Asia talking tough as race to recycle heats up after federal election investment fund promises
Posted
The recycling industry says it is ready to capitalise on election promises made by the Morrison Government to tackle Australia's waste crisis but has warned those promises only address half the problem.
Key points:
- The Government has made big policy commitments for recycling including a $100 million Australian Recycling Investment Fund
- Recycling companies say they are ready and waiting to apply to the investment fund
- But industry insiders say the fund only addresses half of Australia's recycling crisis
With Asia signalling it will no longer accept limitless piles of our waste — and Australians increasingly anxious about what happens to the items they put in their yellow-lid bins — the industry said time was running out.
"When we look at the situation in Asia, the next 12 months are going to be — to use the classic expression — a bear market," Australian Council of Recycling chief executive officer Pete Shmigel said.
"It's not going to be easy. There will probably be greater restrictions putting greater pressure on prices, on commodity values, and as a result, on the kerbside recycling system back here in Australia.
"So we really have to get serious in the next 12 months about getting the money out into the field in terms of new technology and [in terms of] governments purchasing recycled content."
'Definitely' keen, but where's the fund?
The Government made big policy commitments for the industry, including a $100 million Australian Recycling Investment Fund which will issue loans to help businesses build new state-of-the-art infrastructure to process millions of tonnes of waste.
It will be administered by the Clean Energy Finance Corporation (CEFC), but it is not clear when — or how — the fund will begin operating.
A spokesman for new Environment Minister Sussan Ley said she was taking time to study her portfolio, but confirmed the promise would be honoured.
Recycling companies said they were ready and waiting.
"We see ourselves as part of the solution, but to do that we need to invest heavily," said Andrew Smith, Pact Group's head of sustainability.
"Quite often, these investments, without government support, don't actually stack up and meet the financial hurdles that you may have within an organisation.
"So I think the [promised investment fund] will work and can work … and yes, definitely we will be applying [to that fund] where appropriate."
Another company eager to apply to the investment fund is Recycling Plastics Australia, which has a plant in Adelaide.
"There are multiple projects that we're looking at that could tap into that fund," general manager Stephen Scherer said.
"[But] the reality of it is that it has to be a real fund. It can't be a promise based on moving money at a later stage and making it impossible for participants to make a contribution."
Mr Shmigel confirmed member companies of the Australian Council of Recycling were also waiting for the chance to take part.
Another industry body, the Waste Management and Resource Recovery Association of Australia, is also watching closely, but chief executive Gayle Sloan said she wanted to see more detail about the fund.
"The devil is going to be in the detail," Ms Sloan said. "If it's under the current terms of the existing CEFC, we can actually [already] apply now as long as we can demonstrate a reduction in carbon emissions.
"I'm acutely aware the CEFC is working on how this could potentially be applied, so we will be looking with interest."
If you build it, will they buy?
While industry insiders are supportive of the investment fund and are waiting for it to take off, they say it only addresses half of Australia's recycling crisis.
The fund is designed to help build facilities to process recyclable waste and turn it into finished products.
The problem is, businesses building those facilities need to be able to sell their finished product in Australia, otherwise, there is no point borrowing money for the project.
"A project can't be built on the basis that someone hands you cash [to get started], because you've actually got to be able to sustain it and operate it," Ms Sloan said.
The common view within the industry is that the Government must come up with ways to increase demand within Australia for recycled products, whether they are recycled plastic pallets, park and playground equipment, packaging, or bitumen mix for building roads.
Many have told the Prime Minister the only way to achieve that is by introducing laws forcing companies and government departments to purchase set amounts of recycled content.
Such mandatory targets have been introduced in the European Union.
"When we look overseas, the experience with compulsory targets has actually been very successful," Mr Shmigel said.
"The United States requires government agencies to buy recycled.
"The classic area for us [in Australia] would be roads. They are the biggest asset in the country.
"If we saw more roads using recycled content, like glass and plastic, we could easily soak up a lot of the pressure on the system and reduce the stockpiles [of waste] that we have here."
Among the Government's election promises on recycling was a commitment to work with state, territory and local governments to get more recycled content into road construction — although there is no commitment to enshrine that as a legal requirement.
Also calling for some form of mandatory purchasing is Closed Loop managing director Rob Pascoe.
"What we need to do is put the onus back on the people who create the waste," he said.
"So if we are working with councils, for example, and people are putting a product into their recycling bins, we need to make sure that council is responsible for taking back the products that we make out of that waste."
Not everyone believes the Government should legally mandate the purchase of recycled products.
Pact Group's Mr Smith said the Australian market was ready to absorb recycled products — if the supply chain was boosted to ensure the right quality was coming through.
"But I definitely believe that there is a big enough local market to absorb all the waste, the plastic that's being recovered, and to convert it and add value locally," he said.
"[We] use 200,000 tonnes of [unrecycled] resin per year, so we are a natural sink for recycled products.
"So when the capability comes online, when the quality comes online, we will absorb a large portion of this recycled material as it comes through the system.
"I think there's enough momentum now, that I think it's going to stick [without the need for mandatory purchase targets]."
What is Australia making right now?
The Australian recycling industry is already making products that are sold and used here.
Closed Loop collects takeaway coffee cups. It has mastered the technology to recycle these cups in their entirety and has collected almost 5 million cups so far, processing them and turning them into various items.
Pact Group is in a different situation. It already existed as a large global manufacturer of packaging from "virgin" plastic for all sorts of uses.
The company now collects and recycles 30,000 tonnes of plastic in Australia each year. Pact Group mixes some of that processed material with virgin plastic to make packaging, while some are sold to other manufacturers.
Mr Smith said the company has set a goal to collect and recycle 50,000 tonnes of plastic waste each year to be used in its own packaging.
Addicted to exports
Australia's not-so-proud tradition of sending most of its waste overseas appears to be on shaky ground.
China's ban caught federal and state Governments off guard last year and the Malaysian environment minister last week declared her country would no longer be a "dumping ground" for waste from wealthy countries.
A spokesman for the Malaysian Government confirmed shipping containers of poor-quality waste will be sent back to Australia "once the documentation and other procedures are fulfilled". It expects that waste to be shipped by the third week of June.
For all the talk of Australia getting on top of its waste exports, in February this year, it exported about 343,000 tonnes of waste with a value of $485 million.
Ms Sloan said Australia's capacity to process recyclable waste is still about 1.2 million tonnes per year short of where it needs to be.
Topics: business-economics-and-finance, packaging, plastics-and-rubber, recycling-and-waste-management, environmentally-sustainable-business, environment, environmental-impact, australia, asia
