and Sustainable Materials Strategy 2041 committed to reviewing and optimising the framework. The strategy outlined a roadmap for transitioning to a circular economy within the next 20 years, a system designed to minimise waste and promote the continual re-use of resources. The strategy also includes the national waste reduction targets, endorsed by the NSW government, including a challenging target of 80% recovery rate of all waste streams by 2030. In addition, the NSW Government has also committed to introduce new targets to reduce litter items by 2030, and triple the plastics recycling rate by 2030.

The discussion paper recognises a shift towards viewing waste materials as potentially valuable commodities, rather than large volumes of material to be disposed of at the lowest possible cost. This reflects discussions at COP26 which strongly focused on waste as a potential opportunity, rather than a problem. It also reflects the NSW Government's dual focus on reducing the waste produced, and reusing waste products to the greatest possible extent.

The framework review is very timely and will hopefully remove some of the perceived roadblocks to establishing new resource recovery technologies and facilities in NSW.

Professor Wilkinson is due to deliver her final independent report in mid-2022. To have your say on the NSW resource recovery framework issues paper, click here. Feedback closes at 5pm Friday 22 April 2022. ­­­

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