State of waste 2016 — Part 2

Part 1 of this article found that we are still a long way from achieving each state government's recycling targets. This concluding part will investigate the key reforms required, as well as the role of government, in order to move closer to these targets.

Infrastructure

The landfill price rises are driving resource recovery infrastructure investment.

For most states, the levies are now a significant revenue source. In NSW, the landfill levy raises more than $600 million per year.

To its credit, the NSW Government has used these funds to establish the $465.7 million infrastructure and recycling grants program. These funds are granted to private companies and councils (up to $5 and $10 million respectively) for new or improved recycling infrastructure.

The NSW levy, combined with the grant funding, is seeding a renaissance in the development of new recycling infrastructure and job creation. Victoria, South Australia and Western Australia all have similar schemes, though at a lesser scale. Tasmania is exploring a $10/t levy, which in turn may be used to fund future grants.

There are plenty of infrastructure solutions to achieve our aims. The most important infrastructure opportunities in 2016 are:

• organics facilities that convert food and garden waste into compost or energy;
• dirty MRFs to recover recyclables from mixed commercial waste;
• automated C&D sorting platforms;
• energy from waste (EfW), including: pyrolysis, gasification, incineration and anaerobic digestion offering renewable energy solutions;
• processed engineered fuel for export; and
• improved household and business source separation such as 360 L recycling bins, '3 bin systems' for food and garden wastes, resident drop-off facilities and the like.

The most important issue in infrastructure provision is that governments recognise waste as an essential service like electricity or water. The 2016 Infrastructure Australia report on the needs for infrastructure planning and funding did not mention waste/recycling infrastructure once. It is a challenge we must address.

To summarise, the key reforms needed in the infrastructure space are:

• Better and faster planning processes that recognise the need for infrastructure.
• Dedicated waste zoning for infrastructure.
• Protecting buffers around existing facilities.
• Regulation of 'cowboys' operating outside industry standards.
• Recognition of the commercial imperative for investors including aggregation of waste supply, long-term contracts, land availability and an approval pipeline.

Without secured long-term waste supply contracts, companies cannot invest the millions in the advanced infrastructure that we need to further drive recovery rates.

If we wait for other forces such as innovation to lower the price below the prevailing landfill cost, then we are going to wait a long time. We must ensure that the market price signals reflect our strategic imperatives. That is the key message to governments and policymakers.

Landfills

While the total number of active landfills in Australia is unknown, Commonwealth Government data indicates there are at least 600 mid to large sites, while there could be as many as 2000 unregistered and unregulated landfills. The fact that we are unsure of the exact number of landfills in Australia requires immediate review. Small, unlined landfills can still have significant localised impacts and probably should be registered as contaminated sites on relevant registers.

For the foreseeable future, landfill will remain an integral part of the product/waste life cycle. Well-managed (best practice) landfills provide safe disposal of residual waste and average 50% gas capture (whole of life).

Many council-owned landfills do not price to cover the full cost of operation and remediation. Often they have been 'inherited' as quarries and don't include the cost of replacement in their pricing. This ultimately leaves an unfunded liability for residents to pick up. Similarly, the costs of rehabilitation and gas management are often left out of pricing. State governments are coming to the realisation that this needs to be remedied and have started to require landfill full life cost modelling for the setting of gate fees.

Importantly, landfills also provide space for resource recovery. In fact, one of the biggest beneficiaries of landfill levies and grants has been the landfill providers who, by the nature of their business, have land with appropriate licences for recycling.

The key reforms required in the landfill space are:

• Enforcement of minimum operating standards nationally (not just guidelines).
• A landfill accounting protocol (including post closure costs and asset replacement).
• Rationalisation of the small cut-and-fill trench 'tips' into well-run regional sites.
• Mandated gas capture for mid-sized landfills (or ERF funding).
• Licensing and registration of all landfills in Australia.

Energy from Waste (EfW)

The Clean Energy Finance Corporation in 2015 estimated that new EfW and biogas projects “could avoid 9 million tonnes of CO₂-e each year by 2020, potentially contributing 12% of Australia's national carbon abatement".

Let me repeat that. EfW can reduce Australia's emissions by 12%. That is not including the recovery of embodied energy from recyclables nor the diversion of organics from landfill. Our agreement under the Paris Commitment (2015) was a 26% reduction in emissions by 2030. The waste and recycling sector could do most of the heavy lifting (at a low marginal cost).

There are at least 40 biomass energy plants in Australia.

NSW, Victoria and Western Australia have given the green light to EfW via new policies. These generally have three preconditions:

• EfW must not cannibalise recycling.
• Plants must meet high air emission standards.
• Plants must be bona fide energy generators (not just waste disposal).

With the relaxation of state controls on EfW policies we are seeing the emergence of large-scale proposals for incineration and gasification of mixed residual waste. These will act as a competitor to landfill and will further reduce Australia's emissions. Eight large-scale proposals are currently before approval agencies, with many more under development.

It is quite reasonable to expect that EfW will progressively replace landfill as the final disposal option for residual waste. However, this will occur over a 40-year time horizon, not a 4-year horizon.

Jobs

Recycling jobs are largely recession proof. Recycling rates do not generally swing as high or as low as the broader economy and much less than sectors such as mining, tourism and construction.

There are over 50,000 people directly or indirectly employed in the $14+ billion waste sector. The more we grow recycling, the more we employ people at an average ratio of 3:1 recycling:landfill. It should be noted that this ratio jumps significantly in some recycling enterprises, with some tip shops achieving ratios of 30:1.

These are green, sustainable jobs covering technical (engineering, chemistry, science), commercial (sales, business) and operational skills. Recycling is one of the few manufacturing sectors still growing in Australia. We need to reinforce its job-creating potential.

Role of government

The role of government (particularly state government) is to clearly articulate where on the 'recovery spectrum' they intend to sit (low-cost landfill and lower recycling rates, or vice versa) and then to develop the appropriate policies, regulations and funding arrangements to make it happen.

It is clear that Australian governments are generally committed to a future of less waste to landfill and more resource recovery. However, there are significant disparities in effort and effectiveness between jurisdictions. Levies range from $0–133/t in different states and licensing and approval processes are vastly different. Some states are pursuing bans on products, others extended producer responsibility and others grants and incentives.

The National Waste Policy provides an agreed overarching framework. It needs to be dusted off, strengthened and delivered by a partnership of federal and state jurisdictions. Progressive alignment of jurisdiction policy will facilitate reform. But ultimately, market intervention through regulatory or price signals at the state level is needed to drive large-scale reform and therefore to hit state targets.

MRA has worked with businesses and governments across Australia to create realistic waste strategies and action plans. In our experience, most businesses and households support higher recycling rates and somewhat higher landfill levies, but only where a significant amount of the levy revenue is hypothecated to recycling infrastructure and systems.

As one councillor put it to me, “No-one likes paying taxes, but better they be progressive taxes than not. Better that we tax pollution and improve recycling than tax payrolls and increase unemployment."

With that sentiment in mind, we are on the right path. Recycling rates are rising, alternative technologies are emerging, infrastructure is being built and with it jobs and economic returns. However, the fact is we are underperforming relative to state target expectations.

*Mike Ritchie is the Director of MRA Consulting. MRA specialises in waste, resource recovery and carbon and provides advice to companies and all levels of government.