22 Jul 2021

NSW Waste Strategy makes room for energy from waste projects

By Nick Thomas, Alison Packham

The NSW Government's recently released Waste and Sustainable Materials Strategy 2041: (Stage 1 – 2021-2027) provides industry and other stakeholders with some valuable clarity on the potential role for, and assessment of, energy recovery facilities.

The NSW Government has released The NSW Waste and Sustainable Materials Strategy 2041: (Stage 1 – 2021-2027), which includes a range of funding packages to support short- and long-term strategies aimed at transitioning to a circular economy.

A circular economy decreases the amount of waste that ends up in landfill through prioritising sustainable materials, recovery, reuse and recycling. Coinciding with the Federal announcement on the ban on plastic exports, the Strategy announces new funding for waste projects, including:

  • a $37 million Carbon Recycling and Abatement Fund to trial and innovate new approaches to recycling and using recycled material, biogas recovery, and assist businesses collocate in Clean Manufacturing Precincts and Special Activation Precincts;
  • a $10 million Circular Materials Fund as part of the NSW Plastics Action Plan to provide a financial incentive for producers to design out or replace carbon emissions-intensive virgin plastic with lower carbon-intensity recycled materials;
  • a $13 million Circular Innovation Fund, to support research into new technologies and uses for recycled material and provide opportunities to pilot them in government projects; and
  • a $7.5 million fund to support the installation of landfill gas capture infrastructure.

Other initiatives include the diversion of compostable waste from landfill and leadership through government's preferenced purchasing of recycled materials.

Consultation with community, government and industry stakeholders on the highest priority items will follow.

Strategic plans include energy recovery facilities

Energy recovery (energy from waste) technology is one option for tackling the growing amount of residual waste and declining landfill capacity nationally. While energy from waste facilities have been operating in other parts of the world for some time, their deployment in Australia in in its early days.

The Strategy confirms the NSW Government's support for energy recovery technology, where it is used to complement recycling, and not as an alternative to it.

The most commonly used energy recovery technology thermally treats eligible waste to recover the embodied energy from waste. Other types of energy recovery include anaerobic digestion and gas capture. These technologies have the potential to contribute to achieving net zero greenhouse gas emissions by offsetting the use of non-renewable energy sources and avoiding methane emissions from landfill.

The plans for energy recovery facilities in Greater Sydney outlined in the Strategy are:

  • By 2030: one large-scale regional energy recovery facility and a medium-scale "dirty materials" recovery facility (a manual and mechanical sorting facility); and
  • By 2040: at least three large-scale regional energy recovery facilities and one medium "dirty materials" recovery facility.

The Northern Rivers region is also identified as a possible location for a medium-scale energy recovery facility as an alternative to increasing the landfill capacity in the region.

The Strategy speaks of co-locating suitable energy recovery facilities in what it calls Clean Manufacturing Precincts, forming part of the NSW Government's Net Zero Plan.

Regulation

From a regulatory perspective, the construction and operation of new energy recovery facility will need both a State Significant development consent under the Environmental Planning and Assessment Act 1979 (Planning Act) and an Environment Protection Licence under the Protection of the Environment Operations Act 1997.

Under the Planning Act, each development application is assessed on its merits by the consent authority considering matters such as the current and proposed planning controls, the suitability of the site and the public interest. Policy also influences the assessment of these applications.

The NSW Environment Protection Authority (EPA) issued an updated Energy from Waste Policy Statement in June 2021. The new Policy adopts recent recommendations of the NSW Chief Scientist and Engineer to ensure that NSW energy from waste projects deliver international best practice standards and controls to protect human health and the environment. Primarily, this involves adopting stricter air quality standards.

The Policy places significant emphasis on obtaining community acceptance for energy from waste projects and prioritising recovery, reuse and recycling before landfill and energy from waste.

Key issues which may arise in the assessment of these projects include, for example:

  • how the proposal addresses the need for local and regional waste solutions;
  • the proposal's relationship with surrounding land uses;
  • how the proposal responds to current Government policy;
  • potential health and air quality impacts (including cumulative issues from surrounding land uses);
  • the importance of technology to mitigate environmental and health risks; and
  • sources and consistency of eligible feedstock, including having regard to the NSW EPA's Eligible Waste Fuel Guidelines (2016) and reliability of sorting facilities to ensure operational quality control and compliance.

From planning to operation

While energy recovery facilities have been operating in the United Kingdom and Europe for some time, the first approvals for large scale facilities in Australia (two in Western Australia (one of which his operational) and two in Victoria) have been issued more recently. In NSW, there are at least eight development applications in the pipeline, including several in greater Sydney. These projects are complex and can take 10 years to plan and become operational.

The Strategy and the Policy provide industry and other stakeholders in NSW with some valuable clarity on the potential role for energy recovery facilities, how proposals may be assessed, operational requirements, and the NSW Government's intention to plan for the development of specialist precincts.

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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.