Australia is one of the highest waste generating countries in the world per head of population. Population growth and increasing consumerism have led to increasing solid waste being generated. Traditionally, solid waste has been disposed of in landfills. But “in the past 25 years, recycling in Australia has undergone a revolution, from the introduction of council-operated curbside recycling services in the late 1980s and early 1990s, to more recent initiatives, such as the National Television and Computer Recycling Scheme, from 2012“, the Planet Ark Environmental Foundation summed up the development until 2013.
Disposal + recycling + export
In fact, there were three main destinations for the (estimated) 61.0 million tons of waste produced in 2013-2014: disposal to landfill, recovery for use in the domestic economy and export. Latest estimates by Germany Trade & Invest speak of 48 percent of household waste deposited in – licenced or unlicenced – 1,168 landfills; other figures suggest at least 600 mid to large sites, but potentially as many as 2,000 unregistered and unregulated landfills. The Australian Packaging Covenant, which covers some 900 companies and the state and federal governments, has published an overall recycling rate for post-consumer packaging in Australia at 64.2 percent for 2014. The (calculated) recycling rates in 2013-2014 account for 47.5 percent for glass, 67.5 percent for aluminium cans, 42.9 percent for steel cans, 77.3 percent for paperboard, and 48.6 percent for non-beverage aluminum; the plastic packaging recycling rate reached 43.9 percent. And the 2014 National Plastics Recycling Survey assessing the 2013-14 financial year reports that 161,700 tons i.e. 51.6 percent of collected plastics were exported for reprocessing.
But even if the Australian Waste Report (2011), the National Waste Reporting (2013) or the Australian Industry Report (2015) may suggest it: Australian waste management is no entity. Australia comprises of several states: Western Australia, Northern Territory and Southern Australia in the middle, and – from north to south – Queensland, New South Wales, the small Capital Territory and Victoria, not to forget the island Tasmania.
Regarding waste management, they differ and develop in many ways. For example, in 2010-2011 the Capital Territory and Southern Australia reached a total recovery rate of 79 respectively 77 percent, while Western Australia and the Northern Territory recorded 39 respectively 9 percent. And they – amongst others – define different landfill levy policies. While New South Wales charges 133.10 Australian Dollar per ton in metropolises and 76.70 Australian Dollar in the region, Western Australia, Southern Australia, Victoria and the Capital Territory demand between 55 and 60 Australian Dollar per ton of waste.
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Small levy – great carting
The Queensland Government only introduced a very small levy of 37 Australian Dollar in 2010 – resulting in a sudden spike in recycling – and removed it in 2012. Owner and director of Polystyrene Recycling Queensland, Leo Sines, described the situation: “When the levy was introduced the phones ran off the hook with enquiries from businesses on how to divert their waste from landfill, how to minimize their waste and what options were available for recycling. The day the levy was removed, the phones stopped ringing.” The incentives for recycling were gone, the landfill diversion rate immediately decreased and shipping became attractive: According to MRA Consulting, 20,000 trucks moved from Sydney to Brisbane and back, carting more than 400,000 tons of waste in 2014 to tip in South East Queensland in 2014.
New South Wales stroke another path. In February 2013, the NSW Government announced the five-year 465.7 million Australian Dollar “Waste Less, Recycle More“ initiative to support the Waste and Recycling Infrastructure Package, the Local Communities Fund, the Illegal Dumping Fund and the Litter Fund. As of December 2015, the “Waste Less, Recycle More“ programs have awarded 268.3 million Australian Dollar to 653 projects, aiming to process 1,972,762 tons more waste and create 741 jobs. The initiative is funded through the waste levy and is the largest waste and recycling funding program in Australia. And probably the most successful.
A direct benefit of 6.70 Dollar
South Australia too has taken some significant steps to reduce the amount of waste going to landfill: Almost in February 2014 South Australia reached Australia’s second highest resource recovery rate at around 77 percent. This was 17 percent above the national average and reflected a well-developed resource recovery infrastructure (including large organics recycling operations), progressive waste management policies (including broad landfill prohibitions for unsorted waste, recovery targets and government investments in resource recovery infrastructure and programs), and a moderate landfill levy. For every dollar invested by Zero Waste SA’s Industry Program, there was a direct benefit of 6.70 Dollar to the South Australian economy, a consultation paper reported. As a result, South Australia was said to be arguably the nation’s leader in waste management reform and resource recovery.
Low demand for energy from waste
According to a presentation of German VDMA (Verband Deutscher Maschinen- und Anlagenbau) in March 2015, Australia meanwhile possessed some 2,846 waste management plants, 872 transfer stations, 367 recycling facilities and about 114 material recovery facilities. But the last incineration plant closed in 1997, and even energy from waste plants are not in great demand. A factsheet dated 2013 shows that of 48.4 Mt (megaton = one million tons) of generated waste only 1.5 Mt were energetically recovered. Meanwhile New South Wales, Victoria and Western Australia have adopted new regulations with preconditions, so that rising landfill diversion rates could offer a perspective for energy from waste for power generation. According to Zero Waste South Africa, in view of rising global wholesale fertilizer prices and given that organic waste contains nutrients, there is likely to be growing interest in converting organic waste to fertilizer.
The market of waste recovery and waste disposal has increased between 2009 and 2014 by 7.4 percent per year and is expected to rise considerably more than the gross domestic product in the next five years. The turnover of the branch accounts for 11.9 billion Australian Dollar, will rise by 4.5 percent per year and reach 15.0 billion Australian Dollar in 2019. The turnover of businesses accounted of 16 percent of the sales volume in 2013-2014, says Germany Trade and Invest.
Below margin of viability
But as a result of the price balance in favor of landfill and a variety of costs and impediments in changing production processes and collection/disposal practices, many resource recovery infrastructure projects are at or even below the margin of commercial viability. Some jurisdictions including those of New South Wales, Victoria and South Australia have established infrastructure investment co-funding grant schemes to support projects that would not proceed without financial assistance. Funding choice can be aligned with agency-identified material types for which resource recovery is sub-optimal and/or for which opportunities for resource recovery can be identified in the supply chain.
These types of funding arrangements have been successful in supporting infrastructure enhancements and new projects and make an important contribution to Australia’s resource recovery infrastructure. Indeed: By investing more than 80 million Dollar from waste levy funds in the industry over the past decade, Zero Waste South Australia built capacity, improved markets and assisted the development of new products and skills. As the Zero Waste South Australia Waste Strategy 2015-2020 points out the benefits: cost ratios for funded projects that improve industry competitiveness achieve ratios of 6.7, and for infrastructure investment between 1.4 and 11.5.
South Australia wants to get further
However, companies will only invest where recycling is commercially viable. To reach the particular state governments recycling targets, further political intervention by regulations, bans, levies, price signals or grants will be necessary. According to MRA consulting group, plenty of new recycling or recovery technology is available and the sector is waiting for capital investment, but the main barrier remains government willingness to shift market economics. Best example: In March 2016 more than 65 million Australian Dollar generated by waste taxes in South Australia remained unspent in the State’s coffers. Local Government Association President Dave Burgess clarified: “In 2011/12, there were 4,800 people employed in the waste industry. With strong Government leadership and investment, we should be looking at another 4,000 jobs generated over the next 10 to 12 years. The Waste Strategy talks about 200 – 350 million Dollar of investment opportunities over 10-15 years yet we can not get a cent out of the State to fund a project.“ And he added: “It is time these funds are invested in keeping South Australia at the forefront of waste management.“
And South Australia wanted to get further. Zero Waste South Australia, now replaced by Green Industry South Australia, was already interested in international developments, in some cases with other state government and industry partners, providing advice in forums and assistance to develop strategies. These experiences include a zero waste strategy developed for the United Nations and the capital of Gujarat, India (Ahmedabad), participation in a fact-finding mission to Shandong, China, and advice to UN organizations regarding recovery from the Japan Great Eastern Earthquake and tsunami.
Future acquisitions expected
A Snapshot 2013-2014 by the Construction and Property Services Industry Skills Council Ltd highlights the future international orientation of the Australian waste management sector. In fact, liquid and solid waste collection services have a low globalization level and are expected to continue in future years with low foreign ownership growth expected, while a small number of larger firms will be foreign-owned. But waste treatment and disposal services have a medium globalization level due to high foreign ownership links that offset the lack of international trade levels. Subsidiaries of large global waste management companies operate in Australia such as SITA Australia (now SUEZ), Veolia Environmental Services Australia and Remondis Australia Pty Ltd. Some future acquisitions of major domestic players by foreign companies were expected over the next five years.
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