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Appendix A: Resource recovery infrastructure forecast investment by 2039

Infrastructure Gap Analysis Overview

Infrastructure Victoria have undertaken an Infrastructure Gap Analysis to consider the appropriate infrastructure facility types that will be required to manage current and future resource recovery needs of Victoria considering:

  • projected waste generation and resource recovery rates
  • the required capacity to manage future waste tonnes
  • the required capability to transform recovered resources into valuable commodities
  • the potential suitable locations for future infrastructure
  • the indicative capital investment required
  • the indicative timing of when infrastructure will be required based on current and emerging waste policies and market challenges.

The recommended infrastructure facilities are an estimated forecast of what may be required in future years to respond to emerging waste and resource recovery trends. They are not prescriptive and should be used for guiding purposes only. The complete Infrastructure Gap Analysis can be viewed as a Technical Document at

www.infrastructurevictoria.com.au/ project/advice_on_recycling_and resource_recovery_infrastructure

Infrastructure Victoria developed a methodology to guide its recommendations for types of infrastructure needs and the potential locations of infrastructure to respond to current and emerging waste trends. To guide this, Infrastructure Victoria commissioned Brock Baker Environmental Consulting to undertake a ‘Waste and Resource Recovery Infrastructure Data and Spatial Analysis’ report and Blue Environment to develop a ‘Victorian Waste Flows Projection’ model. These data sets informed Infrastructure Victoria’s gap analysis.

Priority materials

Infrastructure Victoria has identified and undertaken detailed analysis of six priority waste material streams: E-waste, glass, organics, paper and cardboard, plastics, and tyres.

Infrastructure Victoria has identified these as priority waste materials for analysis based on:

  1. Their exposure to current market challenges including international import bans and fluctuating commodities prices.
  2. The potential impacts of the COAG waste export ban that seeks to restrict the export of ‘scrap’ glass, paper and cardboard, plastics and tyres which will be phased in from July 2020 and come into full effect by July 2024.
  • The opportunity to divert organics from landfill, which comprises significant tonnes that could be readily recovered for beneficial uses.
  1. The introduction of the Victorian e-waste landfill ban in July 2019 which requires diversion of e-waste to resource recovery pathways. It is noted that e-waste is also heavily exposed to increasing international import restrictions as well.
Infrastructure Gap Analysis Methodology

Drawing upon this work, Infrastructure Victoria’s methodology included analysis of:

  • current and predicted waste generation by material type
  • reprocessing capacity by material type
  • reprocessing capability by material type
  • location of resource recovery infrastructure and its proximity to end markets
  • the Statewide Resource Recovery Infrastructure Plan (SWRRIP) and Regional Implementation Plans
  • existing resource recovery hubs of statewide significance as identified in SWRRIP
  • stated government priorities to support regional economies in transition e.g. in the Latrobe Valley.
  • The ability to meet a range of policy and resource recovery target scenarios by 2022, 2025, 2030 and 2039. These include:
    • The COAG Waste Export Ban proposal that seeks to restrict the export of `scrap’ glass, paper and cardboard, plastics and tyres which will be phased in from July 2020 and come into full effect by July 2024.
    • The APCO plastics recycling target of 70% of plastics to be recycled in Australia by 2025.
    • The National Waste Policy target of an 80% average resource recovery rate from all waste streams following the waste hierarchy by 2030.
    • The Victorian e-waste landfill ban.
Infrastructure Gap Analysis Key Assumptions
  • The results and recommended infrastructure facility types are indicative only. Technology choices and accepted feedstocks must be chosen at the discretion of any project proponent. The Infrastructure Gap Analysis presents data that can inform these decisions.
  • The Infrastructure Gap Analysis is based on responding to forecast waste generation and resource recovery trends.
  • Recovery and reprocessing capacity are based on both known and estimated capacities.
  • Recovery and reprocessing capability are based on both known and estimated capabilities.
  • Full businesses cases have not been developed.
  • Consultation with key stakeholders has not occurred.
  • Capital expenditure costs are based on industry estimates and comparable recent investments in the waste and resource recovery sector.
    • Infrastructure has been costed at 2020 costs. This has been extrapolated out to 2039 based on 2020 costs alone. There has been no inclusion of NPV, discount rates, CPI, etc.
    • It is noted that over time, capital investment for infrastructure will most likely increase.
  • Operating costs have been excluded from this analysis.
  • Locations are indicative only and are based on assumptions around potential site opportunities.
    • Suburbs and towns have been identified based on the aforementioned methodology and are for illustrative purposes only.
    • Any decisions on locations will need to be made primarily by the private sector and guided by appropriate land use planning and environmental approvals.
    • Suburbs and towns are named as a locality guide only and are approximate.
    • For example, where an organics reprocessing facility is identified in a township, the facility would have to be located in an appropriately zoned area and would likely be on private land within the broader area of any given township.
Infrastructure Gap Analysis Recommendations

Infrastructure Victoria recommends that there is an immediate and an ongoing need for investment in Victoria’s waste and resource recovery network. Infrastructure Victoria estimates that by 2039:

  • Investment in approximately 87 new or additional resource recovery infrastructure facilities will be required throughout Victoria.
  • An increase in total resource recovery infrastructure capacity of 3,157,500 tonnes is required.
  • A forecast capital investment of between $800 million to $1.1 billion by 2039 will be needed to deliver the required infrastructure.

Appropriate phasing of infrastructure investment, construction and commissioning will be different for each priority material. Specifically:

  • By 2024 investment in recovery and reprocessing infrastructure will be needed for paper and cardboard, to meet the requirements of the COAG waste export ban.
  • By 2025, investment in recovery and reprocessing infrastructure will be needed for organics and plastics.
  • By 2030, investment in recovery and reprocessing infrastructure will be needed for e-waste.
  • And by 2039, investment will be needed in value-add recovery and reprocessing infrastructure for glass and tyres.

To manage total forecast resource recovery trends by 2039, it is estimated that future resource recovery investment required by 2039 will include:

  • e-waste investment between $12m to $55m to manage 34,500 tonnes per annum
  • glass investment between $17.5m to $24.3m to manage 328,000 tonnes per annum
  • organics investment between $229.75m to $317.32m to manage 805,000 tonnes per annum
  • paper and cardboard investment between $157m to $198m to manage 2 million tonnes per annum
  • plastics between $367.9m to $511.28m to manage 515,000 tonnes per annum
  • tyres investment between $6m to $8m to manage 15,000 tonnes of commingled recycling per annum
  • new MRF investment between $12m to $20m to manage 80,000 tonnes of commingled recycling per annum.
Infrastructure Facility Type Considerations

E-waste

  • Infrastructure is recommended to manage emerging waste streams of high hazard and high value.
  • Reprocessing locations for e-waste products including batteries, televisions, computers, monitors and peripherals have been recommended in existing metropolitan Melbourne hubs.

Solar photovoltaic (PV) panel reprocessing has been recommended:

  • To account for installation of solar PV panel uptake and density throughout Victoria based on data from the Clean Energy Regulator and mapping by the Australian PV Institute (https://pv-map.apvi.org.au/ historical#7/-36.545/144. 316).
  • To complement existing metropolitan Melbourne e-waste reprocessing hubs.
  • In Bendigo due to its proximity to current and future deployment of household, commercial and large-scale solar in central and northern Victoria.
  • In both Geelong and Morwell to service future end-of-life arisings in south west Victoria and Gippsland and to leverage existing infrastructure and labour forces where economic transition is occurring in Victoria.
  • Outside Melbourne and the Geelong region, the northern and eastern regions of Victoria have the highest density of solar PV installations. Both Bendigo and Morwell can potentially serve as the reprocessing hubs for these regions.

Glass

  • Infrastructure is recommended to manage future glass recovery with a view to increasing capacity and capability to process glass into glass sand products for use in sand replacement applications, crushed rock and aggregate blends, and abrasives.
  • In particular, glass sand and aggregate infrastructure is recommended to be deployed throughout regional Victoria to realise the potential for use in local road and infrastructure construction activities to manage future end-of-life arisings and 96 support local circular economic activity.
  • One additional glass beneficiation plant has been recommended due to the recent decrease in capacity following the January 2020 closure of the GRS beneficiation facility in Coolaroo. However, Infrastructure Victoria cautions that any investment in additional glass beneficiation should consider both current and long-term market demand for glass cullet for use in Victorian glass packaging production.

Organics

  • Anaerobic digestion has been identified as a suitable technology to manage current and future commercial food organics recovery.
    • The north of Melbourne is already serviced in Wollert, servicing key clients such as the Melbourne Market (wholesale fruit and vegetables).
    • There are still significant opportunities to service food production businesses in Melbourne’s south east (Dandenong South) and in Victoria’s Goulburn Valley (Girgarre).
    • Other locations throughout Victoria may also be viable and further investigation of suitable location is recommended
  • As Melbourne councils introduce further FOGO services, the existing capacity to consolidate and reprocess organics into compost will be insufficient.
    • Dedicated Special Materials Recovery Centres (transfer stations for organics) are recommended for hubs identified in the SWRRIP in Melbourne’s western (Laverton North) and northern (Epping) suburbs.
    • Due to the challenges in meeting EPA requirements and managing social licence to operate, it is unlikely that any future significant organics reprocessing will occur in metropolitan Melbourne.
    • To meet the increasing FOGO service demands, and to meet Melbourne’s growing population and traffic congestion, Infrastructure Victoria recommends that SMRCs are constructed to provide opportunities to consolidate and aggregate FOGO prior to transportation, enabling transport efficiencies to be realised and haul FOGO to regional Victorian reprocessing facilities.
    • Laverton North is approximately 50km from the Barwon South West region and approximately 100km from the Central West region. Epping is approximately 30km from the southern end of the Goulburn Valley region and approximately 125km from the Central West region.
    • Melbourne’s south east is presently well serviced.
  • In-vessel composting has been recommended in areas close to large regional centres to manage EPA requirements, social licence and urban amenity issues.
  • Open windrow composting has been recommended in regional Victorian locations that are potentially more likely to manage EPA requirements, social licence and urban amenity issues.

Paper and cardboard

  • Pulp mills have been recommended following the COAG export ban to manage the shortfall in both capacity and capability to meet these new requirement and/or domestic production requirements. However it must be noted that such infrastructure is expensive and based on current paper markets, the entrance of any new stakeholders is considered to be unlikely. Therefore, any new pulp mills would likely need to complement existing market players.
  • There is an opportunity for niche and bespoke paper and cardboard products to be produced to meet shifting consumer sentiment and corporate shifts away from single use plastics in packaging.
  • Additional paper separation technology upgrades at MRFs are recommended to meet the COAG waste export ban requirements.
  • Further C&I paper recovery facilities are also recommended to meet the COAG waste export ban requirements.

Plastics

  • Further investment is required in plastics reprocessing infrastructure including to mechanically shred, wash, granulate, flake by single polymer type or pelletise by single polymer type.
  • Victoria potentially has significant competitive advantage and existing plastics manufacturing infrastructure that could be leveraged to manage this challenge. Victoria is currently home to two major plastics resins manufacturing businesses.
    • Qenos has resins manufacturing production operations in NSW and in Altona, Victoria. Qenos is the sole manufacturer of polyethylene in Australia.
    • LyondellBasell has resins manufacturing production operations in NSW and Geelong, Victoria. LyondellBasell is the sole manufacturer of polypropylene in Australia.
    • The presence of these two major resins manufacturers in Victoria, with considerable market access, represents a significant opportunity to use recovered plastics in resins manufacturing in Australia.
  • Investment in both metropolitan Melbourne and regional Victoria would be appropriate. Regional Victoria has historically proven to be suitable for the reprocessing of plastics and there are opportunities for regional flaking and pelletising infrastructure.

Tyres

  • No further tyre reprocessing to shred tyres is required in Victoria to meet current domestic and export market demands.
  • However, should there be interest in building domestic demand for Tyre Derived Products from passenger tyres, then there is an opportunity for investment in increased fibre separation infrastructure.
  • It is recommended that such infrastructure be located in Melbourne’s northern suburbs where Victoria’s two major tyre reprocessing businesses are located.

MRFs

  • Generally, Victorian MRF infrastructure will need upgrading to increase the ability to sort and separate mixed materials. Presently, MRFs typically produce bales of mixed materials including paper and plastics. The market demand and in some cases, market authorisation, is seeing limited outlets for mixed baled materials. Further investment will be required in infrastructure to present sorted, clean streams of recovered materials.
  • Beyond this, there are notable gaps in the provision of MRF infrastructure in Victoria’s south west and central western regions. Infrastructure Victoria sees opportunities for new MRF infrastructure to be located in Geelong and Ballarat to service these Victorian regions.

Note: Locations are indicative only based on Infrastructure Victoria methodology. In some instances facilities are likely to be outside of the identified town centres in a neighbouring area. Capex costs are based on 2020 cost estimates only. Tonnes per annum are based on Waste Data Flows analysis. Number of facilities to manage projected TPA may be scaled up or down based on facility size design. Proposed scale is indicative only.

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