Regulation needed to advance circular economy

Recycling is one link in the circular economy – but it’s the link that closes the loop. Suzanne Toumbourou, CEO of the Australian Council of Recycling, talks about the importance of regulatory support and end markets.

The past few months have been tough for the recycling industry in Australia.

Although the industry is as disappointed in the collapse of REDcycle as the general public, it is also acutely aware of the circumstances and challenges that led to it. It was the result of a fragmented and misaligned regulatory system, exponential growth in the amount of post-consumer soft plastics collected, disruption to recycling infrastructure and stagnated market demand for the recycled products produced.

All these factors can be distilled down to the fundamental lack of co-ordination between environmental policies, and circular economy principles that hinder the recycling sector’s ability to maximise resource recovery and create a strong and resilient industry.

A toxic context

ACOR's Suzanne Toumbourou
Suzanne Toumbourou

As the leading national industry association for the recycling and resource recovery sector in Australia, the Australian Council of Recycling (ACOR), has long advocated for a circular economy where resource recovery, remanufacturing and recycling are recognised and supported as integral functions of this circular process.

However, the current regulatory framework in place for waste – and therefore resource recovery, remanufacturing and recycling – is decidedly linear. Across all jurisdictions, government departments and regulatory bodies are all too often drawing a straight line from new product to ‘waste’ – and are not creating the environment, incentives, and end markets to turn that ‘waste’ back into new products.

The regulatory framework for waste is so fractured that recycling is presently an exception of the process, rather than the goal.

Treating all materials as (eventual) waste turns the entire process into a disposal logistics operation, rather than a resource recovery opportunity. This has led to the various environmental bodies across jurisdictions becoming more focused on mitigating risk than recycling right.

This risk mitigation creates additional burdens on recyclers, such as exorbitant financial assurances and insurance costs and is not a context in which they can operate optimally. Regulators wanting risk-free, guaranteed outcomes that predominantly longstanding conventional processes are able to provide, leave innovators out in the cold with the barriers to entry simply too high.

While we support sensible and safe risk mitigation policies, the same risks are simply not present across all material streams within the ecosystem. The one-size-fits-most risk mitigation policies for waste does not fit all recyclers – not to mention the fact that virgin and new materials are not scrutinised under these same parameters.

We have to balance safety and efficiency and enable recovered resources to compete on a more level playing field with virgin resources. This is particularly poignant in priorities around storage.

The overarching theme that ‘stockpiling’ recoverable resources is always a dangerous practice and a betrayal of the ethos of recycling needs to be abandoned.

Storing materials is a legitimate and often necessary operational function across all manufacturing enterprises. However, the regulatory landscape that has been created in which ‘all discarded or surplus material is ‘waste’’ means that when it comes to recycling, the storage of recoverable resources is demonised, while perfectly acceptable in other adjacent industries.

We must avoid the rise of Schrodingers Stockpiles, where stored materials are arbitrarily deemed as hazardous waste – potentially condemned to landfill or progressed through the recycling system and turned into new products. The stockpiles exist in both states – waste and recoverable resources – and their final state is only decided by how rapidly it moves through the recycling pipeline.

The lack of nationally harmonised definitions of waste, recycling and recoverable resources respectively further creates confusion, contamination and missed economic opportunities. We need a conscious uncoupling of recycling and waste management, and we must draw a definitive (regulatory) line between the two. At the very least, we need a nationally agreed definition of end-of-waste, and a nationally consistent regulatory framework and governance model that includes industry at the table.

A spoke in the wheel

There are three main phases in recycling: collection, processing, and end markets. Our industry cannot direct the volume and quality of the material that flows into our operations, but we can control what comes out – and there must be markets for what does.

There are currently barriers to strong market uptake of recycled material, including cost competitiveness with virgin materials and willingness within the supply chain to embrace change. The manufacturing and remanufacturing process needs more support from governments, private businesses, and consumers. This should include a legislated minimum recycled content component for all new product packaging.

Along with many others in the industry, we would like to see the 2025 National Packaging Targets designed by the Australian Packaging Covenant Organisation mandated. This would promote strong end markets by 2025, ensuring that 50 per cent of average recycled content is included in packaging, and making 100 per cent of packaging reusable, recyclable or compostable. These mandates should apply to all packaging that is sold in Australia and should be benchmarked and regularly and transparently reported on.

This level of government support for a thriving, competitive recycling market through mandated recycled content in packaging would help kick-start supply chain integration of recycled products and materials and establish robust and resilient end markets.

Closing the loop

The recycling sector continues to face a fragmented, variable, and duplicative regulatory environment across Australia’s states and territories, which undermines investor confidence in recycling infrastructure, and public confidence in recycling overall.

Australia’s governments must come together with industry to develop a nationally agreed definition of end-of-waste, a nationally consistent regulatory framework, and a robust governance model that delivers best-practice regulation.

Many gaps in the system resulted in a significant disruption to soft plastics recycling. We must urgently address these gaps to safeguard the sector.

Recycling is just one link in the circular economy – but it’s the link that closes the loop.

Given the right regulatory support and strong end markets, recycling can supercharge the circular economy, delivering significant social, economic, and environmental value like never before.

Source: waste management review