The Victorian Government’s recently released circular economy strategy outlines a bold plan to transform Victoria’s relationship with waste and recycling. The Recycling Victoria strategy represents a fundamental change of mindset and will require changed behaviours from industry and consumers.
The strategy introduces a $300 million reform package for the waste and recycling sectors, and aims to transition Victoria towards a circular economy over the next 10 years. There are strong signals of continued focus on compliance and enforcement in relation to waste and recycling generation, transport and management.
The momentum for the development of this strategy has manifested on the back of a changing waste landscape across Australia. Attitudes towards waste and waste management have shifted, changes to the local and international waste and recycling markets including China’s ban on import of foreign recycling materials, have all directly affected the final destinations of ‘waste’ materials generated within Australia.
It is expected that the drivers of innovation and adaption to be largely industry-led. Businesses operating in this space should be aware of the investment opportunities presented by the changing waste landscape.
What is a circular economy?
A circular economy assumes that resources should be repaired, reused, recycled or recovered, and that ‘waste’ can be reduced through innovation and more productive use of natural resources. In this way, circular economies seek to transform linear economy mindsets (take, use and throw away) by maximising value at each point of a product’s life.
Victoria’s circular economy transition tries to meet these aims by focussing on four goals:
- designing products to last, that can be repaired and recycled;
- using products to create more value;
- recycling more resources; and
- reducing harm from waste and pollution.
These ambitious goals have been supplemented by a number of key commitments and actions.
Key policies
The policies outlined in the strategy are varied, including commitments to legislative reform, investment in new technologies and fresh goals for recycling and waste recovery. There are a range of potential opportunities for businesses which can embrace a circular economy mindset and create or leverage new markets. Conversely, aspects of the new regulatory regime will require behavioural change to maintain basic compliance.
Recycling
The changes of broadest application, including to individuals, are in the recycling space, with the Government intending to dramatically alter the way Victorians collect, sort and use recyclable materials. Key recycling polices include:
- a new four-bin household recycling system to separate recyclables, glass, food and organics, and waste;
- a container deposit scheme to be developed in consultation with councils;
- a statewide education program to help households, businesses and councils transition to the new system;
- increased funding for businesses to invest in infrastructure to sort and process recyclables;
- new grants program to help business reduce waste and to implement measures to improve material efficiency and increase recycling in their daily operations;
- a Business Innovation Centre to develop new, innovative technology and solutions to waste problems; and
- introduction of product stewardship schemes to encourage producer responsibility along the supply chain.
Landfill levy
To support the recycling reforms and provide a strong incentive to modernise waste technologies, the landfill levy is being progressively increased to $125.90 over the next three years. This brings the levy in line with other jurisdictions in Australia, but is almost double the current 2019 Victorian levy amount. Table 1 below outlines the progressive levy changes stipulated in the strategy.
The proposed increases to the landfill levy will also incorporate the proposed changes to waste classification introduced by the amendments to the Environment Protection Act 2017, with levy rates which currently apply to “Prescribed Industrial Waste” to change to “Priority Waste” from 1 July 2020. For detail on the rates please see page 29 of the report here.
Funds generated as a result of the progressively increasing levy are proposed to be reinvested into environmental programs included waste and recycling strategies programs identified in the strategy. Landfill auditing will also be expanded to ensure compliance.
Waste-to-energy infrastructure
The strategy flags challenges for waste-to-energy infrastructure and initiatives, despite allocation of some funding for development of these technologies. Importantly, an annual cap will be introduced, setting a ceiling of one million tonnes of waste feedstock into all thermal waste-to-energy facilities in Victoria. Recycling Victoria envisages that this will create certainty for waste-to-energy proponents and ensure this technology is developed at a sustainable rate. The cap will be implemented through the introduction of new legislation or regulations, intended to apply until 2040 but to be reviewed in 2023.
Waste crime
The new strategy also includes $71.4 million to tackle waste crime, with more resources being invested to stop illegal dumping and stockpiling. Recycling Victoria foreshadows that specific focus will be given to ‘high risk’ sites and substances.
New waste authority and legislation
Further, the Government plans to deliver dedicated waste and recycling legislation, as well as establish a new waste authority. We anticipate that these reforms are likely to mean new service standards for businesses operating in relevant sectors. The introduction of this new waste authority and related legislation would ideally facilitate transparency and uniformity in the implementation of the waste strategy policies.
Timing and implementation
Recycling Victoria sets a 10 year plan with policies and initiatives rolling out progressively over the coming decade. Key recycling policies such as the four-bin system are expected to be introduced from 2021, while the container deposit scheme will begin in 2023.
For a full breakdown of the expected timing on aspects of the strategy, see page 7 of the report here.
Note: businesses should expect that the timeframes outlined for initial steps may be pushed back amidst the uncertain regulatory conditions created by COVID-19.
What the future holds
In light of the introduction of this policy, all types of businesses will need to review their changing obligations in relation to generation and management of waste and recycling.
Businesses should consider new and evolving investment opportunities as Victoria refocuses as a circular economy. If you have any queries about this might affect your business, please contact a member of our team.
Disclaimer
The articles published on this website, current at the dates of publication set out above, are for reference purposes only. They do not constitute legal advice and should not be relied upon as such. Specific legal advice about your specific circumstances should always be sought separately before taking any action.