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5. Recommendations

Infrastructure Victoria makes the following recommendations to the Victorian Government.

Recommendation 01: Improve infrastructure capacity and capability for recovering and reprocessing priority materials

Context

The amount of waste Victorians generate is forecast to grow. Victoria needs investment to increase resource recovery and recycling infrastructure capacity.

This investment also needs to address the capability to meet market demand, international import restrictions, and a range of Victorian and Australian Government policies, such as the Council of Australian Governments (COAG) waste export ban. Bans will cause significant infrastructure capacity and capability shortfalls for paper and cardboard in 2024, followed by a shortfall for plastics in 2025 unless further investment is made.

Similarly, Victoria’s capacity and capability to manage recovered organics and e-waste will be exceeded by 2025 and 2030 respectively, as a result of policies such as the National Waste Policy and Victoria’s e-waste landfill ban, introduced in 2019.

Appendix A includes a summary of additional infrastructure capacity and capability requirements by 2039, and indicative costs.

While much of the recovery and reprocessing infrastructure in Victoria is owned, operated and funded by the private sector, the Victorian Government has a role to play in facilitating investment, leveraging existing investment and providing direct funding to the sector where the market fails to do so.

The data used to inform these recommendations are based on modelling that provides projections to inform Victorian Government decision making. The projections should be considered approximations rather than precise predictions.

Recommendation

Key infrastructure requirements for each priority material are outlined below.

Paper and cardboard

  • 600,000 tonnes of additional paper sorting and pulping infrastructure from 2024.
  • Additional capacity and capability to manufacture paper and cardboard packaging products, such as tissue, paper towels and egg cartons.
  • Improved mechanical sorting of mixed paper and cardboard at Materials Recovery Facilities (MRFs) to recover different paper grades, enhancing access to paper reprocessing markets.

Plastics

  • 288,600 tonnes of total capacity and capability to produce plastic flakes and pellets by polymer in metropolitan Melbourne and regional Victoria from 2025.
  • Transition from recovering mixed plastics bales to recovering plastics separated by polymer using improved optical sorting. This will enable MRF operators to sell to export markets or domestic reprocessors.
  • Upgrade Victorian resins manufacturing infrastructure to incorporate recycled plastics into new plastic products.

Glass

  • Additional glass beneficiation (removing contaminants, sorting by colour and maintaining a minimum piece size) capacity and capability in metropolitan Melbourne to achieve higher value glass use where possible (e.g. for recycled glass containers instead of glass sand).
  • Glass sand reprocessing in regional areas to enable more use of recycled glass sand in regional road construction.

Organics

  • Additional dedicated organics recovery transfer stations in the outer northern and western growth corridors (in line with the Statewide Waste and Resource Recovery Infrastructure Plan’s hubs of state importance) to aggregate and consolidate increasing amounts of food and garden organics (FOGO) from metropolitan Melbourne.
  • Additional capacity of 130,000 tonnes by 2025 and 555,000 tonnes by 2039, through a combination of:
    • Open windrow composting capacity in regional Victoria, particularly Barwon South West and Grampians Central West by 2025.
    • In-vessel composting capacity in metropolitan Melbourne and throughout regional Victoria.
    • Anaerobic digestion capacity in Metropolitan Melbourne to process metropolitan food organics, and in regional Victoria, co-located with existing wastewater treatment plants and food production hubs that generate significant volumes of food waste.
    • Hardstand infrastructure in regional agricultural areas to encourage maturation and tailored blending of compost for specific applications.

E-waste

  • 4,300 tonnes of mechanical reprocessing infrastructure capability to enable high-value e-waste materials to be recovered across metropolitan Melbourne and regional Victoria by 2030.
  • Support ongoing research into new technologies to manage hard to recover and hazardous e-waste. Emerging techniques to consider include improved mechanical and optical, thermal, chemical, nano and biological processing.
  • Consider improvements to the existing e-waste disposal network focussed at resource recovery centres, with increased drop-off points where electronic goods are purchased. This may require appropriate cost-sharing in line with product stewardship approaches and compliance with waste handling requirements.
  • Continue to collaborate with the Australian Government to develop a product stewardship approach for end-of-life solar photovoltaic panels, vehicle and household batteries.

Tyres

  • Investigate opportunities to use passenger vehicle tyres in the production of crumb rubber for road construction.
  • Increase fibre separation infrastructure in metropolitan Melbourne to assist the domestic reuse of passenger tyres or as a contingency for international market constriction. Separated fibre will need to go to waste-to-energy solutions, such as process engineered fuel, or require additional support to develop a market for it.

Other materials

  • Develop MRF (Materials Recovery Facility) input and output quality standards that complement Victorian and local government efforts to reform kerbside recycling.
  • Assess the viability of establishing small to medium-sized MRF infrastructure in regional Victoria for better recovery of recyclables starting with Grampians Central West and Barwon South West Waste and Resource Recovery Group (WRRG) regions.
  • Optimise Victoria’s extensive Resource Recovery Centre and Transfer Station network to improve regional resource recovery and, where necessary, consolidate sites for better resourcing and more efficient transport.
Key findings
  • There is an immediate need to plan for investment in paper and cardboard reprocessing infrastructure in Victoria to comply with the COAG Waste Export Ban.
  • To make up a large proportion of the shortfall, and to continue Australian exports, investment in large-scale paper sorting and pulping facilities is required in Victoria. Alternative processing will also need to increase or be developed. Alternate processing can include:
    • moulded fibre production
    • insulation
    • kitty litter
    • composting.
  • Victoria does not have the capability to sort mixed plastics at MRFs. With no market outlet for mixed plastics, this material is either being stockpiled or landfilled. This prevents Victoria from maximising existing industry reprocessing capacity.
  • Victoria has an estimated glass processing capacity of around 494,200 tonnes. This is enough to meet requirements of the COAG ban and Victorian policies.
  • While we expect there will be enough capacity to process the amount of glass generated in future, there may be opportunities in regional areas for processing glass into glass sand, aggregates and other products. There is also an opportunity to increase the percentage of recycled glass currently used in glass packaging production in Melbourne.
  • Without further investment in organics processing capacity, increasing collection of FOGO will lead to a shortfall in Victorian infrastructure capacity and capability to reprocess these materials.
  • Melbourne’s processing capacity for organics is significantly less than what is recovered; Melbourne relies on regional and interstate processing. Access to suitable sites that can meet regulatory requirements is likely to restrict opportunities to add processing capacity in Melbourne. There is an immediate need to invest in Victoria’s organics consolidation and reprocessing infrastructure to meet current and future generation and recovery rates. A more practical solution is to aggregate and consolidate organic material, with initial processing that reduces weight and volume followed by transport to regional areas for additional processing and use.
  • E-waste generation is increasing in Victoria due to rapid product innovation, the falling cost of new products, and consumer desire to upgrade. Following the 2019 introduction of a Victorian e-waste landfill ban, there are now pathways for collection, with waste facilities in Victoria providing a separate bin for e-waste and other disposal points at various council and private facilities. Drop-off facilities at retail sites have proved successful for other e-waste collections, such as Mobile Muster for mobile phones.
  • There are some emerging e-waste products of concern, specifically solar photovoltaic panels and batteries for solar systems and electric vehicles. Growing amounts of these will reach the end of their useful life in coming years. There is a lack of proven technological reprocessing solutions that can be deployed at scale. Infrastructure Victoria raised this issue in its Advice on Automated and Zero Emissions Vehicles Infrastructure in 2018 (Recommendation 15).
  • There is sufficient tyre reprocessing capacity to meet the requirements of the COAG export ban and Victorian policies. There are no immediate investment opportunities in regional areas, with the largest output – shredded tyres –  almost entirely exported overseas. However, there is an opportunity to increase the use of recovered passenger vehicle tyres, along with their commodity value, by improving Victoria’s infrastructure capability. This provides important contingency planning for these materials if market conditions change.
  • Victoria relies on a relatively small number of MRFs for Municipal Solid Waste (MSW) processing, which makes the sector less resilient and creates problems if one player exits the industry. In addition, the location of resource recovery and reprocessing infrastructure is determined by the private sector, so it does not necessarily minimise transport costs for local government. Market dynamics can also affect the way infrastructure is used – where it may be to one player’s advantage to slow production in certain circumstances.

Recommendation 02: Increase the diversion of organic waste from landfills

Context

Organic material is one of the largest waste streams in Victoria, estimated to make up around 35% of household garbage bins. There is also a large amount of organic waste from the commercial and industrial sector but the data in this sector is not comprehensive. Given that almost all of this material can be recycled in some way, this represents a significant opportunity.

Recommendation

Beyond the infrastructure capacity and capability recommendations already identified for organics, Infrastructure Victoria also recommends that the Victorian Government:

  • Support Victorian councils to increase FOGO kerbside collection services for greater recovery of food waste and reduced contamination in the organic material stream, as mentioned in the Recycling Victoria policy.
  • Complement FOGO collection services with community behaviour change programs to ensure organics collections are well-promoted and utilised. These programs should prioritise food waste reduction and align with the Love Food Hate Waste campaign (see recommendation 5).
  • Increase Commercial and Industrial (C&I) food organics recovery rates, starting with hospitality and food manufacturing businesses.
  • Conduct targeted organics research, development and demonstration activities to promote recovered organics as an alternative to soil conditioners in agricultural production.
  • Develop product standards and agricultural industry guidance to support the use of recycled organics products in agriculture and provide information to increase confidence in their use.
  • Investigate the merits of a Hazard Analysis and Critical Control Point (HACCP) regulatory framework for anerobic digestion.
  • Collaborate with the Australian Government to clarify the application of the Australian Carbon Credit Unit (ACCU) system to waste-to-energy systems, including anaerobic digestion.
  • Consider landfill bans or other incentives if landfill diversion rates plateau.
Key findings
  • There is a significant opportunity for Victoria to divert organic waste from landfill, recover these valuable resources and improve the environment. Victoria’s recovery rate for organics (42.3%) is significantly lower than other material streams (69% on average).
  • Food waste makes up 19% of landfill, and produces methane as it breaks down, which has a global warming potency around 25 times that of carbon dioxide.[1] Emissions from the waste sector account for 2% of Victoria’s total emissions.
  • Twenty-seven of Victoria’s local governments offer FOGO collection and a further 31 only offer a garden organics collection. This leaves 21 local governments offering no organics collection of any kind – two of which are metropolitan and 19 are regional.
  • The performance of FOGO systems can differ greatly. The 2018 National Waste Report says that well-promoted, carefully designed systems can capture about 70% of food waste. In some local government areas less than 4% of the population participate.
  • A full rollout of FOGO is estimated to cost $10-$60 per household initially, depending on whether a kitchen caddy and/or a kerbside bin is provided. This will depend on the residential setting (house or apartment and size of garden). Ongoing collection and processing costs range from $8 to $50 per household.
  • Only around one-third of food waste generated in Victoria is estimated to come from households, with the remainder coming from the C&I sector. There is limited detailed data around food waste generation and recovery from the C&I sector in Victoria, making it difficult to develop specific responses for this sector.
  • Sustainability Victoria (SV) estimates that for the 447,000 tonnes of organics recovered in 2017/18, around 103,00 tonnes of CO2 equivalent emissions are avoided. This implies that for a 10% increase in FOGO recovery rate, the environmental benefit would be an additional 10,000 tonnes of CO2 could be avoided.
  • Clean organic material streams can lead to more recovered organics used on the land, which has significant benefits to soil health, strengthening the market for these materials. Behaviour change can support cleaner streams and further strengthen the market.
  • There is a high demand for some recycled organics, such as timber and mulch, for use in urban areas. This includes residential and commercial landscaping. There is less demand for recovered food organics. Providing greater information about the quality and potential uses of recycled organics can increase demand.
  • A combination of transportation costs and gate fees can limit recycled organics use in agriculture due to distance from the supply (metropolitan Melbourne).
  • C&I food waste is generally more suitable than household waste for use as an anaerobic digestion feedstock.
  • Widespread adoption of anaerobic digestion in the European Union (EU) is supported by HACCP regulatory frameworks, product certification and guidelines for safe use. These measures in combination ensure digestate is safe for agricultural use and streamline the requirements that apply to waste suppliers and digestate users. HACCP is widely used for food production in Australia.
  • There is uncertainty around the application of carbon credits to anaerobic digestion, particularly for some proponents.

[1] Sustainability Victoria (2018) Guide to Biological Recovery of Organics

Recommendation 03: Provide clarity to the waste-to-energy sector and establish regulatory settings to achieve desired waste-to-energy outcomes

Context

There is a role for waste-to-energy to deal with residual (nonrecoverable or non-recyclable) waste in Victoria. In the waste hierarchy, energy recovery is a better outcome than disposal to landfill. Evidence suggests policy uncertainty is stifling private sector investment in waste-to-energy infrastructure. The Government’s Recycling Victoria policy has committed to development of a waste-to-energy framework. Clear policy is necessary to ensure desired outcomes and mitigate against risks, such as demand for feedstock creating perverse incentives to generate more waste, and undermining improvements to reuse and recycling options.

Recommendation

Develop a waste-to-energy policy that reflects the waste hierarchy and supports, rather than hinders, a transition toward a circular economy. A Victorian waste-to-energy policy should contain the following:

  • Information on how waste-to-energy’s role in Victoria supports and facilitates the waste hierarchy.
  • A government commitment to build social licence for residual waste-to-energy and a requirement that projects involve extensive community consultation, and provide ongoing and comprehensive information to the community.
  • Measures that prevent harm to human health and the environment, in line with existing Environment Protection Authority (EPA) requirements and overseas technical and regulatory experience from places such as the EU. Existing EPA standards for emissions, noise, dust and odour will apply, but EU standards and best practice methods should also be considered for product design, emission control, and ongoing and continuous monitoring.
  • Requirements that energy recovery meet minimum energy efficiency thresholds, consistent with international practice.
  • Ways to avoid overcommitting to waste tonnages. Long-term secure feedstock contracts are necessary for waste-to-energy projects to be financially viable, which risks creating perverse incentives to increase waste.
  • Encouragement for strategic site locations, including co-location with industry that can either provide feedstock for, or use the residual energy and heat from, waste-to-energy infrastructure. Prioritise development either within strategic hubs identified by the Victorian Recycling Infrastructure Plan (VRIP) or co-locate facilities with industry.
  • Standards for residual products to facilitate market development. Waste-to-energy processes generate residual materials which, unless used elsewhere, will go to landfill. Reusing these products, where possible, is preferable. For example, fly and bottom ash can be used for building and road construction.
  • Measures to ensure landfill levies do not make waste-to-energy uncompetitive with landfill.
Key findings
  • Waste-to-energy is a preferable alternative to landfill if there are no other viable recovery options. Victoria should still prioritise waste reduction, reuse and recycling. A future waste-to-energy policy should not encourage waste that could have feasibly been recycled, reused or avoided to become feedstock. Waste-to-energy solutions higher on the waste hierarchy (for example, anaerobic digestion of organic materials – see Recommendation 2) are higher priority.
  • For waste-to-energy facilities to be competitive, the landfill levy needs to be set to an appropriate level.[2] Government has a role to play in ensuring that regulations and market prices support options that are higher on the waste hierarchy. The private sector is responsible for making financially viable business models for waste-to-energy facilities, but government can support the pursuit of waste-to-energy by removing barriers to entry.
  • Facilities should account for the changing generation and composition of residual waste.
  • The amount of energy generated from waste-to-energy should not be overstated. The Clean Energy Finance Corporation estimates that energy from waste could meet up to 2% of Australia’s electricity needs.[3]
  • Waste-to-energy by-products may contain contaminants that make them unsuitable for recycling in some cases – particularly if facilities are used to manage hazardous wastes. Landfill planning should include the potential need to manage these materials.
  • The Queensland Government found that pre-sorting residual waste to extract recoverable materials prior to energy recovery imposes additional costs for energy recovery facilities and recovers lower quality recyclable materials.[4]
  • The amount of residual waste in the future is uncertain. Our modelling and analysis suggests that by 2038/39, Victoria will generate 650,000 tonnes per year of residual waste from the six priority materials alone, assuming a 90% recovery rate. The business-as-usual forecast is for up to 5.7 million tonnes per year of residual waste. Not all of this residual waste will be suitable for waste-to-energy.
  • The need for waste-to-energy to manage residual waste will be highly dependent on efforts to reduce waste and recycle materials, as well as the planned landfill capacity. The Recycling Victoria policy’s stated capacity cap of one million tonnes per year for waste-to-energy should be regularly reviewed to manage these uncertainties. If combined efforts to reduce waste generation and recycle material are not highly successful then there is a risk that significant amounts of residual waste above the one million tonne waste-to-energy cap will be consigned to landfill.

[2] Department of Environment, Land, Water and Planning (2017) Turning waste into energy, Join the discussion

[3] Clean Energy Finance Corporation (2016) Energy from waste in Australia: a state-by-state update

[4] Office of Resource Recovery, Department of Environment and Science (2019) Energy from Waste Policy –  Discussion paper for consultation

Recommendation 04: Review funding mechanisms to increase infrastructure capacity and capability

Context

Typically, grants of up to $500,000 have been given by Sustainability Victoria to increase the quantity of recycled products sold, increase resource recovery, divert waste from landfill, fund infrastructure projects, develop new markets, and fund research and development. Through the new Recycling Victoria Infrastructure Fund, grants of up to $8 million are now available for some materials. In addition, other arms of government may provide grants and other investment assistance.

Although grants can have some competitive elements, they are essentially a negotiation between government and industry. In negotiations, a well-informed supplier will often benefit over a less informed buyer. Firms and organisations know their costs of production and Governments often do not.

Recommendation

The Victorian Government and responsible agencies should review the effectiveness of existing funding mechanisms such as grants, tenders and collaborative procurement and trial the use of auctions to secure reprocessing infrastructure capacity, as identified in Recommendation 1, in the following way:

  • A field pilot to test implementation and cost-effectiveness of auctions.
  • Separate auctions for each waste processing class because the cost of additional waste processing will vary for different types of waste (i.e. glass, plastics etc.).
  • An auction in which bidders submit bids as in a tender. However, rather than submitting one proposal, each bidder would be allowed to submit a bid schedule to indicate the quantity of additional waste processing effort they would offer over a range of prices.
  • An assessment of the effectiveness of the field pilot compared to other funding approaches.
Key findings
  • Grants may not always lead to the best outcomes or value for money for government. In recent years, resource recovery grants have been capped at a maximum of $500,000 which may not be enough to achieve significant increases in resource recovery and recycling rates.
  • There is significant potential to increase the coordination across government of various investment initiatives to improve resource recovery.
  • Auctions can reveal information needed to efficiently allocate resources by harnessing competition between competitors as a means of identifying who wins and at what price. Well-designed auctions have been shown to achieve a given outcome at lower price compared with a grant mechanism.
  • Auctions are an alternative approach used successfully in Victoria to achieve government objectives related to infrastructure and efficiently allocate resources, including for the allocation of aquaculture sites in Victoria and to allocate mobile phone spectrum.
  • The Victorian Government (and other governments throughout Australia and around the world) already use a range of other financial support approaches to deliver policy outcomes, such as rebates, subsidies and low-interest loans which could also be applied to resource recovery.
  • An auction creates a competitive environment in which the supply schedule is expanded by asking bidders to nominate the amount of additional effort they would be willing to supply at different prices. Competition forces bidders to seek compensation only for the difference between the cost of supplying additional effort and returns for selling the waste material processed.[5]

[5] Centre for Market Design (2019) Opportunities to improve infrastructure investment in the Victorian waste economy, report for Infrastructure Victoria

Recommendation 05: Provide ongoing statewide and locally tailored behaviour change programs

Context

Overall, people are willing to change the way they sort their waste. Our community research shows that nearly 90% of Victorians are open to it.

The Victorian Government should harness this willingness and partner with local government and industry to make it easier for households to minimise and better sort their waste. Greater separation of waste in homes and businesses can reduce contamination and improve the quality of recycling. Promoting behaviour change is critical to achieving this.

Recommendation

The Victorian Government should ensure its investment in household and business behaviour change programs is consistent and ongoing. The key objectives of the Recycling Victoria policy’s behaviour change programs should include:

  • waste minimisation
  • contamination reduction
  • buying more recycled, reusable, and recyclable or compostable products.

At a minimum, a behaviour change program should be designed using the following principles:

  • Centrally managed and funded.
  • Consistent messaging across Victoria, with nuance for local areas as needed.
  • Persistent and ongoing, evolving as performance improves.
  • Tailored to meet the needs of specific audiences e.g. culturally and linguistically distinct or diverse communities, residents of multi-unit developments, hospitality businesses etc.
  • Considers the role of both positive and punitive incentives and other interventions over the medium to long term.
  • Prioritises specific actions and solutions for households that build on existing good intentions and understanding.
  • Monitored and evaluated.
  • Integrated with relevant initiatives like the APCO targets and Australasian Recycling Label.
  • Draws from consumer behaviour research.
  • Supported by easy-to-use source separation infrastructure at the point of disposal (see Recommendation 6).
Key findings
  • Victorians already understand the need to recycle, so behaviour change efforts should harness the enthusiasm and goodwill of the community to do even better. We surveyed 1,000 Victorians to understand their attitudes and perceptions about how they sort their waste at home, and their willingness to change their behaviour. We found that most Victorians feel it is important to reduce landfill waste (93%), and they consistently recycle when provided with a kerbside recycling bin (85%).
  • There is significant room for improvement in individual recycling practices. We looked at why this is and discussed what the community would like to see and hear to help them recycle more effectively. Key points include simplicity (separate bins for different materials), consistency and a strong understanding of the benefits.[6]
  • There is limited coordination and sharing of materials between Sustainability Victoria, the Metropolitan Waste and Resource Recovery Group and local governments, which all provide waste education.[7] We have heard from industry stakeholders that there is also limited information sharing between industry and government.
  • Waste education in Victoria does not often prioritise waste avoidance but usually focuses on what to do with waste after it is generated. Avoidance education is generally only provided in short bursts and under-funded relative to other government campaigns, limiting its reach, impact and ability to effectively change behaviour.[8]
  • Behaviour change programs will be most effective in changing recycling outcomes where correct recycling is already as simple, easy and consistent as possible. Eliminating or reducing barriers to better recycling behaviour is key to behaviour change. Programs need to be supported by a more consistent approach across Victoria.
  • Examples of successful programs include the TAC Towards Zero and the Target 155 campaigns. Both have a long-term focus, consistent messaging and ongoing funding. While it is difficult to determine the contribution of the Towards Zero campaign to changes in Victoria’s road toll as opposed to changes in technology, the number of lives lost on Victorian roads has declined significantly since the campaign began, even as the number of drivers on Victorian roads has increased.

[6] Quantum Market Research (2019) Kerbside Collection Deep Dive, report for Infrastructure Victoria

[7] Victorian Auditor-General’s Office (2019) Recovering and Reprocessing Resources from Waste

[8] Ibid.

Recommendation 06: Reduce contamination in material streams

Context

Contamination occurs when an item is disposed of in the wrong bin. Contamination reduces the value of recyclable materials because either additional sorting is needed to remove unwanted materials, which can be costly, or the processor needs to dispose of these materials to landfill, which is also costly.

This lowers the market value of materials which lowers the incentive to invest in reprocessing and recycling infrastructure. In some cases, these costs make recycling more expensive than using virgin materials.

An important element in reducing contamination is improving source separation and consistency in the way waste is collected –  particularly for household waste. Not all councils accept the same materials in recycling collections, due to differences in what processors will accept. At the same time, bin lids differ in colour and meaning across local government areas.

These differences can lead to confusion for households and contamination of material streams, and create a barrier to efficiently and effectively educating the community on what they can recycle.

Recommendation

To reduce contamination of materials streams, Infrastructure Victoria recommends that the Victorian Government:

  • Require and support all local governments to standardise bins for household collections, consistent with the Government’s commitment in the Recycling Victoria policy to standardise bins and kerbside services.
  • Advocate for and support the review of the Australian Standard for mobile waste containers AS4123.7.
  • Establish a minimum service standard for local government waste services to promote greater consistency in collections across Victoria.
  • Promote greater source separation of MSW by encouraging and supporting the rollout of separate kerbside bins for glass, or paper and cardboard.
  • Drive greater consistency in the materials collected within each service (e.g. FOGO and commingled) across Victoria.
  • Evaluate existing models to design the best Container Deposit Scheme for Victoria.

An important element in reducing contamination is improving source separation and consistency in the way waste is collected.

Key findings
  • Infrastructure Victoria’s community polling suggests that 25% of all respondents who have commingled kerbside collection are unsure of which bin things should go in.[9]
  • Countries that have high rates of resource recovery from MSW tend to have a more consistent approach to sorting and collection. Currently, approaches differ across Victoria’s 79 local councils.
  • Standardising bins is estimated to cost between $22-$60 per household depending on whether the entire bin is replaced, or just the lid.
  • A consistent approach to collections is estimated to cost between $35-$60 per household for an additional bin and $3 per collection.
  • In 2017/18, contamination rates in Victorian MSW ranged from 3% to 27%, with an average of 10.4% across all local government areas[10] depending on the effort put into education and enforcement along with the socio-economic characteristics of the area.
  • There is limited detailed data on contamination rates in the C&I sector in Victoria making it difficult to develop specific responses for this sector.
  • Container Deposit Schemes are in place across Australia. Results in each state or country vary depending on the exact model used. Our consultation indicates that Queensland (active scheme) and Western Australia (scheme in design phase) are leading examples to investigate further.
  • One of the key benefits of CDS is that they can reduce contamination. Cleaner materials streams can increase the potential for their re-use.
  • The introduction of a CDS was commonly identified by stakeholders who provided feedback on our Evidence Base Report as an initiative that could improve Victoria’s waste and resource recovery system.
  • 92% of people we polled favoured the introduction of a CDS.
  • The Victorian Parliamentary Budget Office (PBO) costed a CDS for the Victorian Parliamentary Inquiry into recycling and waste management and found that a CDS would deliver a financial benefit to Victoria of $244.5 million from 2019-20 to 2022-23. This reflects an increase in government revenue of $253.5 million due to uncollected deposits from containers not being returned, partially offset by an increase in operating expenses of $9.0 million to manage the scheme.
  • Commingling of glass with paper and cardboard leads to lower recyclability of these materials from household collections. This is because the glass gets broken and becomes embedded in the paper and cardboard. Separating these materials is therefore key to improved recycling. Depending on the proximity of paper or glass reprocessing, it may be more appropriate to prioritise one or the other in some regional areas.

[9] Quantum Market Research (2019) Waste Advice Research, report for Infrastructure Victoria

[10] Sustainability Victoria (2019) Victorian Local Government Annual Waste Services Report 2017-18

Recommendation 07: Introduce waste minimisation initiatives

Context

In line with the waste hierarchy, waste minimisation or avoidance is the best way to manage waste.

Minimising waste will not only ease pressure on Victoria’s recycling and resource recovery infrastructure, it will also reduce pressure on Victoria’s finite natural resources and reduce the environmental and human health impacts of waste, such as polluted waterways. Waste minimisation is also one of the key objectives of the Recycling Victoria policy.

Recommendation

The Victorian Government should:

  • Provide support and funding to household food waste minimisation initiatives (such as Sustainability Victoria’s Love Food, Hate Waste), to target avoidable MSW food waste which currently accounts for a third of Victoria’s household garbage stream by weight. Ensure that the statewide municipal recycling behaviour change campaign emphasises the importance of waste avoidance (see Recommendation 5).
  • Consider levies or bans on specific materials that are difficult to recycle or contribute to environmental problems, if viable alternatives exist.
  • Work with the Australian Government and industry to evaluate EU regulations underlying the Waste, Electrical and Electronic Equipment Directive (WEEE) for potential adoption. These regulations include longer warranties for the products, requiring spare parts to be guaranteed, and mandating manufacturer repair to support the development of repair culture.
Key findings
  • The amount of waste we generate has been growing. This is due partly to population growth and partly to changes in our economy and society, such as increased consumption and packaging.
  • The most cost-effective way to manage waste is to create less in the first place. The waste hierarchy calls for waste avoidance and minimisation, including better product and packaging design, and reusing or repairing products and items. Avoiding and reducing waste will reduce pollution, greenhouse gas emissions, and the pressure on our waste management infrastructure.
  • Reducing waste reduces sorting costs and contamination.
  • Levies or bans on single-use plastic straws and cutlery, along with nonrecyclable coffee cups may help combat Victoria’s litter problem and promote behavioural change. That said, poorly designed levies or bans on some materials, such as single-use plastics can lead to unintended consequences. Some industries rely on single-use plastics for medical or research purposes.
  • Food waste accounts for a third of Victoria’s MSW garbage stream by weight. Nearly two-thirds of this is avoidable food waste (such as bakery items, meals, dairy, eggs, fresh vegetables and fresh fruit). Victorians estimate that they waste around $39 worth of food and drink a week – $2000 a year. Across Victoria, this adds up to about $4 billion a year.
  • E-waste – end-of-life electronic products with a plug or battery –  is a fast-growing waste stream. E-waste is a complex mixture of materials and components that, because of their hazardous content, can cause major environmental and health problems if not properly managed. While there are already Australian product stewardship schemes for televisions, computers and mobile phones, many electronic products do not have such arrangements. An EU directive created collection schemes where consumers return their e-waste free of charge. These schemes aim to increase e-waste recycling and/or re-use. Most electronics brands with an Australian presence are also operating in the EU and therefore are required to comply with these requirements in Europe.

Recommendation 08: Remove barriers and strengthen markets for priority materials

Context

Over the last decade, there has been a significant focus in Victoria on establishing infrastructure to collect, sort and, to an extent, reprocess recovered resources. However, this supply of recyclable materials has not always been matched by significant, ongoing demand for recycled products.

With the lack of demand, stockpiling has occurred, the commercial viability of some operators has been challenged, waste sector operators have at times failed to comply with regulatory requirements, and there have been multiple waste material fires throughout Victoria.

To address this supply and demand imbalance, further market development is required to identify opportunities that can use significant and reliable volumes of recycled materials. The Victorian Government has indicated in Recycling Victoria –  a new economy that it will play a significant role here.

Recommendation

Infrastructure Victoria recommends the Victorian Government use multiple approaches to develop end markets for recycled materials. The actions identified here should be applied first to priority materials: glass, organics, plastics, paper and card, e-waste and tyres.

  • Support research and development in the use of recycled materials and products and conduct targeted research and demonstration activities for each priority material. This will overcome product-specific market challenges, such as the application of organic materials to land and the use of recycled plastic in packaging.
  • Build on research, development and demonstration working groups with representatives from government, the recycling industry, end market industries and researchers to accelerate the use of recycled materials.
  • Build on recent efforts to update standards and specifications more quickly to enable greater use of recycled materials and products in Victoria.
  • Transition to performance-based specifications in Victoria to ensure recycled materials are fit-for-purpose, particularly for use in construction and agriculture. This would prescribe the desired outcomes, allowing industry to decide which materials (including recycled products) it will use to comply.
  • Develop and provide recycled product information and guidance to increase confidence in the use of recycled products, such as the use of recovered organics in agriculture or plastics in packaging manufacturing. This may include approaches such as eco-labelling, environmental product declarations, standards, product specifications and safety data sheets.
  • Update the Sustainable Procurement Objectives in the Victorian Government’s Social Procurement Framework to include more explicit requirements about the use of recycled content. Prioritise sustainable outcomes in evaluating procurement proposals. The Victorian Government’s recently announced `Recycled First’ program for major construction projects is an example.
  • Collaborate with the Australian Government to investigate the costs and benefits of taxes, levies and other incentives to increase the competitiveness of recycled materials relative to virgin materials.
Key findings
  • Research and development with industry has been effective in the roads and rail sectors, with the approval of several Victorian specifications permitting the use of recycled materials. This approach could be applied to plastics manufacturing, packaging, agriculture, and paper and cardboard manufacturing.
  • Performance-based specifications are less prescriptive when it comes to how materials are made, and the processing required to meet infrastructure performance criteria and encourage innovation.
  • Where the Victorian Government is not responsible for authorising standards and specifications, it can play a key role by resourcing and facilitating working groups to increase the use of recycled materials across a range of industry sectors.
  • Recycled materials have sometimes been seen as lower quality than virgin materials. Research and development activities are crucial to identifying the potential of recycled materials as either direct substitutes for virgin materials or where there are new uses and benefits associated with using them.
  • The Government supports research and development through funding facilitated by Sustainability Victoria. This can be scaled up and down, but an increase will be required to move forward on all priority materials.
  • The UK Government recently implemented a tax on the production and import of non-recyclable plastic packaging from 2022. The tax was a response to high levels of plastic packaging waste, which predominantly came from new plastics.[11] It is difficult for the Victorian Government to impose a similar tax as Victoria is just one part of a larger market and products can flow across state borders relatively easily.

[11] AlphaBeta (2019) Recycling and resource recovery infrastructure in Victoria: International and Australian comparisons, report for Infrastructure Victoria

Recommendation 09: Ensure that producers and consumers involved in making and using products share the responsibility for their fate

Context

In many instances, producers of goods and services do not face the cost of waste created by packaging or the end-of-life fates of products.

By not considering these costs, producers may over-invest in packaging to attract buyers’ attention or manufacture goods that cannot be easily repaired. Further, consumers do not face all the costs of their consumption, or their sorting and disposal choices.

Recommendation

To provide an incentive for consumers and producers to consider the cost of disposing of or recycling materials, the Victorian Government should:

  • Work with the Australian Government to update the Product Stewardship Act 2011 Product List, which has not been updated since 2017-18.
  • Collaborate with the Australian Government and the electronics industry to increase the scope of e-waste product stewardship covering a wider range of e-waste types, where justified based on the material value and environmental risks they present.
  • Work with the Australian Government and industry groups to further develop product stewardship schemes under the Product Stewardship Act 2011, assessing the merits of voluntary, co-regulatory or mandatory schemes.
  • Work with the Australian Government and industry groups to consider the key elements of successful international product stewardship schemes and their suitability in Australia. Key elements include:
    • levies and deposit refunds
    • take-back requirements
    • advance disposal or recycling fees
    • product labelling requirements
    • product design and repair requirements
    • recycled content targets
    • resource recovery rate targets.
  • Work with the Australian Government to fast-track and prioritise the development of a national product stewardship approach for photovoltaic systems in the short-term.
  • Work with the Battery Stewardship Council to include electric vehicle batteries, addressing the risks set out win Infrastructure Victoria’s Advice on Automated and Zero Emissions Vehicles Infrastructure (Recommendation 15).
Key findings
  • Product stewardship (PS) and extended producer responsibility (EPR) measures can facilitate the shared responsibility of manufacturers, retailers and consumers for the impact of products on the environment, public safety and human health. They aim to ensure that everyone involved in the creation and use of a product shares the burden of what happens to it at the end of its useful life.
  • Consumers and producers are not exposed to the full cost of the waste they generate. This is a `negative externality’ that can be addressed through EPR or PS.
  • The most successful international examples of PS are underpinned by mandatory approaches.[12] There are currently no mandatory Australian schemes.
  • Multiple stakeholders raised the need for mandatory PS for `difficult to recycle materials’, such as packaging made from multiple materials.
  • The Product Stewardship Act 2011 is administered by the Australian Government to provide a framework for reducing the environmental and other impacts of products. It is currently only applied to a limited number of products. Of the several voluntary schemes, participation and effectiveness vary widely.

[12] AlphaBeta (2019) Recycling and resource recovery infrastructure in Victoria: International and Australian comparisons, report for Infrastructure Victoria

Recommendation 10: Provide greater clarity of roles and responsibilities for Victorian Government bodies involved in recycling and resource recovery

Context

There is confusion about the responsibilities of different government bodies involved in the waste and resource recovery sector. This is well documented by the Victorian Auditor-General’s Office and was raised with us by stakeholders.

VAGO found that the lack of an overarching waste policy and gaps in statewide guidance resulted in ad hoc and reactive responses from agencies instead of strategic responses, and an inability to plan for sufficient infrastructure.

In November 2019, the Victorian Parliament’s Environment and Planning Committee Inquiry into Recycling and Waste Management also recommended a review of governance arrangements to ensure clear roles, responsibilities and accountabilities for various organisations. Infrastructure Victoria supports this recommendation.

The Victorian Government has indicated in the Recycling Victoria policy that it will create a new body, which will provide an opportunity to clarify roles and responsibilities.

Recommendation

Infrastructure Victoria recommends that the Victorian Government:

  • Eliminate overlap in roles and responsibilities of the Department of Environment, Land, Water and Planning (DELWP), Sustainability Victoria (SV) and the Waste and Resource Recovery Groups (WRRGs). For waste, key areas to distinctly allocate are policy, strategy, behaviour change, waste collection, waste processing, infrastructure planning and contingency planning.
  • Specify the waste management services roles and responsibilities of local governments in legislation.
  • The roles and responsibilities of local government should include minimum service standards, implemented through subordinate instruments. Minimum service standards could include bin lid colours and the specific materials accepted.
  • Provide financial support for local governments to transition to minimum standards, where necessary.
  • Consider changes to the way waste and material processing services are procured to address market power imbalances between local governments and service providers. This could include mandating participation in collective procurement processes or having these processes handled by a statewide or regional authority.
Key findings
  • Clarity in roles and responsibilities is critical for effective and coordinated planning and implementation of the state’s waste programs and activities. Greater clarity can improve transparency, making it easier to monitor performance and track progress.[13]
  • DELWP, SV and the metropolitan WRRG are not clearly or publicly reporting on the progress of individual actions, overall objectives and outcomes of their strategies in a way that enables industry and community to track their progress.
  • Differences in service provision between local government areas limits the ability to have consistent statewide education[14] and can create confusion for households, leading to contamination of material streams.
  • Local governments play a crucial role in the waste and resource recovery sector, particularly in waste collection. However, their collection roles and responsibilities are not enshrined in legislation.[15] Defining these roles and responsibilities in legislation is an opportunity to set minimum standards for waste collection.
  • The market for MSW recovery and reprocessing services in Victoria is dominated by a few large players. Victoria’s approach to procuring collection and recovery services has, in part, contributed to this problem by creating consolidation in the market as businesses bid for larger and larger numbers of council contracts to achieve economies of scale.
  • Local governments, individually, are at a disadvantage when negotiating waste processing services.
  • Improved governance arrangements, such as mandatory collective procurement or the creation of a suitable authority, have the potential to counterbalance growing market power issues in Victoria’s waste sector.
  • In the face of recent major disruptions to the sector, responsible agencies worked together to minimise the amount of recyclable materials that went to landfill. Having a clear lead agency and decision-making powers for this work would have streamlined processes.

[13] Victorian Auditor General’s Office (2019) Recovering and Reprocessing Resources from Waste

[14] Ibid.

[15] Infrastructure Victoria (2019) Legislative and regulatory review

Recommendation 11: Improve the quality and use of data to support resource recovery

Context

The Victorian Government’s planning and policy decisions need to be informed by reliable data on recycling and resource recovery. Gaps in data create issues for policy and strategy implementation, particularly in monitoring progress towards targets (refer to Recommendation 12).

The responsibility for data collection is currently shared by SV, the EPA, local governments and the WRRGs. SV has responsibility for coordinating reporting of this data. There is significant scope to improve the quality and coverage of data currently published by SV.

In Recycling Victoria: A new economy, the Victorian Government has committed to modernising Victoria’s waste data. Data on the state of Victoria’s recycling sector reports 69% of materials are currently recovered for recycling. However, this data does not include information on whether the recovered material is recycled, illegally dumped or has some other fate.

Recommendation

The Victorian Government can implement its commitment to modernising Victoria’s waste data by:

  • Introducing new data reporting requirements in regulatory and contractual conditions for recycling and resource recovery operators.
  • Providing clearer guidance to local governments and recycling and resource recovery operators on how to report data in a standardised, consistent way.
  • Introducing new controls and quality assurance to verify and validate data.
  • Implementing enhanced data analysis to evaluate the data gathered through the above recommendations. This should include monitoring for perverse outcomes, identifying risks to performance (by sector and material) and identifying opportunities to realise circular economy outcomes (e.g. where waste from one business can be used for production in another business).
  • Regularly reporting performance data to improve transparency in the sector.
  • Ensuring Victorian data quality standards align with other Australian jurisdictions.
Key findings
  • Introducing new data reporting requirements and providing guidance on how to report data would improve the coverage and quality of information on the fate of recovered materials and help overcome issues with data quality.
  • A 2011 report by VAGO on MSW management found that deficiencies in data quality had reduced the reliability of performance data, and that complete, timely, accurate data is necessary to effectively report on performance.[16]
  • Data is often collected through voluntary surveys of local governments and waste recovery and reprocessing operators, so is incomplete and not necessarily accurate.
  • There is scope to impose data requirements on operating licenses within the waste and resource recovery sector through amendments to the Environment Protection Act 1970. Licencing conditions should require regular, periodic reporting of material flows data at all resource recovery facilities.[17]
  • There is scope to improve data provision and reporting in waste processing contracts. This can support improved outcomes for materials as well as contingency planning for sector disruption.
  • Data reporting and governance requirements should be specified where legislation is used to define the scope of different government entities, including local governments.[18]
  • Timely data publishing can improve transparency and accountability around the performance of the sector and inform education and behaviour change campaigns. It can also assist to predict disruption to or emerging gaps in the system. Victoria’s 2017-18 data was published in September 2019.
  • Data governance and system improvements should meet the following objectives:
    • establish a framework for monitoring progress towards the circular economy, including the identification of indicators and metrics
    • introduce a new waste and resource recovery data system to enable better waste management and circular economy monitoring
    • expand waste and recycling market intelligence reporting
    • improve the usefulness and accessibility of Victorian waste data to local governments, industry and the community.
  • Clear governance for a data improvement program is required for efficient delivery. Costs are uncertain but may be in the range of $20 million over three to five years.

[16] Victorian Auditor General’s Report, Municipal Solid Waste Management

[17] AlphaBeta (2019) Recycling and resource recovery infrastructure in Victoria: International and Australian comparisons, report for Infrastructure Victoria

[18] Refer to Recommendation 10 which recommends their role should be defined in legislation

Recommendation 12: Use targets to drive performance

Context

In the high-performing international and Australian jurisdictions we examined, clear long-term vision and ambitious quantitative targets were common.

These included overall system performance as well as waste reduction. In some jurisdictions, targets were statutory with non-compliance penalties. To be effective, targets require rigorous data collection (see Recommendation 11) as well as necessary funding and detailed sector planning. We support the targets that have been formally adopted in the Victorian Government’s circular economy policy –  Recycling Victoria: A new economy.

Recommendation

To leverage the adopted targets, Infrastructure Victoria recommends:

  • In the longer-term, investigate more ambitious and complex targets (e.g. based on carbon emission reduction) and penalties for non-compliance.
  • Consider the use of existing legislative and regulatory tools to improve performance in specific areas such as:
    • The application of planning and building permit conditions to establish performance standards for waste reduction and resource recovery during both construction and ongoing operations.
    • The application of food business licence conditions to establish performance standards for food waste reduction and organics recovery.
    • The application of EPA operating licence conditions to establish performance standards in the industrial sector.
Key findings
  • Our analysis of places around the world with high-performing recycling and resource recovery sectors shows that they have taken a long-term approach to targets, revisiting and increasing these as performance improves.[19]
  • In other countries, targets are also progressing from simple weight or volume-based targets to more sophisticated carbon emission reduction or material-specific targets. These address perverse outcomes and focus effort where the greatest environmental outcomes can be achieved.
  • Legislative and regulatory tools outlined above could be used to implement the Government’s proposed new requirement for business to sort commonly recyclable materials and organic wastes from unrecoverable wastes.
  • Waste management services for multi-unit developments are not fully integrated with the MSW system. In many cases, waste management services are provided directly by commercial operators on behalf of the body corporate, rather than by local governments. Sustainability Victoria has developed the Guide to Better Practice for Waste Management and Recycling in Multi-unit Developments to improve waste management practices and increase recycling in multi-unit developments. This guidance has now been incorporated into the Victorian Planning Provisions.
  • In the City of Melbourne, there are high concentrations of high-rise residential buildings, restaurants and cafes. City of Melbourne residents recycle only 25% of their waste, which is low compared to the Victorian average of 45%.[20] This reflects the higher barriers and lower rates of recycling in multiunit developments generally.[21] [22]

[19] AlphaBeta (2019) Recycling and resource recovery infrastructure in Victoria: International and Australian comparisons, report for Infrastructure Victoria

[20] City of Melbourne (2019) Waste and Resource Recovery Strategy 2030

[21] Quantum Market Research (2019) Kerbside Collection Deep Dive, report for Infrastructure Victoria

[22] Quantum Market Research (2019) Waste Advice Research, report for Infrastructure Victoria

Recommendation 13: Strengthen the status of, and processes around, Victoria's Recycling Infrastructure Plan

Context

The Victorian Recycling Infrastructure Plan (VRIP), formerly known as the Statewide Waste and Resource Recovery Infrastructure Plan (SWRRIP) has provided a long-term vision and roadmap to guide planning for waste and resource recovery infrastructure across the state.

However, the private sector primarily provides waste management, resource recovery and recycling infrastructure, with limited matching of strategic considerations (like waste generation trends, land use planning or minimisation of costs to households and businesses) to the type and location of infrastructure. The objectives of the Plan are therefore difficult to realise.

Recommendation

The Victorian Government should use existing planning mechanisms to improve recycling and resource recovery performance by:

  • Strengthening the status of the VRIP to ensure cohesion of waste management and planning decisions across multiple levels of government. Further amendment of the Victorian Planning Provisions could achieve this.
  • Proactively encouraging the appropriate location of waste and resource recovery operations.
  • Establishing and strengthening standardised land use buffers around waste management sites, considering the implications of local government area boundaries. This would provide greater certainty to the market in developing these sites.
  • Developing and maintaining spatial data on waste generation and flows, as well as resource recovery and reprocessing infrastructure capacity and capability.
  • Facilitating the appropriate location of waste and resource recovery through the formal development of an interagency working group of responsible Victorian resource recovery agencies, economic development agencies, and local governments
  • Undertaking active and transparent contingency planning to provide greater network resilience.
  • Including provision for waste-to-energy and landfill capacity in the VRIP, to optimise the management of residual waste in both business-as-usual (BAU) conditions and disruption.
Key findings
  • For resource recovery and reprocessing to be cost-effective and for recycled products to be attractive to markets on a price basis, the location of particular industries is important. If they are continually pushed further out of the metropolitan area as land value increases and sensitive uses encroach upon them, performance will decrease due to a lack of suitable facilities. We found multiple instances where waste management and reprocessing sites are at risk from the lack of alignment between waste planning and land use planning decisions. For example, a major construction and demolition (C&D) recycler in the south eastern suburbs is likely to lose their current site in the medium term. With no other suitable sites nearby, 100,000 tonnes of processing capacity may be lost.
  • We have also heard from multiple stakeholders that government agencies often appeal land use planning decisions at VCAT based on their presence in the SWRRIP. Although these cases are generally won for the cause of waste management, going to the tribunal is funded by taxpayers and causes delay. The Metropolitan Waste and Resource Recovery Group (MWRRG) is working to identify and protect waste management hubs of state significance through collaborative processes with local government and other agencies. However, the current approach and resourcing limits the completion of the protection plans to two sites (or hubs) per year.
  • Currently there is limited communication and collaboration across government levels and portfolios to facilitate strategic investment in the Victorian waste and resource recovery industry. For the best outcomes, regulators need to understand the compliance status of industry operators and non-regulatory agencies. They also need to understand the business operations of the waste sector industry operators to ensure waste and resource recovery programs are aligned with market conditions. Improved coordination across government could improve the sector. The interagency working group for the Combustible Waste Recyclable Materials (CWRM) taskforce has been effective in bringing together responsible regulating agencies, aligning efforts and improving communication and collaboration. This could serve as a model for future efforts.
  • Waste-to-energy and landfills will likely both play a role in managing waste in the future. The VRIP needs to reflect this point, while ensuring that Victoria does not over-invest in capacity.
  • The VRIP’s objectives need to integrate with a range of government planning policies and plans, including land use planning, economic development, and resources strategies.
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