Latest articles

Sydney Transfer Station Costs Cross Threshold

With Sydney waste transfer stations set to cross the $275 per tonne barrier for the first time, it’s time to ramp up resource recovery.

The drivers
The effect of the NSW landfill levy, carbon pricing and compliance obligations on landfills and transfer stations, will push up pricing from 1 July 2012 by $35/t and possibly more for most Sydney putrescible landfills and transfer stations.

Current Transfer Station prices for household waste in Sydney range from $210 – $250/t. Landfills are about $220/t of household waste.

With CPI at 3%, the landfill levy adding $10/t plus, and carbon pricing between $8-17/t for landfills with more than 50% gas capture, it is likely that most transfer stations will cross the $275/t threshold for the first time.

As an interesting aside, it took Australia 200 years to get to the first $100/t priced landfill, 10 years to get to $200 and it will be only 5 years to get to a $300/t landfill. We will see $300/t landfills by as early as 1 July 2014.

That is good news for recyclers and AWT providers. Bad news for waste generators and councils who don’t maximise recycling and divert recoverable materials from landfill.

The effect
Waste costs represent 1-2% of business costs but they represent the largest single expenditure for most local Councils. These price increases send a very clear signal to businesses and Councils (as the agents for householders), to rapidly increase recycling via improved kerbside recycling, commercial recycling, collection of organics, drop off centres, dirty MRF’s and increased use of AWT.

It is now increasingly poor economics to send recyclable products to landfill (in Sydney). Not only is it a waste of resources and embodied energy, it now costs more than recycling for many products. While this has been true for paper, metals and some plastics for a decade, with the rise in landfill costs, it is now true for many other waste streams including organics, commercial waste and a much wider range of household materials.

For the first time in Australia’s history, recycling of the vast bulk of materials is now cheaper than landfill, in Sydney at least.

That is not true for the rest of Australia for most waste streams.

Most products cost more to recycle than to landfill. That is why over 22 million tonnes is landfilled and rising. We only recycle a few product streams in bulk, including metals and paper/cardboard, glass and some plastics. Those with inherent value.

That is why most recycling is subsidised in some form. Councils are the leaders in recycling and tip the subsidy can for up to $400 million per year in recycling subsidies.

As a generality, the business sector recycle only metals and paper/cardboard, and some plastics, because these products generate a commercial return. The vast majority of businesses will not, and don’t, subsidise their recycling. Consequently the bulk of their waste is landfilled (because it is cheaper to do so). That is totally rational from a shareholder value point of view.

Talk about a 2 speed economy. Landfill in Sydney is fast approaching $300/t whilst the removal of the $35/t landfill levy in QLD has seen landfilling cost in SE QLD drop to less than $40/t. Why would any rational business (or Council) recycle when they can landfill so cheaply. And so it is.

Recycling is a booming business in NSW with any number of new proposals in the pipeline. QLD is moribund. Other States including SA, WA, VIC and ACT are well lead by active and interventionist State agencies and regional groupings of Councils. These apply government policy to drive reform rather than price. It doesn’t matter which – price or policy as long as it works.

In NSW we see a more hands off approach from the EPA to market intervention but a very clear price signal to the market. It is starting to pay recycling dividends and will do so increasingly over the coming few years.

And as a concluding point the biggest winners from the higher landfill levies in NSW are the landfill operators. They are the ones with the capacity to install recycling operations on their sites and in doing so privatise the value of the levy.

They can charge the levy at the gate but divert the material from the landfill, thus avoiding having to acquit the levy to the State Government. Not a bad recycling subsidy with the levy going to $95.20/t on 1 July 2012.

in Waste


Sign up for all our latest articles

Subscribe to our blog and receive notifications of new articles by email

Blog categories

Nabers Accredited Assessor
Local Government Procurement Approved Contractor