Importance of the Circular Economy clear in proposed changes to the NSW Resource Recovery Framework

Claire Smith, Alice Brennan
21 Dec 2022 Time to read: 4 MIN

The NSW EPA has accepted all 22 recommendations in Dr Wilkinson's independent review into the NSW Resource Recovery Framework, aimed at improving circular economy outcomes in NSW and developing markets for recycled products.

Dr Cathy Wilkinson (former CEO of the Victorian EPA) recently released her widely anticipated independent review of the NSW Resource Recovery Framework. Commissioned by the Environment Protection Authority (EPA), the objective of the review was to examine the existing NSW waste and resource recovery framework and to provide recommendations to the EPA on:

  1. how well the framework protects the environment and human health from the inappropriate use of waste;
  2. how well the framework achieves beneficial resource recovery and facilitates circular economy outcomes, including pathways for innovation;
  3. the EPA's ability to take appropriate regulatory action to protect the environment and human health under the framework; and
  4. the framework's transparency, clarity and enforceability.

The review noted that the original resource recovery framework had been set up in 2008 to facilitate the reuse of certain recovered waste for land application or fuels and that there was friction between the environment and safety objectives of the framework and the need for flexibility to support innovation and a smooth transition to a circular economy. The review made 22 recommendations across four key areas.

This article delves into the detail of some of those recommendations and potential implications for the circular economy.

Outcome 1: Improved administration and decision-making

The EPA was criticised for its handling of the revocation of the mixed waste organic material (MWOO) exemption in 2018. The 24-hour notice period for the MWOO ban, together with the lack of transparency and reasons for the decision, highlighted the need for the resource recovery regime to be put on a similar footing to environmental and planning approval regimes. Dr Wilkinson made nine recommendations based on her consultation with stakeholders including that the EPA should:

  • publish clear and comprehensive guidance materials for the application and assessment of orders and exemptions;.
  • better document and explain how the EPA makes decisions on orders and exemptions and ensure that the sector and broader community is aware of the EPA’s considerations to provide confidence that the rationale is credible and sound; and
  • investigate options for an internal review process for certain decisions on resource recovery orders and exemptions.

Outcome 2: Considering the definition of waste and enhancing the regulatory framework

The Criminal Court of Appeal's broad interpretation of the legal definition of waste in EPA v Grafil (Grafil cases) has demonstrated the risks faced by consumers accepting recovered materials (and, consequently, the development of those markets) as well as the need to make producers more responsible for the recovered product they sell. These risks have hampered the advancement of the circular economy and in recognising this, the review recommended that:

  • the EPA should investigate a pathway to enable an “end-of-waste” outcome for suitable common, low risk recovered materials to better enable reuse, particularly for remanufacturing while ensuring the EPA can still address environmentally problematic and undesirable uses and dumping of those materials; and
  • the EPA should investigate whether some activities that use, process and/or store recovered materials should be excluded from certain aspects of the waste regulatory framework to reduce administrative and regulatory burdens and enhance circular outcomes.

The independent review also recognised the lack of innovation pathways available to pilot projects and recommended that the EPA should work with relevant agencies across government to develop a resource recovery innovation pathway to support the development, demonstration and assessment of new and innovative technology and processes.

Outcome 3: Enabling high quality materials to facilitate circularity

One of the key principles in a circular economy is to keep materials, products and services circulating within the economy for as long as possible. Consultation with stakeholders identified a strong focus on expanding the EPA's focus and role from infrastructure and end-product standards to other enablers of a circular economy, such as collaborative partnerships with industry, data availability and transparency. The recommendations included:

  • as part of a regulatory plan for the waste and resource recovery sector, the EPA should investigate ways to enhance protections for consumers of recovered resources and place greater responsibilities on waste generators and processors. This could include through compliance campaigns targeting resource recovery orders and exemptions and other safeguards; and
  • the EPA should investigate opportunities for the increased collection and publication of resource recovery data that could assist in the transition to a circular economy, including collection and publication of the generators and processors operating under a resource recovery order.

Outcome 4: Improving approaches to known and emerging contaminants

The impact of the Grafil cases is also clear in the recommendations made in this outcome. The Grafil Cases had found that a single fragment of asbestos (regardless of type or size) in a recovered aggregate stockpile would mean that the whole stockpile was “asbestos waste” having regard to the definition of asbestos waste in the Protection of the Environment Operations Act. This approach was inconsistent with the work health and safety regime and the approach taken to managing and remediating asbestos contamination under other NSW environmental legislation. While stakeholders requested more flexibility in dealing with contaminants, the report recognised that the human health risks of asbestos are serious and need to be adequately managed. The review recommended that:

  • a scientific expert external to the EPA should review and provide advice on the NSW approach to management of asbestos contaminants in waste and recovered materials. The review should include, but not necessarily be limited to, the protection of human health and the environment and consideration of opportunities and constraints of beneficial reuse;
  • taking into account the advice of the external scientific expert, the EPA should consider how existing approaches to management of asbestos contaminants in waste and recovered materials could be improved; and
  • the EPA should implement a program to proactively investigate emerging contaminants and better engage with stakeholders regarding emerging contaminants.

EPA's response to the Independent Review

The NSW EPA has supported and committed to implementing all 22 recommendations made by the independent review into the NSW Resource and Recovery Framework. In their response to the recommendations, the EPA also committed to continue the meaningful stakeholder engagement and consultation undertaken throughout the review.

Key takeaway

The 2021 CSIRO circular economy roadmap for waste management in Australia emphasised that there are three primary enablers to achieve a circular economy:

  • consistent governance,
  • market development; and
  • zero waste culture.

Dr Wilkinson's report provides practical recommendations based on extensive consultation with a range of stakeholders to assist the EPA with achieving a fit-for-purpose resource recovery framework. However, this is only one of the enablers of a circular economy. It will be incumbent on all parts of state and local government to help drive market development through data sharing, sustainable procurement and development of new recycled and recovered product standards as well as a zero waste culture through better education programs and enforcement mechanisms. Waste levy reforms that divert more money back into the resource recovery sector to assist with these enablers as well as more Commonwealth product stewardship schemes would further supercharge the circular economy and preservation of natural resources.

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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.