Hitting the NSW Waste targets is good for the planet and good politics
By: Mike Ritchie, MRA Consulting Group
On 1 November 2024, during the NSW Circular Economy Summit in Sydney, the Minister for Environment Penny Sharpe and the CEO of the NSW EPA Tony Chappel in separate landmark speeches said âNSW has a waste crisis and we are here to fix itâ⊠or words to that effect (my emphasis).
Most in the audience breathed a sigh of relief that finally someone was listening and going to act upon repeated warnings that NSW is in trouble.
Waste disposal options in Sydney are nearing critical shortage while the State as a whole has fallen way behind in delivering on the National Waste Targets set in 2019.
For clarity the Targets for 2030 are:
| 80% diversion from landfill; |
| 50% reduction in organics to landfill; and a |
| 10% reduction in per capita waste generation. |
We are stuck at 60% recycling, have no chance of achieving a 50% reduction in organics to landfill (a massive greenhouse gas generator) and per capita waste generation has actually grown by 2% since 2019 rather than fallen.
Achieving the Targets on the other hand will lead to transformational job creation in the NSW recycling industry, greenhouse gas reductions and economic investment.
So âwhy the hold-up?â you might ask.
To achieve these targets, we need infrastructure for source segregation (bins and trucks), and to build sorting and processing facilities for mixed waste.
The Minister and CEO announced:
“As a State, weâre at a critical juncture. We must act now to ensure our infrastructure keeps pace with growing waste volumes, and to maximise recycling and recovery efforts. Through a mix of innovative projects, strategic investments, and collaboration, we can turn this challenge into an opportunity.
Action on the infrastructure front has been a long time coming. At long last, there is movement after years of advocacy. It seems so obvious and politically popular.
But, why is building waste infrastructure in NSW so hard?
Well, it isnât because of a lack of willingness by industry, or action by community groups, or advocates or financiers or the public.
Everyone thinks building infrastructure to improve recycling rates and to reduce landfilling, is a good idea.
The only downside is that you need to build it next door to someone. There is the rub. That is why it takes 5 years minimum to get a planning approval for any waste infrastructure of any scale – if you get one at all.
NSW has long adopted a laisse faire (proponent led) planning system, which works fine for shopping centres and home renovations, but is an abject failure for waste. We centrally plan power stations, water treatment facilities, schools, parks, roads, electricity networks, hospitals etc but not waste management infrastructure.
In NSW, waste infrastructure is left to proponents (industry or councils) to propose and defend against the whims of local âoppositionismâ.
It is complicated by the fact that, in NSW, we require a âsocial licenceâ as one of the preconditions for planning approval.
When is a local community ever going to agree to a âsocial licenceâ for an incinerator or a landfill or even for that matter, a 200,000t/yr resource recovery facility?
It is a laudable objective to obtain community support or âsocial licenceâ, but as a concept when applied to large (and therefore strategically important) waste infrastructure, it cannot work because no-one in their right mind wants a landfill next door to them. Next door to someone else, no problem. Just not where it is proposed to go.
I cannot believe the number of times WMRR, ACOR, AORA and other associations, along with private companies, have made this point to Government Ministers, EPA leadership and to independent Government inquiries. It is a particularly unique problem to NSW.
It got so farcical that at one point I was told by a senior planner in the Dept of Planning that âwe are not communist China Mike, we donât centrally plan infrastructure.â What???
With the Ministerâs announcement of the impending release of a âNSW Infrastructure Planâ, it seems we might thankfully see some measure of common sense and some strategic planning for waste.
It is worth pointing out that most other States have such âPlansâ and it is no surprise that lots of investment goes there instead of NSW. Capital is mobile. Jobs are created where facilities are built and operated.
SA has Green Industries to promote waste infrastructure. Vic has Resource Victoria AND a waste infrastructure investment prospectus to encourage investment. QLD has its EfW and investment programs.
In NSW, up to now, we have been leaving it to proponents to fight it out with local residents, oppositional local governments and ultimately and often, the arbitration of the Land and Environment Court. This leads to lengthy delays, increased costs and acts as a significant disincentive to investment. Importantly, those proposing and defending facilities are afforded almost no guidance from the State Government on whether such infrastructure is needed, wanted or necessary.
How much more productive would it be if the State Government just told us what the State needs and then industry and councils got on with building it.
It doesnât mean that locals canât object to a particular proposal but at least it will mean that project proposals are set within a broader strategic framework of need. Dumb proposals will still be rejected but proponents with good proposals will at least have the backing of a State needs assessment.
So, the announcement of an impending State Waste Infrastructure Plan by the Minister came like fresh air. The Government has engaged Arcadis to help prepare the Plan and industry eagerly awaits its release – the sooner investors, proponents and operators have this guidance, the sooner NSW can get on with it.
To provide some clarity on scale and to give a benchmark to review the Arcadis Plan, the MRA team pulled together our own version of what a State Infrastructure Plan might show.
I have provided an overview here to give readers some idea of the magnitude of the task and the absence of time.
To achieve the State Targets we need to divert an additional 5.7 MT per year in NSW by 2030. That equates to the following tonnages per waste stream:
| Required by 2030 to hit the targets (with growth) | |
| MSW | 1.7 MT |
| C&I | 1.5 MT |
| C&D | 2.5 MT |
| Total | 5.7 MT |
To manage these 5.7MT/yr, we need lots more source separation and to build bricks and mortar facilities ranging from separation bins on waste generator sites, weighbridges on local landfills, through to EfW facilities, Container Deposit Scheme expansion and new resource recovery platforms. It is a massive task.
But we are where we are, so letâs get on with it.
The facilities MRA identified are set out below. We donât need to worry too much about where they are built at this time, but closer to generation or markets is obviously optimal.
About 500 are new infrastructure processing bits of kit. This is the stuff that suffers from local opposition and planning controversy. On the other hand and thankfully, over 2000 bits of kit are to do with Commercial waste sorting at source. This is easy to achieve once the economics are fixed.
We even added in a new landfill for Sydney (which has nothing to do with hitting the targets but is an urgent priority for residual materials).
Those 2,751 bits of different kit will mainly be built by the private sector and councils.
The three critical things the private sector and councils need from the State government are the âPlanâ, a financial incentive, and regulatory certainty that the rules will not change sometime in the future.
We turned to the existing s.88 landfill levy for the financial incentive. It raises $0.9B per year. The contribution required to facilitate the above investment is estimated to be $1.3B once. A bit over a yearâs worth of levy, once.
All up this would employ thousands of people and release an investment boon of at least $6B in private sector money. That is 5:1 investment. Driven by grants based on those levy funds. (I hear you say- that sounds like a very good deal. Letâs get on with it).
But of course, life is never that simple.
We cannot just take $1.3B from Treasury (even if the s.88 levy was introduced for recycling purposes). Most of it is spent on other critical infrastructure such as schools, roads and hospitals etc.
So, we came up with an answer as to how to use the levy to fund this infrastructure without having to ask Treasury to reallocate existing levy funds (which we acknowledge is a historical sore point for many in our sector).
An $18/t real increase in the landfill levy over 3 years with those funds 100% hypothecated to the Infrastructure Plan gets the funding moving. That is around 3 cappuccinos per house per year.
If Government wants to accelerate the program faster to achieve the 2030 targets, then they can borrow from the future known levy increases to fund grants now. That is what we suggested.
Of course, others make the valid case that we should just keep lifting the levy until the investment happens. (That is, we should not depend on Grants.) Or governments could ban materials from landfill or require EPR, which would stimulate investment irrespective of the levy settings. Or we could do all of them at that same time. And we should.
We handed the Plan and funding model to the EPA. We hope that they take it seriously.
The EPA recently announced they will release the Infrastructure Plan over âthe next periodâ, âin chaptersâ. As long as it covers what investors and councils need, we shouldnât care how they release it.
But Minister, please make it soon.
It is good for recycling, for jobs, for the regions and for the planet.
(For a copy of MRA’s Plan reach out through our web portal https://mraconsulting.com.au/NSW-infrastructure-plan).
Mike Ritchie is the Managing Director at MRA Consulting Group.
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